Health Insurance in Nepal aims to ensure access to quality healthcare without financial hardship. The program began in 2016 and has since expanded to 49 districts. Members pay an annual premium of NRs. 2500-3500 for a family of 5. Benefits include coverage of up to NRs. 100,000 per family per year. Stakeholders provide both support and criticisms, citing issues around awareness, enrollment rates, benefit packages, and quality of care. Expanding the program, improving facilities, and addressing concerns will help achieve universal health coverage in Nepal.

1. Health Insurance in Nepal
Shiva Ram Khatiwoda
1
(Based on Practicum placement in
Social Health Security Committee (now Health Insurance Board)
during MPH 2nd year, 2016; with some update 2019 )

2. Outline of presentation
• Background : Problem
• Concept of Health Insurance
• Policy summary
• Health Insurance in Nepal
• Enrollment (membership) procedure
• Service utilization and Benefit Package
• Diagram: Relation of User, Provider and Facilitators
• Diagram: IMIS
• Health Insurance Coverage Status
• Perspectives of different stakeholders
• Concerns/Issues
• Way forward
• Take home message
2

3. Background: problem
• Globally, 808 million people in 2010 incurred
catastrophic health spending.
• In most of the low and middle income countries, out of
pocket (OOP) payment is the main modality to pay for
health care service utilization. OOP is the main
contributor of catastrophic expenditure to health.
Source:
Wagstaff A, Flores G, Hsu J, Smitz M-F, Chepynoga K, Buisman LR, et al. Progress on
catastrophic health spending in 133 countries: a retrospective observational
study. Lancet Global Health. (2018) 6:e169–79. doi: 10.1016/S2214-109X(17)30429-1
Mills A. Health care systems in low-and middle-income countries. New Engl J
Med. (2014) 370:552–7. doi: 10.1056/NEJMra1110897
3

4. Background ...
• There are many stories of people having difficulty in getting
health care services due to financial reasons.
• Is government’s health insurance program going to check the
financial barrier?
4

5. Background ...
• Many countries rely heavily on patients' out-of-pocket payments to
providers to finance their health care systems. This prevents some
people from seeking care and results in financial catastrophe and
impoverishment for others who do obtain care.
• Surveys in eighty-nine countries covering 89 percent of the world's
population suggest that 150 million people globally suffer financial
catastrophe annually because they pay for health services.
• Prepayment mechanisms protect people from financial catastrophe,
but there is no strong evidence that social health insurance systems
offer better or worse protection than tax-based systems do.
Source:
Xu K, Evans DB, Carrin G, Aguilar-Rivera AM, Musgrove P, Evans T.
Protecting households from catastrophic health spending. Health
affairs. 2007;26(4):972-83.
5

6. Background ...
• 100 million people
are still being pushed
into extreme
poverty because they
have to pay for health
care.
• All UN Member States
have agreed to try to
achieve universal
health coverage
(UHC) by 2030, as
part of the
Sustainable
Development Goals.
• Source:
https://www.who.int/ne
ws-room/fact-
sheets/detail/universal-
health-coverage-(uhc)
6
• every year 150 million people suffer financial hardship
• UHC (Universal Health Coverage): everyone receives the healthcare
service they need without undergoing financial hardship

7. Concept of Health Insurance
• When states/society/governments started to think about
the better health of everyone in the society, this concept
began.
• More importantly, we should focus on keeping people
healthy, and letting no one fall sick.
• In case of illness, everyone should get quality healthcare
services without financial hardship.
• In health insurance, financial risk is shared, small financial
contribution from many will created large pool of fund, this
is used to provide health service to the ones who need.
7

8. Concept ...
• There are different ways of countries provide
services to people:
– In some countries, people get health services free of
cost. This is funded by general taxation mechanisms.
(Like in UK, following the concept of social reforms of
scholars/leaders like William Beveridge)
– In some countries employee and employers contribute
through payroll deduction for health care services.
(Like in Germany, following the concept of social
reforms of scholars/leaders like Otto von Bismarck)
– In systems like out-of-pocket (OOP) payment model,
people have to pay to get health services (at the time
of service utilization, at point of care), this puts people
in difficulty when utilizing health services
8

