Community Based Health Insurance (CBHI) is still an emerging concept for the majority of Ethiopians though it has been piloted for many years. However, the scheme is benefiting 22.5 million Ethiopians who are living under extreme poverty excluded from formal insurance schemes. Even in Addis Ababa, where the scheme started two years ago, close to 200,000 people are getting financial protection against the high cost of healthcare services. EBR’s Kiya Ali explores.
Aregash Amataw was born in Woldia town of Amhara regional state. Not attending formal education and leading a life of poverty have not been good enough reasons for Aregash to lose hope. To defeat poverty, she decided to come to Addis Ababa and started to work as a daily laborer five years ago. However, things didn’t go as smoothly as she thought they would. In fact, there were days when Aregash did not have a proper meal as she could not afford it.
“In addition to poverty, I had to struggle with health problems,” Aregash told EBR. She couldn’t go to medical institutions because out-of-pocket health care spending remains unaffordable to a large majority of the population.
The worst was yet to come for Aregash. A year ago when she went to Woldia to visit her parents, she suddenly lost her consciousness and fell to the ground. “When I regained my consciousness, I decided to go to the nearby healthcare center,” she remarked. “The doctor told me I had diabetes. That made regular medical checkup an obligation for me.”
Initially when Aregash learned she needed to visit health centers regularly and take medicine for the rest of her life, she had no idea how she could afford it. Fortunately, it was during this moment that she heard about Community-Based Health Insurance (CBHI). “When I found out that I could get medical services at minimal cost, I didn’t hesitate to register,” she recalled.
CBHI was launched in Addis Ababa two years ago by the Ethiopian Health Insurance Agency (EHIA) after drawing the experience learned from the same service first introduced in 13 woredas in different parts of the country 10 years ago. In the 2018/19 fiscal year, CBHI service provision expanded into 657 woredas found in five regions and Addis Ababa. Currently, 22.5 million people are benefiting from this scheme nationwide.
It was in 2017 that CBHI started as a pilot project in 10 woredas found in each district of Addis Ababa. “Our main objective was to improve societal health care and increase social productivity; thereby supporting the economic growth of the country,” general manager of Addis Ababa Health Insurance Agency, Birhanu Aika remarked.
Since the pilot project in 10 woredas proved to be feasible, the scheme was expanded into 40 additional woredas of Addis Ababa during the past fiscal year. Currently, 188,850 households in the capital are benefiting from the scheme.
The scheme is one of the major components of the health care financing reform started in Ethiopia since 1997 as part of the Health Sector Development Program with the aim of improving the country’s health status. According to a research entitled ‘Health Care Financing in Ethiopia: Implications on Access to Essential Medicines,’ the health care system in Ethiopia is limited by overreliance on out-of-pocket payments and absence of health resources as well as inefficient and inequitable use of resources, which limit universal coverage of health care. Especially, ensuring access to affordable healthcare services has been a difficult task for the government.
In the last 10 years, Ethiopia’s health sector has been dependent mainly on direct payment by households, which covers 40Pct of the national health expense. International donors cover 37Pct of the national health expenditure while the remaining is financed by the government. In addition, per capita health expenditure in Ethiopia climbed from USD16.1 in 2007 to close to USD30 in 2017 while the country’s expenditure on drugs had been increasing annually by 28Pct on average in the past decade. These factors burden households with high out-of-pocket expenditures during the demand for medical treatment.
On top of these, less than one percent of the population has health insurance from both private and public insurance companies. Insurance companies do not sell health insurance separately. Rather, it is provided as a package with life insurance. The minimum amount that could be bought by an individual depends on the individual’s age. For instance, for a 28 years old person, the minimum amount that insurance companies are paying as compensation in case of death is ETB100, 000. The individual should pay an average of ETB2, 000 per year. If the person wants to buy a life insurance that amounts more than ETB 100,000, the insurance companies will calculate the amount based on the rate set by NBE. This means, the majority of poor informal sector workers and rural self-employed residents in Ethiopia cannot access health related protection from insurance companies.
“For the last several years, unimproved healthcare services and financial burdens of healthcare have been among the main issues for the people of Ethiopia, Mizan Kiros (MD), Director General of the Ethiopian Health Insurance Agency assessed.
To reverse this and protect citizens from high out-of-pocket expenditure for healthcare, the health insurance strategy was developed by the Ministry of Health (MoH) in May 2008 and the government embarked on health insurance schemes such as CBHI for citizens engaged in the informal and agricultural sectors and Social Health Insurance (SHI) for people in the formal sector. SHI hasn’t bear fruit as a result of low awareness among beneficiaries.
