| Project Detail |
Project Name Strengthening Universal Health Coverage through Health Insurance
Project Number 57204-001
Country / Economy Nepal
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
The proposed TA aims to assess issues hampering implementation of National Health Insurance Program (NHIP), identify systemic, policy, procedural, and technical causes, and provide, institutional capacity building, and information management solutions to overcome those challenges. The focus is on both NHIP implementation as well as on the information architecture underpinning the NHIP and other social protection schemes.
Project Rationale and Linkage to Country/Regional Strategy
In 2021, Nepals current health expenditure per person of $65 was significantly lower than the South Asia regional average of $206. Of this expenditure, out-of-pocket spending is 51.3%, slightly more than the regional average of 48.2%, while the government contributes only 33.2%. With a sizable portion of health expenditures coming out-of-pocket, Nepalese households face heightened vulnerability to catastrophic health expenditures, risking impoverishment.
To address this, the Government of Nepal has committed to achieve universal health coverage by improving financial risk protection, providing free quality basic health care services, and providing quality and affordable essential medicines for all. The Constitution guarantees the fundamental right to access basic health services free of charge, including essential health services because of unforeseen health emergencies. The Constitution also provides the basis for the Health Insurance Act 2017, ensuring financial risk protection and reducing out-of-pocket spending. The National Health Insurance Program (NHIP) is the main instrument to improve financial risk protection for families. All Nepali families can enroll in the NHIP, and those below the poverty line are exempted from paying premiums. The Health Insurance Board (HIB) implements the NHIP. In addition, the Social Security Fund (SSF) also provides health insurance to employees, but not to their families, in the formal sector.
The TA aligns with the Strategy 2030 of the ADB, the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR) universal health coverage window priority areas, and the knowledge support priority of ADBs country partnership strategy for Nepal, 20202024, which focuses on strengthening inclusive and sustainable delivery of social services. The TA supports operational priorities of Strategy 2030: (i) addressing remaining poverty and reducing inequalities (OP1); and (ii) strengthening governance and institutional capacity (OP6), and Sustainable Development Goals 1 and 3. This TA builds on ADBs ongoing and past TA support provided to strengthen NHIP.
Since its start in 2017, the NHIP was gradually introduced in different parts of the country and has been available throughout the country since July 2023. The NHIP enrollment rate gradually increased, with 23% of the population and 33% of all families enrolled in 2021. However, NHIP implementation is not progressing as planned. NHIP enrollment increased more slowly than expected, with significant regional differences and a limited number of families continuing enrollment after 1 year. In addition, there are several challenges to operationalizing the NHIP: (i) the NHIPs actual contribution to reducing out-of-pocket spending has not yet been assessed; (ii) there is no systemic process to identify the lowest-income households; (iii) poverty mapping started in 2012 and is completed in about two-thirds of the country only, with no process for updating the data in place, and only in the completed districts are poor families exempted from premiums; (iv) the quality of the health services provided varies significantly; (v) a limited number of health facilities are participating in the NHIP; (vi) in 2021, only 343 of the 753 local governments provided an empaneled health facility; (vii) the benefit package has not changed since 2017 and requires updating; (viii) HIB has significant delays in claims settlement and implements very limited gatekeeping in processing claims to contain costs; and (ix) HIB lacks the budget and staff to implement and expand NHIP in its current design. There are indications that effective delivery of NHIP is hampered by integrity issues at the service delivery level, such as overbilling, fraud, and healthcare providers favoring patients with less complicated to save cost, so-called cream skimming. These could be addressed with improved digitalization of HIB functions.
Using digital technology to strengthen NHIP implementation is hampered by limited e-governance capacity at country level. The information systems used to implement the NHIP and other social protection programs function in isolation. Data validation and systematic high quality updating processes are almost nonexistent, leading to regular one-off exercises to collect the same data. Multiple use of data through sharing and interlinkage between systems is limited. Data interoperability standards do not exist at the sectoral level; at the technical level, they exist but are not enforced. Poverty data, which is essential for social protection programs, is poorly automated and is not systematically collected, updated, and linked with information systems of social protection programs using this data. The basic registry of people with reliable personal data, the national identification database, one of the building blocks for all service delivery systems, is not yet completed. A planned integrated social registry encompassing socioeconomic data at household and individual level is yet to be developed. Efforts put forward by the Ministry of Communication and Information Technology (MOCIT) and the E-governance Commission under the Prime Ministers Officein systems development standards, gradual transformation of stand-alone legacy systems into integrated systems, data interoperability standards, and basic registries, including finalizing and maintaining the National ID database as the basic registry for peoplewill be vital to support efficient implementation of the NHIP and other social protection schemes. |
