Egypt's Transition towards a Third Wave of Health Sector Reform (3)
Egypt’s Transition is currently understood and related to the role of a transitional government until an elected government is in place. A Minister of Health’s role in a transitional government is difficult to define and if defined challenging to achieve. This role was proposed in an earlier post to focus on restoring people’s confidence in the health sector, raising health staff moral, and paving the way for a third wave of health sector reform. In all cases and after two waves of pilot health sector reforms as explained in an earlier post , an elected government would be expected to lead a third wave of reform based on a health care system suitable for Egypt that would replace the existing pluralistic and fragmented health care system. That system that was not able to achieve two of its health outcomes: (i) financial protection; and (ii) client satisfaction considering that Egypt is progressing fairly well on achieving many of the Health Millennium Development Goals.
A longer transition to achieve universal coverage that depends on a major health care sector system that leads (more likely dominates) the financing and delivery of health care services in Egypt will be required. The decision of that kind of health care system is expected to be one of two options as explained in an earlier post:
The first option is a social health insurance led system that is more reliant on tax revenues and is capturing some of the tax-based finance system functions. In that case, SHI will be based on financing from contributions from those who can afford to contribute based on their ability to pay subsidized by government contributions to cover the premiums and co-payments for those who cannot afford to pay either totally or partially. In that case, government’s contributions should be expected to come from the country’s general revenues and to be tax-based, preferably not based on ear-marked taxes. This would represent a natural continuation of the second wave of reform and its pilot in Suez.
Universal coverage would likely be achieved in stages as explained in a related post. However, The speed of this coverage would depend on Egypt’s ability to face a number of challenges, as discussed in a previous post, in terms of: (i) its ability to recover from the aftershocks of the revolution and resume its pre-revolution high growth rate, as well increase its level of GNI; (ii) its ability to formalize its economy with protected jobs; (iii) its ability to become more urbanized; (iv) its ability of building its health insurance administration system; (v) its level of poverty and society’s willingness to cross-subsidize the poor; (vi) its ownership of an efficient and functional provider network; and (vii) its ability to regulate.
There will be additional specific key factors related to Egypt and its historical path to achieve universal coverage such as its payroll salary scale. Current employer and employees contributions are based on basic salaries. Once contributions are calculated on the basis of total salary (basic + variable), not only will the employee will pay much higher contributions, but also the employer will also need to carry the burden of higher expenditures. In many cases, the employer will be the government which will mean additional burden on its already very tight budget, and in some cases it will be the public and private sector which will create burden on its products cost structure and will increase its prices, probably pushing inflation higher and driving more of the small enterprises into informality to evade its insurance contribution.
The second option is a national health led system which is tax-based with a directly managed provider network shifting to a purchaser-provider-contracting model. In that case, NHS will be based on financing from general revenues. This system is more likely to declare universal coverage at a national scale in an earlier phase than a health care system based on SHI but probably will not be able to do that in reality. The reality will be the same as an SHI based system, actual universal coverage will also happen in stages. The key major challenge is that the NHS would require much more funding from the government to replace the contributions from employers and employees that would ease the funding. This would mean that the government will need to allocate more budgets from the general revenues.
On the positive side, an NHS might spend less based on some claims, produce better health outcomes due to its better ability to integrate with public health programs, would require less complicated structures to run the system, and would less impact the labor markets than SHI. It is also a system that MOH would prefer to pursue given its proximity to its thinking and given the familiarity of its staff with its service delivery mechanism. People might be more comfortable with this system as it doesn’t require them to contribute, unless user fees and co-payments are applied.
The purchase-provider-contracting model, within an NHS, might be a solution to resolve many of the inherent problems of an NHS in terms of system performance and client satisfaction, if it is complemented with strong regulation and quality standards. Payment for Performance mechanisms would then represent a key feature of paying public health providers in the form of performance based financing. As well, contracting not for profit non-governmental organizations that have access to the general population for secondary health care would be another key feature in the form of performance based contracting.
In both cases, described above, a transition plan will need to be in place before embarking on its implementation and before that an explicit decision will need to be made by the elected government and the people’s assembly about the health care system to be adopted. A transitional government would be expected not to adopt one of the above mentioned systems before allowing a broad discussion among health sector stakeholders and the people about their system of preference as they will have to live with its consequences and will be obliged to commit funds for its financing probably by sacrificing other developmental priorities.
Until we meet again....