Health Sector Reform

india5                                                                Health Sector Reform  

      Organizational and Policy Process
    Decentralization of Health Systems

   “Decision Space” Analytical Approach

Politics of Policy Change

Organizational Development and Institutional Reform

Health Sector Reform in Poland and the Development of Regional Insurance Funds

Harvard and Health Reform in Colombia

A Decade of Health Reform in Developing Countries: Some Lessons
Getting Health Reform Right: A Framework for Assessing Health System Performance and Designing Reform Strategies

Health Sector Analysis and the Development of a Primary Care Reform Strategy in the Arab Republic of Egypt

Social Health Insurance in Uganda: Is it Feasible?


Research Activities for the IHSP “Organizational and Policy Process” Component
The organizational and policy process component of IHSP is involved in three major areas in health systems research, all related to key policy issues of health reform:

  • decentralization of health systems
  • politics of policy change
  • organizational development and institutional reform

Organizational and Policy Process

The IHSP has pioneered the area of decentralization of health systems. It has developed an innovative analytical approach to decentralization, called the “Decision Space Approach” that is based on principal agent theory. (Publication Link: DDM No. 54. Decentralization of Health Systems: Decision Space, Innovation, and Performance). The approach was also published in 1998 in Social Science and Medicine. This approach provides a comparative tool for analyzing the range of choice over different functions that is allowed to decentralized authorities. IHSP has used the approach in studies of decentralization in Chile, Colombia, Bolivia in Latin America (Publication Link: Decentralization of Health Systems in Latin America: A Comparative Study of Chile, Colombia, and Bolivia). Another set of studies was done comparing Zambia, Uganda, Ghana and the Philippines, (Publication Link: Decentralization of Health Systems: Preliminary Review of Four Country Case Studies). A separate in depth study of Zambia was completed  (Decentralization of the Health System in Zambia). This research was funded by the United States Agency for Development through two Harvard projects: the Data for Decision Making Project and the Partnerships for Health Reform.

Supported by two USAID projects – the Data for Decision Making Project and Partnerships for Health Reform — teams of national researchers and our team at Harvard used the decision space approach to analyze decentralization in four countries: Chile, Bolivia, Colombia and Zambia. The studies collected and analyzed nationally available data on income and expenditures, human resources data, utilization of public health services, and socio-economic conditions. Field case studies with interviews of officials and observers in selected municipalities in the countries were also implemented.

“Decision Space” Analytical Approach

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Comparative Findings

The studies found considerable variation in “decision space” allowed in the different countries as shown in the following table. While none of the countries grant wide choice over revenues, expenditures, and fees, most grant a moderate range of choice over revenues and all grant a moderate range of choice over expenditures. Only Zambia had little choice over alternative revenue sources. Interestingly, the norms and standards established by the Latin American Ministries limited local choice more than in Zambia.

Comparative Decision Space: Current Ranges of Choice













One of the major hypotheses about decentralization is that it contributes to inequity of expenditures among wealthier and poorer localities. The argument is that local governments with more resources will be able to allocate more to health than can poorer localities. Our studies found that although wealthier localities indeed were able to spend more per capita on health, the gap between rich and poor was actually declining over the period of decentralization. Decentralization seems to be good for equity of per capita expenditures. Our studies found increasing equity of per capita expenditures in Chile and Colombia at the municipal level. One of the mechanism that was effective in achieving this degree of equity was the use of earmarking of population based formula funding to the municipalities in Colombia. Colombian municipalities received general revenues according to a formula based on population and other factors. A percentage of these revenues were earmarked for the health sector – forcing municipalities to spend relatively similar amounts of the central government funds to health. That they also began to assign similar amounts from their own source revenues is a local choice that is encouraging. Bolivia used a similar earmarking tool. In Zambia, the formula to allocate budgetary to the districts was largely based on population size and it appears to have been implemented as planned, resulting in relatively equal per capita expenditures among districts. In Chile we found an alternative mechanism – the Municipal Common Fund which redistributed local own-source revenues from wealthy municipalities to the poorer municipalities – that resulted in a relatively equal per capita expenditures in all but the wealthiest decile. These research findings suggest that neither the advocates nor the detractors of decentralization policies are 100% right. In most cases, decentralization is neither likely to lead to radical improvement in a health system, nor to produce a disaster. However, forms of decentralization that include mechanisms to improve equity, like the Municipal Common Fund in Chile, the earmarking of central funds in Bolivia and Colombia, and the population based formula for allocating budgets to districts in Zambia can definitely improve the equity of resource allocations. It also was related to increased utilization. The range of choice allowed to municipalities is quite limited for certain functions that might be needed to improve performance—such as hiring and firing, payments to providers, and decisions about health service norms. It seems likely that experimenting with wider decision space, and appropriate incentives for guiding those choices might be worth evaluating for their impact on efficiency and quality. Finally, it is also clear that central authorities need more accurate information about what is happening at the municipal level. This will enable them to develop monitoring systems in order to adjust the decision space, incentives, and use of central funding to achieve national policy objectives in health.

