Medical insurance have to be an election agenda

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If Nepalis are to vote on issues fairly than personalities on this 12 months’s elections, they need to concentrate to the manifesto of the Nepali Congress (NC) which has put an emphasis on the 2017 National Health Insurance Act.

It was the NC’s firebrand leader Gagan Thapa who pushed that laws when he served as Health Minister. He’s now the party’s general secretary, and sees medical health insurance as a method to improve the access and affordability of quality health care in Nepal.

Even for a rustic like Nepal, universal health coverage will not be a distant dream if there may be the vital political will. The Covid-19 pandemic has already made it evident that investing in health care and prevention is central to the well-being of the society with added economic advantages.

Many countries within the region have medical health insurance for his or her residents. An example is Thailand’s Universal Health Coverage Scheme, lauded as the most effective model for a developing country. 

The Nepal Health Insurance program was initiated to realize universal health coverage and was certainly one of the important thing agendas within the 2015 election with widespread political support. This system actually began in 2016 and the Health Insurance Act was enacted in 2017. 

With Ministry of Finance (MoF) funding, it offers monetary protection to people by paying on to the service providers’ on-behalf of insured members. 

In a couple of years, Nepal’s medical health insurance program has had a scalable impact. Our 2020 study within the Kaski district showed that in patient expenses of insured families was lower than that of non-insured ones, and were also higher protected against catastrophic expenses than the non-insured. 

Broadly, this system aimed to enhance the health quality through provider and purchaser split, and by employing a strategic purchasing approach. As an illustration, in Thailand, the National Health Security Office purchases services for 43 million people independently which has played a big role in improving health care services. 

Medical insurance generates an extra health budget, because it is a pooling mechanism. The MoF has allocated the insurance budget without curtailing the present national health budget.

Unfortunately, the insurance scheme design and implementation have been drowned out by political rhetoric leading to operational ambiguity and erratic implementation. With out a serious political will to strengthen this system, it’s more likely to come to grief before long. 

Insured persons are dissatisfied with service providers for his or her historically low-quality services. Actually, the standard of care has worsened in places after the insurance scheme was introduced, leading to a high drop-out rate. 

In turn, service providers are frustrated over the Health Insurance Board (HIB)’s sluggish reimbursement process and a few have even stopped their facilities. The HIB doesn’t have adequate expert human resources to hurry up the reimbursement, nor has it formulated an efficient service purchase mechanism. 

The Board has not been capable of function as a prudent insurance manager due to lack of basic organisational policies on human resources, finance, monitoring and evaluation, communication etc. There are also crucial design errors within the insurance program, resembling reimbursement strategy, un-equitable premiums, and provider/purchaser split, to call a couple of. 

The present program primarily employs fee-for-service (FES) which is a conventional, retrospective and input-based approach with a cumbersome process to review, validation of cost, and payment. The FES was chosen despite other programs including free health service and safer motherhood implementing relatively efficient, output-based and prospective approaches resembling capitation. 

There are also traditional and cultural problems inside the MoH, and HIB as a semi-autonomous body doesn’t have the influence or muscle to observe and negotiate with service providers

The premium amount and profit package was fixed through very limited study which was a modest Rs2,500 and Rs 50,000 respectively at first, later increased to Rs 3,500 and Rs100,000 but with no scientific basis. 

This profit package is kind of small for a family of 5. The quantity gets smaller with increased cost for the high prevalence of non-communicable and chronic diseases in the overall population.

Aside from the targeted groups (with premium subsidy), the flat premium amount of Rs3,500 for the remainder is basically unbalanced. The richest 10% of Nepal’s population has greater than 26 times the wealth of the poorest 40%. What this implies is that while Rs3,500 is peanuts for some households, it may very well be a monthly household food expense for others.

Despite this, the HIB claims that there isn’t a clear provider and purchaser split between MoH and HIB, the previous has a high influence on the latter’s organisational structure, as such, many staffing decisions are still pending the ministry’s approval years later. 

Nearly all of the HIB staff are seconded from the Ministry of Health,  none of them are health economists or have financial background. Learning by doing is a costly, ineffective and inefficient approach for a high-priority national program. 

Similarly, the Health Insurance Board is incapable of coordinating with line ministries for this system’s effective implementation. For instance, the Act has delegated the NIB’s members to standardise service providers’ quality control. Nonetheless, its board is dominated by MoH members. 

This ends in poor service quality, resulting in dissatisfaction amongst insured populations and within the high dropout rate and under-utilisation of the services. 

Nepal’s medical health insurance program must undergo a serious and urgent reform to forestall it from becoming obsolete:

Short to medium term recommendations:

  1. HIB must develop organisational guidelines to streamline reimbursement. The main focus have to be on demand generation to enrol wealthy, healthy and poorest groups equitably.
  2. The health service purchasing strategy have to be reviewed, and this also needs to guide the structure and human resources needed. 
  3. Private health service providers will inevitably be integrated into this system given the access gaps created by the limited variety of public providers. But private providers are sometimes more politically placed and vested interest can put HIB in a weaker negotiating position.   
  4. HIB should develop standards for hospital/PHCC preparedness, provide additional training and incentives for the medical experts and develop monitoring tools.
  5. Integration with other social security funds and health programs will improve efficiency and reduce duplication and wastage. Coordination with these funds will help access data on informal, and formal sector populations and cross-share promising practices particularly on investment.
  6. HIB should partner with existing research agencies and health economists to conduct studies and use ground-up feedback to reform. 

Long run recommendations:

  1. Premium-based pricing won’t be fair or sustainable due to poverty and amidst high informal sector employees. So HIB should look into the potential for fully tax-funded schemes for the informal sector populations.
  2. Provider and purchaser split: The provider and buy split might undergo lengthy technical and political discussion after HIB fulfils nearly all of short and medium plans eventually. It requires having clear roles and responsibilities between MoH and HIB, understanding of the scope of labor and mutual trust. 

Gaj Gurung is a public health practitioner currently based in Bangkok, Thailand. He has PhD in public health from College of Public Health and Sciences, Chulalongkorn University. His PhD evaluated the Nepal Health Insurance Program implementation fidelity and its effectiveness in reducing the out-of-pocket health expenses amongst insured populations.

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