Paradigm shift towards sustainable health financing in Africa

Universal health coverage (UHC), embedded within the United Nations Sustainable Development Goals, is defined by the World Health Organization as all individuals having access to required health services of sufficient quality without suffering financial hardship. Sadly, effective strategies for financing healthcare, which are critical to achieving this goal, remain a challenge in Sub-Saharan Africa (SSA).

Access to quality healthcare services without individuals suffering financial hardship remains a challenge in Africa. For a larger percentage of the African population, individuals’ access to essential health services depends on direct out-of-pocket payments (OOPs), pushing millions of people further into poverty each year. One of the consequences of this is that millions of people do not seek quality treatment for their health issues, exacerbating the problem and increasing the burden of preventable deaths in Africa.

With public health epidemics and pandemics like the COVID-19 pandemic emphasizing the importance of UHC, there is an urgent need for a paradigm shift towards adopting health financing strategies in Africa that ensure financial risk protection and support sustainable health services towards the attainment of UHC.

Solutions for health financing in Africa are not a “one size fits all” or generalizable model but require tailored, country-specific approaches that address the unique needs of countries

Sustainable health financing in Africa

Addressing the challenges of sustainable health financing in Africa requires a look at two key perspectives: demand and supply. The demand perspective refers to individuals’ demand for quality and affordable healthcare services, while the supply perspective refers to the availability of quality healthcare infrastructure to meet the demand.

Some health financing approaches have been employed in various capacities across Africa to cater for the growing demand for affordable healthcare on the continent. A common approach is the National Health Insurance Scheme (NHIS). A number of countries are either in the process of fully implementing NHIS as a sustainable health financing mechanism or already have such structures in place. A single, compulsory NHIS provides the most equitable option, as voluntary health insurance can lead to further inequities and disparities among populations. Social health insurance (SHI), a compulsory system that deducts contribution payments directly from employee payroll taxes, is another health financing mechanism. However, in SSA, where the formal sector is relatively small and the majority of the population is in the informal sector, this approach is less suitable and sustainable.

Read also: Strengthening Health Financing in Africa Towards Universal Health Coverage

In Nigeria, a new National Health Insurance Authority (NHIA) Act was signed into law in May 2022. The Act establishes and empowers the NHIA to ensure the provision of health insurance for all Nigerians through a mandatory mechanism in collaboration with state health insurance agencies. Through this Act, efforts to tackle high poverty levels caused by OOPs for healthcare through health insurance for all categories of Nigerians by 2030 are now more achievable than ever before.

On the supply side of health financing, there is a critical need for the establishment and strengthening of healthcare facilities such as hospitals, diagnostic centres, and laboratories that ensure the optimal supply of quality healthcare. Ensuring that quality health services reach some of the most vulnerable communities remains a challenge throughout the region. Basic amenities for health facilities, such as water, electricity, and sanitation, are lacking in rural areas and require investment. A considerable challenge in the supply of quality healthcare is the dependency on donor funding and the development of effective strategies to strengthen domestic financing mechanisms. Addressing this issue of supply, African countries have begun to explore the role of public-private partnerships (PPPs) in strengthening healthcare.

Strategies to improve sustainability in health financing in Africa

Solutions for health financing in Africa are not a “one size fits all” or generalizable model but require tailored, country-specific approaches that address the unique needs of countries. Achieving UHC in Africa requires systems that raise the bulk of funds through forms of prepayment (e.g. taxes and/or insurance), and then pool these funds to spread the financial risk of illness across the population. In view of these, the following are strategies to strengthen health financing in Africa:

 Enhancing public-private partnerships (PPPs): Sustaining increased health coverage requires the strengthening of health systems, emphasising the value of PPPs in health financing reforms. PPPs can provide a coordinated approach to addressing quality, efficiency, and financing issues in health service delivery. Leveraging PPPs can help overcome the limitations of financial, technical, and human resources in different aspects of the healthcare system.

Increasing government health expenditure: Ensuring quality health services reach some of the most vulnerable communities where even basic health facilities are lacking requires investment. Increasing the government’s commitment of domestic resources to health financing is essential to address the shortages of critical inputs, such as human resources for health and pharmaceuticals.

Optimizing the health insurance schemes: Ensuring that there is wider coverage for health insurance schemes in African countries by putting some mechanisms in place to include the vulnerable and underserved population in the scheme.

In conclusion

Appropriate and sustainable health financing strategies that safeguard financial risk protection underpin sustainable health services and the attainment of UHC. Concerted efforts at various levels between African governments, donors, and the private sector are therefore necessary to address quality, efficiency, and financing issues in health service delivery and advance towards UHC.