Potential risks of national health insurance

Last week, the potential benefits of National Health Insurance (NHI) were highlighted. It was discussed that NHI has the potential to improve access to health services, as well as to provide financial risk protection.

Like most things, NHI has its advantages and its disadvantages. This article will highlight some of the potential risks of such a system.{{more}}

Health insurance generally will make health services available to most people and also increase and improve the services offered. However, the health system could emphasize expensive curative care over primary and preventative services. If a NHI scheme does not view primary and preventative services as a way to minimize health insurance cost over the long term, then this can put a significant burden on the scheme and can then lead to financial difficulties. A sustainable and well managed NHI system must work hand in hand with the health sector to put great emphasis on primary and preventative services, as these are way cheaper and more cost effective. The old saying that prevention is better than cure is indeed applicable here.

Another significant risk of such a system is that low payment levels may not attract quality providers. Insurance agencies could lack capacity to ensure quality of private providers and if there is a lack of cost controls this can bankrupt the insurance fund. Failure to pay private providers on time can result in private providers not honouring the insurance and could lead to frustration among patients and private providers.

In a country where unemployment may be high or where NHI payment be considered as an added tax to people, the government must therefore be able to pay for those who cannot pay, so that those who are paying do not feel as if they are paying for others who may use the system more than them and at times may abuse the system. If this does not happen, then people may be reluctant to pay and so a compulsory system must be instituted. However, with such a system, people may abuse it because they will not want to think that they are paying for a service that they are not utilizing.

Although NHI can provide substantial funding for the health sector, government must still contribute to the health sector. Resources flowing through insurance schemes could make governments feel free to reallocate general budget resources away from health, leaving the health sector with unchanged or fewer resources. Therefore, it is important that NHI funds be looked at as additional funding for the health sector and not alternative funding to government budgetary allocation. Insurance funds without adequate oversight and accountability can also become easy targets for corruption.

Benefits of a NHI system could favour the already better-off because they are easier to reach with insurance. That is, they may be more willing to pay and may pay higher premiums. Benefits to the poor could become false promises if insurance is not purposefully designed to target the poor. The system may exist, but the poor may not be able to utilize it, as copayments can potentially be a barrier for the poor.

Countries may launch a broad, but expensive, benefit package that is financially unsustainable, and later be forced to limit coverage and thus dash expectations. It is therefore important that, as we consider such a system, the potential benefits be weighed against the potential risks and the necessary feasibility studies be conducted and a gradual phase in approach be taken, so that the benefit package can widen with time.

Dr Rosmond Adams is a medical doctor and a public health specialist. He may be emailed at adamsrosmond@gmail.com