International Multi-stakeholder Consultation on National AIDS Programmes Sustainability Nairobi, April 19 -20, 2012 Anton Pruijssers

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

3

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

4

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 hea

lth e

xpen

ditu

re p

er c

apita

(in

t. $

PPP

)

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%

Nami

biaSo

uth A

frica

Ango

laSa

o Tom

e &Le

soth

oMa

urita

niaCa

pe Ve

rde

Seyc

helle

sEq

uat.G

uinea

Botsw

ana

Gabo

nMa

daga

scar

Swaz

iland

Cong

o B.

Moza

mbiqu

eMa

uriti

usEt

hiopia

Sierra

Leon

eUR

Tanz

ania

Mali

Liber

iaNi

ger

Como

res

Zamb

iaZim

babw

eBe

ninRw

anda

Burk

ina Fa

soGu

inea-

Bissa

uEr

itrea

Sene

gal

Suda

nKe

nya

Chad

Gamb

iaCe

ntra

lMa

lawi

Cote

d'Ivo

ireGh

ana

Ugan

daNi

geria

Came

roon

Togo

Buru

ndi

DRCo

ngo

Guine

a

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

Cape Verde

Namibia

Mali

Zimbabwe

Botswana

Senegal

Swaziland

Rwanda

Kenya

Côte d'Ivoire

Togo

Mauritius

Benin

Nigeria

Niger

Tanzania

Madagascar

Seychelles

Gabon

Malawi

Guinea-Bissau

Burkina Faso

Ethiopia

Guinea

Chad

Mozambique

Uganda

Cameroon

Perc

ent o

f tot

al he

alth

expe

nditu

re

Social security and private prepaid health care spending

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

8

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

9

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

10

2. Pivotal question

How and where to break this vicious cycle

and transform it into

A virtuous cycleof access for all

to healthcare of good qualityin a sustainable way?

11

Deliv

ery

3. Three cases

Finan

cing

Demand Supply

Patient

High

High

High HighTrust

Case 3.Health Insurance

Case 2.Credit for

Medical Providers

Case 1.Medical Quality Assessment & Improvement

12

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:

=>

13

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)

14

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 50,000Third 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

15

Case 2: Credits to medical providersLeverage 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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

International Multi-stakeholder Consultationon National AIDS Programmes

Thank you for your attention

QUESTIONS??

Anton PruijssersDirector Operations Health InsurancePharmAccess Foundation+31 615 118 [email protected]