Knowledge Brief Health, Nutrition and Population Global Practice SOCIAL HEALTH INSURANCE REFORM IN EGYPT: IMPLEMENTATION CHALLENGES D AND THE WAY FORWARD 1 Rafael Cortez June 2017 KEY MESSAGES: May 2014 • A process of reforms for Egypt’s social health insurance will require an implementation road map over the next 10 years, at the minimum. After the approval of the Comprehensive Social Health Insurance (CSHI) law, there is a consolidation period for the new institutions, in which capacity will be built to face emerging challenges as well as the transfer of knowledge and technical assistance, and substantial investments will be made to successfully expand the quality of services with greater efficiency gains. • The CSHI law seeks to install new institutional arrangements aiming to support the government’s National Health Policy: achieving equity in financing and access to health care services for all citizens. Therefore, the CSHI is seen as a key pillar in poverty alleviation, attaining UHC, and sustainable growth. CSHI is about health equity and getting value for money. Introduction ability to improve health resource mobilization. To address The Government of Egypt aims to achieve health equity, or this, the macroeconomic trend should be reversed to ensure social justice in health care, by reorganizing the health system greater resource allocation and public investments in the through financial protection, the expansion of services to all, health sector. This will be key towards achieving the better quality of services, and also greater accountability and Sustainable Development Goals (SDGs) and responding monitoring of results and governance. Two of the reform’s more effectively to rising levels of non-communicable priorities are to increase financial protection and ensure diseases (NCDs), the high prevalence of hepatitis C, and efficiency in the provision of services, and mobilize resources health disparities affecting vulnerable and poor populations. ensuring financial sustainability. Egypt only spends 5.1 percent of its GDP towards health care, while out-of-pocket The Egyptian health system requires immediate changes to expenditures is high (69.7 percent of the total health address the existing and incoming health challenges. To expenditures). Article 18 of the Constitution sets a target of 3 achieve universal health coverage (UHC) efficiently, percent of the GDP, demanding a shift in resource effectively and with equity, the government is in the process of mobilization and improving the effectiveness of the health issuing a Law on Comprehensive Social Health Insurance system to deliver services. (CSHI), a mandatory and universal system based on social solidarity and the provision of health services to all enrolled Egypt is a lower middle-income country with high health citizens in Egypt. The state pays the cost of coverage for inequalities and a lack of services in rural and poor, urban vulnerable populations, with a gradual involvement of areas. The fiscal situation is not stable (fiscal deficit is governorates to guarantee that the system has good estimated at 13 percent) while revenues, as a percentage of governance and is financially sustainable. To this end, the the GDP, have decreased. Also, the country is limited in its Government will seek to ensure that the CSHI organizational 1 This Knowledge brief was prepared by Rafael Cortez (Senior Economist, GHN05) with contributions from Gustavo Demarco (Human Development Program Leader, MNC03) and Amr Elshalakani (Health Specialist GHN05) as part of the Technical Assistance “Egypt Social Inclusion (P162423)’ to support the Government of Arab Republic of Egypt. in developing its Comprehensive Social Health Insurance (CSHI) reform process. . Page 1 HNPGP Knowledge Brief • structure and culture of service delivery to be implemented fit conflict of interest, and the professionalism needed to carry well with the policy objectives of the National Health Policy. out the role of the higher administrative authority of the CSHI fund. Key concepts of the health insurance reform in Egypt Under the CSHI law, private and public health networks will STEWARSHIP AND REGULATION operate the provision of services. This will be done in order to integrate and coordinate services among high-level and The current health system lacks adequate governance complex facilities such as hospitals and surrounding primary arrangements. Indeed, fragmentation and current weak roles health centers. In an optimal situation, users should have the within the Ministry of Health (MOH) have produced a situation option to select their providers within a well-defined catchment in which stewardship is not fully implemented. Governance to area, especially at the secondary and tertiary care levels. monitor and regulate compliance of protocols and quality standards is not sufficient. The large private sector remains Figure 2. Provision of health care services unregulated, while regulation of the drugs market is also limited. To address this, the MOH should respond to the essential public health functions by providing a clear vision and direction for the entire health system. It requires using valid, timely, and reliable data to generate evidence on regulating health providers’ actions to promote positive health outcomes. Figure 1 Equity on health access (percent) Source: World Bank 2006. Figure 3. Source of health Care Financing in Egypt Source: HHEUS 2010 The main areas of stewardship for the MOH that should be developed and strengthened are the following: - Generation of data for continuous results-evaluation and evidence-based decisions - Design and implementation of policy strategies for the sector - Providing protocols and quality standards to providers of health care services and drugs - Establishment of incentives and penalties to be applied to health care providers’ quality and compliance of standards and norms Source: Ministry of Health. - Promoting public-private partnerships - Monitoring and public health surveillance - Accountability and cross checks ACCREDITATION OF SERVICES SEPARATION OF ROLES BETWEEN FINANCING AND One of the key pillars of an effective CSHI