Lessons drawn from the research are presented in a set of Guidelines for Policy, (Publication Link: Guidelines for Promoting Decentralization of Health Systems in Latin America) and included in the module on decentralization prepared for the World Bank Flagship Course on Health Sector Reform and presented in special seminars in various countries. Future research in this area will assess the impact of decentralization on vertical programs such as immunization and HIV/AIDS and on health care logistics and supply systems with support from several USAID projects.

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Politics of the Policy Change
IHSP has also engaged in major research on political processes of health policy reform. This research includes a comparative study of the policy process of reform in Chile, Colombia and Mexico, (Publication Link: Enhancing The Political Feasibility of Health Reform: A comparative analysis of Chile, Colombia and Mexico). Applying both stakeholder and institutional approaches the research has developed the innovative concept of “change teams” of politically astute technocrats from several key ministries who drive the reforms forward. IHSP with support from the USAID LAC Bureau’s Health Sector Reform Initiative, has done in-depth studies of the policy process of health reform in Chile, Colombia and Mexico to develop lessons for the policy process of health reform in other countries, (Publication Link: Enhancing the Political Feasibility of Health Reform: A Comparative Analysis of Chile, Colombia, and Mexico). The studies have shown significant similarities in the Chilean and Colombian “success stories” that were lacking in the Mexican case that did not produce reform. The studies do not evaluate the success or failure of the reform policy itself, but rather the successful political strategies for adoption of a significant reform, regardless of its effectiveness. It is often argued that it should be easier to implement broad reforms in authoritarian regimes because they can make decisions without having to respond to different interest groups that, in democratic systems, can often block reforms. Contrary to this expectation, we found that reforms occur in both democratic Colombia and in Chile during the Pinochet dictatorship, and that the limited democratic regime of Mexico did not produce reforms. Furthermore, we found that within the restricted range of political actors in Pinochet’s Chile, there was significant bargaining and negotiating among major stakeholders that were able to delay the reforms and limit their reach during the adoption and implementation of the changes. We found that a major factor in the success of reforms was that a relatively stable and coherent “change team” was formed. This team was formed with individuals from, and continuing links to, a macro-economic “change team” which had successfully developed policies of economic reform. The health sector change team was made up of technical experts with a coherent shared ideological commitment but who did not see themselves as politicians. These teams were supported by the presidents and other major political actors in the governments of Chile and Colombia. Their members were from the Ministry of Planning and the Ministry of Finance and had initially worked on macro level reforms and pension reforms, usually with significant success. Successful teams were initiated and recruited in a conscious effort, usually by cabinet level officials or their immediate subordinates. Members of the macro-economic change team then turned their attention to health sector – in Colombia after being forced to by the Congress – and sent key members to work in the Ministry of Health. Part of the reason that Mexico failed to produce reform is that the efforts to create a coherent change team in health were frustrated by intense internal competition among key macro-economic change team members over the anticipated selection of the next president. The health sector change teams pursued different strategies to get their policies adopted. One of the strategies was to isolate the change team from the broader political process until it had developed a significant technically defined package of reforms. This strategy appears to have been more successful than a broadly public participatory debate that is often recommended before the development of a health reform package. The reform package was then presented as a complete reform and as the president’s own proposal for legislative attention. During the legislative process (which occurred even in the Pinochet dictatorship) the change team was able to overwhelm the opposition with well-developed technical arguments. It was important throughout the process that the change team demonstrated full technical command of the issues and present evidence-based arguments. The team’s own legitimacy and effectiveness in building and maintaining high level support depended on credible rational arguments. The studies suggest the following lessons for major reform efforts (Publications Link: Guidelines for Enhancing the Political Feasibility of Health Reform in Latin America):

