A universal health coverage will translate into a healthy economy

There is net gain to the economy when a society adopts universal health coverage (UHC). This gain is not simply in terms of improvement of the health of the people and the lowering of mortality rates, but also in terms of the impact on the economy as a whole.

A study carried out by the consulting firm, KPMG, on the impact UHC is going to have on the South African economy since it was adopted in August 1211, shows that the economic benefits of investing in healthcare far outweigh the potential costs associated with the roll-out of UHC and the funding thereof through increased taxes. This is real both at the individual household level as well as at the macro-economy level as a whole.

Where is the evidence? First, a Government must prioritise improvement in healthcare as a leading objective in its programme to change society for the better. Once this is done, then the tools for doing so must be equally identified and prioritised. It has been established by historical and cross-cultural studies, discussed extensively over time, that UHC is a viable tool for transforming the health outcomes of the people. This led the WHO to call upon all developing countries to adopt UHC urgently if they were to achieve the MDGs by 2015.

Two, there is never an opportune time to adopt UHC. Taking the first step is vital. While institutional preparation is necessary, there never comes a time when such institutions mature first before UHC is adopted. The adoption of UHC itself calls for institutional transformation and capacity building as UHC is rolled out.

The recent experiences of Mexico, Thailand, Ruanda and now South Africa illustrate this point vividly. The will to start is more important than the prior certainty of success. The IFC recent report on transforming the NHIF into a universal health insurer has further confirmed this thesis.

Three, as the South African case study by KPMG shows, the intended expenditure of R13 billion this year on healthcare, could create an additional R650 million in economic activity nationally. Some of the potential positive impacts could stem from the economic benefits of increased life expectancy and increased labour productivity, amongst others. A similar experience is bound to be replicated in Kenya.

Four, middle income countries which have implemented a form of national health insurance or UHC have benefited economically from a healthier population. Estimates indicate that increasing a nation’s life expectancy by a year could potentially increase the GDP per capital by 4 per cent in the long run. For more on this it is worth reading, The Effect of Health on Economic Growth: A Production Function Approach,” by D Bloom, D Canning and J Sevilla, in WORLD DEVELOPMENT, 2003.

Five, since UHC leads to improved health among workers and reduced loss of working time due to absenteeism as a result of frequent sickness and lack of prompt medical attention, it will equally impact positively on productivity. International studies have estimated the increase in labour productivity to be between 20 per cent and 47.5 per cent in the medium to long term.

Six, cynics often say that the individual worker should not see a reduction in his take home pay as a result of monthly deductions to cover health insurance. Some employers even go further to resist their counterpart contribution to that of the employees which is required by ILO standards. The major argument is that this is an unnecessary labour cost which reduces profit margins.

Studies have shown that both arguments are wrong. Uninsured workers are often exposed to catastrophic health expenditures that can suddenly wipe out all their family savings and plunge them into perpetual debt. Paying a small fraction of the salary every month to avert such a disaster is a major benefit of UHC.

In the same way, employers who ensure that workers, their families and relatives in general have access to proper health care end up looking after their own workers more effectively than when social welfare is compartmentalised among employers. In Kenya, for example, lack of UHC means that Harambee steps in when catastrophic health expenses face an individual worker and everybody else, including the employer, has to chip in. This system is cumbersome, inefficient, quite often more expensive and very unpredictable.

The Kenyan Cabinet has just passed a policy paper and a bill to be taken to Parliament to establish UHC in Kenya. The Constitution in Article 43 expects every Kenyan to have access to quality and affordable healthcare, including reproductive health.

The Constitution does not tell the Government how this will be done; it is the responsibility of the Government to come up with an appropriate policy to do so. It has done so by coming up with a UHC rooted in our history and our experience since 1966.

Once rolled out this initiative will revolutionise healthcare delivery in our nation. It will have more or less the same effect that adopting free primary school education had in 2002. As usual, the free primary school initiative had its own cynics and critics; and they were very loud. They cast a lot of aspersions on the Narc Government without giving any other alternative to solving the educational crisis in our country. But the Narc Government marched on, and President Kibaki ensured that the initiative was implemented amid tremendous odds.

 Likewise, we must be brave enough to implement Universal Health Care coverage so that access to good healthcare is not simply a preserve of the elite. The aim of our nationalists when they initiated the National Hospital Insurance Fund in 1966 was to transform it into a National Health Insurance Fund and we have taken a bit too long getting this job done. The time has come to do it. And that time is now. There is work to be done; let’s do it.

The writer is Minister for Medical Services and ODM Secretary General