CBHI, which is health insurance that pools members’ premium payments into a collective fund, is expanding. The beneficiaries of CBHI in the capital are broadly classified into two. The first group includes residents of the city who are found below the poverty line and used to get medical services for free at government hospitals and health posts. These people are currently included under CBHI without paying the premium amount. In the second group are included people in the informal sector that can pay the premium amount. The annual premium payment in Addis Ababa currently stands at ETB340 while in regions it is ETB240. In addition, beneficiaries pay ETB20 for registration.
The premium collected will be used to cover basic health care costs at local health centers when beneficiaries get sick. The insurance is even accepted at hospitals when beneficiaries are referred by lower level health facilities.
In Addis Ababa, the service is provided using 110 health institutions including 13 public hospitals operating in the capital. Although the government has no strategic plan regarding the number of people it should address per year as well as for the next five years, the number of beneficiaries is expected to increase in the future. However, there is no significant change on the number of new health infrastructure. So when more people become beneficiaries of community based health insurance, there will be a bit of pressure. To deal with this problem, noted Birhanu, the government is working on tracking the expected pressure by including it in the strategic plan they are designing.
After the implementation of CBHI, the number of people who are covering their medical expenses out-of-pocket is reducing,” explained Abel Ayele, focal person of CBHI at Zewditu memorial Hospital. Beneficiaries are allowed to get medical services such as outpatient treatment, palliative care, surgeries, diagnostic and maternity services coupled with the supply of medicine in government hospitals. “In case beneficiaries don’t get the medicine prescribed by the doctor at the pharmacy in the premises of the health institution, they can access it from the government owned Kenema pharmacies,” Birhanu explained.
Although health care financing is still a challenge for Ethiopia, the implementation of CBHI gives hope for many people. “It will help bring equity among people in the country,” remarked Sabit Ababor, Knowledge transfer director at the Ethiopian Public Health Institute. “It will also help switch from the major modes of financing, which are budget mobilized as tax revenue and from donors’ assistance.”
Although limited, studies conducted on willingness-to-pay reveal that significant amount of fund can be mobilized using the CBHI scheme. For instance, it is estimated that the amount of fund that can be mobilized using CBHI systems could be up to three times higher than the recurrent budget allocated by the government for the health sector.
Mizan recently announced to the media that CBHI beneficiaries were able to pay a total of ETB1.2 billion nationwide during the past fiscal year. Out of the total collected money from beneficiaries, ETB617 million has been paid to cover healthcare services cost for clients and their families. Government expenditure, in this regard, stood below ETB5 million. Similarly, ETB75 million has been collected in Addis Ababa from benificaries since the scheme was introduced two years ago.
According to Abel, however, there are also challenges faced by the hospitals providing the services. “At one time, the expense of Nifas Silk District reached ETB5 million. Since they didn’t pay us the amount on time, we refrained from giving service to patients who come from Nifas Silk District. However, we have resolved this problem now,” Abel says.
Tigist Mengiste, CBHI work process coordinator at Kirkos District, believes there might be a delay in payments. “If there is a delay on document submission from the hospitals and health centers, we can’t settle the payment on time,” she elaborates. Currently 9,552 people living in Kirkos District are registered. Out of this, 4,046 of them live under extreme poverty.
There are also complaints coming from the side of the beneficiaries such as being unable to get service in case of referrals. This can be corroborated by Aregash’s experience. Although a health care center in Woldia wrote Aregash a referral to Menelik II Hospital last year, she was denied service. “Since I was very sick at that moment, I went to a private hospital despite having the privilege of accessing medical service under the CBHI scheme.”
Seleshi Abayneh, head of Woreda 7 health office at Kirkos District, confirmed that they have received similar complaints regarding service provision from health care providers. “When we receive such complaints, we report the case to district officials and discuss the issue with them to curb the possibility of that happening again,” he says.
On the other hand, Tigist argues that such problems exist in various private and government hospitals too. “So this is not necessarily related with the CBHI scheme. It is related with service provision efficiency of the hospitals operating in the country as a whole,” she argued.
Solomon Yehualashet, deputy CEO of life and health insurance section at Ethio Life and General insurance company, suggests the involvement of private insurance companies as reinsurers in a bid to improve the efficiency of CBHI. “This will help expand the service provision by incorporating private hospitals,” he notes.
Although Sabit worries about the sustainability of the scheme he agrees with Solomon. “Currently, the Ethiopian health care financing system depends on donation. If the donation is interrupted, there should be a way to ensure the sustainability of the CBHI scheme,” Sabit concludes. EBR
9th Year • Apr.16 – May.15 2020 • No. 85