What happened to the health credit fund?

Wednesday December 5 2018

Congestion. Patients wait  for treatment at

Congestion. Patients wait for treatment at Mbarara Regional Referral Hospital. Helping private hospitals acquire long term loans at low interests would help reduce the congestion in government hospitals. PHOTO BY FELIX AINEBYOONA. 

By ISAAC MUFUMBA

The promise:
In the run up to the 2011 General Election, the ruling NRM party committed to putting in place a mechanism through which private health service providers could access long term loans to enable them make more investments.

The promise was captured in what was to later become known as the “Peace, Unity and Transformation for Prosperity” manifesto.
“In the next five years, the NRM government will provide a fund accessed through commercial banks, like we have done for agriculture, to be accessed by investors in the health sector for long term financing on concessionary terms. Furthermore, the NRM will continue to encourage and support private public partnerships in the health sector,” the manifesto read in part.

The argument was that government appreciates the role that investors and private health facilities, including those owned by religious organisations, were playing in making health services available to communities across the country.

The manifesto, however, added that government was at the same time aware of financial constraints that many of these institutions face on account of failure to access long term financing at rates other than those demanded by commercial banks.
Investors in the pharmaceutical sector, the manifesto said, were facing a similar funding problem, which was deemed to be inhibiting growth and development of the industry.

The manifesto added that it was because of these challenges that government was advancing financial assistance and medicines to 58 and 679 private, not-for-profit hospitals and health centres, respectively.
The establishment of the fund, through which they could access long term financing on concessionary terms, was, therefore, intended to curb dependence on government support and also enable them to expand, acquire modern medical equipment and offer specialised services.
The fund was meant to work in the same way as the Agricultural Credit Facility (ACF) or the Fisheries Credit Fund (FCD).

Comparison
ACF was set up by Bank of Uganda in partnership with the Uganda Development Bank and a host of commercial banks and micro deposit taking institutions to avail long term financing at concessionary terms to those engaged in commercial agriculture and agro-processing or value addition at commercial level. ACF became operational in October 2009.
The $2 million FCD, on the other hand, was designed to boost the activities of at least 2,200 people engaged in subsistence or commercial fish farming, and fish traders and processors.

The actors were meant to access loans through commercial banks to enable them acquire modern equipment such as boats, fishing gear and refrigerated vehicles to enable them engage in modern fishing practices and also prevent post-harvest losses.
More than eight years after the promise was first made, there is nothing to suggest that the fund is in place or that there is increased government funding to the health sector. So what happened to the fund?

Big numbers. Patients receive free medical

Big numbers. Patients receive free medical services at Mengo Hospital, Kampala last year. Many Ugandans cannot afford basic health services in private hospitals. MONITOR PHOTO

Impact
One of objectives of the fund was to cure the problem of private health facilities having to borrow at commercial rates in order to fund their investments.
At a time when Uganda was and continues to be under immense financial pressure to increase the healthcare kitty because of, among others, increased demand due to a sharp rise in the population and the need to adopt to changes in medical technology and changes in patients’ choices and expectations, such a fund would have allowed private health facilities to provide the kind of specialised treatment that the public demands at affordable rates.

That did not happen. The investors continue to borrow at commercial rates, which means that the cost of money has to be passed on to the consumers. This has made the cost of medical care and treatment in the private hospitals in Uganda quite high and out of the reach of many an ordinary Ugandan. This explains why some sections of media have been awash with stories of patients being detained in some of the private hospitals for failure to foot bills. The other objective had been to boost the capacity of the local pharmaceutical industry. That did not happen. Stock-outs of essential medicines and health supplies continue. The existence of expired drugs, the bulk of which are imported, continue to grace the shelves of our hospitals and health centres.

Regional impact
At a regional level, it has been known for quite some time now that the six East African Community (EAC) member states; Uganda, Kenya, Tanzania, Burundi, Rwanda and South Sudan, have to import up to 70 per cent of the medicines.
In an effort to extricate the region from this conundrum, EAC countries in April launched the second EAC regional pharmaceutical manufacturing plan of action 2017-2027, which was developed with technical and financial assistance from the government of Germany through its development arm, GTZ. The plan focusses on, among others, supporting production of active pharmaceutical ingredients and excipients as well as promoting the sector specific service industry. Had the plan to create that fund been operationalised as promised, Uganda would have provided the lead for others to follow, especially in the area of production of the essential medicines needed in the region.

Implication. Manufacture of such drugs would

Implication. Manufacture of such drugs would see government grow the local industry and attract market from neighbours. File photo.

Monitor’s Position

It is not clear how we ever got to this but if what Second Deputy Prime Minister Kirunda Kivejinja said in April during the East African vaccine symposium is true, it is laughable that the East African region does not produce vaccines.
“The region wholly depends on importing vaccines as there is currently no local production capacity,” Mr Kivejinja said.

Over the years, we have made major strides in the area of agriculture by developing medicines such as the Newcastle vaccine for poultry and the thermo stable NCD vaccine. How does one explain the fact that we do not have capacity to produce any vaccines at a time when immunisation coverage for children has risen to 95 per cent and when children are being immunised against the 11 killer diseases, including cancer of the cervix? Uganda needs to take advantage of the Presidential Initiative on Science and Technology to encourage development in such areas. Like the chief executive of Kampala Pharmaceutical Industries, Mr Mohamed Nazeem, pointed out during the launch of EAC regional pharmaceutical manufacturing plan of action, 2017 to 2027, failure by government to avail low-cost loans to drug manufacturers is stifling growth in the sector. This must be addressed if we are to grow local industries.

Official explanation

The senior public relations officer in the Ministry of Health, Mr Emmanuel Ainebyoona, says government had indeed released a National Policy on Private Partnerships in Health but that he was not aware of a special fund for private health facilities.
“The National Policy on Public Private Partnerships, a product of the 4th joint review commission, which was held by the Ministry of Health in April 2001, has been in place for some time now. I, however, do not know about the fund. The best-placed person to know about that would be the commissioner in-charge of planning,” he said on phone on Friday.

It was not possible to talk to Dr Sarah Byakika, who is in-charge of strategic planning and investments at the Ministry of Health, but other sources have since indicated that officials from the Health and Finance ministries have since began talks aimed at making the fund a reality. It is not clear whether the talks are time bound.

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