One month ago, the Government of Kenya released four new health bills to accelerate progress towards the goal of universal health coverage. If passed, the bills will set in motion far-reaching reforms to how health services are financed and delivered in Kenya. Among these bills is the Social Health Insurance Bill, which proposes extending health insurance to all Kenyans based on member contributions, with government-subsidized coverage for the poor. It also mandates the creation of three funds to cover different types of services and a new government agency to manage it all.
To unpack what the Social Health Insurance Bill aims to do, why, and how, ThinkWell hosted a Counterpoint webinar with the bill’s primary architects, county stakeholders, as well as leading health financing experts on October 3, 2023.
Click the button below to watch the webinar recording on our YouTube channel.
Counterpoint is ThinkWell’s signature series of webinars, which offers a platform for free and frank debate about questions related to health system strengthening. In this edition, ThinkWell’s Regional Director for East and Southern Africa, Dr. Anne Musuva, hosted a discussion about Kenya’s new Social Health Insurance Bill featuring four panelists:
Dr. Elizabeth Wangia, Director, Healthcare Financing, Kenya Ministry of Health
Dr. Daniel Mwai, President’s Advisor on Health and Standards, Office of the President, Kenya
Mr. Felix Murira, Country Program Manager, ThinkWell Kenya
Dr. Joy Mugambi, County Director of Health Administration and Planning, Nakuru County, Kenya
Some of the questions the panel explored include the following:
What overarching objectives is the Social Health Insurance Bill trying to achieve?
What drove the specific design choices (e.g., three separate funds, means-testing for everyone not employed in the formal sector, and a new health authority)?
How do the reforms envisioned by this bill align with the service delivery reforms set out in the other bills, especially the reorganization of all primary and secondary care facilities into networks?
What is the role of counties in implementing these reforms?
What are the biggest hurdles we can expect on the way to implementing the bill successfully?
By Kristan Jela Tambio, Helena Lagon Alvior, Pura Angela Co, Maria Eufemia Yap, Mary Camille Samson, and Rosario Dizon
As the Philippines continues its progress towards fully implementing its Universal Health Care (UHC) Law (RA 11223), it is crucial to harness ground-level insights and best practices that can be shared across the different provinces and municipalities in the country. ThinkWell Philippines and the Asian Development Bank (ADB) recently supported the Department of Health (DOH) Western Visayas Regional Office to organize and facilitate the first regional UHC Summit on July 12, 2023. It was followed by the two-day Learning Forum, which fostered further learning exchange on the progress of the technical, managerial, and financial integration across the province-wide and city-wide health systems in the Western Visayas Region.
The Western Visayas Region is currently the first region in the country where all six provinces and two highly urbanized cities have committed to restructuring their health systems according to the mandates in the law. This ensures that there is a region-wide effort on local health systems integration. In his opening statement, Regional Director Dr. Adriano P. Suba-an said, “Your presence here is a testament that we are on the right track towards the achievement of the UHC with inclusivity, creativity, and purposive expansion of medical coverage and reach.”
The summit was designed to celebrate gains and acknowledge and address the challenges the different local government units have faced during the past three years of implementation. The first panel focused on the accomplishments achieved by individuals within the local health offices and government units. In contrast, the second panel, composed of a different set of local chief executives (LCEs), provincial health officers, and municipal health officers, recounted significant milestones and hurdles on several topics, such as the stewardship of province-wide health systems, comprehensiveness of the primary care package and health care provider networks, human resources for health, and health financing (particularly the special health fund and frontload support mechanisms). The provinces also showcased their achievements in the Key Result Areas of the UHC Local Health Systems Maturity Level via a gallery walk during the event. Summit participants had the chance to ask provincial representatives how they progressed in their Key Result Areas and share their insights and experiences.
