Financial health through health insurance
PharmAccess is working towards:
- Making inclusive health insurance programs work in the context in which we operate; delivering proof of concept and then scale up. Data-driven health insurance programs to better distribute funds and improve accountability
- Funds to be distributed horizontally - shifting away from traditional vertical disease-specific funding (including those from Global Fund, World Bank, and PEPFAR)
- National governments committing to (co-)pay for the premiums of people in low-income households.
Introduction
With health insurance, people are protected from the majority of catastrophic out-of-pocket health expenditures, which improves their financial health. PharmAccess offers support on realizing health insurance coverage for all in the key countries we operate in. We play the role of technical assistance partner, supporting governments in their rollout of effective and sustainable health insurance models, exploring different financing mechanisms, and offering the necessary (digital) technical support. In some countries, we are closely involved in the very first design phases of a health insurance model (Zanzibar), while other interventions are in a testing and scaling phase (Kenya, Nigeria). Ghana’s economic crisis has brought new challenges for the National Health Insurance Authority, and we are working with them to refine the national scheme.
1.1 Digitalization to make health insurance models work
Financial inclusion is increasing globally, with account ownership now reaching 76% of adults [24]. But inclusion is highly variable in sub-Saharan Africa, ranging from 45% in Nigeria to 73% in Kenya [25].
Throughout the region, there is evidence of the widespread use of digital finance: the percentage of adults making or receiving digital payments is almost as high as account ownership. As well as increasing financial inclusion, this digitalization can give people better access to healthcare.
Digitalization has also provided significant opportunities to make health insurance models work for low-resource settings: People can enroll and participate in insurance programs with less effort, and they can be reached and make digital payments via their cell phones.
- Health insurance authorities are better able to redistribute funds and create health allowances, including by identifying the most vulnerable groups to better tailor their support
- Payers can access data on how funds are spent and advise on how spending can be made more effective
- Facilities and governments can pool fragmented financing streams for areas that need the most attention.
1.2 Countries’ progress in providing health insurance for the underprivileged
To make UHC truly inclusive, the lowest-income groups must receive subsidies. Digitalization is an effective and efficient way to ensure that people with low incomes or poor financial health can access quality healthcare through subsidized health insurance. Digital technologies can help make UHC work in low-income settings. At PharmAccess, we have supported and developed multiple solutions to enable people to enroll in health insurance against marginal costs, advancing countries on their journeys towards UHC and connect more people to affordable healthcare. To scale this success further, individual governments will need to make financial commitments to health insurance, for example through subsidy programs. The different stages of innovation and demand-side financing models in the countries we support experience ups and downs. They also vary, depending on the route and stage of the country’s journey towards universal health coverage (UHC).
Marwa, Kenya In Kenya, the Marwa Kisumu Solidarity Health Cover was launched in 2019. The County Government of Kisumu (CGK) committed to KES 105 million (US$ 844,000) in co-funding for a universal healthcare insurance program for all citizens of Kisumu. In partnership with the National Health Insurance Fund (NHIF), PharmAccess and CarePay implemented the initial stage of the scheme, and donor funding covered the first 42,500 vulnerable households enrolled, giving them access to services in 49 designated facilities. For the financial year 2022/23, the CGK has committed US$ 900,000, increasing at 10% per annum for the next three years. It is important the CGK keeps to this commitment, and we would welcome support in encouraging this. The Marwa Kisumu Solidarity Health Cover is an inspirational example of an inclusive healthcare scheme that uses data and technology to improve financial inclusion by better allocating funds. Our ambition is to help create best practices in building inclusive digital health ecosystems and inspire other stakeholders to roll out similar models.
Kisumu Governor Prof. Peter Anyang’ Nyong’o addressed in November 2022 his key achievements and plans for his second term [26]. He cited the digitization of the health management systems and facility improvements at Kisumu’s main Referral Hospital and other infrastructural developments at sub county hospitals as key achievements. Others include the implementation of the Marwa Health Insurance Cover which he termed as a trailblazer in Kenya, a case in point for other counties to bench mark on.
