1

International Multi-stakeholderConsultation

on National AIDS Programmes

Sustainability

Nairobi, April 19 -20, 2012

Anton Pruijssers

2

Content

1. Introduction: a perspective on Health in Africa

2. Pivotal question

3. 3 cases

4. Conclusions

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1.1 Health in AfricaAfrica spends little on health

750

5,703

Chart Title

267

336

Chart Title

Population(millions)

Total health expenditure(million USD)

Burden of communicable diseases

(million DALYS)

Africa

Rest of the world

38,046

4,351,772

Chart Title

Source, WHO 2008

Africa is home to more than 10% of the worlds population, almost half of the burden of communicable diseases, but less than 1% of health expenditure is spent in Africa

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1.2 Health in AfricaFirst law of health economics

the tight relationship between income and health expenditure leaves littleroom for maneuver

Source: WDI data, 2006

100 1,000 10,000 100,000 10

100

1,000

10,000

Total expenditure on health per capita (WHO 2008, int. $ PPP)

GDP per capita (int. $ PPP)

Tota

l healt

h e

xpendit

ure

per

capit

a (

int.

$ P

PP

)

Eritrea

USA

Nigeria

Burundi

Netherlands

Liberia

5

Data based on usage, not expenditure (most recent survey year available between 1995-2006)

1.3 Health in AfricaThe private health sector is a major provider for the poor

> 40% in lowest income quintile receive health care from private for-profit providers Investments in the private sector are low

Nigeria Uganda Kenya Ethiopia

51%

67%61%

48%

64%

53%

45% 44%

Highest income quin-tileLowest income quintile

Source: World Bank, 2006, Africa Development Indicators

Percentage of people seeking health services in private health facilities

6

1.4 Health in AfricaOut-of-pocket payments are high

0%

25%

50%

75%

100%

Nam

ibia

South

Afr

ica

Angola

Sao T

om

e &

Leso

tho

Mauri

tania

Cape V

erd

e

Seyc

helles

Equat.

Guin

ea

Bots

wana

Gabon

Madagasc

ar

Swazi

land

Congo B

.

Moza

mbiq

ue

Mauri

tius

Eth

iopia

Sierr

a L

eone

UR T

anza

nia

Mali

Lib

eri

a

Nig

er

Com

ore

s

Zam

bia

Zim

babw

e

Benin

Rw

anda

Burk

ina F

aso

Guin

ea-B

issa

u

Eri

trea

Senegal

Sudan

Kenya

Chad

Gam

bia

Centr

al

Mala

wi

Cote

d'Iv

oir

e

Ghana

Uganda

Nig

eri

a

Cam

ero

on

Togo

Buru

ndi

DRC

ongo

Guin

ea

Source: WHO 2008

Private out-of-pocket expenses contribute ~50% to total health expenditure in Africa

Out-of-pocket health expenditure as a percentage of total health expenditure

7

1.5 Health in AfricaHealth insurance is rare

0%

10%

20%

30%

40%

50%

South

Africa

Cap

e Verd

e

Nam

ibia

Mali

Zim

bab

we

Botsw

ana

Senegal

Swazilan

d

Rw

anda

Ken

ya

Côte d

'Ivoire

Togo

Mau

ritius

Ben

in

Nigeria

Niger

Tan

zania

Mad

agascar

Seychelles

Gab

on

Malaw

i

Guin

ea-Bissau

Burkin

a Faso

Ethiop

ia

Guin

ea

Chad

Mozam

biq

ue

Ugan

da

Cam

eroon

Perc

ent

of t

otal

hea

lth

expe

ndit

ure

Social security and private prepaid health care spending

Only 4% of total health expenditure in Africa is financed through health insurance

Only 4% of total health expenditure in Africa is financed through health insurance

Source: WHO 2008

risk pooling in Africa is scarce, solidarity is limited

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1.6 Health in Africa; Inefficient institutions, implications for behavior

Individuals– Prefer lower, short-term gains over higher, future gains

– high discount rates -> poverty trap

Social groups– trust is limited to the group

– no institutions to arrange benefit entitlement

Companies– high interest rates 40-200%

-> high discount rates -> negative Net Present Value -> little investment

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Delivery

1.7 Summary on health in Africa: a vicious cycle

Financin

g

African health systems are stuck in a vicious circle of low demand and low supply of health care. Trust in the system is low.

Unknown and unbearable risk is a crucial factor hampering investments

Low

Low

Low LowRisk

Demand

• High out-of-pocket expenses

• Low access

• Low ownership

• Low solidarity

Supply

• Low quality health care

• Low efficiency

• High risk

• Scarcity of data

Patient• Catastrophic spending

• Low utilization

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2. Pivotal question

How and where to break this vicious cycle

and transform it into

A virtuous cycle

of access for all

to healthcare of good quality

in a sustainable way?

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Deliv

er

y

3. Three cases

Fin

anci

ng

Demand Supply

Patient

High

High

High HighTrust

Case 3.Health Insurance

Case 2.Credit for

Medical Providers

Case 1.Medical Quality Assessment & Improvement

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Case 1: Quality standards and quality improvement

Comprises of innovative and realistic standards for healthcare providers in resource restricted settings.