9. Concept ...
• Three main functions of Health Insurance :
9
Revenue Collection Pooling Purchasing
Raise sufficient and
sustainable revenues in an
efficient and equitable
manner to provide individuals
with both a basic package of
essential services and
financial protection against
unpredictable financial loses
caused by illness and injury
Manage
these
revenues to
equitably
and
efficiently
pool health
risks
Assure the
purchase of
health services in
an allocatively
and technically
efficient manner
Revenue
collection
Pooling Purchasing

10. Concept ...
• Constitution of Nepal declares health as right. Basic health care
services is free to citizens in Nepal.
• Government of Nepal provides limited basic health care services
free. However in the time of further need (like in case of need of
advanced care), people have to invest themselves from their
pocket. This can be catastrophic or impoverishing, and leaves many
people deprived of health care services.
• Alternative mechanisms like health insurance may be helpful
remedy to prevent catastrophic health expenses of
households/individuals.
• One of the alternatives to prevent catastrophic household/OOP
expenditure, to have sustainable health financing in the country,
and to assure health care right is gradual implementation of health
insurance program.
10

11. Policy summary
• Constitution of Nepal – idea of right to health and healthcare
• National Health Policy 2014 -
• National Health Policy 2074 BS - improving health service
delivery through all sorts of services (preventive, curative
etc.), improving health of people, increasing access and
utilization of health service,
• National Health Insurance Policy 2013 – increasing access
and utilization of quality health service to all without
financial hardship, through contribution of all,
• Nepal Health Sector Strategy (NHSS 2015 - 2020) – quality of
health service
• Social Health Security Program Standard Operation
Procedure 2014 -
11

12. Policy ...
• Health Insurance Act 2074 S –
implementing health insurance
program to improve access and
utilization of quality health
services and to achieve Universal
Health Coverage (UHC)
• SDG 2030 – Achieving UHC
12
Diagram: Three dimensions of UHC

13. Health Insurance in Nepal
• Health insurance program of government is of non-profit nature.
Previously Government of Nepal started this program under Social
Health Security Development Committee (SHSDC). It was
established in 2014. Now it is turned into Health Insurance Board
(HIB). It’s central office is in Teku, within DoHS premises. It is
implementing health insurance program since 2016. This is the
authorized body in Nepal working for financial risk protection
through health insurance program.
• Health Insurance program (or National Health Insurance or Social
Health Insurance)
• It aims to - ensure access and utilization of quality health services
without financial hardship by means of risk sharing (pooling, pre-
payment) mechanism, - establish self-sustained health financing
mechanism in the country, - achieve UHC
• External development partners are supporting Government of
Nepal to strengthen health system to improve health outcomes.13
Health Insurance Board

14. Health Insurance ...
• Enrollment started from Kailali, on 7th April 2016
• Routine Activities of SHSDC (now HIB: Health Insurance Board)
include: - Planning, Implementing, developing rules and guidelines,
coordinating, staffing, training, agreement with service providers,
strengthening health facility, enrollment, claim review,
reimbursement, monitoring, supervision, evaluation, research,
reporting, publication etc.
• In first phase, program started from Kailali, Baglung and Ilam.
• By 2019 October, out of 77, this program was scaled up in 49
districts, 9 districts are in pipeline.
• Before this program, there were some community-based health
insurance program in some districts of Nepal.
• Gradually this HI program is being implemented throughout
country. 14

15. Enrollment (membership) procedure
– Enrollment assistants visit households
– Families have to pay premium, choose first service
point, get ID card
– Premium (contribution) of NRs. 2500.00 (now
3500) for family up to five members, for each
additional member NRs 450.00 (now 700) for a
year
– Premium of poor and elderly is free (supported by
government)
15

16. Service Utilization and Benefit Package
• Service utilization procedure:
– Going to first service point (accredited health care
facility nearby) with the card,
– If needed referral is given to higher accredited facility
• Benefit Package:
– Facility of up to NRs. 50,000.00 (now 100,000.00 per
year for family of five members), for each additional
members additional NRs. 10,000.00 (now 20,000) and
in special case up to 200,000)
– Everyone is expected to get equally better care
16