  • Develop support for reform at the presidency, cabinet, and in the planning and finance ministries. Reform initiated only in the health sector is likely not to have sufficient support to be pushed through the executive and legislative processes.
  • Pay attention to recruitment of a like-minded technical competent “change team” with strong vertical links to high level officials and horizontal links to officials in other sectors.
  • In political processes technical arguments and good data matter. The legitimacy and effectiveness of change teams depend on their ability to marshal strong arguments and good data. This is the source of their power and linkage to other stakeholders.
  • Isolation of the change team in the formulation of policy may be an effective strategy to create a single and coherent reform package that has the support of major political actors.

Research on the policy process of health reform in Poland concluded that usual stakeholder analysis is inadequate because many of the stakeholders do not consistently pursue policy objectives, (Publications Link: DDM No. 74. Unpredictable Politics: Policy Process of Health Reform in Poland) Continuing research in this area is being funded by the Inter-American Development Bank through FUNSALUD in Mexico.

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Organizational Development and Institutional Reform
Research on organizational development and institutional reform involved the transformation of the Colombian Ministry of Health during the period of major health reform. This research developed a multi-dimensional approach based on recent organization theories and assessed the existing structure and human resource skills in relation to the desired functions in the new health reform. Findings included:

  • Inadequate analytical capacity needed for the new roles of policy design and regulating a mixed market system
  • Lack of a single unit with sufficient number of skilled economists, policy analysts, legal experts to perform this analytical role
  • High turnover of mid level and high level directors
  • Rigid bureaucratic organizational culture in long term staff

The research resulted in proposed specific reorganization and transformation processes including:

  • Creation of a Health Reform Analytical Unit at a high level of the Ministry
  • Reassignment of existing experts to this unit
  • Long-term contracts to reduce turnover of directors
  • Agreements at the political level to reduce turnover
  • Processes of strategic planning, mission statements and recruitment to change the organizational culture to a “learning culture”

This research was funded by the Colombian government and the Inter-American Development Bank and published in Health Policy and Planning (see below).

Selected Publications
Bossert T. “Analyzing the Decentralization of Health Systems in Developing Countries: Decision Space, Innovation and Performance,Social Science and Medicine, November 1998.

Bossert T., “Transformations of Ministries of Health in the Era of Health Reform: the Case of Colombia,” Health Policy and Planning, March, 1998.

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Health Sector Reform in Poland and the Development of Regional Insurance Funds
HSPH faculty (Berman, Bossert, Campbell, Hsiao) first visited Poland in October 1995 at the invitation of the U.S. Agency for International Development (USAID) and the Polish Government. They began an extensive consultation funded by USAID through the Data For Decision-Making (DDM) Project that extended through June 2000. The project evolved through two distinct periods, an initial (1995-1998) focus upon health sector reform at the local government level, and then a later (1998-2000) focus on reform at the national level.

The Harvard IHSP team forged an agreement with the Jagiellonian University School of Public Health (JSPH) and called their collaboration the Consortium for Health (Consortium). Andrzej Rys, then the JSPH Director, became Co-Director of the Consortium along with Paul Campbell from Harvard. The Harvard and Jagiellonian officials then joined with partners from local governments representing different regions in Poland to draft a project design. These local collaborators, from Suwalki, Leczyca, Krakow and later on, Nowy Sacz, shared the goal of improving the quality and efficiency of health care with the two universities.

