Universal Health Insurance in Rwanda

This story of the dramatic transformation of the health care system of Rwanda, a mostly rural country of 8 million, though surely exaggerated, is truly impressive. It carries important lessons to countries like India where political initiative and administrative commitment to do something similar is sorely missing.

Since 2004 Rwanda has been running a community rated universal health insurance system, Mutuelle de Santé,

Mutuelle is a community system - premiums go into a local risk pool and are administered by communities. Until last year, Mutuelle’s premiums were about two dollars a year. This system turned out to be untenable - even two dollars a year was too much for a lot of people... Last year Mutuelle adopted a sliding scale. For the wealthiest, premiums essentially quadrupled, to about $8 a year. Each visit to a clinic has a co-pay of about 33 cents. If you need to go to the hospital, you pay a tenth of your hospital bill. But now the poorest - as judged by their communities - pay nothing. The Health Ministry says that the poorest 25 percent of Rwandans get free care... only 4 percent of Rwandans are uninsured.

This has been credited with dramatically improving Rwanda's health care standards,

AIDS has been cutting life expectancies in Africa and is widespread in Rwanda. Yet life expectancy at birth in Rwanda has increased from 48 to 58 - in the last 10 years. Deaths of children under 5 have dropped by half in five years; malaria deaths have dropped by roughly two-thirds. Of all countries in Africa Rwanda is probably getting the closest to having health for all, health access for all... 

A measure of Mutuelle’s success is a tremendous increase in the use of health care facilities... A clinic visit before was 5,000 francs - about $8.30... 80 percent of people in need of AIDS treatment are getting it - a figure in Africa rivaled only by Botswana, which is 20 times richer than Rwanda. Hospital utilization rates have tripled... Five years ago, when giving birth in a health center cost around $25, only 20 percent of women did so. Now that it is 33 cents, 70 percent do - a big reason that deaths of mothers and children have dropped so precipitously. Malaria - a major killer of children - is also now treated... Today, malaria is usually diagnosed by a community health worker. She can give the first dose of an effective medicine right away, then send the patient to a health clinic for a visit that will cost a maximum of 33 cents.

And it has had a salutary effect on the health care system itself,

Now there is a well-functioning national network of thousands of community health workers at the village level. There are hundreds of clinics, all with basic equipment and a full cupboard of essential medicines. Each of Rwanda’s 30 districts has a hospital, with at minimum 15 doctors, offering basic surgical services...

The increase in clients and the payments from Mutuelle they bring has transformed hospitals. Without income, hospitals couldn’t pay doctors or buy equipment. Now that hospitals can pay, doctors and nurses are moving from cities to the countryside. Before there was a marked concentration in cities... Now there’s equitable distribution across the nation...

It gives relief to people knowing that if you get sick, you don’t need to have a lot of money... It gives you psychological stability so you can concentrate on something else. The money can be used for other things - this is very important in trying to stimulate economic development.

The biggest challenge for Mutuelle is its financial sustainability since even with the cross-subsidy, premiums cover only about 45 percent of costs. The rest of the money is from the government and international donors. Given the low income levels, it is inevitable that a significant share of the cost of financing Muuelle will have to be borne by the government.

There are few important issues not raised in Tina Rosenberg's report that Rwanda will soo have to confront (or is already confronting). One, as access increases and offtake rises, public health care systems will become stretched out. There will come a stage when public systems will be unable to meet the requirements on its own, without being supplemented by the private sector. Once private sector enters the picture the current capitation based health insurance model will have to undergo radical changes. Managing this transition will be critical.

Two, as this system stabilizes and basic health care services are taken care of, there will be increasing demand for more advanced specialist services. But even with private sector support, the supply-side gaps for such care will not be easily bridged. Further, additions of more specialist services will also add to the financial burden on the government.

Three, even with all the user charges, hospitals will have adequate resources to incentivize only a handful of doctors to move to rural areas. In countries like India, which have much greater depth of medical personnel and governments offer relatively attractive terms of service, attracting even basic doctors, leave alone specialists, to work in rural areas has proven to be insurmountable. In fact, this rural-urban divide will widen with the growth of the private sector.

These, and a few others, are complex challenges, for which there are no easy answers. Rwanda will have to face them and innovate with local solutions to overcome them and sustain its universal health insurance system.