Several stakeholders shared key insights and ideas to strengthen the implementation of the UHC Law. Mayor Irene Montilla of Isabela, Negros Occidental advocated for allocating a minimum of 15% of the budget of local government units for health care as a tangible commitment of local chief executives towards health and health equity within the community. Furthermore, she underscored the necessity of working as a cohesive local health system, as the rural health unit cannot operate in isolation. Dr. Leslie Anne Luces-Sedillo of Aklan highlighted the significance of a transdisciplinary approach, the pivotal roles played by organizations like the Association of Municipal Health Officers of the Philippines, the LCE’s ownership of the UHC principles, and the importance of fostering collaboration at the grassroots level. Dr. Luces-Sedillo emphasized the finance team’s indispensable involvement in ensuring the local health care system’s financial sustainability. Dr. Sheila Gumabong of Guimaras reiterated how creating legal instruments fostered trust and collaboration by providing clarity of shared responsibility among key stakeholders such as local health offices, LCEs, hospital and facility heads, and private sector stakeholders.
The speakers also called for improvements and efficiency in the system. Current guidelines in the special health fund sandbox require an escrow or buffer fund to secure frontloading of funds from PhilHealth. This may tie up and render a significant portion of the local government units’ funds unusable especially for provinces with very limited fiscal space, prompting Governor Joaquin Carlos Rahman Nava of the Province of Guimaras to call for a more streamlined and cost-effective way of acquiring and utilizing the frontloaded money in the special health fund. Additionally, Dr. Maria Socorro Quiñon from Iloilo Province encouraged service providers to place prime importance on their financial sustainability and the integrity of their services by clarifying standards of care at each level, especially the primary care level.
The event ended with a ceremony celebrating the commitments of health teams and stakeholders, such as the local government units, civil society organizations, and non-governmental organizations, to work towards UHC, focusing on essential lessons and implementation advancements. In the words of Regional Director Suba-an, “Indeed, we have shown and proved to the rest of the regions in the country that here in Western Visayas, walang maiiwan (no one gets left behind). In our pursuit of UHC, everyone is on board, and no one will ever be left behind. Padayon kita sa paghugpong agud ang UHC nga handum, aton maagom (Let’s continue to unite so that we can achieve the UHC that we want).”
In the two-day Learning Forum that followed, ThinkWell’s partner provinces, Antique and Guimaras, provided significant contributions on technical and financial integration as they discussed the unification of care pathways design within a province-wide health system and health care provider networks, the development of a referral manual within the care system, analysis of referral form data, setting up the special health fund, and the KONSULTA sandbox experience. ThinkWell and ADB will publish learning from the Learning Forum to provide insights to the DOH and other regions as efforts toward full UHC implementation continue.
We want to extend our deepest gratitude to the following individuals who were also present at the UHC Summit:
DOH Western Visayas Regional Office: Dr. Mary Pauline Angelique C. Gestosani, Chief of RLED, and Dr. Mary Joy D. Castroverde, Head of HSIMEC
Provincial Health Officers: Dr. Leoncio Abiera, Jr. from Antique Province, and Dr. Ramon Alex Nolasco from Capiz Province
Municipal Health Officers: Dr. Christian Earvin Bondoc from Igbaras, Iloilo; Dr. Melba Billones from San Jose, Antique; and Dr. Uldarico Babayen-on, Jr. from Sebaste, Antique
Development Partners: ReachHealth and the World Health Organization
Much has been written about the inadequate or delayed flow of funds to frontline providers and its contribution to poor service delivery. The Lancet Global Health Commission on financing primary health care notes that because of insufficient public spending in many places, primary health care is not fully meeting the needs of people.
I gained a new, more grounded appreciation for this problem when I recently visited a series of dispensaries and health centers in a western county of Kenya. At many of these health facilities, casual staff like cleaners and clerks had not been paid for months because the funds received from the county were inadequate and often delayed.
Other facilities I found understaffed—some staffed by a single nurse—and it is not rare to find these facilities closed because the managing nurse is on leave or away for training. When the nurse is available, patients are often sent away to buy drugs from private pharmacies because the dispensary is out of essential medicines. These circumstances are common in many other parts of the country and point to significant under-resourcing of primary health care (PHC) in Kenya as well as poor fund flow to frontline providers.
