Countries of the South battle on

In an unequal 21st-century world, access to healthcare is key to fighting poverty and ensuring social cohesion. Every year, 150 million people worldwide spend more than 40% of their income on health. Universal health coverage (UHC) would allow millions to receive healthcare without falling into poverty.

There is a growing focus on UHC in health systems. The 2010 World Health Report and associated declaration of the World Health Organization (WHO) general assembly urged member states to “aim for affordable universal coverage and access for all citizens on the basis of equity and solidarity.” In December 2012 the United Nations General Assembly adopted a landmark resolution on UHC. Last May, the World Bank president Jim Yong Kim made a commitment towards UCH at the World Health Assembly. Governments are taking action: China, Thailand, South Africa and Mexico are some of the first emerging economies scaling up public investment in health, and many low-income countries, especially in Africa, have introduced free healthcare policies as a first step towards universal coverage.

Moving towards UHC requires progress on three fronts: the range of services, the proportion of the costs of the services covered and the population covered. Home-grown financing mechanisms are key to ensuring funds are raised equitably and redistributing resources. UHC is not a one-size-fits-all affair: governments develop approaches to fit the social, economic and political contexts of their countries. UHC requires pooling arrangements that redistribute resources to the individuals with the greatest health needs.

The debate continues: what is the best mix of financing mechanisms, especially to protect people outside the formal employment sector? What financing mechanisms to use for access to care? Several countries, such as India and South Africa, have developed proposals for the health system to be financed in line with the ability to pay, and benefits received according to need.

Free care

The WHO maintains that user fees are “the most inequitable method for financing healthcare services” (1). A number of low-income countries have abolished user fees for some or all of their citizens as a first step towards UHC. In Mali, the government has introduced policies to provide selected services free of charge, including caesarean sections. Between 2005 and 2009, caesarean rates in Mali doubled and facility deliveries increased from 53% to 64% (2). Burkina Faso, Sierra Leone, Niger, Benin and Senegal have introduced similar initiatives for priority groups. Just 12 months after Sierra Leone ended user fees for pregnant women and children, use of medical care by children had increased by 214% and maternal mortality had declined by 61% (3). The number of children treated for malaria tripled over the same period (4). A 2005 study estimated that by removing user fees in 20 African countries, 233,000 deaths of under-fives could be prevented every year (5). In Zambia all user fees have been abolished for primary healthcare.

Attention has been paid to the equity of public service access, but far less to different ways of financing services. Working towards UHC, the main debate is on the relative merits of financing mechanisms: tax financing, social health insurance, community-based insurance and out-of-pocket payments.

Voluntary work

Among these mechanisms, voluntary community-based health insurance is being widely promoted. But no country has achieved anything close to UHC using voluntary insurance as its primary financing mechanism. The 2010 “World Health Report” states: “It is impossible to achieve universal coverage through insurance schemes when enrolment is voluntary.” Research shows that community health insurance is regressive, and raises concerns over its use as the first step towards universal coverage. In Ghana and Tanzania, contributions to community health insurance by people outside the formal sector are regressive: the share of healthcare payments by poorer households is greater than their share of income or expenditure, and vice versa for richer households.

Ghana’s national health insurance scheme (NHIS) was introduced in 2004, promising to deliver UHC. Yet after nearly 10 years of implementation, it covers just 36% of Ghanaians since many cannot afford the contributions. The remaining 64% still make out-of-pocket payments to access healthcare. For members, the NHIS covers the direct costs of health services and medicines for most common diseases. The scheme is financed by a 2.5% levy on VAT (70%), payroll deductions from formal sector workers (22%) and annual premium contributions from informal sector workers (5%). The annual contributions payable by informal sector workers only provide 5% of what is needed to finance the scheme, but are high enough to exclude most people.

Zambia and Uganda are exploring this strategy. Zambia is holding multi-stakeholder provincial consultative meetings to discuss a Social Health Insurance draft bill that must go to parliament for enactment. This is one of the financing tools the government hopes to use. But countries that have taken this approach have struggled to expand coverage beyond the formal sector.

Innovative financing

There are other financing mechanisms for covering the informal sector that are not regressive, notably VAT payments in Tanzania and Ghana, and direct taxes. Finding the most equitable and efficient way of providing financial protection for those outside the formal sector is one of the most important issues facing low-income countries (6). Tax financing makes it possible to create a national-level risk pool and provide a broader potential revenue base, especially in countries with high levels of informal employment. It also removes the need for expensive insurance administration systems, and has proved the most equitable system for raising and distributing health resources most fairly across the whole population (7). A number of countries are exploring innovative financing mechanisms such as small levies on financial transactions or levies on large and profitable companies. Gabon raised $30m for health in 2009, using a 1.5% levy on the post-tax profits of companies that handle remittances and a 10% tax on mobile phone operators (8).

But UHC also requires significant development assistance, at least in the short-to-medium term. According to the WHO, only eight low-income countries will be in a position to fully finance UHC from domestic resources in 2015 (9). More long-term and predictable aid is vital, to help build effective public health systems and also to improve public financial management and taxation systems so that countries can become self-sufficient.

The Busan Partnership for Effective Development Cooperation says aid must be delivered in a way that supports democratic country ownership, empowering developing country governments and their citizens. Government-to-government aid via sector or general budget support is probably the best way of helping countries advance towards UHC. In Ethiopia, directing development aid through government funding channels has led to significant health gains. Nine international partners finance Ethiopia’s MDG Performance Fund, which fills critical gaps in the national health sector plan, both in infrastructure and human resources (10).

African countries can take immediate steps to move towards UHC, and will reap the rewards. The question is how governments, donors and civil society will work together to develop national health financing strategies for UHC that are universal and equitable, if they are aligned with country health plans and include all sources of financing for health. The next decades will tell what room is given to unproven, risky policies that threaten to derail progress.