Health Systems & Reform ISSN: 2328-8604 (Print) 2328-8620 (Online) Journal homepage: http://www.tandfonline.com/loi/khsr20 Progressive Pathway to Universal Health Coverage in Tanzania: A Call for Preferential Resource Allocation Targeting the Poor Huihui Wang, Mariam Ally Juma, Nicolas Rosemberg & Mpoki M. Ulisubisya To cite this article: Huihui Wang, Mariam Ally Juma, Nicolas Rosemberg & Mpoki M. Ulisubisya (2018) Progressive Pathway to Universal Health Coverage in Tanzania: A Call for Preferential Resource Allocation Targeting the Poor, Health Systems & Reform, 4:4, 279-283, DOI: 10.1080/23288604.2018.1513268 To link to this article: https://doi.org/10.1080/23288604.2018.1513268 Published with license by Taylor & Francis Group, LLC© 2018 International Bank for Reconstruction and Development / The World Bank Accepted author version posted online: 24 Sep 2018. Published online: 31 Oct 2018. Submit your article to this journal Article views: 207 View Crossmark data Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=khsr20 Health Systems & Reform, 4(4):279–283, 2018 Published with license by Taylor & Francis Group, LLC ISSN: 2328-8604 print / 2328-8620 online DOI: 10.1080/23288604.2018.1513268 Commentary Progressive Pathway to Universal Health Coverage in Tanzania: A Call for Preferential Resource Allocation Targeting the Poor Huihui Wang1,*, Mariam Ally Juma1, Nicolas Rosemberg 1 and Mpoki M. Ulisubisya2 1 Health, Nutrition & Population Global Practice, World Bank, Washington, DC, USA 2 Ministry of Health, Community Development, Gender, Elderly and Children, Dodoma, Tanzania CONTENTS Abstract—Universal health coverage (UHC) can be a vehicle for improving equity, health outcomes, and financial well-being. Country Context After publication of the World Health Organization’s report in Considering the Poor in Grant Transfers to LGAS 2010, many countries declared their goal of achieving UHC. A Considering the Poor in Government In-Kind Transfers key lesson from research evidence and country experience in Considering the Poor in Government Contributions to Health implementation of pro-poor UHC is that public budget plays a crucial role in financing the poor. It has long been recognized that Insurance Funds if a country wants to reduce the gap between the poor and non- References poor, deprived groups should receive preferential allocation of health care resources to achieve more rapid improvements in their health. Based on a technical analysis of public funds alloca- tion mechanisms in Tanzania, we argue that these mechanisms should prioritize the poor more explicitly and give them prefer- ential treatment to close the gap with the non-poor in service utilization and health outcomes. Universal health coverage (UHC)—the availability of qual- ity, affordable health services for all when needed without financial impoverishment—can be a vehicle for improving equity, health outcomes, and financial well-being. After publication of the World Health Organization’s (WHO) World Health Report in 2010, many countries declared their goal of achieving UHC.1 In its Global Health 2035 report, the Lancet Commission on Investing in Health Keywords: equity, health finance, Tanzania, UHC argued that progressive pathways to universal health cover- Received 4 May 2018; revised 18 July 2018; accepted 15 August 2018. age are an efficient way to achieve health and financial *Correspondence to: Huihui Wang; Email: hwang7@worldbank.org protection.2 Though most African countries have govern- Color versions of one or more of the figures in the article can be found online at www.tandfonline.com/khsr. ment programs for the poor, effective population coverage is low and programs face severe financial constraints.3 A © 2018 International Bank for Reconstruction and Development / The World Bank This is an Open Access article distributed under the terms of the Creative key lesson from research evidence and country experience Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), in implementation of pro-poor UHC is that the public bud- which permits unrestricted use, distribution, and reproduction in any med- get plays a crucial role in financing the poor.4 ium, provided the original work is properly cited. 