The importance of PHC
In 1978, the International Conference on Primary Health Care signed the Declaration of Alma-Ata and called for strengthening of PHC, particularly in low- and middle-income countries. PHC is a whole-of-society approach to health that puts people and communities at the center of their health, focuses on patient needs, and shifts focus away from hospitals and specialist care. Equitable and high-quality PHC is the foundation of a strong health system and is essential for achieving universal health coverage (UHC).
What Kenya has gotten right
Kenya has made significant progress in expanding equitable access to PHC. Inspired by the Declaration of Alma-Ata, in the 1990s, the nation introduced user fee exemptions in public primary health care facilities to expand access to PHC. In 2006, Kenya launched a community health strategy that outlined services to be offered at the community level.
In 2013, Kenya adopted a devolved system of government which made the delivery of health services a county responsibility. Since then, county governments have expanded geographical access to health care by constructing health facilities, particularly dispensaries and health centers, referred to as PHC facilities. Access to PHC services was further improved through the free maternity program, Linda Mama, launched in 2013. The national government later introduced the “user fee forgone” grant to compensate PHCs for revenue lost from user fee exemptions. These funds were used for facility operations, including filling supply gaps and paying casual workers.
In 2015, the National Health Insurance Fund (NHIF) shifted from a focus on hospitalization to an expanded benefit package that includes outpatient care. The NHIF introduced capitation, a population-based provider payment mechanism that can improve equity and strengthen primary health care. Additionally, DANIDA, Denmark’s Development Corporation provides funds to PHC facilities for their operations and maintenance.
Currently, the Ministry of Health (MOH) is pursuing a number of reforms to strengthen PHC. The government is rolling out primary care networks which seek to improve PHC through reorganizing service delivery around a network of community units and PHC facilities. The MOH has also announced plans to recruit community health promoters across all counties and the establishment of a PHC fund to further improve PHC.
The glass half empty
Despite Kenya’s recognition of PHC as the backbone of UHC and the country’s immense milestones, we continue to face challenges in advancing the PHC vision. These include inadequate financing for PHC and lack of financial autonomy which lead to compromised quality, inadequate human resources, and drug stock-outs. Secondary and tertiary facilities receive the lion’s share of resources, including direct financing, human resources, and drug supplies. ThinkWell conducted preliminary analyses of several counties which show that PHC facilities on average receive less than 20% of a county’s health allocation yet constitute over 90% of the facilities and provide at least 60% of the services in a given county. Financing of the community health strategy and paying stipends for community health volunteers has been inconsistent.
Several recent developments have jeopardized nationwide PHC financing. In 2021, the national government discontinued the user fee forgone grant for PHC facilities and converted the conditional grant to an equitable share grant for counties. The counties have full discretion over these funds, many of which have not been channeled to PHC facilities. DANIDA, which remained a main source of direct financing for PHC facilities, announced plans to phase out this funding by 2025.
Following the loss of two primary funding sources, PHC facilities are left with limited options, including the NHIF and county grants in the few counties that provide them. A facility’s access to NHIF revenue depends largely on whether its county has enacted legislation allowing facilities to retain and use funds generated from the NHIF, including from Linda Mama and from capitation payments. 21 counties have not allowed facilities to do this. Providers in these counties have little incentive to submit claims to the NHIF, leading to loss of NHIF revenue. As a result, mothers coming to deliver at PHC facilities in these counties are often sent away for drugs and supplies, defeating the purpose of Linda Mama, a program premised on free care to vulnerable women at point of use.
So, what should be done?
As Kenya rolls out its ambitious UHC program, we must strengthen PHC to deliver on the UHC promise. The government will need to prioritize the following:
Review resource allocation to prioritize PHC.
This will involve not only increasing allocation to the health sector, particularly PHC, but also reviewing how resources are allocated between PHC, secondary care, and tertiary health care. These allocations should be commensurate with the health care demands at each level. This is at the heart of strategic purchasing, a health financing function which seeks to allocate resources based on information about population needs and provider behavior.
Enact legislation to grant facilities financial autonomy.
The national government or counties should enact legislation that allows all health facilities, including primary health facilities , the autonomy to raise, retain and use funds at facility level. This will mean that facilities can retain NHIF revenue for the services they provide and would be incentivized to make claims to NHIF.
