Patients in a hospital. Out-of-pocket payments are expenditures borne directly by patients where insurance or government policy of free medical care does not cover the full cost of the health good or service. PHOTO/FILE
The amount of money Ugandans spent on out-of-pocket expenditure on healthcare increased by Shs88.3 billion between 2019/2020 and 2020/2021, the Health Ministry said on Thursday.
Out-of-pocket payments are expenditures borne directly by patients where insurance or government policy of free medical care does not cover the full cost of the health good or service. They can include cost-sharing, self-medication and other expenditures paid directly by private households.
“Households out-of-pocket (OOP) payments accounted for Shs2.21 trillion in FY 2019/20 which increased to Shs2.30 trillion in FY 2020/21,” the National Health Accounts report released by the ministry noted.
“The OOP payments, which are made after the illness has struck, depend on the household’s ability to pay and shows how much a household is burdened in the quest for health care at the time-of-service utilisation,” the report added.
It noted that over the same time, the percentage share of Current Health Expenditure (CHE) decreased from 29.9 percent to 27.4 percent. CHE, according to details from the ministry, is the measure of the sum of healthcare goods and services consumed by households, non-profit institutions serving households, and the general government, valued at market prices.
The report authors noted that a huge share of household expenditure went to “curative care” (over 90 percent) whose main component is medical care goods like pharmaceuticals. They called on policy reforms to lighten the burden of health care on individuals and households.
“Government and other key stakeholders need to develop a policy to address this by prioritising government funding on pharmaceuticals and implementing strategic purchasing initiatives that can benefit from economies of scale while utilising the available off-budget resources,” they recommended.
The report was developed by the Health Ministry together with the World Health Organisation and the United States Agency for International Development (USAID), who are the major funders of Uganda’s health system.
The report noted with concern that donors fund the bulk of current health expenditure; 46.6 percent in 2019/20 and 50.9 percent in 2020/21.
“This heavy reliance on donor financing in the health sector poses a significant risk to sustainability,” the report warns. Private sector financing followed with 29.6 percent and 28 percent for the respective years, with households contributing 95 percent of the private sector financing.
The government spent the least share of current health expenditure at 24.4 percent (2019/20) and 21.7 percent in 2020/21, noted the report, although this was an increase from 17.2 percent in 2018/19. This indicates that although OOP and donor dependence are rising, overall funding from the government has also been increasing over the years.
The consultants also noted a high share of current health expenditure from Health Development Partners (HDPs) but is off-budget at 45.4 percent compared to the 4.6 percent which was on budget for FY 2020/21.
“This makes the alignment of HDP programmes to government priorities difficult and leads to duplication of services across the country. Thus, a policy on increasing public agencies that are managing health sector resources is needed,” the authors recommend.
“This can be done through having joint management teams between government and NGOs which is likely to enable efficiency gains that arise due to grouped or aligned resource allocation.”
A health worker attends to patients in an ICU ward in Mulago hospital. PHOTO/file
Foreign funding
On the issue of donor dependence, the consultants urge the government to increase domestic funding at a faster rate.
“Global Health initiatives like GAVI [a vaccine alliance] and Global Fund [a partnership that funds responses to Aids, Tuberculosis and Malaria] that are providing significant support to the health sector have to transition and take off the co-financing embedded within their strategies if the country attains a certain income status like the middle-income status,” the report noted.
“Thus, to avoid service delivery shortfalls, policymakers in Uganda need to ascertain that there is an equal pace of domestic financing as the country moves closer to attaining middle-income status.”
Dr Diana Atwine, the permanent secretary, said the Health ministry is increasing efforts to ensure there is a National Health Insurance Scheme (NHIS) to protect the public from catastrophic health expenditure.
“The NHIS Bill, as far as the Ministry of Health is concerned, we finished our job. We did the consultation, wrote the paper and submitted it to the Cabinet. It is until the Cabinet discusses it that it will come [to Parliament],” she said.
“We want this NHIS [like] yesterday because we know it will improve risk pooling and it will make us more responsible and reduce catastrophic expenditures on health care.”
Dr Jane Ruth Aceng, the Health minister and Member of Parliament for Lira City, said earlier that the notion that healthcare should be free of charge is hindering the progress of the health system. The current government policy specifies that healthcare in public facilities is supposed to be free of charge.
“Health care is expensive. I have moved to many places in this world, I have never found where services in health are given free of charge except in Uganda. We are hiding our heads in the sand and pretending that services can be free,” Dr Aceng said.
“Because healthcare is expensive and we don’t have money, we are all aware that the NHIS Bill has been on the agenda since last year, it needs to be fast-tracked because it is the only way we are going to mobilise additional resources for health. We cannot keep talking about free health services, somebody must pay for it.”
Currently, the health sector is struggling under the weight of poor or limited infrastructure in many health facilities, limited quantity of drug supply due to low budget allocation, and low number of doctors and specialists in the public service.
Dr Aceng said they are increasing efforts on disease prevention with the view of eradicating diseases like malaria. “We need to think critically about the burden of malaria and epidemics that we face from time to time. We in the Ministry, together with all of you, have determined that we change the [malaria control] department to malaria elimination or eradication department and begin the process, however difficult it is, to put an end to malaria,” she said.
The minister also called for more efficient procurement and delivery of medical goods. She said that with support from the government and donors, Uganda has improved health outcomes of the population.
On the issue of donor dependence, Dr Charles Ayume, the outgoing chairperson of the Parliamentary Health Committee, said they have been increasing efforts to ensure domestic funding for health increases. Citing the HIV fight, he said the government last year gave Shs50 billion for buying antiretroviral medicines.
Dr Ayume said the government should become more frugal and mitigate wastage to ensure what is allocated for service delivery is put to good use. “We need to package ourselves and find ways of sustaining ourselves, especially sustaining the HIV fight, which we can!” he said.
Dr Ayume added that local pharmaceutical companies should be supported to expand production capacity to reduce the cost of medicines.
Challenge
Dr Jane Ruth Aceng, the Health minister and Member of Parliament for Lira City, said earlier that the notion that healthcare should be free of charge is hindering the progress of the health system. The current government policy specifies that healthcare in public facilities is supposed to be free of charge.