The IHSP team was urged to initially focus on local reform for several reasons. First, radical health sector reform at the national level was developing more slowly in Poland than in other Central European nations (e.g. Czech Republic, Hungary). Second, the Law of Large Cities had given the larger municipalities responsibility for outpatient health services that had previously been held by regional (but federally appointed, voivode) authorities, and they were looking for guidance. Third, a small number of regional and municipal officials in Poland had already begun to initiate reforms at the local level and they would provide examples of reforms in action. Fourth, strengthening local government was a strategic objective of the Warsaw mission.

During this initial period the Consortium was active in policy as well as management issues. At the policy level project participants met with collaborators throughout Poland, and through the new municipal government associations. They worked hard to develop an appropriate role for municipal governments in a health system that could be expected to evolve continually for the foreseeable future. Consortium members met to discuss international experience on this issue as well as to host national meetings.

The general and component planning processes led to the following Consortium roles in local government strengthening and health reform:

  • Involvement in the policy-making process. Project participants influenced legislative and executive (regulatory) activity that supported the local government role in health. This was accomplished through involvement in selected municipalities (gminas), zones and municipal government associations, as well as through direct contact with both elected and appointed government at all levels. (Publication Link: DDM No. 64. Poland Health Policy: Democracy and Governance At Local Levels In International Perspective)
  • Work with local governments to develop and test models of health delivery. The project assisted Krakow Gmina, for example, from the initial planning through implementation of a complex set of reforms. Citizens of Krakow were eventually given the choice to be cared for by one of four competing city-funded health plans (developed from ZOZ’s). In addition they could also select a primary care doctor within the health plan who became responsible for coordinating their full range of care needs. While project staff worked intensively in a few areas, like Krakow, they also traveled throughout the country to learn from local officials who were implementing an array of different health delivery models, (Publication Links: DDM No. 67 Enrollment Procedures and Self-selection by Patients: Evidence From A Family Practice in Krakow, Poland,
    DDM No. 60 Quality of Outpatient Services, Krakow Gmina,
    DDM No. 73 Provision of Ambulatory Health Services in Poland: A Case Study from Krakow.
  • Enhancement of managerial capacity at the local level. The project recognized from the outset that managerial skills would be in increasing demand regardless of the type of models of health delivery system implemented. Managers throughout the system were going to have more autonomy and they needed the skills to make use of their new authority and responsibility. Project experts, from both the United States and Poland, provided on-site consultation and training, as well as workshops in a variety of relevant areas, including: provider contracting, cost accounting, planning and control methods, quality monitoring and policy analysis. Manuals on these subjects were published in Polish and have been utilized throughout Poland.

During the initial local government phase, the project: 1) completed Poland’s first application of market research methods (focus groups and patient surveys) at the health facility level, 2) facilitated the rapid spread the practice of provider contracts across the country through conferences and training programs, 3) developed and implemented new approaches for quality monitoring of gmina-managed outpatient services, and 4) assisted with the establishment of the nation’s first truly private non-profit hospital of the post-communist period.

It became clear in 1998 that Poland was on the verge of national health sector reform. Legislation initially proposed in 1977 was modified and passed. The piece of legislation finally implementing a broad set of reforms, the Health Insurance Act, became effective on January 1, 1999. On that date the government also initiated a new set of county-level governments, new regional or state governments, a new educational system built on the new levels of government, and a new pension system.

With the agreement of the Warsaw USAID mission the project became increasingly involved in providing technical assistance on national health care issues. The IHSP team jprepared papers offering advice on topics from financing to the design of delivery systems. These papers have included the following:

Roberts and Campbell facilitated a four-day retreat for MOH officials and members of the Polish Parliament on health sector reform. The first day of the retreat was held at a seminar center outside Warsaw and subsequent days were spent in Vienna studying relevant elements of the Austrian health system. The Polish government ultimately decided to implement health sector reform that included the following major features:

  • Decentralization: Since the political changes of 1989 many responsibilities previously under the total control of the central government had been devolved to local authorities. This was true for the health sector as well. For example, responsibility for outpatient primary and specialty care services, as well as in some cases inpatient care, was transferred to large cities and local government service zones. The 1999 Health Insurance Law took the additional step of establishing 16 new regional insurance funds. The regional funds are responsible for financing the system largely through required employer/employee payroll contributions, and also for contracting for care from a largely public but also some private providers.
  • Separation of payer and provider:  Strategic authority previously held by central government officials was also granted to managers of officially “independent” (and relatively autonomous) health institutions, including hospitals and ZOZ’s. This was done on an experimental basis at first and then later established as the dominant model. The creation of more autonomous units limited first the central government and now the regional insurance fund role to financiers rather than direct providers of health services.
  • Market and market like-incentives:  The reforms have reflected the government’s multi-sector acknowledgment of the need for organizational and individual economic incentives in order to gain widespread and sustainable improvements. With the separation of payers and providers, local government health authorities began to take official advantage of the opportunity to compensate providers on a performance basis.

The project also convened a series of meetings in Poland to facilitate communications on the evolving reform. Officials from the new regional government health offices attended as well as representatives from municipal governments and the Ministry of Health. In addition the Consortium also invited the leaders of three of the regional funds to Harvard for a strategic planning retreat, mirroring the program held a year earlier for the Krakow city health department. The senior Ministry official in charge of social sector reform, Mrs. Knysok, also attended. A large number of Harvard faculty were involved and the Polish officials also made visits to relevant facility and government offices.

During the final national policy phase, the project: 1) drafted a white paper on the new reforms; 2) conducted applied research on relevant topics such as physician contracting and independent units; 3) produced a number of other reports, articles and books on reform-related subjects; 4) provided models on provider contracting, quality monitoring, planning, and public relations for the new health system; 5) held workshops on the general reform process as well as on specific skills such as provider contracting for senior Ministry as well as local government bureaucrats and elected officials and facility managers; and, 6) introduced senior officials and Ministry managers to relevant international experience, especially in the region.

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Harvard and Health Reform in Colombia
In the mid 1990’s Colombia initiated one of the most innovative and ambitious health reform efforts in the world with the passage of Law 100 in 1993. This law and earlier laws on decentralization, reflected some of the most advanced thinking on the design of new financing, organization and payments systems. Following the concepts of “managed competition” that had also influenced the Clinton health reform package, Law 100 promoted a two tiered competition — among providers and among insurance plans, in both the public and private sectors. Harvard was asked to support the implementation of this ambitious reform in a project funded by the Government of Colombia and the Inter-American Development Bank. The Project was a collective effort of various departments and programs at Harvard and was headed by William Hsiao as Principal Investigator. IHSP Senior Political Scientist, Thomas Bossert was Project Director and IHSP Director, Prof. Peter Berman, managed the National Health Accounts component.

The project supported the Ministry of Health and Social Security in the initial three years of the implementation of Law 100. The project was designed to develop a Ten Year Work Plan for the implementation of the reform, and to develop the terms of reference for projects to support reform leadership, training and applied research for the reform. The project provided applied research in financing and organization issues, human resources development, technical assistance and training in a variety of key areas of the reform. We conducted surveys of the new insurance programs, assessments of capacities of public and private hospitals, evaluation of funding flows and payments mechanisms. We developed improved collection strategies, recommended policy modifications to expand coverage of the subsidized population, encouraged support for decentralization, provided basis for new formulae for allocation of resources, developed reorganization plans and plans for human resource development and recruitment.

Harvard support was effective in promoting the initial stages of the reform and alterting the government to modifications needed for a more effective implementation. However, subsequent government decisions, along with a major economic decline and deterioration of the security situation have undermined the reform, making it difficult to evaluate the effectiveness of the ambitious program. Lessons from our experience, suggest caution in the implementation of two tiered competitive systems, especially competition among insurance plans. However, lessons on organization of the Ministry, decentralization, and payments mechanisms have been disseminated through journal articles, our participation in the World Bank Flagship Course in Health Reform and Sustainable Financing, and our Harvard T.H. Chan School of Public Health courses.