279 280 Health Systems & Reform, Vol. 4 (2018), No. 4 It has been long recognized that if a country wants to Tanzania’s decentralized health system is financed through reduce the gap between the poor and non-poor, vertical a mixture of sources. In 2014–2015, per capita total health aspects of equity need to be addressed—that is, the unequal spending in Tanzania (at current prices) was 73,365 Tanzania treatment of unequal.5,6 In other words, deprived groups shillings (TZS), equivalent to 40 USD, among which 37% should receive preferential allocation of health care resources was from external assistance, 28% from domestic revenue, to achieve more rapid improvements in their health. In this 26% from out-of-pocket payments, 7% from social insurance commentary, based on a technical analysis of public funds contributions, and 2% from voluntary payment. Though allocation mechanisms in Tanzania, we argue that these external funds remain the largest financing source for mechanisms should prioritize the poor more explicitly and Tanzania, its share has dropped from 48% in 2010. This give them preferential treatment to close the gap with the paralleled the increasing importance of domestic revenues non-poor in service utilization and health outcomes. for health financing, with its share growing from 22% to 28% during the same period. In 2016–2017, government health spending reached 1.5 trillion TZS, around 660 million USD, most of COUNTRY CONTEXT which flows to the Ministry of Health, Community Tanzania, the fourth most populous country in sub- Development, Gender, Elderly and Children and local Saharan Africa (57 million in 2017), has made significant government authorities (LGAs; Figure 1). Based on the progress in economic growth and poverty reduction, yet size of each funding stream and its relevance to UHC, more than a quarter of the population is still living below the rest of this article focuses on the following funding the poverty line. Using data from household budget sur- mechanisms in terms of their consideration of the poor: veys, the Tanzania Mainland Poverty Assessment found (1) grant transfers to LGAs for service delivery (37% of decreases in poverty rates between 2007 and 2012, from total government health spending); (2) Ministry of 34.4% to 28.1% for basic needs poverty (not meeting Health, Community Development, Gender, Elderly and basic consumption needs) and from 11.7% to 9.7% for Children in-kind transfers (22%), such as drugs and extreme poverty (not meeting minimum nutrition require- medical supplies, and grant transfers to faith based orga- ments). Over 80% of these poor live in rural areas, where nizations/facilities and donor-supported national pro- poverty reduction has been relatively slow compared with grams; and (3) government contributions to health Dar-es-Salaam.7 insurance funds (12%). This commentary does not cover Tanzania has made substantial progress toward UHC, though challenges remain. The under-five mortality rate fell sharply from 166 per 1,000 live births in 1990 to 54 in 2012.8 Government Overall coverage of health services, however, was among the contributions to insurance funds lowest in East and Southern Africa. Nearly 10% of house- 12% holds had health expenditure greater than 10% of total house- hold expenditure in 2012, and 2.5% were at the 25% Transfer to LGAs threshold.9 37% Moreover, sizable disparities exist across different wealth groups. For example, comparing the bottom and top income quintiles, the prevalence rates of stunting among children are 39.2% and 19.1%, respectively, and total fertility rates are 7.5 versus 3.1, respectively. The MoHCDEC skilled birth attendance rate for women in the bottom 44% Regional quintile, in turn, is less than half of that in the top administration (41.8% versus 95.1%), and the same pattern holds for the and hospitals proportion of women of reproductive age who have pro- 7% blems paying for treatment (30% versus 60%).10 Evidence FIGURE 1. Tanzania Government Health Spending, shows that poor households are much more likely to 2016–2017. experience catastrophic expenditure.11 Source: BOOST Data, World Bank. Wang et al.: Progressive Pathway to Universal Health Coverage in Tanzania 281 government transfers to ministry departments, regional CONSIDERING THE POOR IN GOVERNMENT IN- health authorities, government agencies, and regional KIND TRANSFERS and tertiary hospitals (Source: BOOST data from World Health facilities in Tanzania, especially for primary care, often Bank compiled based on data from Ministry of Finance, receive drug supplies from the central level. LGAs receive Tanzania). virtual allocation for drugs and then place requests to the Medical Stores Department, which gets funds directly from CONSIDERING THE POOR IN GRANT TRANSFERS the ministry. Upon delivery of drugs, the allocation for facil- TO LGAS ities is deducted. The Tanzanian government is committed to solving the drug shortage problem. In the past two years’ The Health Sector Basket Fund (HSBF), a seven-donor budget (2016–2018), for instance, more than 250 billion TZS pooled funding mechanism, uses a needs-based formula for of domestic funding was allocated for pharmaceutical