As a continuum of its quest towards Universal Health Coverage (UHC), Government of Nepal launched the National Health Insurance Program (NHIP) 2013, followed by the Social Health Security Development (SHSD) Committee 2015 as a legal framework for the implementation. The pilot phase of this insurance program was launched from 3 districts, now in the second phase 2016 – 17, has expanded over 25 districts and has a final nationwide target of 75 districts by year 2021. This program has seen many hitches already and the pathway to complete successful implementation of this program seems more daunting.
Nepal has made significant progresses in improving the health of its citizens in recent years, with remarkable achievements in women and children health, the country is on track to achieve the Millennium Development Goals, however the aim of UHC and even the sustainability of current achievements appears grim with the frail health financing system. Health expenditure in Nepal has compromised of only about 6% of the total national GDP, with a meagre $40 per-capita expenditure on health, almost half of which is covered by the international aids. The public are at risk of catastrophic health expenditureƗ with 55% out of pocket payment as compared to 48% in other low-income countries.,
Ɨ Catastrophic health expenditure is defined as out-of-pocket spending for health care that exceeds a certain proportion of a household’s income with the consequence that households suffer the burden of disease and poverty. (WHO Bulletin, 2017)
|Per capita health Expenditure (US$)||Total Health expenditure in GDP||Public share of total health expenditures %||Out-of- pocket share of total health expenditures %|
|Low Mid Income||81||4||42||53|
Source: World Bank, 2010.
Table1: Health Financing in Nepal (2010).
Government of Nepal has declared health as a fundamental right with every citizen’s access to free basic health services. The Nepal Health Sector Strategy(NHSS) 2015- 2020 also outlines the strategies towards UHC consisting of delivery of this right while minimizing the associated the financial hardship for which the insurance program. This new insurance program is based on comprehensive social contributory scheme with government subsidies for the poor (Table 2) ensuring access to quality health service while reducing out of pocket payments.
The national health insurance scheme relies on prepaid pooling of funds with later entitlement to health care benefits, reduced vulnerability to the expenses of care at times of illness or injury (financial risk protection). The current scheme aims at risk and contribution pooling in three forms- from low to high risk, from rich to poor and from productive to non-productive age group. The modus operandi, non-refundable, non-transferable social contributory scheme with annual contribution from households of NPR 2,500 (US$1 ~ NPR 100) for household of up to 5 members and additional NPR 425 per person for additional members, with subsidies for certain exempt groups as shown in Table 2.
FCHV- Female Community Health Volunteers
Table 2: NHIP subsidy scheme.
The benefit package consists of coverage of medical costs amounting NPR 50,000 for a family of 5 members with additional NPR 10,000 for an additional member with maximum NPR 100,000 ($ 1,000) per year, per family.
25% of 30 million people of Nepal live below the poverty line and 15% of them live below $ 1.90 per day. Acquisition of matching fund for the subsidized enrollment of this group of the population, will be a huge setback for the aim of pooled fund collection, stern on the already exhausted health economy. Yet another issue of concern is the limitation and efficacy of protection provided by the insurance benefits, health service equivalent to $500 -$ 1,000 for the entire family. This upper ceiling is negligible compared to actual costs of health-related expenditures incurred by an average Nepali family today where 14 – 35 % catastrophic health related expenditures occur annually.,
This program will also face the challenge in bringing about balance between pre- existing disparities in human resource distribution, gaps across wealth quintiles and geographic location. Nepal has an overall chronic shortage in health human resources, doctors, nurses, midwives with their density less than 7 per 10,000 population. The prevalence of health facility is also scarce with less than 5 hospital beds per 1,000 population and most of which are in the major cities., Only 68% of the population reside in areas within 30 minutes access to health institutes, with a significant urban (86%) and rural (60%) incongruity. The resulting burden of this discrepancy is, as expected disproportionately felt by the poorest households who have the limited recourse to purchase quality services from private providers.
