Apr 19 - 25, 2010

One major pillar of any social protection network is access to free or affordable health care. Major health incidents, especially those of catastrophic dimensions, often aggravate households' poverty.

Development of the private health sector is often constrained by the low level of development of the health insurance industry. The lack of access to health insurance poses a major problem for the financing of care for catastrophic episodes of illness and injuries.

Risk pooling through health insurance may prevent households from falling into poverty, and those who are already poor will have the chance to get access to better health services.

Health insurance thus greatly helps reduce and prevent poverty. Even when health insurance does not pay for services, it can negotiate prices for health care and thus make the costs of services more transparent. At several levels, health insurance has become an issue in Pakistan.

The federal Ministry of Health is discussing how else to extend coverage of health insurance.

In general, public health expenditure is very low in Pakistan as around 3 per cent of the budget is spent on health, and public health expenditure is around half of a per cent of the GDP. National public expenditure on health is US$4 per capita, while total expenditure on health is US$18 per capita. Social health insurance covers only 5 per cent of the population but represents about 40 per cent of federal and provincial governments spending on health.

The health care financing system consists of three alternative protection schemes, where health insurance still represents a small segment. The public has access to the public system financed by the federal and provincial governments. Public health care facilities comprise of basic health units, rural health centers, and public hospitals. Although public health care is supposed to be free, problems encountered are 1) frequent unofficial charges; 2) inadequate availability of medicines and supplies (which have to be bought outside by the patients), and 3) absenteeism of staff.

Employees in the formal sector are covered by the social security health insurance system (Employees Social Security Institution). The formal sector includes employees of private companies with a minimum number of employees (the number varies province-wise from 5 to 10) and their families. These social security institutions operate health facilities at the province level.

With many facilities in rented buildings and the better ones in newly built facilities owned by the social security institutions, the quality of the facilities varies but is better than in the public sector.

Social health insurance covering most of the population is a new concept in Pakistan, which requires major assistance and a lot of awareness raising, capacity building, and institutional development. So far, not much assistance has been given to the federal or provincial governments in the sector.

The World Bank tried to support health insurance pilot projects in NWFP and Punjab in the past but later on withdrew its support. The Japan Social Development Fund withdrew its funding because the project was not initiated on time as implementing NGOs could not solve their problems on ownership of the insurance. German Agency for Technical Cooperation mainly provides technical assistance to the provincial government of NWFP to finance health care.

The government of Punjab has made major efforts to study the possibility and feasibility of health insurance, elaborating on how to extend health insurance to the poor through federal or provincial government subsidies as well as on how to cover public servants.

Social health insurance is a concept developed in European industrialized countries and covers the whole population against financial losses due to illness and accidents. The concept has also been adapted to newly industrialized and developing countries.

The People's Republic of China, the Republic of Korea, the Philippines, Mongolia, and Vietnam have developed social health insurance schemes. Their experiences can serve as a model for Pakistan.

Inadequate public health facilities force the people to spend a major portion of their incomes for private health services, as the government's spending on health sector is reducing for the last few years and now stands at the bottom in South Asian region. It is interesting to note that in developing countries only one third of the population have access to medicines through public sector, while private sector provides medicines to rest of the two-thirds. Prices people pay for lowest-priced generic medicines vary from 2.5 times to 6.5 times of international reference prices (IRPs) in the two sectors respectively.

This is mainly because developing countries lack proper regulation or assessment system to assess the pricing of medicines.

The World Health Organization at the start of year 2009 had also estimated in its review on Health Inequalities in Pakistan that the out-of-pocket health expenditure in Pakistan stands at 71 per cent, the highest in the Eastern Mediterranean region - and a burden for the poor. It also said that the unregulated private sector delivers a high proportion of health services and there is a great discrepancy in the quality of services. Those who can only afford to pay a little usually get the poorest quality of the services.

In rural areas, the very poor women and men avail government services as they can afford only those. They visit private doctors as a last resort, and sometimes because of a referral made by the government doctor. The existing health infrastructure is not sufficient to cater to the needs of over 200 million people residing in the country. According to the data on health centres a minimal increase in health centres was witnessed during 2000-2007. Moreover, there exists a significant difference among provinces.

The overall healthcare system in the country can't be improved without enhancing greater allocations and involving the private sector. However, unless individuals are ready to become partners in such schemes, not much can be expected.