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Financing Universal Health Care-Feasibility of health care insurance in the PRDP region

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By Ibrahim Kasirye  

 @ikasirye_ug

Despite the significant external financing of health services in Uganda (through global initiatives such as: the Global Fund for AIDS, Tuberculosis and Malaria; the Global Alliance for Vaccine and Immunizations—GAVI; and the US’s President’s Emergency Plan for AIDS Relief—PEFFAR), overall public health spending remains very low in Uganda. The health sector share of the national budget increased from 6.2 % in 1998 to 11 % by 2008/9 before reducing to 8.6% by 2013/14.[1] This falls short of the pledge made in Abuja 2001 to commit 15 percent of annual budgets to public health spending. As such, overall public health spending in Uganda is only US$ 7.3 per person compared to the recommended spending by WHO of at least US$ 30 per person. At the same time, households appear to bear an increasing burden of health costs with private spending on health, surpassing public spending. For instance, in 2012/13, the estimated private spending on health of UGX 2,282 billion was more than double the public spending of UGX 852 billion (see Table below). On the other hand, the share of the PRDP[2] region in private spending on health was about 28% despite the region accounting for 48% of the Ugandan population. Such low levels of health finance have meant that public health facilities—where the majority of poor households seek health services, are plagued with inefficiencies such as routine drug stock out and lack of health personnel.

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As such, the Government of Uganda has initiated efforts to secure alternative sources of health care finance. In 2006, the GoU proposed the introduction of a mandatory National Health Insurance Scheme as a means of generating more resources for the health sector. In particular, the government proposes that each employee contributes 4% of the earnings and the employer 8% to a national health insurance scheme. After more than 8 years since it was first proposed, the scheme is yet to be fully operationalised due to objections raised by various stakeholders. These include: the fact that the scheme is neither fully understood nor undersigned by the general public who along with business groups would be opposed to the imposition of another mandatory levy. Kasirye3Nonetheless, the Uganda Ministry of Health has maintained the initiative of the health sector agenda with the operations expected to start within 3 years. However, there are some notable considerations to take into account; first, 51 percent of the working age population are paid employment therefore the scheme would have limited coverage. Secondly, 17 percent of the Ugandans that are in paid-employment are poor so additional deductions are bound to affect their disposable incomes. Furthermore, nine out of every ten persons in paid employment work in the informal sector so the proposed scheme wouldn’t cover them- this is most pronounced in the PRDP region where there is relatively low paid employment.

As a result it is worthwhile to consider other alternative means of raising health resources for the region and the aforementioned categories of people who would otherwise be excluded. The proposed health insurance scheme as it is currently constituted is likely to exclude a very large and vulnerable section of society in the PRDP region and the rest of the country.

Ibrahim Kasirye is the Principal Research Fellow at Economic Policy Research Centre (EPRC)

 

[1] (MFPED, 2014).

[2] Peace, Recovery and Development Plan- This covers 55 districts in the broader northern Uganda

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