Years of poor service both in terms of availability and quality has resulted in a very high degree of mistrust among people towards public health institutes. Private health sector in Nepal is a huge industry which received 90.4% of total out-of- pocket expenditures, amounting $540 million in 2011. These private sectors are based upon highly unregulated fee-for-service business model and triumph over the public sector both in terms of number and patient turnover. Contextually, incorporation of these for-profit private medical sector in the scheme will pose an immense challenge if not even threaten its very own existence. A very cautious outline should be put forward by the government for their amalgamation, probably building upon issues of their social accountability and responsibility.
|Private for-profit Hospitals||105||4,621|
Source: MOHP 2010
Table 3. Comparison of number of hospitals and beds.
In addition, chronic and Non-Communicable Diseases (NCDs) have become a huge global health challenge. The requirements in today’s personalized medicine era therefore cannot be limited to and by the mere 70 drugs of the National List of Essential Drugs. Suitable recourse to consider the costlier and effective noble treatment modalities to address the chronic illnesses, NCDs must also be periodically made.
The Silver lining:
NHIP aims to generate and distribute the limited financial resources to maximum number of its citizens when a backdrop of globally estimated 100 million people are pushed into poverty annually because of their health-related expenses. Establishment of the constitutional health rights, programs and high-level committee for this insurance program demonstrates the dedication, which has been key to successes of similar kind of programs in countries like Thailand and China.
Thailand is a remarkable example of strong dedication from the leadership in bringing about changes at very affordable costs. In a span of 10 years, by 2011 the UHC program was successfully expanded from less than one third coverage to over 98% of the 68 million population. Costs of their health scheme averages $80 per person, double to the existing $40 expenditure of Nepal. China on the other hand has the largest known expansion of insurance coverage in history. In the span of 5 years (2005 to 2011), the coverage expanded over a billion population from less than 50% to 95% citizens. Though, Nepal’s population is nowhere compared to China, however Nepal can pick up on the role of political and socio-economic backup, importance of public support, and commitment demonstrated from top leaders for such a gigantic maneuver. 
Nepal also needs to be meticulous on their financing strategies. The government needs to seek for options in increasing revenue, perhaps by appealing more international support or increasing tax rates. On a better approach, the government should also take steps towards the spill reduction by corruption control as in Indonesia, where the government took on policy for zero tolerance against corruption and were able to raise tax related revenue from 9.9% to 11% in just over four years. Much can be achieved in the arena of economic transparency in Nepal, where reports of Transparency International show stable corruption perception index of around 30 in the last decade, 0 being very corrupt and 100 very clean.
Nepal also has different pre-existing free health benefits covering the major health issues of the country and will eventually come under the remit of this program. The government already provides free 70 essential drugs, basic laboratory services, maternal and neonatal health care at public health facilities. Ongoing public health programs for immunization, family planning, community-based integrated management of neonatal and childhood illness (CB-IMNCI), essential therapeutics for Tuberculosis, Malaria, Kala-azar, Leprosy, HIV prevention and treatment program are being distributed free of cost.
Lastly, Nepal needs to set up a clear realistic idea, aim for practically achievable targets. The program in China, for instance where the annual premium is only around $20, almost equal to $25 of Nepal, the coverage in return is merely sufficient and hence the benefits of which are often questioned. 
Successful implementation of the health insurance will not only have the well-known benefit of financial protection but also health related benefits. Experiences in Costa Rica, China and Peru have demonstrated that consumers with protection against health-related financial risks have better health seeking behavior as well as service providers have a positive difference in behaviors of the towards them. This scheme will again, also provide an opportunity for improvement of the existing public institutes both in terms of quality and quantity.
To conclude, merely formatting a policy and distribution of health insurance cards will not suffice this low-income nation to achieve its health targets. This health insurance policy should be taken as a nation’s top priority health policy and convert all its challenges to opportunities. Nepal must learn from other countries, examine experiences of both successes and failures, make necessary policy innovations, timely amendments and with a multi sectoral approach implement them, make this National Health Insurance Program implementation a story of success worth remembering .
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