Instate direct facility financing.
As the main sources of direct facility funding dry up, counties should consider directly funding PHC facilities for their operations to improve service delivery. Facility managers are best placed to determine their priorities and manage their funds to meet the needs of the communities they serve. This should be accompanied by support to ensure adherence to the public financial management rules to ensure funds are well used and facility managers are accountable.
Prioritize service delivery.
Investing in additional facilities should be preceded by careful consideration of the need for a facility and the availability of resources to maintain it. Preliminary analysis suggests that counties should shift their priority from building new facilities to resourcing existing facilities and improving quality of care. The focus should be on ensuring existing facilities are well equipped, are stocked with medicines, and have adequate and well-trained health workers.
Conduct further research.
There is a clear need for further evidence on how best to finance and incentivize PHC to deliver high-quality, cost-effective, and equitable care. We need to track financing levels, sources, and expenditure for PHC, and measure what funding levels, strategies, and incentives are associated with better outcomes.
As Kenya continues to deal with the effects of the Covid-19 pandemic and face a triple burden of disease, financing PHC is even more important and should be a key priority for government, at both the national level and county level. The government’s plans to roll out primary care networks and improve PHC financing are a great opportunity for strengthening primary health care. The implementation of these reforms and their outcomes should be tracked closely to inform policy.
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How USAID HFA assisted the Government of Indonesia in improving COVID-19 health financing efficiency.
For more than three years, citizens and governments around the world have endured COVID-19. It has posed a unique challenge to national governments to rebalance the three dimensions of everyday life that it most impacts: economy, society, and health. In the face of continuous uncertainty brought on by this unprecedented crisis, Indonesia’s leaders have created strategies to ensure efficiency and economic resilience while also safeguarding the wellbeing of communities. One of these strategies is identifying the most effective health financing system. Efficient and equitable health financing not only saves money, but it also increases coverage for patients otherwise neglected by outdated systems.
To identify and hone this system, the Government of Indonesia (GOI) collaborated with USAID Health Financing Activity (HFA) to build evidence and consensus among stakeholders across the government and health sector. Building on the powerful partnership between USAID and the Ministry of Health (MOH), countless hours of research, discussion, and revisions were conducted to adapt the health financing system to the nuances of a pandemic.
The initial shock of a global pandemic
In March 2020, Indonesia reported its first confirmed case of COVID-19. In the following weeks— characterized by a sense of uncertainty, fear, and rapidly evolving circumstances—almost every aspect of life was impacted. In an instant, the government’s top priority became providing care to COVID-19 patients as quickly as possible. The GOI took measures to protect citizens and finance their medical services. But hospital beds rapidly filled, and access to vital resources dwindled. Normal or routine health procedures quickly became untenable under the burden of COVID-19.
As hospital reimbursement claims piled up, the need for a formulation of a more efficient payment system was clear. Guided by reimbursement and cost data from four large hospitals—Dr. Soetomo Regional Public Hospital Surabaya, Sulianti Saroso Infectious Disease Hospital, Fatmawati Central General Hospital, and Persahabatan Central General Hospital—the GOI decided on a per-diem scheme for reimbursement.
The system reimbursed health care providers or hospitals for all treatment they provide patients—medication, equipment, tools, consumables—in a single day. The reimbursement amount, or “tariff,” was set by MOH. The per-diem tariff scheme served as a quick fix to ensure the GOI was fully reimbursing hospitals as they cared for an overwhelming patient load as the patients arrived. Over the coming months, however, the weight of cases exceeded expectations and the system couldn’t keep up.
A method for better spending and faster care
Cases continued to increase, and so did the costs of reimbursements. The costs doubled to IDR 204.9 trillion (nearly US$13.5 billion) between December 2021 and December 2022, leaving public health officials wondering if the high charges from hospitals were a true reflection of the upward trend in cases. MOH requested USAID HFA to perform an evidence-based task analysis to support its decision-making process.
