1. 1 International Multi-stakeholder Consultation on National AIDS Programmes Sustainability Nairobi, April 19 -20, 2012 Anton Pruijssers

2. 2 Content 1. Introduction: a perspective on Health in Africa 2. Pivotal question 3. 3 cases 4. Conclusions

3. 3 1.1 Health in Africa Africa spends little on health Population (millions) Total health expenditure (million USD) Burden of communicable diseases (million DALYS) Africa Rest of the world 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. 4 1.2 Health in Africa First law of health economics  the tight relationship between income and health expenditure leaves little room for maneuver Source: WDI data, 2006

5. 5 Data based on usage, not expenditure (most recent survey year available between 1995-2006) 1.3 Health in Africa The 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 Source: World Bank, 2006, Africa Development Indicators Percentage of people seeking health services in private health facilities

6. 6 1.4 Health in Africa Out-of-pocket payments are high 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. 7 1.5 Health in Africa Health insurance is rare 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. 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. 9 DeliveryDelivery 1.7 Summary on health in Africa: a vicious cycle FinancingFinancing  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 Risk DemandDemand High out-of- pocket expenses Low access Low ownership Low solidarity SupplySupply Low quality health care Low efficiency High risk Scarcity of data Low quality health care Low efficiency High risk Scarcity of data PatientPatient Catastrophic spending Low utilization

10. 10 2. Pivotal question How and where to break this vicious cycle and transform it into A virtuous cycle of access for all to healthcare of good quality in a sustainable way?

11. 11 DeliveryDelivery 3. Three cases FinancingFinancing DemandDemand SupplySupply PatientPatient High Trust Case 3. Health Insurance Case 3. Health Insurance Case 2. Credit for Medical Providers Case 2. Credit for Medical Providers Case 1. Medical Quality Assessment & Improvement Case 1. Medical Quality Assessment & Improvement

12. 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. 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. 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 50,000 Third 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. 15 Case 2: Credits to medical providers Leverage of public money, and revolving 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. 16 Portfolio Performance Disbursed: USD 544,000 to 96 clinics per 29.02.2012 Outstanding USD 356,000; recovered USD 124,264 TA Performance 162 79 103 74 19 Clinics formally entered the MCF Program Clinics completed business training Clinics completed quality training SafeCare assessments performed Quality 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. 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. 18 Case 3: Health Insurance Fund - Enrolment HIF projects 2012Target Group ACTUALTarget /projection SizeFeb-12Dec-12 Nigeria Lagos Market Women77,00024,16930,000 Nigeria CAPDAN (WB)21,90012,13310,000 Nigeria Kwara North80,00034,77036,000 Nigeria Kwara Central71,00024,51630,000 Nigeria Kwara SouthTbd05,000 Kenya Tanykina20,0001,22010,000 Kenya Koisagat25,000018,500 Kenya AARTbd020,000 Tanzania KNCU200,0004,47027,000 Tanzania Tujijenge70,00005,000 Namibia Mister Sister PHC15,0005,0146,600 Mozambique UEM22,0000 TOTAL 106,292220,100

19. 19 DeliveryDelivery Case 3: Health Insurance Fund Nigeria FinancingFinancing DemandDemand SupplySupply PatientPatient High Trust Spent today 10 m Euro Spent today 10 m Euro Investments by Private Parties 30 m Euro Investments by Private Parties 30 m Euro Donor commitment to health insurance Nigeria 30 m Euro for 5 years Donor commitment to health insurance Nigeria 30 m Euro for 5 years Prepayment by users 0.8 m Euro 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 government 2.4 m Euro Kwara state government 2.4 m Euro

20. 20 Case 3: Health Insurance Fund Nigeria Results  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. 21 Case 3: Health Insurance Fund Interaction 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. 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. 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. 24 International Multi-stakeholder Consultation on National AIDS Programmes Thank you for your attention QUESTIONS?? Anton Pruijssers Director Operations Health Insurance PharmAccess Foundation +31 615 118 118 a.pruijssers@pharmaccess.org