Zanzibar, Tanzania The Zanzibar government aims to move away from the notion of free healthcare and towards universal health coverage (UHC) through insurance-based approaches. The government asked PharmAccess to support the redesign of the archipelago’s health financing strategy, and together we are taking a truly system-based approach. The strategy includes a health equity fund sponsored by government to finance the premiums of low-income people. The quality of care is an important element: the government has also adopted SafeCare, our stepwise quality improvement methodology, as a step towards guaranteeing broad participation in the health insurance program. The approach has been data-driven from the start, with socio economic mapping and digital data collection already underway. We encourage and support the government to keep the pace of progress to demonstrate to citizens how the change in approach will be advantageous.
Kwara, Nigeria Among Nigeria’s significant challenges, as outlined in the previous chapter, the fragmentation of funds is a major issue. Coverage and quality of healthcare services in Nigeria is unevenly distributed and compares poorly to neighboring states [27]. Nigeria has made some progress towards political commitment to health insurance, with more than 30 states enacting social health insurance legislation. Kwara has made a commitment to subsidize the lowest-income groups through the Kwara State Health Insurance Scheme. Despite implementation challenges due to the pandemic, 88,000 people have enrolled so far, and more than 25,000 claims have been processed. Kwara works with CarePay and has used data and reporting to support the scheme. The state’s ambition is to give 3.4 million citizens access to quality healthcare. Given the challenges Nigeria is facing, it is vital that the government stays accountable to its commitments. We also seek more digitalization to ensure that the funds arrive where they are needed most. We welcome support in encouraging accountability and digitalization in Nigeria to ensure the best outcome for citizens.
1.3 Strengthening health systems through digitalized health insurance schemes
By strengthening existing national health insurance schemes, governments can ensure increased access to care and help improve general financial health and inclusion. Actions include making risk pools bigger, making basic packages work by ensuring they are comprehensive enough and actually cover essential healthcare services, and making payment and reimbursement systems more equitable, efficient, and faster. Universal health coverage (UHC) is possible when health insurance is data-driven. To strengthen health systems so they support UHC, we need coordinated and aligned digital solutions. Digitalization brings benefits to governments, donors, healthcare providers, insurers and patients. Progress is being made throughout the region, but each country faces its own digitalization challenges. In Ghana, the government has made considerable progress towards achieving UHC: by 2021, there were 17 million people enrolled in the National Health Insurance Scheme (NHIS), covering over half of the country’s population. However, the country now faces significant challenges due to the inflation crisis. Reimbursements are delayed, and when claims are paid out too late, hospitals become financially distressed and people lose trust in the system. PharmAccess aims to support NHIA to avoid reversing the progress made so far. To maintain trust in the system – even in times of inflation – the government could explain better to Ghanaians why premium increases are needed and lead discussions publicly and transparently.
In November 2022, The Association of Health Service Administrators, Ghana (AHSAG) warned about poor healthcare delivery as a result of the economic situation. In a communiqué published in a Ghanian newspaper, they pushed for immediate government intervention [28]. ‘’ Rising inflation, high fuel cost and exchange rate depreciation have resulted in astronomical increase in cost of health commodities and other inputs for quality health care delivery. Ser-vice fees and charges, on the other hand, remain fixed by parliament and [National Health In-surance Authority] NHIA, thereby eroding the meagre margins that come into the coffers of public health facilities. This has led to serious liquidity challenge for health care providers re-sulting in delayed payment for drugs and non-drug consumables with major pharmaceutical suppliers demanding payment on delivery’’.
In Nigeria, a lack of internet access and connectivity in remote areas makes allocating health insurance to the lowest income groups challenging. It is proving difficult to roll out basic infrastructure because of the lack of security for telecommunication companies. This means the most vulnerable groups have no access to the digital tools that would help them benefit from health insurance and services. In Zanzibar, the government has successfully linked UHC to quality, and through PharmAccess’ quality arm SafeCare, all facilities on the archipelago are collecting data on healthcare performance. We are supporting the government to identify who is and is not able to pay for insurance. All Zanzibar residents now receive an insurance card, and we can track their data to inform the development of the social health insurance model. Digital tools can embed funding into existing national approaches. By using digital tools, organizations such as Global Fund and the World Bank can strengthen and reduce the fragmentation of their funding. Ideally, large funds will invest in digitalization efforts nationally, to strengthen the entire system and to make all funding streams transparent.
