Financing healthcare when social insurance is not an option
Given Bangladesh’s low tax-to-GDP ratio, the adoption of contributory social health insurance for every citizen might be difficult. Then how should Bangladesh go about improving access to healthcare?
Bangladesh, financed by a mix of general tax revenue and private financing with high out-of-pocket payments, spends $54 per capita on health, which is much lower than the $88 recommended by the World Health Organisation.
The strategic interventions suggested in the Health Care Financing Strategy (HCFS) 20012-32 are still limited, despite the piloting of Shasthyo Shurokhsha Karmasuchi (SSK) – a health protection scheme for the below poverty line (BPL) population – in a few sub-districts of a district.
Major strategic directions for health care financing in the global context include: (i) Bismarck system – employers and employees contributed social health insurance (SHI) system; (ii) Beveridge system – national health service financed by tax revenue-based system; and (iii) a mixed system. This article attempts to explore the strategic direction of healthcare financing that fits well in the Bangladesh context.
Gaps: Comprehensive benefits package based on contributory social health insurance may not be feasible in the short-run in Bangladesh due to the massive informal sector (87.5%), low tax-GDP ratio (8.77%), and lack of eligible healthcare providers to serve the insurance clients.
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Note that public hospitals are not eligible to be included in any health insurance mechanism due to rigid public-financial management rules. There is also a lack of quality private hospitals across the country, especially at the upazila and district levels.
However, contributory social insurance may be feasible for a benefits package comprising emergency care (accidents and injuries) and some critical illnesses (e.g., cancer, kidney dialysis, kidney transplantation, liver cirrhosis, COPD, etc.) by imposing a small amount of premium, which may be collected by charging on mobile phones.
There is also a wide prospect of flourishing group health insurance, especially for corporate employees, industrial workers including garment workers, and university students.
The government's current budgetary allocation for health of 5.4% is small compared to the WHO-recommended allocation of 15%. That being said, about 20-30% of the budgetary allocation on health remains unspent.
On the other hand, the current input-based, line-item allocation, along with the lack of proper input-mix and skill mix, leads to producing sub-optimum services from the given allocation.
Thus, it is not reasonable to increase the allocation until the Ministry of Health and Family Welfare (MOHFW) fully and efficiently utilises the given allocation. This is the crux of the problems.
Actions: There is no monolithic solution for financing health care in Bangladesh. The solution involves doing many things at once. The central focus of the country should be strengthening the general tax revenue-based public financing through improving efficiency, especially allocation/purchasing efficiency, by addressing the systemic barriers associated with spending the allocated budget as well as avoiding duplication in fund allocation.
Simultaneously, the government should gradually add more budgetary allocation (e.g., 1% share or so of the national budget) over the next couple of years to fill up the gaps in the existing line items and add new line items.
Special focus needs to be given to developing a strong community-based healthcare system emphasising preventive and promotional care and establishing an effective referral mechanism by making the community clinic the first contract point through its strengthening by employing 2-3 nurses/paramedic/midwifery.
In the urban areas, a catchment area-based strong primary health care system needs to be established by adding innovative features. Aalo Clinic – an innovative Urban Primary Health Care (PHC) model implemented by UNICEF by adding some unique features – can be an option.
There are some unique features of Aalo Clinic: catchment area-based comprehensive primary healthcare focusing on both preventive and curative care for all citizens (universal); digital health inclusion - integrated digital health platform with digital health account for every citizen and capturing all health service activities for ensuring quality healthcare services; empanelment of doctors (GPS and consultants) based on annual contractual agreement; service hours from 8.30 am to 9.30 pm (Two shifts); minimum 6-8 minutes duration of every consultation for better patient counselling; pay for performance approach; continuous quality improvement with prescription auditing and resource mapping; operated by a Contracted Management Agency.
However, the country eventually needs to move towards demand-side financing from its current supply-side financing focus. The SSK has widened the scope of moving towards demand-side financing for medicine, supplies, diagnostic and ambulance rental with the supply-side budgeting for salary, allowances, and facility development.
Thus, there is the scope of making the SSK-type social health protection schemes universal by right for secondary and tertiary care to address both demand-side and supply-side bottlenecks. If it is not possible to include all at a time, the country can proceed primarily with low-income (bottom two income quintiles) and vulnerable groups (elderly, children and disabled) and gradually add other quintiles.
There is also a scope of constituting a Sickness Fund for a benefits package comprising of emergency care (accidents and injuries), critical illnesses (e.g., cancer, kidney dialysis, kidney transplantation, liver cirrhosis, COPD, etc.) and super speciality care.
Government contribution can be primarily ensured by diverting the fund allocated to the Department of Social Welfare as a one-time financial assistance of Tk50,000 to poor patients suffering from cancer, kidney, liver cirrhosis, stroke, paralysis, congenital heart and thalassemia.
Government contribution can also be sought through imposing an additional tax on tobacco and other commodities which have public health risks (e.g., energy drinks) and additional VAT on luxurious commodities like Ghana. Scopes also exists for seeking CSR contribution of pharmaceuticals and other corporates, DPs contribution, and other philanthropic contributions.
Impact: The implementation of the four recommendations simultaneously or step by step may generate the following results: an increase in access to quality health care across all sections of the population; reduction in OOP payments; reduction in catastrophic health expenditure; reducing in impoverishment due to OOP payments; creating confidence on health system; preventing seeking cross-border health care contributing to boost up the macroeconomic condition.
What next: The MOHFW requires reflecting these strategic interventions in the Strategic Investment Plan currently being prepared and then in the Program Implementation Plan. Then it requires seeking various approvals from the apex ministries to implement these strategic interventions. The apex ministries need to think about the health sector differently, given its importance and complexities, to implement these strategic interventions.
Dr Syed Abdul Hamid is a Professor at the Institute of Health Economics, University of Dhaka
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.
