The devil is in the detail: Shortfalls of the National Heal Insurance (General) regulation 2019 -Statutory Instrument No. 63

By Peslie Gibson Ng’ambi
PhD Scholar, MSc, BPharm

The Statutory instrument (SI) no. 63 of 2019 giving some regulations surrounding the national health insurance was recently released by the Minister of health. In addition, it has been announced that although deductions will be effected now, contributors will only be able to start reaping the benefits in 2020. As an ardent proponent of social health insurance, I am happy at the rate the wheels are turning. Nonetheless, I remain keen to find out about the reimbursement system that will be adopted as the SI is very silent on the matter.

In as much as the SI has indicated payment mechanism (contributions) and the benefits package, it has not indicated the reimbursement mechanism. I must admit that I am not privileged to other information on this matter and I speak only from the information contained in the SI 63 and the national health insurance act of 2018. The NHI Act does mention that the authority shall negotiate with the accredited health care providers, a schedule of fees and charges for the insured care services that are fair and optimal. So far this is as far as to goes in terms of reimbursement. Many followers would be keen on wanting to know the mechanisms and principles that will guide these negotiations.

Information about what will guide the reimbursement system is cardinal to both the NHIMA and the potential accredited healthcare providers.
The way of developing the essential drug list will need to be reconsidered as it only provides for the minimum but does not mean it covers all the necessary eventualities. Other than merely assessing the clinical effectiveness, there will be a need for the economic evaluation of treatments, especially for high-cost drugs and interventions. Procedures and systems will also need to be subjected to economic evaluations as they will also be consuming the resources.

Regardless of how much is pooled under the fund, the economic principle of scarce resources will always ensue as medical technologies advance and become more expensive, and increase in chronic diseases; therefore, it is cardinal that mechanisms of cost containment are established in advance.
Just to shade some light to anyone that may need to understand the most prominent reimbursement mechanisms, I have highlighted there pros and cons and my personal preferred mechanism based on my understanding of the Zambian society.

“Prescription generic drugs on the essential drugs list prescribed by an accredited health care provider an approved or use under the Scheme” is the actual wording in the SI 63 which makes me unease.

One of the sticking points is that the authority will only reimburse for generic medicines. To a professional, generic (just like biosimilar) has a particular meaning and not just a loose term. A generic drug is a medication that has the same active ingredient as the branded (original) drugs and gives the same treatment effect. In most cases, generic drugs can even cost 10 times less than the price of the original drugs. This is one of the most effective cost-containment measures but left to be the only guiding principle in reimbursement can limit the extent of delivering quality care in line with global advancements. The flip side of only reimbursing generic medicines means it will at least 10 years (average patent period) for a “new” medicine to be paid used in Zambia. This is because it takes approximately 10 years for a new (branded) drug to come off patent to allow for the production of generic brands. In the same vein, a beneficiary is not protected in cases where the only available drug is an expensive branded one.
The way around this is to adopt international price referencing mechanisms and maximum caps that the authority can pay for new medicines. Several international price references mechanisms exist and it’ll be upon the authority to adopt one that keeps the costs low but still allow for access to new medicines and other technologies.

Fee-for-Service

This is the most common method that most private insurance providers operating in the Zambian market employ. Under this mechanism, healthcare providers are paid according to the number of services they provide. For example, if one goes to any provider be it private or government they can bill the NHIMA on each test they do such as a malaria test, radiology scan, as well as each prescribed medication.
Pros: Providers are not restricted as to how many interventions they offer individuals.
Providers have an incentive to improve quality in order to attract more patients.
Cons: It gives the provider an incentive to order unnecessary treatments in order to maximise on the reimbursement per case.
A bad instrument for cost containment.

Diagnosis Related Groups (DRGs)

This is a system in which patients are classified into economically and medically similar groups in which the use of resources during hospitalisation is assumed similar. A fixed-rate is reimbursed to healthcare providers based on the diagnosis. For example, all providers will be reimbursed the same amount for a malaria diagnosis regardless of how many tests and treatments used.
Pros: An incentive for cost containment by the providers who aim to use only necessary interventions and discharge patients in time. This drives quality improvement within a limited budget and capacity.
Cons: Provides an incentive for premature discharges and selection of low-cost patients.

Capitation

Under the capitation system. Health providers are reimbursed based on the number of patients enrolled under them regardless of who uses the services. This would be catastrophic to start with and not very effective cost containment measure for the Zambian setting.
Pros: Does not require close monitoring
Cons: Gives an incentive for providers to mass enrol low-cost patients.

An unrelated thought provoked in my mind is looking at the legal provision of the claim payout as indicated in the Act, “The Authority shall, on receipt of a claim under sub-regulation (1), assess the claim and pay the accredited health care provider of a valid claim”. This needs a to be thought through especially for the health provider who may cry foul at the end of the day.
The authority provides for the deadline of remitting contributions but on the flip side does not provide for the timeline in which to pay claims (reimbursement). The regulation mentions assessment of claims but is not time-bound as to how long it can take to assess and payout. It is only fair that a time period is specified as this helps the healthcare provider in their planning. In addition, it also does not state if claims will be made daily, weekly, monthly, quarterly or annually.
I will share more on this thought digression but for now I’ll get back onto concluding on what the public can champion for in terms of the benefits package. I propose the need to provide for reimbursement of branded medicines under clearly set rules. Need to revisit how the essential drug list is compiled and harmonising with the Zambia National Formulary. The Health Technology Assessment team to get on to provide guidance to the decision-makers under the authority and ministry of health. Need to clarify on the reimbursement mechanism of which I would recommend the DRG sort of system tailored to our health system.

About the author
Peslie Gibson Ng’ambi, PhD scholar in Health Economics at the University of Manchester, UK and visiting lecturer in Health Economics in Germany. Holds an MSc in Pharmacoeconomic and Health Economics, Cardiff University, UK and a Bachelor of Pharmacy from the University of Zambia.