Empirica Actuaries supports efforts to transform the national health system with the aim of providing all Batswana with affordable, high-quality, and universally accessible healthcare.
As Botswana embarks on its National Health Insurance (NHI) journey, the quest for Universal Health Coverage (UHC) brings both promise and complexity. This Note 1 in our 24-month series discusses a case for NHI in Botswana and then sets the scene for the subsequent notes.
Firstly, we note that UHC and NHI are different things. UHC is about accessibility to quality healthcare services while the NHI represents one financing mechanism of pooling contributions to fund those services.
To derive meaningful value from producing and sharing these notes, it’s essential that we ask the right questions. Perhaps the first question is: if healthcare is already free in Botswana, why should there be a focus on UHC? Second, is NHI essential for achieving UHC?
The answer to the first question was detailed by the Ministry of Health at the launch of the NHI. It was explained that there is a UHC Index of the WHO and Botswana currently has an index score of 55, signalling significant gaps in healthcare access and quality.
In our view, closing these gaps demands a thorough review of system efficiencies, shifting toward bottom-up budget allocations, and identifying and eliminating waste.
In the subsequent notes on funding, we explore different ways of how this can be done, such as The Kingdom of Saudi Arabia’s appointment of Actuaries to set the healthcare budget towards achieving UHC.
Regarding the second question about whether UHC needs a NHI to be achieved. The answer is no, UHC does not have to be an insurance.
However, we considered three factors that then make reviewing funding for UHC imperative. The current healthcare system is under pressure, resulting in inadequate service delivery such as long waiting times, high bed-occupancy rates, etc.
The reliance on mineral income exposes health spending to economic shocks, threatening budget stability.
And lastly, healthcare inflation consistently outpaces general CPI, eroding purchasing power and straining resources. These 3 factors lead us to consider that alternative financing is required to secure healthcare spending for future generations.
In our subsequent notes on the structure of the NHI, we consider that an effective NHI needs to be delivered in accordance with what we call pre-determined design decisions.
First, the role of Medical Aid schemes (MAS) needs to continue unchanged. We then go on to explain why this approach delivers distinct advantages.
Second, due to limitations in the ability to pool resources, we propose that the government can instead repurpose its healthcare spending in a private setting.
Lastly, we propose that the government leverages its scale advantage to negotiate lower unit costs (e.g., bulk drug purchasing, standardised tariffs) as a centralised purchaser.
In the notes on benefit design and rationing, we will compare two NHI tiers, NHI Class 1 matching MAS comprehensive benefits and NHI Class 2 – an essential package.
We consider what happens if the average cost of the NHI per person is lower than the price that the MAS charge per person on average for comprehensive healthcare cover.
Effectively, this means that we will be shopping for healthcare cover at a discount, which has the risk of defeating the purpose of achieving UHC.
We will conclude our work by proposing that the government can consider delivering the ideal NHI Class with a special health risks layering.
Healthcare cover and insurance products generally evolve through enhancements as new competitors enter the market and companies redesign their benefit packages.
Further notes in the Empirica Actuaries NHI Note series will expand on the issues identified in the current note, as well as other important questions relating to the NHI proposal.