services, allocation to LGAs. In 2016–2017, HSBF allocation to LGAs covering vaccines, maternal, neonatal and child health, family was about 7% of total government expenditure. The formula planning, and antiretroviral and malaria drugs. These inputs puts 60% weights on population size, 10% on morbidity can offer significant benefits for the poor because the condi- measured by under-five mortality rate, 10% on poverty, and tions disproportionally affect this group. The challenge, how- 20% on remoteness. ever, is the low execution rate of the domestic development Government block grants to LGAs are the largest source budget, which is the category that drugs and medical supplies of funding of service delivery at primary level. Although it is fall under. In 2016–2017, the latest year for which data are supposed to apply the same formula as HSBF, in practice, available, nearly half of the domestic budget was not executed, there are no consistent allocation criteria. The allocation and the expenditure for drugs and medical supplies was only process is reported to be driven by a combination of factors 80 TZS billion. As with grant transfers to LGAs/facilities, such such as population needs, historical trends, and political in-kind transfers will improve the quality of services for those negotiations. As a result, there is a nearly sevenfold differ- who visit facilities but will not fully benefit the poor who have ence between regions with the highest and lowest per capita more limited access to providers. expenditures of block grants (6,456 versus 29,570 TZS) in Grant transfers to nongovernmental agencies (NGOs) and 2016–2017, which cannot be easily explained. donor-supported programs are other in-kind transfers to For both government block grants and HSBF transfers, LGAs/facilities. The fact that NGOs tend to work in less- less than five million USD is explicitly allocated to accessible areas and donor programs tend to focus on basic provide preferential treatment for the poor. Moreover, health services (e.g., infectious disease programs) provides once reaching the LGAs, it is difficult to tell whether some assurance that the poor may benefit from these mechan- and how the poor are prioritized. In compliance with isms. Yet in practice, this is highly dependent on individual government directives, these budgets are executed against NGOs or programs, and there are limited data to assess the line items, which feature economic functions such as extent to which programs are benefiting the poor. personnel compensation, goods and services, and assets acquisition, rather than the needs of the poor or service CONSIDERING THE POOR IN GOVERNMENT utilization. Most government block grants are spent on CONTRIBUTIONS TO HEALTH INSURANCE FUNDS personnel compensation, which means that an equitable distribution of health workers will determine pro-poor Tanzania has two main types of health insurance funds. The use of these block grants. In Tanzania it has always National Health Insurance Fund (NHIF) was established in been challenging for the poor areas to be prioritized 1999 as a scheme mostly for civil servants but is also open to when deploying health workers, because there is no dedi- private sector employees and the self-employed as well as cated resource to provide financial incentives for them to their family members. It covers about 7% of the Tanzanian work there. The HSBF, in turn, provides almost 90% of population, offering them a comprehensive benefit package nonsalary recurrent expenditure of LGAs, which helps including general outpatient and inpatient care, specialized ease the inadequacy of government inputs to operational surgery, pharmaceuticals, optical services, and orthopedics. expenses. However, such spending mostly benefits those The Community Health Funds (CHF), which started in 2001, who utilize services, among whom the poor are under- is designed to cover the rural and informal sector population. represented given geographic and other barriers. In 2015, CHF covered 19.8% of the population, offering 282 Health Systems & Reform, Vol. 4 (2018), No. 4 them a limited benefit package at primary health care facil- facilities, and the budget allocation for drugs and medical ities, mostly outpatient curative services within the district. supplies is at a record high. The government’s contribution to the NHIF accounted for Tanzania is at a critical stage in refining health financing about 12% of government health spending in 2016–2017 and policies to accelerate progress toward UHC. A health finan- included 3% employer matching for civil servants and 6.25% cing strategy has been developed, envisioning a single of the salary of members of the police. According to