Cost of Providing Universal Coverage

The Uganda Ministry of Health has set an overall goal to achieve Universal Coverage. If achieved this would enable all of its population to seek care without financial constraint or any concern of financial hardship as a result of accessing health services. It would also imply that required health services were easily accessible and available to all, at their time of need.

In 2001 the WHO “Report of the Commission on Macroeconomics and Health” suggested that on average it would cost $34 per person per year to provide the full set of essential heath interventions. These are broadly those covered by Uganda’s National Minimum Health Care package, UNMHCP.

The equivalent in 2008 allowing for an average of 6% pa inflation is $51.

WHO data show that in 2008, in Uganda, the total health expenditure (THE) per person was just $33. So a shortfall of $18, about 35%.

The Government of Uganda contributes about 23% of this total, $7.59.

Donors, NGOs and charitable giving contributes 38% of the total, $12.54.

That means the sick and their families are paying on average 39% out-of-pocket (OOP), $12.87.

There is general acceptance, which we will explore another time, that this OOP expenditure is too much for the majority of the population and perhaps a major barrier preventing the most needy from seeking and accessing basic health services.

Donor funding is generally not deemed to be a sustainable means of funding health care.

So the GoU will need to increase its share. As mentioned before, Government spending on health care is capped at 10% of the overall government budget. So unless this approach is changed we will need to see a significant increase in the overall national budget, which would imply either greater taxation or a much higher national GDP. The 10% of budget allocated to health care is equivalent to 1.4% of GDP. The CIA World Factbook shows Uganda’s GDP as $17b.

GDP in Uganda has been growing strongly at more than 6% per annum, but this is largely negated by both inflation and the growth in population which is the second highest in the world at 3.5% pa.

A recent report in the Sunday Monitor indicated that Uganda may be able to produce up to 120,000 barrels of oil per day (it currently imports all of the 13,000 barrels/day it consumes; source CIA). This new local production could result in up to $3b additional annual income, about 17% of GDP. So in future years oil could be a significant contributor to the country’s economy.

How might this impact the GoU health care budget allocation?

If we use current budget policy (10% to health care) and the same 1.4% of GDP as above, oil production will only add about $1.35 per person per year for health services.

If we take a more optimistic view (one not likely without a shift in GoU policy) and increase the allocation of national budget to health care from 10% to the 15% agreed in the 2001 Abuja pledge, this would be equivalent to 2.1% of GDP. GoU would be contributing an extra $3.80 per capita and oil would contribute an additional $2.03. This total extra of $5.83, whilst very welcome, is still small compared to the estimated gap in funding, $18, that contributed from overseas, $12.54 or OOP, $12.87.

So not even the promise of wealth from national oil production or a change in GoU economic policy will be enough to significantly, or materially, reduce the financial burden on the sick paying out-of-pocket or reduce the country’s reliance on necessary funding from overseas.

In order to defray the full contribution to health care from overseas, the GoU would need to spend up to 13% of the estimated revenue generated by oil production. Such an approach would certainly be possible, but I wonder how likely it might be; still it’s something worth pushing towards.

About Kevin Duffy

Interim Management and Consulting - Healthcare Development. Kevin has thirteen years senior management experience in the development and delivery of healthcare services in Africa and South Asia.
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