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A Decade of Health Sector Reform in Developing Countries: Some Lessons
Within the last decade, the concept of “health sector reform” for middle and lower income countries has gone from being a new idea to becoming an overused “buzz word” that is attached to any and all efforts to improve health systems. Today, one can often hear health sector reform referred to in negative terms, cited as the cause of poor health system performance. How did a notion of substantial change to improve health systems so quickly become accused of causing their problems? What can be done to develop better approaches to health sector reform?

At the conclusion of nine years of project activity through the Data for Decision Making Project, IHSP organized a symposium to review a decade of experience in health reform in developing countries. The background paper “A Decade of Health Sector Reform in Developing Countries: What Have We Learned?” for that symposium cited the following:

  • Health sector reform should refer to substantial strategic change efforts that are built on a strong evidence base and logical framework for health system change, i.e. are purposeful and sustainable.
  • Many programs and projects using the term “health sector reform” as a label do not meet these criteria. They fall into two broad groups:

-Rapid health system change that is a response or reaction to broader social, political, or economic changes, not part of an intentional effort to improve health system performance. This includes many of the changes in transitional economies, the responses to structural adjustment programs, and major state reforms that impact on the health sector. Typically, the health system response must be quick and may be poorly thought out and planned.
-“Solutions looking for problems.” International organizations and national authorities often latch onto the latest fashions in health system change, such as user fees, hospital autonomy, or decentralization, without clearly laying out the priority problems they want to solve and whether these “solutions” are right for the problems.

  • Well-designed health reform programs have been relatively rare. These can be classified as “Big R” reforms, which address broader health system changes and use multiple mechanisms, and “little r” reforms, which are typically focussed on one part of the health system and perhaps only one mechanism.
  • Few low income countries have tried to effect a Big R reform There is much more experience with little r.
  • Experience to date has been mixed, with few dramatic successes. Reform is difficult, especially Big R. And this difficulty has been underestimated. Reform needs some institutional stability, good evidence and information, and the right human resource capacities to be successful. Often this requires preparation.
  • Does this mean that reform is too hard? No, not at all. There is no going back to a simpler world of hierarchical vertical interventions. The urgent health problems of the day: HIV/AIDS, reproductive health, integrated management of childhood illness, emerging or resurgent infectious disease, will all require substantial improvements in overall health system performance. Reform must be seen as a partner to these urgent public health programs, not as a competitor.

Getting Health Reform Right: A Framework for Assessing Health System Performance and Designing Reform Strategies

IHSP faculty Profs. Berman and Bossert have worked with Harvard faculty colleagues William Hsiao, Marc Roberts, and Michael Reich to develop and teach more systematic approaches to health sector reform in collaboration with the World Bank Institute’s Flagship Course on Health Sector Reform and Sustainable Financing.

As part of this effort, Profs. Hsiao, Roberts, Berman, and Reich authored Getting Health Reform Right, (GHRR) a framework and guide for assessing health system performance and designing reform strategies. This book was published in 2004 by Oxford University Press. Early drafts of GHRR have been used in the WBI Flagship Course.

GHRR includes several useful contributions to more systematic thinking about health sector reform:

    • A well-developed ethical framework
    • Significant role for politics and political analysis
    • A recommended framework of health system performance criteria

A set of key health system “control knobs” that make up much of the content of reform programs, including:

  • a systematic approach, with examples, to “diagnosing” health system problems and developing “therapy” for their improvement.

 The innovative approaches in GHRR have increasingly become the conceptual base for much of IHSP’s work as well its teaching and research.

Health Sector Analysis and the Development of a Primary Care Reform Strategy in the Arab Republic of Egypt

In 1994, an IHSP team led by Prof. Peter Berman was invited to the Arab Republic of Egypt to begin a collaboration with the Ministry of Health and Population. This activity was supported by the U.S. Agency for International Development through the Data for Decision Making Project.

