Proposal to Implement a National Social Health Insurance Scheme in Zambia

Collins Chansa -MOH

Henry Kansembe -MoH

Michael Kachumi -CHAZ

David Chilombo -PIA

Anthony Dumingu -MoLSS

Caroline Yeta-PRA

Introduction

Population: 12.2 (2007 proj.) Under -5 mortality rate: 119 per 1,000 live

births Infant mortality rate 70 per 1,000 live births Maternal Mortality: 591 per 100,000 Poverty incidence; 64 percent Extreme poverty; 46% Gini-coefficient; 0.57

Financing Sources (I) As a % of the total GRZ Discretionary Budget,

the health sector currently receives 11.5% The major sources of funding for Public health

services are GRZ (45%), Donors (55%) though SWAp, Direct Sector Support, Projects

As a % of Total Health Exp. GRZ 25%, Households 27%, Donors 42%, Employers 5%, Others 1%

As a % of GDP, Total Health Exp. Represents - 6.3% which translate to approximately USD$ 58 per capita (NHA 2006)

Financing Sources (II)

Other sources include User fees which until the scrapping in

rural areas represented about 4%. User fees still remain an important source of financing for major hospitals like the UTH.

Medical levy (1% tax on interest earnings) which contributes about K8 billion annually.

NHSP estimated financing gap 2009-2010

93.86 154.65

756.18

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GRZ SWAp Project Financing gap

NHSP Financing Gap 2009-2010

Justification for SHI SHI is likely to be a more equitable health care

financing mechanism than the current existing health care financing sources

Insurance schemes would subsidize services to the poor and vulnerable

General & disease-specific Household Exp. on health still very high. SHI will tap into this

SHI will play a complementary role in providing funding to the health sector and assist GRZ in meeting the Abuja Declaration of 15%

What we have done so far

Comprehensive studies (from 1992 to 2008) looking at: Resource flows in Zambia's Health system (NHA) Health Facilities Census detailing available health facilities and

equipment in Zambia Six (6) joint appraisals of Zambia’s health reforms Four (4) Demographic and Health Surveys showing population

characteristics & common diseases Costing of NHSP and BHCP Two (2) studies profiling Catastrophic Health Expenditures

(University of Cape Town & UNZA, 2008) One (1) study on Policy Options for Health Care Financing

What we have done so far ...

Detailed Actuarial Study (2008) Looking at: The population to be covered to make the

scheme viable Break-even point Premium rate that will cater for the benefit

package envisaged The benefit package The rate of administrative expenses Eligibility conditions to benefits Projection of investments and reserves

Description of the Proposed National SHI in Zambia

The national SHI fund shall be established by an Act of Parliament. The fund shall be administered by an autonomous institution/body

Scheme will be feasible when the contribution rate is at 5% of the Insured Person’s salary. The contribution rate will be shared by Employer & Employee (evenly or otherwise)

The scheme is expected to invest in safe opportunities such as treasury bills, fixed deposits and treasury bonds

Description of the Proposed National SHI in Zambia

The scheme will initially cover the formal sector employees (public and private) who are estimated to be 495,277 in 2009 and projected at 739,337 in 2023

This includes (i) Central Government (ii) Local Government (iii) Parastatal Organizations, and (iv) Private-sector Employees

The number of beneficiaries per single contributor will 6 (principle member, spouse & four children/dependants)

From the above, the total population covered initially will be 2,971,662 (22%) and increase to 4,436,024 (35%) by 2023

At a later stage, it will be vital to expand the scheme to the informal sector

Funding Sources & Cash Outflows

Contributions

Cash Outflows

Operating Balance

Investment Income

Net Cash Inflows Reserve

2009 456.85 437.89 18.96 26.48 45.44 91.13

2010

2011

2012

2013

2014

2015

2016

2017

222.08

566.2 493.04 73.16 43.98 117.15 395.85

510.04 465.01 45.03 34.92 79.95

807.94

626.23 542.46 83.77 48.95 132.73 591.2

690.22 596.44 93.78 53.93 147.71

1,302.24

758.24 655.45 102.79 58.84 161.62 1,045.38

830.27 719.98 110.29 63.53 173.82

1,863.91

905.64 790.14 115.5 67.81 183.31 1,576.11

984.54 866.72 117.82 71.52 189.35

1,066.60 950.22 116.38 74.45 190.83 2,161.41

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6000

7000

8000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

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Reserve Contributions Cash Outflows

Operating Balance Investment Income Net Cash Inflows

Next Steps….

Political process: mobilize support from donors Civil society, FBOs, private employers

Use actuarial model (Cabinet Office still studying report) to guide decision making including conducting more sensitivity analysis

Preparation of Policy documents and legislature on SHI

Documentation and Logistics Marketing Strategy

Re-investment, fund holder & institutional arrangements

Political Pressure, trade unions, co-payments by employers

Quality of health care services e.g. drugs Extension of Coverage to informal sector &

in rural areas Information Communication & Technology No User Fees, Community health Insurance.

What will motivate people to contribute? 14

Anticipated Challenges

I Thank You

END of Presentation