EVEN a cursory glance at the health-related aspects of the federal and provincial budgets confirms that health insurance, as an option, has been firmly put on the policy agenda after remaining in the shadows for years. In the past few years, this option has been discussed in the news and policy papers as one way to extend health coverage in an increasingly misaligned private-public healthcare system.

This statement caps a situation where generally falling governmental health allocations and spiraling private healthcare costs have caused a crisis that threatens to leave millions out of the healthcare provision loop. A beginning seems to have been made in both the federal and Punjab government budgets.

The federal budget has allocated Rs1 billion for a national health insurance scheme that is expected to extend health cover to 100 million people. Punjab has also set aside Rs4bn for a similar scheme in the province. The bare outlines of the respective schemes are going to be filled out in the coming days. However, there are indications that the Punjab scheme will be introduced in four cities on a pilot basis with private insurance companies playing a large part.

In both cases, a hurried timetable for producing a blueprint of the proposed schemes has also been announced. Great care needs to be exercised before making a final decision on the schemes and the intended benefits.

Care is necessary in crafting health insurance.

Health insurance is very common in the West and has a history spread over decades of incremental advances. America is perhaps the most extreme example of a country with a private insurance-based health system which has given rise to wide inequities in the provision of health services. In contrast, Germany and France have evolved insurance-based systems with the aim of reducing inequities and ensuring wider coverage where the government plays a dominant role in regulating and financing the system.

There are three insurance-based schemes that are in currency at the moment. There are drawbacks and benefits attached to each which should be weighed carefully before taking a final decision on what policy mix is suitable for Pakistan.

One form of social health insurance is subsidised by the government and comes in various shapes. It generally extends only to government employees; however, in rare cases it also covers informal workers. In the latter case, often because of weak income and tax documentation, informal workers remain uncovered.

In health insurance systems which focus on individuals at the community level, there are serious associated downsides of low coverage. A flat rate of insurance ends up extracting more from the poor than they would have ordinarily spent on healthcare. These schemes generate little revenue and are not financially sustainable in the long run, as pointed out in an Oxfam report.

The third option is that of private health insurance which, unfortunately, is accessible to only a tiny elite and has high premium rates. The US and South African health systems are dominantly based on private health insurance.

Crucially, the federal budget seeks to introduce a national health insurance scheme. The presumed template for the scheme is the Ghanaian national health insurance system. Again, the Ghanaian scheme is reported to suffer from low coverage and has high administrative costs. The scheme’s intended benefits for the poor have been undermined by the rich and affluent sections of society.

Whatever form the national insurance scheme finally assumes in the end, the lessons from other countries operating similar schemes should be systematically factored into the design of the schemes. Having said this, a few words are in order about the Pakistani state’s plummeting commitment to social sectors which has triggered this rush towards health insurance schemes.

Though these initiatives have almost become a necessity against the backdrop of a universal healthcare debate, there still needs to be balance in policy while crafting an equitable healthcare delivery system financed by tax revenues and with the government in the driving seat to determine the direction, coverage and eligibility of the scheme.

In the new insurance-driven system, this can be achieved by putting more emphasis on non-profit entities running the scheme with a view to enhancing equity, affordability and the widest possible coverage at a time when the government is increasingly abdicating its responsibility where state provision of healthcare is concerned.

On a broader canvas, if the proposed trend towards privatisation continues the state’s moral claim to raising taxes will be weakened. This should be uppermost in the mind of policymakers, political parties and state managers while taking steps towards health insurance which might become fully privatised in the long term. This would have serious consequences for universal health coverage.

The writer is an Islamabad-based development consultant and policy analyst.

drarifazad@gmail.com

Published in Dawn, June 30th, 2014