I would like from the outset commend News Diggers newspapers for the extremely exemplary way they have conducted themselves as news medium.

However, I would like to draw your attention to the editorial of Wednesday, 18th May 2022 on the above captioned subject. Immediately, I could not DISAGREE more with the argument and content of the editorial. There is no justification in commending the former PF government for the introduction of the Social Health Insurance scheme (SHI). Its introduction was unnecessary and unjustified. More often than not, the problem with SHI among its supporters are the illusory positive aspects associated with it. Illusory because the factual position is in all aspects weighted against SHI.

Arguments in favour of social health insurance often appear appealing especially when couched in the form of terms such as “solidarity”, “equity”, universal health coverage”, “access” and such like – all fundamentally necessary by the way in terms of the aspirations of any health system. So there is nothing much wrong with the terms themselves. What is wrong is the perception that social health insurance offers a poor, indebted, stagnant developing country a way out to manage its health affairs. The reasons are rather simple and often ignored or neglected in the African context – at least with those countries that have taken the adventurous route of trying to find this out the hard way.

SHI is under active consideration worldwide because of its negative consequences as a financing strategy and as a mechanisms for strengthening health systems, the principal functions its supposed to execute for one simple reason. It is inefficient. It fails to contain costs and as a result the capacity to finance health and offer financial risk protection to the population in order to make health care accessible and affordable are functions which are increasingly failing under SHI. Conversely, countries running tax based system such as we have done and continue to do are progressively managing health systems better and more efficiently. We can compare the health system performance and conflicts going on in countries with SHI insurance such as Germany, France, Japan and other OECD countries versus those with tax based systems such as the UK, Scandinavian countries, Singapore to see the differences in health outcomes and health care expenditures.

In Africa SHI has been introduced more as a fad rather than an economic tool which uses financial resources which are constrained and need to be optimised. This has been the tragedy on the SHI landscape. We know that it is costly to manage, more so than a tax based system – for instance partly due to its inherently higher transaction costs ; we know that it creates a lesser pooling of resources a than tax generated system. Other weaknesses and factors that have been ignored in the adoption of SHI are the following:

System failure induced by the substitutability of resources once the SHI scheme came into being as Ministry of Finance technocrats reduce the health sector budget. Partly arising from the above, the attempt to have SHI as an over-arch aching financing strategy that caters to the needs of the entire population fails. Current epidemiological trends and disease burden are weighted against the urban areas where conditions such as cardiovascular diseases and cancers are manifesting themselves. SHI collections are biased towards formal employment, which is again the urban areas. The distribution of health care facilities contracted and accredited under SHI are principally in the urban areas. In both design and content, therefore we have an SHI system discriminating against the rural areas and population.

The rural areas are characterised by underfunded health services, long travel distances to health services, drug stock-outs, lack of human resources for health. More worryingly SHI creates a dichotomy that introduces and perpetuates health service social discrimination by separating poor from the better off – “formal versus informal” to use the Zambian language!.

The last aspect of the contributions raises further issues. The one percent contributory rate grossly underfunds the SHI scheme. In effect, it is the rural poor who are cross-subsidising the scheme which is all contrary to the expectations and arguments in favour of SHI. Should this be stopped the SHI would be immediately bankrupt. Its capacity to fulfil its mandate are at risk before it even started obviously on the basis of this revenue generation level. The alternative is to increase contributory rates but that does not resolve its long term sustainability risks nor address its inherent inequity and bias again the urban poor and rural population.

More services can be paid for in a system that can be made uniquely universal even for a poor country as Cuba has shown. It has achieved universal coverage and can support global health as seen under Covid – 19.

The coverage of health facilities that are contracted to provide heath services has in the main omitted the private sector. So the phenomenon of increase in private health care utilisation could if anything be an emergence of private health insurance more than social health insurance. But whatever the reason it is not social health insurance as almost none of the private health care providers are contracted under the scheme.

In summary, therefore the decision to introduce social health insurance was not motivated by trying to improve the health system in any sense at all. The reasons lie elsewhere only the people who introduced can explain. We note that the introduction of social health insurance should be supported by an economy that is growing (growth in the gross domestic product) in order to provide sufficient employment and coverage of the population. In addition, a growing economy guarantees positive real incomes necessary to have feasible contribution rates. The economy had slowed down significantly and all signs given the national debt etc were that it would only worsen. This negated any signs of sustainability of the scheme.

Bona Mukosha Chitah, PhD (Economics)
Department of Economics,
University of Zambia