Fix ailing public health system then provide a national health insurance coverage

The Government of Uganda is gearing up to introduce the National Health Insurance Policy. This policy will enable every Ugandan above the age of 18 to contribute Shs15,000 to a national pool, with the aim of providing free medical care to all citizens.

It is important to note, however, that there are other issues affecting Uganda’s public health system beyond free medical care.

Despite this, the policy is an essential step in ensuring access to healthcare for all which is a fundamental human right and attaining the Sustainable Development Goal 3 targets. One may also wonder if the amount to be paid will be sufficient to cover each citizen’s medical needs.

It is crucial to understand how medical insurance works. Medical insurance pools everyone’s contributions into a single fund, which is used to pay for medical bills. This means that there is no direct exchange of services because it is unlikely that everyone will simultaneously require medical attention unless it’s in a pandemic situation.

Despite the need for the National Health Insurance Policy, it is uncertain whether Uganda’s public health system is prepared to handle the challenges that come with it. The public health system faces challenges such as inadequate hospitals, insufficient medicines and equipment in health centers and referral hospitals. These challenges may mean that Ugandans may still need to opt for private health facilities, which can be more expensive due to the lack of medical equipment, understaffing, and pillaging of resources and drugs from health centres.

Uganda’s public health system is also facing significant challenges in terms of domestic financing and policy gaps. Despite international conventions, such as the Abuja protocol, recommending that developing countries allocate 15 percent of their national budget to the health sector, Uganda’s spending in this area still falls far short of this target.

In fact, in the financial years 2020/21, 2021/22, 2022/23, and 2023/24, the proportion of total budget expenditure on the health sector was only 6 percent, 8 percent, 8percent, and 6 percent, respectively. Although per capita total health expenditure has increased from $36.9 in the financial year 2021/22 to $58 in the financial year 2022/23, it remains below the minimum recommended $86 by the World Health Organisation for low-income countries.

In addition, Uganda’s health sector heavily relies on off-budget financing from development partners and private household out-of-pocket means. The country’s health sector financing is mainly dependent on donors and loans rather than on domestic sources. For instance, in the financial years 2020/21, 2022/22, 2022/23, and 2023/24, external financing stood at Shs1,302 billion, Shs1,447 billion, Shs1,473 billion, and Shs1,557 billion, respectively.

In contrast, financing from the Government of Uganda was only shs.222 billion, Shs338 billion, Shs323, and Shs151 billion, respectively, over the same period. This heavy reliance on external financing means that if donors stop funding, the government may struggle to subsidize the National Health Insurance Policy. Additionally, there is limited budget allocation for essential medicines, resulting in drug stockouts in public health facilities.

Uganda’s health sector is also facing significant staff gaps, with many planned positions remaining unfilled. This lack of readiness highlights the need for the government to address systemic problems affecting the health system before rolling out the National Health Insurance Policy. Despite these challenges, the government must take bold steps to address the systemic problems plaguing the health sector to ensure that the National Health Insurance Policy is a success.

Ronald Ochen, Economist at the Civil Society Budget Advocacy Group, [email protected]