institutional PROVISION arrangement is the creation of an independent entity The proposed CSHI law defines a Comprehensive Social controlling and regulating the provision of health care services. Health Insurance Organization (CSHIO). This is a non-profit This entity should regulate all public health and non-public public body that will manage funds for the CSHI system. The health providers. The CSHI law is expected to develop an CSHIO is expected to be legally autonomous in management accreditation agency that reviews that healthcare providers and budget, under the Prime Minister’s office. To guarantee participate in meeting predetermined criteria and good governance, the CSHIO has a Board of Directors whose standards. The accreditation agency should guarantee composition should represent adequate independence, no continuous compliance with defined quality standards and the Page 2 HNPGP Knowledge Brief agency should also assist and guide providers to achieve services. Payments for results through targeted indicators can those standards. This agency should also protect the rights of be negotiated annually with each health care networks. users, and carry out comprehensive surveys to collect and analyze data on the quality and performance of providers, Policy challenges and the way forward users’ views of received services’ quality outcomes, performance improvement etc. Decisions made during the implementation of the CSHI law will define, within the short term, if citizens are going to benefit This agency should be an independent entity reporting to the from increased access to quality services and reduced out-of- Ministry of Finance with a clear operations manual ensuring pocket expenditures. New investments and improvement in there is no conflict of interest among its staff with public and management capacity will be essential to the success of the private providers. Competitive salaries and effective human reforms in the long term. Within this context, the country faces resource management will guarantee the professional several challenges; in order to overcome these barriers independency of the regulatory entity. The agency must also specific actions must be carried out by the Government that inform and empower beneficiaries through local institutional include the following: public awareness campaigns, including delivery cards that • Investments to increase access to quality, integrated describe user rights and information from health care information systems providers. Innovative auditing mechanisms can be used • Massive communication strategies aimed to increase through internal audits to verify the work performed. The their awareness and knowledge about the CSHI reform, feedback from the audits and management reports can be what it seeks to attain, and what their roles are in the used to correct any mismanagement, address bottlenecks, reform and improve the performance of health care networks (HCNs). • The provision of finances to increase and improve health The foundations for a good CSHI fund management services while simultaneously reorganizing the health system. The reform should not affect the intensity of The CSHI system should include a fund that mandatorily service delivery, especially for targeted and vulnerable covers the entire Egyptian population and simultaneously populations and rural areas strengthens the stewardship capacity of the MOH and accountability with three main design features: an explicit • Development of diagnostic tools for performance to menu of benefits; disbursements linked to achieving agreed overcome identified bottlenecks within the HCNs targets; and independent external audits to verify service • Adequate human resources to operate the new system as delivery and quality. Rather than funding more facilities and well as effective human resource management, including physical inputs or adjusting existing insurance mechanisms, training and career path of medical staff all of which failed to adequately address the health problems of the poor, it is necessary to change the operating culture of • Conduct an actuarial study and the disease burden the health system, especially the functioning of the social assessment. health insurance contracting process, in particular by incorporating performance incentives at all levels. One • Design and continuous formulations of benefits plans, unique law could include the arrangements for both the CSHI payment mechanisms, and sustainable financing fund and accreditation agency. strategies and regulations for disbursing the funds • It is essential that institutional arrangements to promote It is, therefore, proposed is that the CSHI put into practice a UHC safeguard a clear separation of functions: provision, cascade of incentives carefully tailored to encourage each financing, insurance, stewardship and accreditation level of the health system to take the proper steps to improve coverage, quality, and results. Legally binding management • One purchasing organization (the CSHI fund) could buy agreements between the CSHI fund and the HCNs, with users health care services from public and non-public providers exercising free choice of providers: through contract agreements that include norms and protocols established by the MOH. The health care -The CSHI fund: provides funds to the HCNs against organization (HCO) function could monitor and promote enrolment progress and attainment of each of a set of targets the quality of services of contracted, accredited providers that includes coverage, hardship incurred, and quality of through verification of quality and standards, protecting health care services; users right -Healthcare Networks and Providers deliver specified package of cost-effective services, while increasing quality to • Discussion on the implementation of co-payments. attract the beneficiary population. The CSHI fund would pay Inclusion of any fees in the CSHI is not optimal neither Providers on a fee-for-service basis, which the Providers can recommended to be implemented due to its potential invest to improve productivity and quality; regressive effects. To address this, the CSHI should -The CSHI fund