Egypt was already engaged in several major system change initiatives prior to our work, including a major expansion to social health insurance, by expanding the Health Insurance Organization’s coverage to schoolchildren and the introduction of cost recovery in government hospitals. But the MOHP lacked some of the essential information needed to assess their situation and design and monitor reform strategies. IHSP was asked to help develop this information base and the sustainable capacity to expand and use it in the Department of Planning of the MOHP.

Over the next three years, our Egyptian colleagues created an outstanding core of health system data that provided the basis for design of Egypt’s current health sector reform program. The Department of Planning recruited and trained staff who still provide key capacity for Egypt’s reform efforts. IHSP fielded long-term advisor A.K. Nandakumar from Harvard to assist this effort in Egypt for two years as well as regular supporting inputs from Harvard faculty and researchers such as Prof. Berman, Dr. Julia Walsh, Prof. Winnie Yip, Dr. Thomas Bossert, Dr. Hassan Salah and others. Close collaboration was established with the American University of Cairo and several other institutions.

Developing the evidence base for health sector analysis and reform in Egypt included the following:

These studies and reports demonstrated convincingly that Egypt could greatly strengthen its health system performance. Government services had been receiving a declining share of total health spending, while at the same time expanding the built-up capacity and staffing. Quality and efficiency appeared to be declining over time and the population, including the poor, was increasingly making use of non-government health care, which imposed a regressive cost burden on the poor. Resource allocation goals of shifting funding to primary care services were not being systematically monitored.

Building on this evidence base, the Department of Planning with the support of the Minister of Health launched a program of national consultations and workshops on health reform. IHSP helped facilitate the input of senior staff of the MOHP to discuss and analyse health and health care system problems and strategies for Egypt, culminating in the report “Egypt: Strategies for Health Sector Change,” which was widely discussed and used by Egyptian and international authorities.

This initiative was further stimulated by strong interest from the World Bank and European Union to support health reform efforts in Egypt. With support from the Partnerships for Health Reform Project, Prof. Berman and other senior Harvard faculty and other colleagues worked closely in 1997 with the new Minister of Health, Prof. Ismail Sallam, in applying the data and analysis to the design of a reform strategy for primary care in Egypt. The process of collaboration included intensive meetings with the Minister to review options, in-depth reviews and discussions with a high-level working group in Egypt, and production of new policy strategy: “A Reform Strategy for Primary Care in Egypt.” This strategy was adopted as official government policy and became the basis for a major multi-donor program in Egypt.

The primary care reform strategy was designed through innovative use of the evidence base on health problems, health care use, and health financing. A team of international and national experts developed a series of scenario papers which were reviewed step by step with senior Egyptian officials. These scenarios indicated the reform strategy should include changes in financing, financial incentives to providers, and the fundamental organization of public and private health care delivery to extend coverage with a core package of effective primary care services to all Egyptians. Initial estimates suggested that a well-designed system could actually increase coverage and benefits while reducing total health expenditures, given the wastefully structured public-private mix in Egypt’s health care system.

The Government of Egypt is now implementing key elements of this primary care reform program on a pilot basis in three governorates. IHSP researcher Dr. Hassan Salah was part of the field team working on the Alexandria pilot until summer 2000 and continues to work with the successor project in Egypt.


Social Health Insurance in Uganda: Is it Feasible?
In spring 2001, a team from the Harvard School of Public Health and the Institute of Public Health, at Makere University, set out to determine the answer to the question posed above. They were able to conclude that social health insurance is potentially feasible, although it will not be easy to develop and may pose significant risks.

Social health insurance (SHI) is one of many methods used by countries to raise financial resources for health and to ensure that all or part of a nation’s population has access to care and risk protection. Typically, SHI is initially focused on civil servants and the formal sector labor force and its dependents. This is because this group can be enrolled relatively easily for collection purposes, is of middle to upper income, and has an emerging high demand for health care. Also, for the most part, this group tends to be located in and around cities and towns and thus, has access to covered services.

To assess the feasibility of SHI in Uganda, three important dimensions had to be reviewed: (1) financial feasibility and affordability; (2) institutional capacity and experience: and (3) the knowledge, attitudes, and expectations of the potential beneficiaries and funders of SHI (i.e., is it politically feasible?).

