PharmAccess’ lessons learned on rolling out health insurance in Tanzania

PharmAccess is an international organization dedicated to ensuring that everyone — irrespective of their gender, social status, income levels and location — is able to get better healthcare when they need it. Access to quality healthcare is something many in the industrialized world take for granted. But in Africa, lack of access to care pushes millions of people into poverty each year. Contrary to what most people think, addressing this challenge is not only a matter of a lack of money.

This article sheds light on the lessons that PharmAccess has learned in supporting communities and the local government in Tanzania to obtain access to better healthcare and realize long-term improvement of the health sector.

PharmAccess has a long history working in Tanzania, with activities ranging from extensive HIV/AIDS screening and treatment programs to nationwide healthcare quality improvement using the SafeCare standards. The last decade, PharmAccess helped designing and rolling out health insurance reforms in the country, including iCHF, that focused on people working in the informal sector.

The article aims to explain the success factors of iCHF. How did iCHF successfully enrolled 670 thousand people in the provinces Kilimanjaro and Manyara(18–22% of the regional population)? Why were these individuals willing to pay a premium, despite their tight budget? In sharing the stories of hospital staff, beneficiaries and community health workers in the communities of Manyara and Kilimanjaro, we can begin to understand the benefit of health insurance on informal economy workers and their families, as well as for hospitals connected to the scheme.

Firstly: why health insurances?

In sub-Saharan countries like Tanzania, only about 30% of the population has access to an insurance product, leaving the majority exposed to the risk of frequent, out-of-pocket healthcare costs. Health insurance means people are protected from (at least a part of) these adverse risks. Health insurance has other benefits too. Insurance premiums increase the funds channeled into the system with more sustainable sources of funding, allowing both the demand and supply side of healthcare to improve. Implemented well, they fundamentally change how revenue for healthcare is raised and redistributed across the population.

What can we learn from the implementation of iCHF in the regions of Kilimanjaro and Manyara?

I. Under the right circumstances, people are willing to pre-pay for healthcare

Insurance provides protection against financial shocks caused by out-of-pocket health costs. It gives people the freedom to seek healthcare when they need it, not only when they can afford it.

However, for those that are used to pay out-of-pocket, insurances require a mind shift. An insurance premium must be paid, even when health services are not used.

From interventions with the communities in the region, we learned that there is a willingness to prepay, even among low-income groups. Insurances provide much-needed financial security for poor families who experience a daily struggle to afford basic necessities.

Anna Laurent (45) lives in Ngoni, Manyara. She is a farmer and a mother of five children. Her youngest is 10 years old, the oldest 24.
‘’The reality is, life was hard before I had insurance. Without ’emergency money’ you are in trouble. I usually bought paracetamol for me or my children to relieve the pain. I also tried to guess and got only one test from the lab for a disease, but left others, as it was too expensive. If I eventually had to go the hospital, I needed a loan and afterwards to sell a chicken, or two, but even that was often not enough. After talking to my husband we decided to join iCHF. Treating one child can cost more than we pay for the insurance for a whole year.’’

II. Improve healthcare quality to increase the demand for healthcare

In an uncertain environment of low trust and poorly functioning healthcare institutions, people may be hesitant to pre-pay for insurance premiums. It is challenging to convince people with low incomes to pre-pay for healthcare, but if the quality of care is poor, if medicines are out of stock, and no doctors are available, the task becomes impossible. Therefore healthcare providers were incentivized to invest in better quality care. By improving quality, trust is built and people will be more prepared to pre-pay.

PharmAccess’ SafeCare became an integral component of iCHF. From the start of iCHF in 2015, all facilities entered a quality improvement program based on the internationally accredited SafeCare standards.

SafeCare is a quality improvement methodology specially designed for health facilities in resource-restricted settings. Facilities receive regular visits from SafeCare assessors to stimulate, support and monitor their progress. SafeCare equips providers with the tools and instruments to improve, step by step, and offer their patients better services.

Dr Eileen Lirhunde (33) is assistant medical officer at Kibosho hospital, Kilimanjaro. ‘’Our healthcare results have improved so much, largely through SafeCare. I cannot compare our current situation with where we came from. Before SafeCare, it was a mess here. Imagine, earlier, you could have a seriously sick patient coming in. You check the [emergency drugs] cupboard and find out the medicine is not there. You rush to the pharmacy, and the medicine is out of stock because it wasn’t ordered, or there is simply no-one there. Thanks to SafeCare, everything is clearly labeled, you know medicines are available and tools are working. Health results also improve as people come earlier to the facility, now that they are insured. There is less chance for complications to become chronic. And at the maternal ward, there are fewer cases of premature deaths, because women can get treated on time.’

III. Select the right reimbursement model

There are several ways to manage the financial sustainability of health schemes. One approach includes the use of capitation fees, in which healthcare providers get fixed monthly reimbursements, based on the number of registered patients at their facility.