17. Organization of Health Insurance Board
• Organization – 3 dimensions
17
Administrative Regulatory Service Provision
Board/Committee
Daily administration under
Executive Director
Monitoring Supervision
and Quality Control
Committee
Accredited hospitals or health
facility
- Hospitals: Central/ Tertiary
Level Hospitals, Provincial
/ Regional/Zonal Hospitals
- Teaching Hospitals,
- Private Hospitals,
Community Hospitals,
Hospitals of I/NGOs
- District Hospitals
- PHCC
District Office headed by
District Managers
District level - Health
Insurance Coordination
Committee
Enrollment Assistants at
community
Health Facility level -
Health Insurance
Coordination Committee

18. Simplified diagram showing relation of service users, facilitators and
providers 18
Household
Enrollment
Assistants
First Service Point
Health Facility
Higher Health Facility
Regulation,
Coordination
Referral
Relation of User, Provider and Facilitators
Service
Users
HIB
Service provider
Facilitator
(Pooling, Purchasing)
(Providing
quality
health
services)
(Pre-payment, service
utilization)

19. 19
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Entry, Services
provided, Claims,
Review, Feedback,
Reimbursement
Server,
Information
Bank
Internet
Diagram showing IMIS(Insurance Management Information
System) mechanism
All are connected through IT based insurance
management system (IMIS).
Registration, entry, claims and reviews are
made.
All information are stored.
IMIS – Insurance Management Information System
ID
card
IT set up

20. Insurance Coverage Status (14th November 2019)
20
• Total people covered : 23,00,000+
• Implemented districts : 49 districts (out of 77)
Source: http://dashboard.hib.gov.np:81/

21. Perspectives of different stakeholders on
Health Insurance program of government
(Based on talks, 2016)
– Service Users –
• This program enables low income group to access health facility, this
strengthens coping capacity to receive health services.
• When we are sick, this helps us receive much benefit. When we are not
sick, that small contribution goes to help other citizens of our society. It
is our social duty as citizens. This helps to create social harmony.
• The amount of benefit is very low, more subsidies should be given to
poor.
– Some service providers and consultants (government) –
• Health care should be focused for services, not the profits. We should
do little efforts then we can provide services in cheaper rates. Public
providers also can run pharmacy and lab/radio-imaging to provide
respective services (drugs etc.) in cheaper rates.
– Some other Service providers (private) –
• Health facilities can not sustain in cheap rates of services
21

22. Perspectives....
– Faculties/public health experts –
• This is better than directly paying mechanism. But it
deviates from idea of equity and justice since there is
same rate of enrollment to anyone of any income group.
• Other ways of ensuring needed health services to the
people should also be explored. (Like progressive taxation
and free health services like that of Scandinavian
countries.)
– Health Economists –
• There should be economic awareness like - a cigarette,
which cause diseases, costs NRs 10.00. But for the social
health insurance what we need is less than that (9.5) per
family per day. A little saving enables us obtain much
benefit.
22

23. Perspectives....
– Managers of Health Insurance program (officials of HIB)–
• New trends – Some of best practices being adopted for the
first time in Nepal: IT-based, Referral mechanism, Cash-less
system, Review of medical practice helps to ensure rational
practice
• This program strengthens health services, both private and
government service providers will have healthy practice to
attract service users, will help achieve UHC.
• Due to technical difficulty of identifying vulnerable and poor,
(since respective ministry could not do so), poor and
vulnerable could not receive this service in this year.
(However, there are other programs like free health programs
and 10% support for poor and vulnerable from health
facilities can be helpful to some extent.)
• When the program expands, premium rate may become low,
benefit package will expand.
23

24. Concerns/Issues
• Awareness :
– Some people do not know about Health Insurance
program (low awareness among people about
health insurance program), may be
communication gap among users, providers and
moderators (managers of HIB)
– Some people do not follow chain of referrals
– Some worry much even minor problem
24

25. Concerns...
• Enrollment and Renewal :
– People are attracted, facilities are getting crowded
– Rate of enrollment is same to everyone
– Slow/late activation
– IMIS and Insurance coordination is not active 24/7
– But, low rate of retention/renewal
25

26. Concerns...
• Benefit package :
• It does not cover all sort of health problem
• What if 100,000.00 is not sufficient to cover all
healthcare costs and no other sources are with the
people (especially the poor)?
• Benefit is low in comparison to higher cost of
travel and accommodation (especially for the
people of remote)
• No cost of travel (ambulance) is included
• Difficulty to get care if people of one place suffers
illness when travelling in another place
26