national health insurance for the entire country, guaranteed 2015–2016 Demographic and Health Survey (DHS) data, coverage of the poor, and movement toward output-based NHIF covers mostly the top 40% in the income distribution, payment mechanisms. A proposal to amend legislation for though these figures do not include retirees, who are more the NHIF and CHF is expected to be considered this year. likely to be poor. Nevertheless, given the employment status This will provide a platform for more pro-poor financing of the majority of NHIF’s beneficiaries, in the absence of policies for both supply- and demand-side interventions. pooling mechanisms with the rest of the population, it is The identification and registry system of the poor under unlikely that NHIF will directly contribute to coverage of the Productive Social Safety Net (PSSN), a flagship national the poor or cross-subsidize the poor. social protection program, provides an important opportunity The government’s contribution to CHF is in the form of to prioritize health resource allocation for the poor. Under the matching grants paid from the HSBF resources at the PSSN, about 1.1 million households, 15% of the population, central level. Matching grants are meant to provide addi- were identified as extreme poor. And the targeting mechan- tional funds for LGAs to improve service delivery for CHF ism employed by the PSSN, a combination of community- beneficiaries. This mechanism, therefore, can be poten- based approach and proxy means testing, has proved effective tially pro-poor if the poor are enrolled in CHF. There is with a low rate of inclusion error.12 This identification and also a directive in place to exempt CHF contributions by registry system may be used as a tool to direct resource the poor. In practice, however, it is challenging to track allocation centered around the poor. More important, it can how many poor people receive such subsidies for their be used to monitor and evaluate how the poor have benefited enrollment. Moreover, wealthier districts tend to have from public funds on a more frequent basis as a supplement higher contributions (six times difference), and these are to household surveys conducted every five years. the districts that receive more matching grants, which Building on the existing foundation of pro-poor policies, compromises the extent to which the matching grants ben- further actions are needed. From the perspective of service efit the poor. Moreover, matching grants for CHF form delivery, human resource deployment and in-kind transfer only a very small part of government health spending. In should give explicit priority to the areas where the poor 2017–2018, three billion TZS from HSBF is allocated for concentrate for easy access. A roadmap that prioritizes poor this purpose. areas in investment of key inputs will be indispensable to ensure that health human resources, operating expenses, and infrastructure upgrades are improved in an integrated manner. A combination of administrative enforcement and financial THE WAY FORWARD incentives, for example, will be needed to bring health work- The review of potential vehicles for pro-poor resource alloca- ers to poor areas. tion in Tanzania shows that HSBF allocation to LGAs in Measures that make service providers more responsive to effect is the only funding stream that explicitly prioritizes the needs of the poor will also be required. Part of the public the poor but at a modest scale. NHIF contributions are ear- funding they receive may be explicitly earmarked for innova- marked for members who are relatively better off, and other tive service delivery models that provide a niche for the poor. domestic transfers are purely based on inputs needed for Ethiopia’s health extension workers served this purpose, mak- service delivery. This means that the poor can only benefit ing services more accessible by the poor but less preferable if they access and use services, which is exactly the problem by the rich.13 When transitioning to output-based financing, that needs to be addressed. as the health financing strategy outlines, it is worth exploring How can the poor receive preferential treatment to access some output measures related to how the poor are being and use services? A good foundation already exists. Political reached and served. commitment to improving health service delivery and health On the demand side, there should be explicit efforts to bring the outcomes is evident; in just two and a half years since the poor to service points by improving their knowledge, awareness, current administration took office, the government has and financial barriers. 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