Prime Minister Imran Khan’s Sehat Sahulat Programme (SSP) is undoubtedly an initiative greatly appreciated by all.
The eligible defined on the SSP website are those living below the poverty line (defined as earning less than 2 dollars per day) in Punjab, Khyber Pakhtunkhwa (KP), Azad Jammu and Kashmir, Gilgit-Baltistan (GB) and the entire population of the newly merged KPK districts and Tharparkar district in Sindh. Prime Minister Imran Khan has also directed that those with disabilities in Punjab, AJK, GB and Islamabad Capital Territory and transgenders across Pakistan registered with NADRA with special CNIC be also covered.
Khyber Pakhtunkhwa (KP) has clearly taken the lead with enrollment as high as 51 percent of its population - 14.4 million and on 1 February the Prime Minister tweeted: “Congratulations to KP government for making KP first province in Pakistan with Universal Health Coverage for all KP-domiciled citizens. 40,000,000 residents covered with free health insurance. Free treatment up to Rs 1,000,000 per family per year in over 400 government/private hospitals across Pakistan.”
Two questions need answering. First in fairness to the previous administrations is the Sehat Sahulat Card specific to Imran Khan? And to gauge the card’s sustainability has any actuarial work been carried out. This latter question is critical given that Pakistani chief executives have repeatedly displayed a penchant for selecting projects - physical or social infrastructure - based on their own set of beliefs, which however altruistic they maybe, do not take account of the internal and economic rates of return of any project that would have helped prioritize projects.
The idea of providing free medical aid to the poor and vulnerable through a micro health insurance scheme began soon after the launch of the Benazir Income Support Programme (BISP) by the Zardari-led government (2008-13) – titled Waseela-e-Sehat - with technical support from Germany’s Federal Ministry of Economic Cooperation and Development through GIZ (German Agency for International Cooperation). The subsequent pilot health insurance scheme was launched in Faisalabad by enrolling 75,000 families between 2012 and 2014.
From experiences gleaned from provinces the then Prime Minister Nawaz Sharif launched Prime Minister’s National Health Insurance Programme (PMNHIP) with his brother Shahbaz Sharif, the then chief minister Punjab, establishing the Punjab Health Initiative Management Company (PHIM) on 7 February 2015 (the Buzdar government continues to use this platform). Its objective: improve access of the poor to good quality medical services with 1.5 billion rupees budgeted allocation for the initiative.
Nawaz Sharif’s words at the launch of the PMNHIP are reminiscent of Prime Minister Imran Khan’s recent speeches on the subject: “people do not have enough money to buy medicines. They don’t even have enough money to travel to hospital…..the government will cover medical bills (per card per family) that amounts to more than 250,000 rupees. If it exceeds that limit, the treasury will chip in…..I wish those provinces which are not part of the programme (Khyber Pakhtunkhwa) also join the scheme. It is not a matter of politics...the programme will benefit 3.2 million families living in Punjab, Balochistan and Fata in two phases and a social mobilisation campaign would be launched to ensure registration of all deserving people under the scheme. People sell their property and household items for medical treatment of their loved ones, but this will not happen anymore.”
In the first phase the districts selected included Rahimyar Khan (by October 2016, 382,000 cards had been distributed comprising of 75 percent of the target beneficiaries) followed by Narowal, Khanewal, and Sargodha with a rise in target beneficiaries to 1.28 million. The government’s vision for the next phase (January 2017 to June 2017) was to add three more districts to benefit a population of 1.6 million families (11.2 million poor individuals). By 2018, election year, the programme was to be implemented in 36 districts of Punjab.
The PMNHIP card holders were to be enabled to avail treatment at both public and private hospitals, 50,000 rupees was earmarked for treatment of common illness, 300,000 rupees for treatment of serious medical conditions and the limit could be extended to 600,000 rupees if funds ran out during treatment. KP never became part of the PMNHIP and instead
in 2015 independently pursued its social health protection initiative/Sehat Sahulat Programme in four districts (in the second year of the PTI government) with support from KfW development bank (German) and technical support from GIZ.
