Health Care Reform: an Opportunity for Insurance Industry Participation in Sierra Leone's Medical Care System

The socialized system of healthcare delivery and financing, a relic of the British colonial era, still practiced in Sierra Leone has glaringly failed and any efforts at resuscitating it without implementation of major structural and systemic reform will only serve to prolong the inevitable.

Throughout the world, total state control and management of industries, services, markets and the means of production are gradually becoming a relic of the past. This model as practiced in the Sierra Leone healthcare system has empirically been proven to have served only to stifle innovation, growth, productivity and quality output with a resultant decline in overall living and healthcare standards of the citizenry. The current state of the hospitals and health centers glaringly highlights the systemic problems endemic in the entire government owned, managed, financed and operated health care system.

The continued operation of such a decadent and dilapidated delivery and financing system, lacking in even the basics of a modern healthcare infrastructure continues relegating Sierra Leone to the very bottom of the human development index.

The transformation thus of the medical healthcare delivery and financing system into a private insurance or a national insurance based system offers opportunities not only for insurers to develop market-based medical insurance plans and policies but also serves to effectuate the Ministry of Health & Sanitation’s desired policy goals, as espoused in the 2002 National Health Policy Paper.

Both policy and regulatory officials, healthcare providers, the insurance industry and other stakeholders must be engaged to effectuate implementation of fundamental systemic reforms if the country is to avert an even greater catastrophe.

Privatization:

Under the proposed privatization plan, the Ministry of Health & Sanitation will be transformed from ownership and management of hospitals, clinics, and employer of last resort for all physicians, nurses and ancillary healthcare providers into a health agency with only policy and regulatory functions.

The goal will be for the health agency to serve as a policy and regulatory watch dog mandated with ensuring that adequate and quality medical care is provided at the various private hospitals, clinics and pharmacies that will inevitably be established with the break-up of the current government owned facilities.

With the break-up and subsequent purchase or leases of these hospitals, clinics, health centers and other facilities, investors and entrepreneurs in an effort to realize maximum returns on investments, will economically be compelled to upgrade quality and standard of care, introduce state of the art equipment and technologies and engender a type of market forces competition which will inure only to the betterment of health consumers in the country.

A much needed infusion of capital into the health care industry by such a privatization plan will clearly spur additional economic activities in ancillary industries, as the dynamic forces of privatization and market mechanism forces of demand and supply will ensure competition for the healthcare pie.

The dismantling of the current mammoth and highly inefficient government owned healthcare delivery and financing entity must from a public policy perspective be designed and restructured to ensure governmental ownership and management divestiture from hospitals and other health care facilities.

Under such a scenario the government’s current enormous but woefully mismanaged capital outlay for health services will be substantially decreased as inefficiencies of corruption, salaries of providers, infrastructure maintenance, costs of medications and diagnostic equipments and other overhead operating costs will no longer be recurrent expenditures from the nation’s depleting coffers.

A system based entirely on a private market-based national health insurance plan with private enterprise and market competition at its core appears the most logical reform policy route to ensure a future sound, efficient and profitable health care infrastructure.

 Health Insurance Plans:

The cog which the proposed new system must revolve around is a nationwide network of affordable health insurance plans creatively designed to ensure a greater pool participation of a majority of the population. In such a system health insurance companies and provider organizations will be established to market various health plans, with minimum services and premiums based on market conditions. The responsibility for monitoring compliance by the various plans would fall under the ambit of both the Ministry of Health and Sanitation and the Sierra Leone Insurance Commission.

A major plank in this proposed health care delivery and financing privatization hinges on the enactment of health insurance legislation providing for employers to provide health care for their employees and dependants as part of a standard benefits package with concomitant tax incentives and governmental subsidies to ensure compliance. With such legislation the virtual free socialized medical care system, the costs of which have been borne exclusively by the government will now be based on a multi-payer system in which government, employees and employers will all participate.

With the system as currently structured however, only the government has a financial interest and stake and when other programs conflict with the financing of health care, politicians have only been too willing to sacrifice the health of their citizens on he alter of their greed and personal aggrandizement.

It is envisaged that health insurance providers will introduce concepts and plans, such as Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO), through alliances of health providers and insurance companies and marketed to employers, labor unions, governmental ministries and corporations on an annual premium basis.

The competition engendered by such health organizations for the medical insurance pie will subsequently result in competitive rates, coverage, deductibles, co-payments and premiums to make health care costs affordable for all.

As unemployment and underemployment are perennial problems in the Sierra Leonean economy, the provision of health care benefits to this category of the population must remain the responsibility of government. Medical services provided to this category of citizens in a private enterprise environment must be reimbursed by the government on a negotiated and pre-determined fee schedule or an insurance mechanism established in which government negotiates with providers and carriers for the provision of services.

As an example a fund established by levying taxes on the private health care providers, envisaged to emerge with such privatization, could be instituted and utilized to pay for these indigent services.

Further, since the hospitals, medical clinics and other medical facilities will be operated as businesses, either for profit or as non-profit organizations, the market forces of demand and supply will certainly ensure that patient quality care, improvements in diagnostic technologies, competent personnel and a general responsiveness to the demands of the clients will drive the new marketplace. The lethargic and inefficient atmosphere witnessed at most government hospitals today with customer service virtually non existent would be a philosophy of the past.

The economic viability of healthcare businesses will depend largely on the clientele they can attract and maintain utilizing the above yardstick. Providers of lousy health care plans and services will inevitably loose business to competitors as every year participants will have an opportunity to change health insurance plans.

Since a large population of Sierra Leone resides in rural areas, the proposed privatization plan will ensure the expansion of health care facilities into areas currently inadequately serviced. This plan will ensure that clinics and doctors put up shop in every part of the country in order to tap into the healthcare services available in these rural areas.

Designing an insurance system and plan to cater to the needs of the rural population who often are self employed in farming and mining activities posses a challenge to insurers in Sierra Leone, who in the past have been largely passive and unimaginative in policy design to meet the challenges and risks confronting the nation’s socio-economic landscape.

Proactive and creative underwriting of risks must be undertaking by underwriters, actuaries and marketing specialists to design, tailor and price health insurance coverage to meet the diverse needs of the insuring public. For example, the creation of pools by occupational categories could be one method by which insured’s, engaged in similar trades could be encouraged to form co-operatives for purposes of obtaining health insurance coverage at affordable rates for themselves and dependants. Premium payments through the pooling together of the co-operatives commodities can be an alternative payment method for the medical services. Health insurance companies could possibly establish subsidiary or ancillary companies solely for the handling of payments made by cash crops.

The current system under which nearly all doctors and related health care providers are employed by the government while at the same time owning private practices would be changed with a concomitant government savings on salaries, productivity and other fringe benefits. As privatization takes over in the hospitals, physicians, nurses and other providers will no longer be on the government’s payroll but will rather be independent contractors with their own practices.

Conclusion:

Whilst a micro version of the proposed reform has mushroomed in an ad hoc manner over the years with some large companies and corporations contracting with individual physicians and clinics for the provision of health care to their employees and dependants, the kind of systemic and structural overhaul needed to forestall a total collapse of the system and extend similar services to all could only be realized by a comprehensive approach along lines of reforms proposed in this policy paper.