The contribution of rwandan health insurance in economic development of rwanda

2.9. Challenges of health insurance schemes in Africa

On the path to adequate healthcare, rural populations in developing countries face many obstacles, which often seem insurmountable. In many African countries a considerable proportion of the population faces problems of financial access to essential healthcare services.  This holds especially true for the informal sector and beneficiaries living in rural areas. In order to enhance healthcare coverage and provide financial protection against impoverishment due to the costs of catastrophic illness, the Government of Rwanda has implemented several financing mechanisms. (Atim. C 1999:46)

Apart from social health insurance schemes covering employees in the formal public and private sectors, a community based health insurance was established to improve access and offer financial protection to the majority of the Rwandan population working in the formal economy.  In addition to the Community Based Health Insurance Policy, the present policy has been elaborated to provide a comprehensive guiding framework for a National Health Insurance system in Rwanda. Significant breakthroughs have been made in recent years concerning the extension of social security in Rwanda. (Ministry of health report 2000:2)

Notably, the Government's decision to introduce compulsory health insurance for the entire population, accompanied by a policy of strong support to the development of mutual health organizations throughout the country. Building on existing examples of community-based initiatives, there has been a huge growth in the number of mutual health organizations (mutuelles de santé), which have been set up in each of the 30 health districts and are also present at the level of the health centre in the form of a smaller unit called section of mutual health; there are now more than 400 of these units. (Ministry of health report 2000:2)

Membership rates of Community Based Health Insurance (CBHI) stood at 73% in 2006 and increased since then to reach 91% of coverage in 2010. In 2010, the CBHI policy has been updated in order to be more adapted to the current challenges. The new policy improved population's access to quality health services in a fair and equitable manner. The existing statutory social security system in Rwanda includes the Social Security Fund (pensions and occupational risks); and, for the health part, the RAMA (Rwandaise d'Assurance Maladie) and the MMI (Military Medical Insurance).

The Rwandan Government shows a strong interest in strengthening the structure and capacity of public institutions in providing social security.

More recently, on December 2008, the Rwandan Ministry of Finance and Economic Planning released a project on "Rationalizing delivery of social security benefits services to be delivered less than one institution". (Ministry of health report 2000:2)

The project of the Government is to merge two main social security institutions, the Social Security Fund of Rwanda and "la Rwandaise d'Assurance Maladie" (RAMA) in a single Rwanda Social Security Board (RSSB). In 2009, the «Social Security Policy» has been prepared by the Ministry of Finance and Economic Planning. The new Rwanda's vision for social security is to reach the ideal situation of «Social security coverage for all» and having all the population covered with maximum benefits possible (retirement, professional risk benefits, sickness benefits, maternity, healthcare, etc.). 

In order to achieve this, key actions have been identified such as the reinforcement of compulsory affiliation and/or development of incentives for voluntary membership in order to increase the coverage, awareness campaign for active participation of the population through community based-organizations. In 2011, the Ministry of Local Government has prepared a National Strategy on Social Protection. This strategy presents the social protection vision for the next 10 years. (Ministry of health report 2000:2).

The long term vision for Rwanda is to establish by 2020 a «social protection system that complements and contributes to economic growth». The mission is to ensure «that all poor and vulnerable beneficiaries are guaranteed a minimum income and access to core essential services that those who can work are provided with the means of escaping poverty, and that increasing numbers of beneficiaries are able to access risk-sharing mechanisms that protect them from crises and shocks.»  Therefore, two main elements have been identified to establish the social protection system:

A social protection floor for the most vulnerable groups and an increased participation of the informal sector in the contributory social security system. Furthermore, after the war and genocide the Ministry of health (MOH) set its priorities on the reconstruction of health infrastructures and services and the decentralization of the health sector into districts.

From 1994 until 1996, most health centres and hospitals were supported by international organizations and provided some free healthcare services. But in 1996, the MOH introduced user fees in public and mission facilities.

When international organizations decreased their support, health facilities started to increase prices for their drugs and services in order to cover a large part of their recurrent cost for health centers and comparatively lower cost recovery rates over time, the MOH addressed new cost recovery strategies for healthcare services by launching prepayment schemes focused on improving equity in access to quality healthcare for the rural population, and setting incentives to healthcare providers to improve quality and efficiency in health service delivery (Schneider P, Diop F & Bucyana S. 2000).

In the Poverty Reduction Strategy annual progress report (2003-2004:56); it was shown that community health insurance were regarded by the government of Rwanda as the main mechanism of expanding financial protectionism against health risks. After successive pilots since 1998, the ministry of health has promoted the establishment of mutual's schemes. Community health insurance schemes are normally local community initiatives based on concepts of solidarity and risk pooling and involve active participation of group members. They improve equity access to healthcare for the excluded high level of solidarity, trust and finally improve the ability to counter-risk, cover all healthcare cost (Ministry of health report 2000:2).

Community health insurance schemes have existed in Rwanda; it was in the 1960s that community-based health insurance systems, like the association Muvandimwe de Kibungo (1966) and the association Umubano mu bantu de Butare (1975) started to be constituted. However, these community-based health insurance initiatives were further developed only since the reintroduction of the payment policy in 1996. The development of community-based health insurance initiatives in the form of modern mutual health insurance has been on the increase during the past five years. In fact, the number of mutual health insurance increased from six (6) in 1998 to 76 in 2001 and 226 in November 2004.

The geographical coverage of mutual health insurance was also extended: whereas initially in 1999, this mutual health insurance was mainly developed in the four provinces of the country, as well as in the city hall of Kigali. They cover about 2.101.034 beneficiaries, representing 27% of the population of Rwanda. It is not uncommon that the closest health center is several kilometers away, the infrastructure is inadequate and the staffs receive their rural patients not as clients, but as beggars.

The bill also has to be paid out of pocket, which in the context of rural Africa is extremely difficult, especially during the run-up to harvest time. (Pledge of the district 2011:58)

The viability of a MHI partly depends on outside determinants that can hardly be influenced by the scheme such as a country's legal and policy framework, but nevertheless, the design of the scheme and its running as well as community participation is important factor for sustainability (Atim, 1998; Criel, 1998). Schemes are generally limited to a specific region or community and thus only reach a small number of beneficiaries. Moreover, insurance packages are not comprehensive, but only offer supplementary coverage for certain medical treatments. Mutual health insurance generally operates on a non-or low-profit basis.(Social Science and Medicine 48, 881-886)

The problem known as «moral hazard» should be considered; as insurance lowers the price of care at the point of use and removes barriers to access, utilization of health facilities was increase (Manning et al. 1987)-surely a desirable effect given the current under-utilization of facilities in developing countries. But healthcare costs may grow far more rapidly than resources mobilized through premiums-an effect which can quickly jeopardize the scheme's financial viability. Furthermore, some provider-payment mechanisms like fee-for-service reimbursement give incentives for the provision of unnecessary and expensive treatment to insured patients (McGuire et al. 1989).

Again there is a challenge third, called adverse selection where the beneficiaries most likely to join a voluntary scheme are high-risk individuals such as the chronically ill, who anticipate a high need for care. Due to this self-selection, the claims made to the scheme were exceed its revenues by far if premiums are based on the average risks in the community. As a consequence, premiums would have to be raised and insured persons with a relatively lower risk than other members would drop out of the scheme, and would therefore again increase the healthcare cost per insurance member (Cholet and Lewis 1997)