As part of iCHF, enrollees could choose a facility for primary healthcare services. This facility in turn benefits from a steady income; a capitation fee for every registered household. The money follows the patient, which incentivizes healthcare staff to invest in their quality so they can attract more patients. Instead of being reimbursed after treatment, providers receive a fixed fee at the beginning of the month, based on the number of people that selected the facility as their primary facility. Providers receive a more predictable stream of income from the insurance scheme.

As capitation fees are fixed per household, staff tend to work towards prevention and decreasing their hospital re-admission rates. In the maternal wards, facilities tend to encourage regular check-ups, leading to less complications in the longer run. After all, when no (additional) care is needed, the facility makes a profit.

John Materu (52) has worked for nine years as Medical Officer at Kibosho hospital, Kilimanjaro.
‘’Being at Kibosho hospital gives me an opportunity to deliver healthcare services to the small-scale farmers and villagers with low socio-economic status. They are the neediest population.

The iCHF capitation fees are a game changer for our hospital. Before iCHF it frequently happened that more clients come for treatment and their costs exceeded the reimbursement, so the hospital ended up with a loss. A year before iCHF we ended up with a loss of more than 6 million Tanzanian Schilling ($ 26,000). During iCHF, following the introduction of the digital platform, we managed to realize a balance of about 1.8M Tsz ($ 780). This profit enables us to invest in better services and new activities within the hospital. One major improvement is the digitization of our administration and guidelines, which makes it much less likely to make a mistake. Digitalizing our medicine stock and supplies equally made a huge difference. You can see how supplies are moving and we are on time ordering new ones.

SafeCare helped us choosing where and how to improve, which reduced the suffering of our patients. Our admission days have gone down, so people can go back home earlier to be united again with their beloved ones. But most important, you see the improvements coming back in the reduced number of complications and deaths. And I am proud that at this hospital, we haven’t had mothers dying during labor for a long time.’’

IV. Include private health facilities in the scheme

Private facilities are needed to meet Tanzanian’s demand for healthcare. In rural areas these clinics are often faith-based and perceived to provide better care. Some enrollees suggest they offer better specializations, hold a more adequate stock of drugs or require fewer bureaucratic procedures. For many living in remote areas being able to access private facilities means a significant reduction in travel costs. According to 2015 data, 72 percent of enrollees in Kilimanjaro choose to access healthcare services through a private (faith- based) provider.

The availability of private providers has boosted iCHF enrollment
rates. For these facilities joining iCHF means that they benefit financially
from the capitation fees.

Private facilities receive a slightly higher share of the capitation fees
as public providers already receive government subsidy to cover
costs for medicines, medical supplies and staff salaries. iCHF thus
represents a system that encourages both public and private provider
participation. Without this compensation these private providers
often experience trouble sustaining their businesses leading to less
access to care, especially in remote areas.

Dr Joseph Lorr (48) is Medical officer in charge at Hospital Dareda, Manyara.
‘’We are a private hospital, but we act like a district hospital. Workers, drugs and supplies are partly received through the district authorities.

But as a ‘district hospital’, we don’t only serve people from the village. People also come from further ahead, from Babati. They enjoy our services which are of good quality, thanks to ‘5S’ [a hospital management system] and SafeCare. We try and take good care of patient rights.

People in this village are very poor. When they come here, they see hope. Traveling further is too expensive. At the same time, health demands are high: in this village it is common to see women having 10–14 children.

Many people here are dependent on us, which comes with challenges. When seriously ill people come in, you need to treat them, regardless of their financial status. You cannot say: pay first. But after the treatment, when they are presented with the bill, they often run away. Only last weekend four patients from the female ward flee without paying, resulting in a loss of 800,000 Tsz ($350).’’

V. Community involvement is key

PharmAccess helped train and coordinate community health workers
(CHWs) and other volunteers to develop iCHF awareness and health
insurance principles. For many insurance is a new concept. It requires
time and dedication to educate people and build credibility.

The work of CHWs has been a key success factor. They are chosen
by the community as trusted citizens and many have already built
a record in volunteering and serving. CHWs go from household to
household to sensitize the community and collect the premiums
so people are better equipped to make decisions on health-related
matters. As part of an incentive-based approach they receive a percentage
of the co-premium for each household they enroll.

Community awareness during iCHF went beyond the work of CHWs. Residents learned about the scheme via radio, road shows, church and school visits that extended the marketing reach.

Mike Ngowi (58) was iCHF Community Health Worker (CHW). Over 4,5 years, he enrolled more than 10,000 households for health insurance, an average of 188 households per month.
‘’I have been able convince almost all families that I visited to sign up for iCHF by talking to both the father and the mother. Although the father may be the head of the household, the mother is the one who usually carries the burden to care for the sick. Sometimes I would even call their grownup children to help their parents paying their premium’.

I have been volunteering in my community since I was young; and with that, I have been able to build up trust. The work is not about salary, as you don’t get much for it. But I believe God remembers you. Good things come back to me a in a different way.’’