For two years prior to COVID-19, USAID HFA, implemented by ThinkWell, had been working to build evidence and capacity within the GOI to support MOH in generating and utilizing evidence to inform policy processes, including optimizing the National Health Insurance Scheme (NHIS). When the MOH tapped USAID HFA, the program immediately began assisting the government to generate a robust, timely, and efficient health financing payment scheme for the COVID-19 response in Indonesia.
“Calculating how much the correct real cost was for COVID-19 needs actually required finding the real costs for each unit,” said Dr. Yuli Farianti, MOH Center of Health Financing and Decentralization Policy (Pusjak PDK) Head. Between 2020 and 2021, HFA carried out a study to determine the actual costs of treating COVID-19. “That’s when we began to see the relevance of how the case-based groups (CBGs) might work in this situation,” she said.
The COVID-19 CBGs scheme was modeled after the CBGs payment method that has been applied for other disease areas since 2014. The system charges health care expenses in a package, per instance of care. Each package covers the entire treatment cycle from when a patient tests positive for COVID-19 until their discharge from a health facility. The amount of reimbursed expense per package varies based on severity level, which incentivized hospitals to treat patients quickly and according to each patient’s unique needs
USAID HFA’s technical and analytical assistance made it possible to reconfigure the reimbursement formula so that public funds were utilized effectively, and openness and transparency were promoted among hospitals. The new tariff was enacted in an MOH decree on October 1, 2021.
A policy that changes with the circumstances
Dr. Yuli highlighted that shifting to CBGs improved spending patterns and budgeting. “Before CBGs, [the rates] were calculated unit by unit, from masks to medicine, and beyond,” said Dr. Yuli. “Afterwards, [the expenses were] added to the daily rate of medical service. At the end of the day, expenses surged. CBG is a package service. They take everything into account, from equipment to medical consumables to services and others all under a particular CBG package code.”
COVID-19 continued to rapidly evolve, epidemiologically and clinically, and the development of less severe variants, vaccination, and herd immunity led Pusjak PDK to seek further revisions to the CBG tariff amounts. The Omicron variant required fewer resources, so USAID HFA worked with MOH to adjust the tariffs to reflect the provided health treatment.
According to Dr. Yuli, the process presented two challenges: formulating the new tariffs and implementing them in hospital operations. At the end of the day, however, hospitals across the nation recognized the public good represented by the new tariff structure and have since implemented the new scheme.
Moving forward and a shift to endemic
The World Health Organization’s Strategic Preparedness and Response Plan: April 2023–April 2025 will end the emergency phase of the COVID-19 pandemic in all countries and shift from emergency response to sustainable comprehensive management of the disease. As she reflected on the current declining trend in COVID-19 deaths and hospitalizations, Dr. Yuli expressed her hope that COVID-19 will be incorporated into the NHIS covered diseases soon. “Notwithstanding future challenges, we have to take into account the sustainability of the NHIS,” she said. Since the time of writing, COVID-19 has been deemed endemic in Indonesia and has automatically been included in NHIS coverage.
Dr. Yuli is grateful for USAID HFA’s assistance throughout its three-year collaborative journey with MOH to find the most effective COVID-19 financing and adjusting the tariffs accordingly. “It is very significant,” she said. “If we don’t work with USAID, it will definitely be more difficult for us. It was such a great help in many aspects, such as the studies and many more…The process was much faster and more efficient with the help of HFA including the process of revising [the tariff]. Moreover, hospitals and other stakeholders have been supportive. Maybe without their help we wouldn’t be able to finish this fast.”
“HFA helped us do the tariff calculation, they taught us what to formulate, how to release the data, how to conduct analysis, and generate tariff calculation,” Professor Abdul Kadir, Head of the Supervisory Board of the Indonesia Social Security Agency on Health.
The successes of this project will act as an example for the MOH’s policy endeavors going forward. The teamwork fostered by USAID HFA between stakeholders and experts to create efficient policy and improved internal capacity will hopefully benefit the health care system of Indonesia as it continues to grow and adapt to whatever circumstances arise.
Header image: Puskesmas Setiabudi, Jakarta, Indonesia, July 2023; Credit: Ardy Rahmatullah for ThinkWell