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Sehat Sahulat Programme - SSP (or Qaumi Sehat Card) is one of the flagship initiatives in the health space by the PTI government. After the success in KP, Punjab government is rolling it out aggressively during FY22. PTI gurus are banking upon this initiative to regain party’s lost popularity before the 2023 general elections. In that quest, it appears that the programme is being planned to roll out in haste and that is exposing some risks on the capability and capacity in execution in the short run, and its implication on the financial solvency of State Life Insurance Company (SLIC) in the medium to long run.

State-sponsored health insurance are a relatively new phenomenon in Pakistan. It was first rolled out in 2012 as a micro insurance product backed by German Development Bank funding in KP. The micro insurance plan was extended in various poorer regions of Pakistan based on the poverty scorecard. Seeing the success, in 2015, the KP government rolled out the second phase and by 2021, 100 percent of KP population has been covered.

Universal Health Coverage (now Universal Health Insurance – UHI) for whole provincial population was rolled out in July 2020, and the contract was awarded to SLIC. However, the company took two extensions before rolling it out in February 2021. The reasons for delay were that SLIC was not ready to cover bigger population. It had to hire health facilitation officers (HFOs) in every hospital on the panel and to gear up to resolve other administrative issues. That is why SLIC took its sweet time in KP even though the provincial UHI is rolled out in phases.

The Punjab government wants to cover a much bigger province in one go. UHI is already rolled out in Lahore division on 1st January 2021 and by 31st March 2021, the whole Punjab is targeted to cover. The insurance cover would be covering up to Rs1 million (Rs10 lakh) worth of secondary and tertiary care for each family a year.

Punjab’s population is three times of KP, and the government wants to roll out the plan in three months while it took KP eight months to do so. The demographics in Punjab are different from those in KP. In KP, the health facilities are far and few beyond a few districts. In Punjab, the health facilities (secondary care hospitals) are in every district. The awareness (to use UHI) amongst general population is much higher in Punjab, as against the KP. In KP, the marketing and awareness were left to SLIC (part of contract). While for Punjab, the government is doing so itself and the spent and impact is much higher.

SLIC ought to do a lot of groundwork in three months which is extremely challenging. There are serious doubts on the capacity of the company to do so in a small time. One question arises is why the whole Punjab is awarded to one company and it is the same company covering the KP. Then SLIC is primarily a life insurance company and didn’t have any prior experience (before rolling it out in KP) in providing health insurance which is all together a different animal.

Health insurance has historically remained small in Pakistan. A few private companies slowly built portfolios in private space. A better option could have been to distribute province amongst different companies. Nonetheless, there was one tender for the whole province. A consortium of five private companies did participate, but they were disqualified on technical grounds. Some may speculate that the government only wants state-owned insurance company into the play. Here the fear of SLIC solvency surfaces.

The insurance premium for Punjab population is awarded at Rs 4,700 per family per year. That is much higher than Rs 2,850 for KP. Since Punjab claims ratio could be higher and considering this and inflation factor, the bid was higher. The contract is awarded for five years. In the start, all divisions (minus two —DG Khan and Sahiwal divisions, which are already executed in July 2021) are part of it. Later the remaining two will be merged to this contract. The total families in Punjab are computed at 29 million and the annual premium would be close to Rs 100 billion. In the first one or two years, the premium might be enough for SLIC to cover claims. But overtime with more awareness, experts fear losses could incur in SLIC. Then what if the government delays the payment to SLIC -as it is owned by the federal government. This questions the financial sustainability of the programme.

Then the Punjab health budget is in addition to that. In the start, there are predominately private hospitals are on the panel of Punjab’s UHI. However, around 70 percent of the load in Punjab is on the public hospitals. The coverage of UHI is for general ward only. If someone wants private room and or other upgradations, that person will not get benefit of UHI. This would imply that upper middle class and rich may not use UHI, and that shall leave more space for the marginalized segment. This is good. However, the poorer segment is catered mostly by the public hospitals. When these to move on to private, there are questions of private hospitals capacity to handle higher volumes. It seems the plan is to slowly increase the coverage to all hospitals, including public, in the future. That is good. But there could be serious capacity issues till then.

Overall, the UHI is a great initiative and is giving access to health facilities to many who cannot afford private hospitalization. Once the programme is rolled out, the PTI government may win the heart of many disgruntled voters and may entice other parties’ voters to its support. But in the quest for this, an overly aggressive plan is being rolled out, which has its own challenges. The message for the government is to tread with care and move slowly to ensure better facilitation by SLIC and develop capacity of hospitals to handle. And the more important issue is financial solvency of SLIC. These risks are not well covered, and the government should watch out for these before it is too late.

Copyright Business Recorder, 2022

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Ali Khizar

Ali Khizar is the Head of Research at Business Recorder

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