VI. Digitalization to improve healthcare

From the beginning of iCHF, PharmAccess stimulated the use of IT in
the healthcare sector. Digitalization has the potential to dramatically
transform healthcare by improving efficiency, cost-effectiveness and
generating data.

Many Tanzanian facilities made the first and major step in digitalization:
the introduction of digital patient files. Up until a few years
ago most providers only administered their patients and records
on paper. Digital records allow medical staff to send patient files to
other staff members, reducing overhead costs as well as the chance
for errors. The facilities connected to the scheme made additional
steps including the digitalization of their treatment protocols and
laboratory investigations.

The emphasis on digitalization within iCHF has been notable in other areas too. CHWs enrolled members into iCHF via their mobile phone, providing a user-friendly design that is less prone to errors. PharmAccess played a consultative role in designing an IT system, ensuring smooth enrollment, up-scaling and refining operations.

Digitalization enables innovations in other healthcare areas too. For example, PharmAccess found that linking payment with quality care can ensure better results. We introduced a pilot for pregnant women in Kilimanjaro and Manyara called MomCare. In this first pilot, participating facilities already show to invest in better maternal healthcare services. Moreover, adherence to check-ups has improved. For more information on MomCare, watch this video.

Coleta Kimario is 47 years old and assistant matron (a nurse) at Kibosho hospital. She works in this occupation since 1997. ‘’Thanks to our digital system, there is no more overflow of patients at the reception. It all runs a lot quicker. People are directed to where they need to go, right after they come in. Before digitalization, I could find mistakes in a file and it would take me easily an hour to solve it. The communication between departments also has improved. You can now share and analyze the records easily.

Sometimes I walk into the Medical Director’s office and he tells me: ‘Look, I am sitting here but I can see my screen what is going on in the various departments and follow the patients, who has been admitted, who is still waiting.’’

iCHF became a success. But there is work to do.

After four years of implementation, iCHF has proved to be a success. iCHF demonstrates that insurance can help protect the poor against catastrophic out-of-pocket healthcare costs.

The reimbursement model also incentivizes healthcare providers to improve the quality of their services which in turn helps (potential) insurance enrollees trust the system. Better quality also leads to a higher willingness to pay for insurance which leads to a more financially sustainable healthcare system.

The model became a blueprint for developing the National iCHF (N-iCHF), which is to be implemented in all 26 regions of Tanzania. The N-iCHF began enrolling new members in May 2019. The new scheme adopted most features of iCHF. This article lists some of our learnings acquired during implementing iCHF in Manyara and Kilimanjaro, that can help accelerate the road to universal health coverage (UHC) in Tanzania and other sub-Saharan African countries. To conclude, some additional reflections can be made:

Continuing government commitment is key
For a health scheme like iCHF to be successful on a national scale, the central government needs to stay fully committed. We have learned that iCHF be sustained without donor funding but does require engagement and full support from local leaders. Currently the Tanzanian government subsidizes 50% of the premium and the more successful the scheme, the more funding is required to subsidize the premiums, as well as to maintain human resources, equipment, medicines and the like.

Develop an attractive model for private facilities to join the scheme.
In Africa private health services account for approximately 50% of healthcare provision. Their services are used across all income groups. To utilize the role and capacity of the private sector, joining the scheme needs to be made attractive with a realistic reimbursement model, so providers can continue to improve their quality and increase their capacity.

Introduce targeted subsidies for the poorest of the poor.
Identifying the households that both can and cannot afford to contribute to their own health insurance costs is essential to designing sustainable schemes. Equipped with this data, the government and national health insurers can develop policies to ensure that subsidies and funds are channeled equitably to benefit the most vulnerable groups without crowding out contributions from
those who can pay.

Innovate to improve quality of health
From the experience of implementing health insurances, we also acquired lessons to use digitalization to innovate and further improve healthcare. For example, PharmAccess found that linking payment with quality of the care provided can ensure better results. To learn more about how this approach is used to improve maternal healthcare, watch this video.

To close, a final word from Faina Muhammed (44). Faina is a mother of three children between 9 and 17 years old and lives in Babati, Manyara. Here, she sits next to her last-born.
‘‘When we had the iCHF insurance, my kids even liked going to the hospital. I just gave them the insurance card and they were ready to leave. Before the insurance that was very different. They didn’t want to go and made up all kinds of excuses because they knew it meant that I had to beg for money to get them treated. In practice, it meant we just didn’t see any doctor. Perhaps we would eventually visit a dispensary when somebody in the community helped us out. In the meantime, somebody might have given us some Panadol for some temporary relief.

Our financial situation is difficult. My husband passed away a year ago. Last year somebody supported us to get the insurance and it really helped us. My son got Typhoid and Amoeba and got treated.

I have a disability and my kids need to help out. After school they beg on the road, sometimes they come home with a bag of maize or so for us to eat. Now our insurance is expired. My plan is save up and register again for the insurance cover, so when my children get sick they can get treated and get better. I really have that plan. But I first need to save for a mattress because sleeping is also a priority. After that, I want to set money aside for the insurance.’’