27. Concerns...
• Complaints on quality of health service :
– In response to the increasing service users, there is
limited facility (human resources, drugs,
infrastructure, machines etc.)
– Few private hospitals are included
– Not all public hospitals are included as service
providers
– Some centers are not giving adequate attention to
people having health insurance
– Some hospitals send people to private pharmacy
showing drug deficit
27

28. Way forward
• Low enrollment and renewal issues – more awareness
programs; - make mandatory enrollment in formal sectors
(parliamentarians, civil servants, teachers, police, army etc.)
• Raise extra fund from alternative means (like sin tax on
tobacco/alcohol etc.) to fund the care of people who need it
so that no one is deprived of right to health and healthcare.
• Strengthen health facility (provision of adequate drugs in
pharmacy, adequate human resources, infrastructures,
machines etc. (Allocate adequate budget – in response to
increasing service users). Improve service quality
• Provision of 24/7 services
• Expand services in benefit package
• Include – ambulance and emergency services, chronic
diseases, cost of travel and accommodation
28

29. Way forward ...
• Activate membership as early as possible
• Allow people to use facility if they suffer illness when
they went far from their place (as per rule - first service
point is usually in the usual place of residence)
• Regulation – monitor and take proper action if any
facility is not responding patient well
• Improve complaint hearing system, make it 24/7
• Promote prevention and health promotion (campaign
and package for – healthy living, healthy environment,
stop tobacco, vaccination, periodic check up, etc.)
• In case of further need – have back up plan to provide
care if someone needs more fund than the ceiling of
benefit package
29

30. Take home message
• Successful implementation of the program will help to
reduce out of pocket expenditure to health, reduce
financial hardship, increase access and utilization of
needed health care services.
• There are different concerns/issues about the program
from different perspectives (of expert, user, provider,
facilitator) related with general procedures and service
provisions.
• Improving service quality and addressing different
concerns will help in better implementation of social health
security (health insurance) program.
• Government’s health insurance program may help to have
sustainable health financing and achieve universal health
coverage (UHC) in the country – every one will get health
services they need without having financial hardships.
30

31. During practicum placement (2016; personal note)
• Participation and observation of
National Workshop on Social Health
Insurance Program: five areas –
Policy, SOP, IMIS, Cost, IEC/BCC
• Support to draft Annual Report
of SHSDC
• Participation and observation of
a consultation meeting on draft
of Health Insurance Act.
31

32. Abbreviations
• DoHS: Department of Health Services
• FY: Fiscal Year
• HI: Health Insurance
• HIB : Health Insurance Board
• IEC/BCC: Information Education Communication/Behavior
Change Communication
• IMIS: Insurance Management Information System
• IT: Information Technology
• OOP: Out-of-Pocket
• PHCC: Primary Health Care Center
• SDGs: Sustainable Development Goals
• SHSDC: Social Health Security Development Committee
• SOP: Standard Operation Procedure
• UHC: Universal Health Coverage
• WHO: World Health Organization
32

33. Bibliography
• Annual Report of Department of Health Services 2017/2018, and
other latest report of DoHS
• Reports of Health Insurance Board (website:
https://www.hib.gov.np/, previously http://www.shs.gov.np/)
• Mishra SR, Khanal P, Karki DK, Kallestrup P, Enemark U. National
health insurance policy in Nepal: challenges for implementation.
Global health action. 2015 Dec 1;8(1):28763.
• Ranabhat CL, Kim CB, Singh DR, Park MB. A comparative study on
outcome of government and co-operative community-based health
insurance in Nepal. Frontiers in Public Health. 2017 Sep 22;5:250.
• Khatiwoda SR, Dhungana RR, Sapkota VP, Singh S. Estimating the
Direct Cost of Cancer in Nepal: A Cross-Sectional Study in a Tertiary
Cancer Hospital. Frontiers in Public Health. 2019;7:160.
• Discussion in Media :
– Sajha Sawal | साझा सवाल । सरकारी स्वास््य बीमा काययक्रम कति
प्रभावकारी ? https://www.youtube.com/watch?v=sMl42iXUjXA
33

34. Thank You
34