Standards have been approved by the international accrediting body of accreditors ISQua

Linked to a step-wise improvement process

These incentives will eventually improve the reputation of these healthcare facilities

Clients are expected to have increased trust in services provided

The SafeCare Initiative was started in 2011, a collaboration of:

=>

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Case 1: SafeCare - Highlights

200+ facilities assessed using SafeCare methodology through PharmAccess programs in Kenya, Tanzania, Ghana, Namibia and Nigeria

35 local surveyors and facilitators trained

APHIA plus: USAID program for Kenya, SafeCare as external validation for social franchises (e.g. PSI/Marie Stopes Int’l)

NHIF Kenya: proposal to develop stepwise certification of healthcare facilities in the new outpatient scheme

MOSH Nigeria: development of concept note for Technical Assistance on stepwise certification of 1,000 PHC clinics

AHME (Gates/DFID) funding awaiting final approval (4.3 million USD for Kenya, Ghana and Nigeria)

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Case 2: Credits to medical providers

Local partners provide Technical Assistance on:

Quality assessment and improvement (SafeCare)

Business training

Preparing financial statements and business plan

Support with filing of loan application

• Around EUR 2,500

Entry loan

• Around EUR 20,000

Second

Loan

• Around EUR 50,000

Third loan

Medical Credit Fund provides affordable loans to private medical providers through local banks

Medical providers become bankable

Risk sharing arrangement with bank

Winner of G-20 Challenge

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Case 2: Credits to medical providers

Leverage of public money, and revolving

Public funding Private funding Result

3300loans

to >2000 clinics

Local banks

Senior debt

Junior debt

Equity (first loss+mngt cost)

Technical assistance (grants)

Empty

Value of Public and Private Funding and Loans in Medical Credit Fund (USD)

Participants: OPIC, Dutch Government, Soros, USAID, Calvert Foundation, IFC-G20

13 m USD

65 m USD

Leverage

Revolving

30 m USD

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PortfolioPerformance

• Disbursed: USD 544,000 to 96 clinics per 29.02.2012• Outstanding USD 356,000; recovered USD 124,264

TA Performance

16279

103741919

Clinics formally entered the MCF ProgramClinics completed business trainingClinics completed quality training SafeCare assessments performedQuality Plans approved (for second loans)Business Plans approved (for second loans)

Partners • Tanzania: APHFTA, BancABC and NMB Bank• Ghana: SPMDP/GRMA and Merchant Bank• Kenya: K-MET and PSI, K-Rep Bank• Nigeria: Hygeia Foundation and First City Monument

Bank

Case 2: MCF – Performance to date

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Case 3: Health Insurance Fund (HIF)

Community-based voluntary health insurance schemes in Nigeria, Tanzania, Kenya, Mozambique and Namibia

Implemented by local private health insurance companies and TPAs e.g. Hygeia, AAR, Medilink and MicroEnsure

Public funds from:– Dutch Ministry of Foreign Affairs

– The World Bank

– USAID

– Kwara State Government

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Case 3: Health Insurance Fund - Enrolment

HIF projects 2012 Target Group

ACTUAL Target /projection

Size Feb-12 Dec-12

Nigeria Lagos Market Women 77,000 24,169 30,000

Nigeria CAPDAN (WB) 21,900 12,133 10,000

Nigeria Kwara North 80,000 34,770 36,000

Nigeria Kwara Central 71,000 24,516 30,000

Nigeria Kwara South Tbd 0 5,000

Kenya Tanykina 20,000 1,220 10,000

Kenya Koisagat 25,000 0 18,500

Kenya AAR Tbd 0 20,000

Tanzania KNCU 200,000 4,470 27,000

Tanzania Tujijenge 70,000 0 5,000

Namibia Mister Sister PHC 15,000 5,014 6,600

Mozambique UEM 22,000 0 22,000

TOTAL   

106,292 220,100

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Delivery

Case 3: Health Insurance Fund Nigeria

Financin

gDemand Supply

Patient

High

High

High HighTrust

Spent today

10 m Euro

Investments by Private Parties

30 m Euro

Donor commitmentto health insurance Nigeria

30 m Euro for 5 years

Prepayment by users

0.8 m Euro

• 8 m Euro spent on 95,000 farmers and market staff

• Nigerian HMO spent 2 m on admin including profit

Kwara state government2.4 m Euro

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Case 3: Health Insurance Fund NigeriaResults

Public commitments led to private investments

Total money in the system has increased >3 times

Mobilizing (voluntary) pre-payments from individuals

=> getting more money in the system long term

=> leveraging public and donor funding

=> pre-payments may be increased step-by-step, but only in parallel to growth in the health system’s capacity, both in volume and quality

Familiarize individuals with concept of (health) insurance

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Case 3: Health Insurance FundInteraction with vertical programs

Comprehensive package covering basic primary health care, maternal and neonatal care as well as inpatient care

Includes basic screening functions for e.g. HIV/AIDS, STD, TB, malaria, diabetes, hypertension

For most diagnoses, treatments including drugs are covered

Refers positive HIV/AIDS cases to the providers with vertical funding, increasing the number of found cases

=> increased impact on a community level

Interactions and synergies with vertical programs can be optimized further

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Summary -1-

Health systems in Africa are stuck in a vicious circle of low demand, low quality of care and little investment

Donor and government funds should be applied to reduce the risk in the sector, stimulate risk pooling mechanisms and attract private investments

Implementing quality standards and quality improvement processes will increase trust in the system

Transformation from a vicious cycle to a virtuous cycle takes time and requires well-balanced mobilization of public, donor and private funds

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Summary -2-

Achievement of a sustainable increase of the total amount of money in the system can be realized by introducing voluntary prepayments in insurance

Interactions and synergies with vertical programs can be optimized further

With more money in the system and increasing trust, investments will be stimulated in turn, building the virtuous cycle

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International Multi-stakeholder Consultationon National AIDS Programmes

Thank you for your attention

QUESTIONS??

Anton Pruijssers

Director Operations Health Insurance

PharmAccess Foundation

+31 615 118 118

a.pruijssers@pharmaccess.org