can also transfer funds on a per-capita basis operationalize an effective targeting mechanism to to the providers, in addition to a fee-for-services scheme. The identify the poor and exempt them from payment public providers could use part of those funds to pay premiums. These populations should receive a incentives to staff to improve productivity and quality of subsidized premium by the Government Page 5 HNPGP Knowledge Brief • • The role of the provision agency is to help HCNs integrate existing structures into the new perceived model of and coordinate their services. The above institutions and governance. arrangements should facilitate achieving efficiency, • A series of four technical notes and corresponding effectiveness, and accountability of health providers workshops on Knowledge Transfer and Best Buys on financial sustainability and health financing options • The private provision of services, through proper and arrangements. The technical notes and workshops regulation and contracts under competitive basis, have to • would focus on benefits plans and priority settings, be strengthened with medium and long term goals financial sustainability (revenues), and costing and • In the long term, the financing of the CSHI fund must be payment mechanisms. These would include the provision related to payroll contribution and general taxation. of extensive in-depth knowledge of best practices from Unmarked taxing is not an option in the long term to other countries, a revision of current needs, and ensure the sustainability of the fund proposing technical analysis and solutions for policy and/or implementation actions. • Ensuring that the insured populations have a right to • Direct technical support and advice to the MOF for choose their providers actuarial and macro-fiscal domains. This will be • Guaranteeing an adequate transition of the current health provided through direct dialogue, on-demand support by insurance organization into the new CSHI institutional a multi-disciplinary team of experts. The team arrangements composition should ideally include actuarial, health economists, and macro-fiscal economists, among others. Areas of potential collaboration and implementation • Transfer of know-how in the design and support. implementation support of payment mechanisms. Sharing international experiences through study tours and The strategy to strengthen UHC in Egypt is comprehensive working sessions with international and local experts. and proposes a set of new well-designed institutional arrangements seeking good governance. The CSHI law • Support capacity building in HCNs entities to that is currently being discussed within the Government strengthen the management capacity for service provides guidance for health providers, financiers, delivery. WBG and development partners’ assistance stakeholders, and government representatives on a path could support building the capacity in the construction, towards UHC. Substantial analytical products and technical management, and monitoring of a selected number (4) of activities should span the first 3 years of implementation HCNs at the regional level. This includes designing a that is after the law has been approved by Parliament. The monitoring tool for quality performance of the delivery of key areas of work and potential support from stakeholders health care services and resource allocation and development agencies are the following: arrangements to gain performance efficiency in the selected HCNs pilots. Comprehensive training sessions • Strategic use and dissemination. MOF and MOH will be conducted to CSHI staff and HCN entities in health leadership in the preparation of a technical report about care management and health financing areas. This the UHC road map in Egypt can be supported by the activity will promote the interaction at the management WBG, and international cooperation agencies and it can level with other health insurance institutions and promote be used as an umbrella document guiding actions to south-to-south knowledge exchange. In addition, strengthen the CSHI reform and UHC results and to technical and training support from seasoned promote high-policy dialogue among key stakeholders international and WBG staff experts will be provided to through seminars and workshops with local technical HCN managers through a short training course. A detailed teams from the government and civil society. This will training needs analysis will be previously defined, in include presenting perspectives from experts, coordination with the CSHI management team. stakeholders, and government officials on key challenges • Support of the analysis of four key studies led by the and areas for further technical assistance, especially on MOH on stakeholder analysis, national health accounts, the theme of separation of functions and management pharmaceutical market analysis, and private health sector reforms. The critical next step is to prepare the operations assessment. manual for the CSHI fund, the HCO, and accreditation entity; and develop a communication strategy for national • Technical assistance in the design and stakeholders on the CSHI arrangements, vision, goals implementation of the accreditation entity “Egyptian and functioning. authority for quality and accreditation standards (EAQAS)” responsible for the functions described in the • To outline and discuss transitional arrangements and proposed law, especially in those roles related to implementation plans for the CSHIO, HCNs, and protection of user rights, establishing of standards of accreditation entity. This work will revolve around quality, monitoring and accreditation all public and private providing technical advice on how to transform the health facilities. The Health, Nutrition and Population Knowledge Briefs of the World Bank are a quick reference on the essentials of specific HNP-related topics summarizing new findings and information. These may highlight an issue and key interventions proven to be effective in improving health, or disseminate new findings and lessons learned from the Regions. For more information on this topic, go to: www.worldbank.org/health. Page 4