Introduction to health expenditure in Egypt

Under the Constitution, the Ministry of Health and Population is responsible for the health of all Egyptian citizens, meaning that it shall work to improve all citizens’ health without discrimination, in particular by reducing the mortality rate of infants, mothers and pregnant women; limiting the impact of uncontrolled population growth; and reducing the burden that illness places on society, its productivity and its development.

In early 1996, the Ministry of Health and Population reevaluated the health sector, a step that made clear the need for comprehensive health reform. The same year saw broad debates that addressed the government’s ability to provide comprehensive care (preventive, primary care as well as curative care for all citizens). In November 1996, the Minister of Health and Population formed a committee to lead health reform and coordinate the efforts of the competent authorities to determine how to begin the process of reform.

This committee submitted a basic document for the Health Sector Reform Program, which identified the following goals:

• The institution of phased-in, full state insurance coverage for the entire population through the establishment of a national health insurance fund.

• The restructuring of health-service provision through both the public and private sectors, using a system based on the family health model.

• Decentralization in the provision of services by reverting the planning and administration of these services to the provincial level.

• The provision of health services—preventive, primary and curative—through family health units and centers and district hospitals.

• The integration of health services in primary health-care units through a family doctor who acts as the gatekeeper to the health system.

• Choice and competition between health-service providers in the public and private sectors.

• Development of the necessary administrative and organizational systems and structures to implement reform.

• A commitment to provide basic medications to all Egyptians at affordable prices⁴.

In order to begin implementing these reforms, the ministry needed a realistic assessment of expenditure on health care to use as the basis for strategic planning, and it developed the National Health Accounts (NHA) for this purpose⁵.  In addition to being a tool of strategic planning, the NHA provides a comprehensive description of sources of expenditure (public and private), how funds move through the health system, the agencies administering them and intermediary players in the system. It is thus an analysis of total expenditure on health care, including public (government) spending, private spending and insurance spending.

Private expenditure consists of:

1. Out-of-pocket spending
2. Some part of insurance premiums, private and public
3. Insurance co-payments
4. User fees, public and private
5. Out-of-pocket spending on medication

Public expenditure includes spending on health services and care from the state treasury, and it represents a percentage of the annual state budget.
Insurance expenditure on health care includes funds paid by citizens (which are considered private expenditure), and this is the larger portion, as well as funds from the public treasury, the percentages of which are determined by insurance laws currently in force. The best example is Law 99/1992 for student insurance. Under that law, the student pays an annual premium of LE4 (private spending) as well as a co-payment of one-third the cost of medication (also private spending), while the government pays an annual premium of LE12 for each student (public spending from the state treasury).

To round out the description and analysis of the NHA, the ministry used data from the state treasury and the Ministry of Finance on funds allocated to health care through the Ministry of Health and other ministries that offer health services, such as the Ministry of Higher Education and the Ministry of Defense. It also relied on data about health spending from the Household Survey (a measure of private spending based on fixed samples) in order to assess the size and type of private expenditure and the components of out-of-pocket spending.

In its conclusion, the NHA report offers the following general recommendations to decision makers and strategic planners in the health-care sector:

• Reform the health sector.

• Restructure the sector to achieve integration.

• Reorganize health expenditure and its structures within the framework of comprehensive insurance.

• Redirect public and private expenditure on health care into a unified national fund to bear the risk of illness.
 
Remarkably, the report did not discuss several issues that lie at the heart of existing challenges, such as the fact that health-care spending as a percentage of the public budget is less than average in countries of the same socioeconomic level (the appropriate average is 8% to 10% according to the World Health Organization). In addition, steadily rising out-of-pocket spending has exceeded internationally acceptable rates, particularly for private clinic services and pharmacies—a reflection of the health system’s inefficiency and the disarray and lack of regulation in the medical market, which does not achieve the objectives of equitability and availability and leads to violations of the right to health. This is in addition to the substantial gap in the availability of health services between rural and urban areas and north and south.

The debate published here by the EIPR on health expenditure raises several questions about measures and policies implemented by the Ministry of Health, and whether they ensure the Egyptian citizen’s right to quality, efficient, equitable and accessible health care. There is also the basic question as to whether strategic planners and decision makers have benefited from the findings of the NHA report. It is clear that the study’s findings have been ignored when drafting and implementing policies in the decade since the Health Sector Reform Program was created, which has undermined and violated citizens’ right to equitable, accessible, comprehensive health care.

The following pages contain a summary of the discussion that took place in the EIPR offices. The debate, titled “The Challenges Facing Health Expenditure in Egypt,” was organized by the EIPR’s Health and Human Rights Program on Tuesday, 26 August 2008, with the participation of several experts in health and economics, as well as the EIPR’s staff.

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[4] Analysis of the Health Sector and Future Strategies in Egypt, basic document for the Health Sector Reform Program, 1996 (updated in 2001 and 2003).

[5]  Although there is no universally accepted definition of what constitutes health expenditure, the NHA document of 1995 adopted the following definition, which will be used by this report: “Health expenditure is all expenditure on preventive care, training, rehabilitation, and health care, including population and food programs and emergency programs aimed at improving the health of individuals and the entire population. The report does not include expenditures on medical education and university training, but it does include training in the health sector of the Ministry of Health and Population.”