Existing Socio-Economic Conditions and Financial Feasibility and Affordability

To understand the scope of the task facing Uganda in developing SHI, it is important to know some facts about its present-day human development. Its statistics are similar to many other low-income countries on Sub-Saharan Africa. Life expectancy is just 47 years, with approximately 1/3 of all children suffering from malnutrition. Five hundred per 100,000 deliveries result in the mother’s death. Only 65% of the population is literate (74% for males and 57% for women). Communicable diseases are still the main cause of disease and death. However, while these numbers may seem dismal, significant achievements have been made in human development indicators, thus demonstrating that improvement is possible. For example, the number of children in primary education has more than doubled since 1996.

Where would the financing come from for SHI within Uganda? The combined team estimated various scenarios of the potential labor force of civil servants and formal sector workers and their dependents who could contribute to SHI, taking into account their wages and possible contribution levels. While not able to undertake a detailed technical analysis of financial feasibility due to the available data, the team estimated Uganda could finance a package of benefits in the range of 8-10% of wages, with specific assumptions regarding wages, utilization, and prices/costs (this 8-10% being deducted from those employees’ payroll.)

Institutional Capacity and Constraints

Major areas of institutional development are needed in order to carry out a system of social health insurance. These include collections, management of insurance and provider payment, regulation and supervision of insurance and health care delivery, provider registration, accreditation and quality control. Those organizations in Uganda that currently collect funds from civil servants and formal sector workers would need to be strengthened before they could reliably carry out collections for SHI purposes. The same can be said of those organizations in Uganda responsible for insurance management and regulation, accreditation and quality control (i.e., the ability to detect fraud and control such abuse). The report expands on some of the major technical areas of capacity development needed and some of the current “best practices” and pitfalls that should be considered.

Political Feasibility

In order to determine if it is politically feasible to implement SHI in Uganda, the team met with focus groups and held interviews with key employee and employer groups who would be likely to participate in SHI. The focus groups were generally aware of SHI, but did not completely understand the specifics of how such a system would work. The members of the focus groups recognized that coverage under SHI would have limits, but nonetheless still expected an improved quality of inpatient and outpatient services and care when compared to free public services, although responses widely varied as to what those services should encompass. Most notable, the members were very skeptical about the existing institutions’ ability to operate a SHI system efficiently and effectively. Clearly, a supervisory structure would need to be put into place in order to monitor the finances and assets that a SHI system would accumulate. A new SHI system in Uganda must assure contributors that it is financially reliable and able to provide them with good quality services to be acceptable.

Should Uganda Develop SHI Now or Later?

The team concluded that at the current time, developing a SHI in Uganda does entail a high level of risk. The concept of SHI was not thoroughly understood by those most likely to contribute to such a system. SHI is a program that must be well-designed and managed from the start, or the government of Uganda would face bearing the brunt of the financial burdens it would impose for several years, thereby placing many other important social priorities in jeopardy, a cost that Uganda might not be able to afford. Moreover, if it is not regulated and kept isolated from politics, it could become a means for manipulation and patronage, with the common people paying higher-than-intended costs for SHI. Finally, in developed countries, implementing SHI generally takes a decade to ensure that the capacity and institutions to operate SHI effectively exist. For a developing country such as Uganda, that time line may need to increase.

Acknowledging these risks, the team discussed four options that Uganda could choose: (1) do nothing; (2) implement a scheme of SHI that would only cover high-end “catastrophic coverage”; (3) develop a comprehensive scheme; and (4) start small and expanding coverage over time in a series of “steps.” The team suggested that Uganda start small and work with option #4. Implementing option #4 would allow Uganda the needed time to develop and improve upon its already existing institutional capacity in the key areas of care management, provider payment, and quality assurance.

The report concludes with an outline work plan for a natural SHI task force which would develop a more comprehensive analysis and a process of stakeholder consultation and specific policy development.

The full report is available upon request to the International Health Systems Program.

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