Egypt's Road towards Social Health Insurance - The Road to be Traveled (1)

In 2005, Egypt formally declared universal health insurance coverage of its population as its objective through the adoption of social health insurance (SHI).  This was an expansion to the original program that was introduced to Egypt's workers in 1964.  This coverage was expanded to those working in formal jobs in the public and private sector at different rates of contribution, allowing rich companies to opt out of the system. In addition, coverage was expanded to pensioners and widows. The latter coverage imposed additional burden on the system and it’s financing given the absence of contributions similar to those paid by the employers and due to the fact that these services are more expensive. All these measures might have disrupted the risk pooling function of the scheme limiting its capacity to raise enough funds to finance the system and its ability to provide the protection it is supposed to do. Thirty years later, with the inability of the system to cope with its expenses, SHI coverage was further compulsory expanded to Egypt's school children, and later, voluntary expanded to Egypt's preschool children. 

To date, insurance coverage has reached about half of the population, however; inequity is still a concern.  At the household level, a head of a family who is a civil servant and his daughter at school would be insured, while his housewife and his son in college wouldn’t be. Usually the poor and those working in the informal sector would not have access to health insurance services and would be expected to receive services at public health facilities.

The delay in expanding SHI coverage to the remaining half of Egypt’s population was blamed mainly on the underfunding of the health sector. Projections of a few billions of Egyptian pounds were quoted to be needed to fund the system in a sustainable manner.  While this remains true in case cost projections were built on estimating the cost per person for a certain package of services for a period of time; however, more money might not always mean better health; there might be room to introduce efficiency in the current system and make more funds available through running the system better.  Besides efficiency, there could be other areas that need to be examined.  Data indicates that the percent of Egypt’s GDP spent on health increased from 3.7% in 1995 to 5.9% in 2009; however, during the same period, the percentage of public health expenditures (which is what the government spends on health) from total expenditures on health decreased from one third to one fourth. Significantly, out-of-pocket expenditures (which are what the people spend on health) increased from half of the total expenditures on health in 1995 to nearly three quarters in 2009. These are considerably huge amounts of funds floating out of the pool of funds of SHI and decreasing more its ability of expanding its coverage.  Further and consistently, Egyptians spend one third of their treatment costs on pharmaceuticals. All of that suggest that there could be other factors that present obstacles on Egypt’s path to reach universal health insurance coverage.

But why do nations resort to SHI schemes in the first place? The most direct answer is to mobilize additional funds for health care. Underfunding of health care will lead to poor health outcomes, one of three main objectives of a health system.  The other two are usually rarely mentioned or given attention by those running health care systems, namely financial protection and client satisfaction, sometimes referred to as dignity. Financial protection means protection from large health expenditures that could bankrupt families leading to their impoverishment. Health expenditures were shown to be a primary cause of impoverishment, even for the rich and better off. Client satisfaction usually means to be treated in a humane form by your health care provider; in addition to many other things such as the perception that you are receiving quality care.  There are other reasons that a nation would resort to social health insurance.  William Hisao, the SHI guru mentioned some of these below, which could be valuable objectives by themselves: 

• to subsidize premiums for the poor rather than financing and providing universal health care for all, in case tax revenues are inadequate to fund health care of a reasonable quality for everyone
• to free up public funds so they can be targeted to public health goods and services;
• to separate the responsibilities for collecting and managing SHI financing from the responsibilities for providing health care to patients, whereby services are contracted from providers that are separate entities to be accountable to patients for the quality of services;
• to use the capacity of nongovernmental organizations (NGOs) and private providers to improve access by the insured to health care by means of contracting.

He concludes that SHI is a financing approach for mobilizing funds and pooling risks. The newly mobilized funds should be allocated for the poor and near-poor to improve their financial access to health care. SHI may be a solution for a critical part of a nation’s systemic health care problem, but is not necessarily a solution for the whole problem.

This is the first of a series of blogs that will discuss the application of social health insurance in Egypt and its feasibility within the guidance provided by international literature.

Until we meet again...