1.4 CarePay: giving more people access to affordable healthcare
Connection is a key element of a transparent, digitalized system that provides access to affordable healthcare. CarePay’s mobile and cloud-based platform, branded as M-TIBA in Kenya, connects insurers, donors, healthcare providers, and individuals to digitize the healthcare journey in the public and private sectors. M-TIBA currently connects over 4.7 million people and 4,800 healthcare providers in Kenya and Nigeria. CarePay’s platform can lower costs, reduce fraud, and enable faster payments to hospitals. The reduction in costs unlocks opportunities to create more affordable health insurance products for lower- and middle-income groups. Every user is identifiable by their cell phone. Users can always access data on their usage and benefits, and they initiate every claim and payment. Insurers are using the platform to manage their claims more efficiently – one top private East African insurance provider cut administration costs significantly, from 20% to 12.5% of the premium. PharmAccess is working with insurers to innovate new equitable health financing models, which prove to governments and payers how a data-driven approach can inform improved access and healthcare financing. PharmAccess and Carepay will be working together on the following initiatives in 2023: MomCare – PharmAccess outsources MomCare claims management and provider payments to CarePay. The program will grow in 2023: big institutional players can fund the wallets for certain groups of patients or for vulnerable groups, helping make UHC more inclusive. We are also developing a business model for a MomCare value-based care approach for private clinics in Kenya. MCF – MCF provides digital loans, called Cash Advance loans, to health SMEs to finance working capital using mobile money revenue as non-traditional capital. Cash Advance, issued through the CarePay platform, reached a milestone in 2022 with the 5,000th loan issued. CarePay platform for social health insurance schemes – PharmAccess is working with CarePay to facilitate the establishment of social health insurance schemes in Kenya (Kisumu, Marwa) and Nigeria (Kwara state health insurance scheme).
CarePay in 2023 and beyond To grow the adoption of insurance and to drive the transformation of the health industry, CarePay is exploring new propositions that will make affordable healthcare more accessible for uninsured people. A number of new products aim to scale the adoption of health insurance, including by helping people feel more comfortable with the idea of prepaying for healthcare. CarePay will also scale through public partners (national insurers) as well as with private (micro) insurers and telecommunication companies. Bundled insurances – CarePay is in the test phase for bundled accident and emergency insurance for certain bus transport routes, for which people pay a little extra to receive adequate care if they are in an accident. Government partnerships – To reach the lowest income groups and those with the poorest financial health, CarePay will continue to partner with governments, alongside PharmAccess. The platform can support governments’ work towards financial inclusion, by increasing transparency and efficiency, and providing valuable data on healthcare service utilization and the diagnosis and prevalence of diseases. CarePay is proving beneficial through the subsidized scheme in Marwa, Kenya, the maternal value-based healthcare model MomCare, and in Kwara, Nigeria, for example. Micro insurance – CarePay can take over claims management and paying out to clinics, so insurers can further lower costs and unlock discounts for providers through economies of scale. This enables the design of lower-cost products for the uninsured and lower-income market. Upgraded platform – Beyond our collaboration, CarePay will launch an upgraded platform for the United Arab Emirates with an established insurer in mid-2023, positioning the platform for further expansion in Africa (without the insurer). Uganda will follow in the second half of 2023 and South Africa in 2024. Upgraded platform – Beyond our collaboration, CarePay will launch an upgraded platform for the United Arab Emirates with an established insurer in mid-2023, positioning the platform for further expansion in Africa (without the insurer). Uganda will follow in the second half of 2023 and South Africa in 2024.
Key challenges to overcome Health insurance is still a new product for many people, and insurers will need to provide accessible introductions to help people adjust to the idea and make payments. This will help insurers roll out insurance products to the mass market, focusing on lower- and middle-income segments. Transparency is fundamental to trust. But currently there is limited appetite for transparency among players throughout the healthcare system, including governments, donors, established insurers, and private companies, despite many claiming a commitment to it. CarePay’s platform makes all forms of funding transparent and can be a valuable tool for allocating healthcare funding more efficiently and effectively.