State Life Insurance Corporation of Pakistan (SLICP), a public sector company, was to provide the services in districts selected for PMNHIP and the premium for Punjab districts was to be paid by the Punjab government. There is no information on the SLICP website of how much premium was or has been agreed, or its key performance indicators (KPI) for example loss ratios, rejection ratios and expense analysis. If one inputs Sehat Sahulat Card on the SLICP website one is directed to the SSP website which understandably does not provide any KPI on SLICP. However, the Punjab government with federal support is expected to provide 70 billion rupees to SLICP for health care facilities in Punjab, an official told Business Recorder recently.
In January 2019, a little over four months after Imran Khan took oath as prime minister there was a name change – from PMNHIP to Sehat Sahulat Programme administered by Ministry of National Health Services, Regulations and Coordination and there has been considerable expansion of the programme since with the following figures cited this Saturday past: total families enrolled 7,687,460, hospital visits 1,706,326 (a number that is rising each day) and the Punjab Health Initiative Management Company ‘s website gives the number of total families enrolled at 5,313,017, hospital visits at 1,107,788 and admissions at 335,166.
The question is not whether SSP has the public’s unwavering support because that it undoubtedly has but, as noted above, whether any actuarial analyses has been undertaken to determine its financial viability. In April 2019 an actuarial analysis of the SSP was commissioned by GIZ and undertaken jointly with International Labor Organization’s Impact Insurance (a facility that enables insurance companies, governments and partners to embrace impact insurance to reduce households’ vulnerability, promote stronger enterprises and facilitate better public policies). Their findings are as follows: (i) admission rates were very low not only in comparison to developed countries and new economies (example Thailand) but also in comparison to baseline Survey in Pakistan. The obvious conclusion is that there is likely to be a substantial increase in future; (ii) projected claims costs and expenses (nominal terms) are very sensitive to the assumed increase in utilization, assumed increase in unit cost and fairly sensitive to the family size assumption. In this context it is relevant to recall that in April 2019 when the analysis was completed (before the country went on the International Monetary Fund programme) inflation was less than 7 percent, rose to around 12 percent in 2019-20 and is projected to be higher than 8 percent in the current year. Medicine prices have sky-rocketed as have all other associated costs including the price of electricity; (iii) projected demographic changes – if they are small then there would be minimal impact on cost of claims and premiums; and (iv) the baseline indicative premium required from the projection model is 1,755 rupees per family per annum for 2019-21 - an amount that without doubt would need to be upgraded. However, if one takes this as given then the total amount required with the number of cards issued is 13.491 billion rupees – within the level of affordability.
The study’s recommendations are not only self-evident but need to be implemented by those administering the programme notably frequent monitoring of incidence rates, every two years a full actuarial and statistical experience analysis and premium adequacy review be undertaken (due this year since the last one was in 2019), an annual report by the insurance provider SLICP on experience relative to premium received including its KPIs, and third party administrator holds reserves for the first and some of the second year to ensure claims can be paid in later years if a level premium is applied for three years but if these reserves were invested instead of just kept in cash the amount would grow and be used for perhaps lowering the premium per family.
To conclude, the Pakistani public has learnt to its cost that the road to hell is paved with good intentions. Take the case of the verdict in the rental power project case which cost the country hundreds of millions of dollars in penalties; or the Sharifs desire to end load shedding once and for all with a focus on generation (that raised cost to the consumers due to the steady rise in capacity payments) while ignoring the transmission system that could not even vacate the generation during the PPP led government; or perhaps most pertinently the unsustainable rise in annual budgeted pensions that are draining the treasury. One would hope that the expansion of the SSP is based on data and its analyses not on the intent, albeit a commendable intent, to provide universal health coverage.
Copyright Business Recorder, 2021
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