In early September, I attended a three-day Zimbabwe all stakeholder conference on health in Victoria Falls, as part of the ‘innovative spending in health’ project. This event revealed, among other challenges, that just over 10% of Zimbabwe’s 15 million population has medical aid cover. This means that the majority of the country’s urban and rural poor, and those in farming and other remote communities, cannot access private or specialist healthcare unless they can pay for the service out-of-pocket.
One of the reasons why such a big proportion of the population is not covered is that the country’s economy is now dominated by an informal employment sector, one that poses challenges to businesses in the medical insurance trade on how to collect monthly premiums from would-be clients. Current medical insurance business models are suited for the formal employment sector, where people are employed in registered companies and have predictable incomes that are dispensed through banks. It is important to note, however, that the country’s 33 medical aid providers have not been found wanting with respect to the innovative packages that they provide – from individual and family packages, packages that allow access to different categories of health facilities, to medical insurance schemes that also encompass funeral cover.
Intense competition between the players has necessitated these various forms of service innovation. However, the innovations have not led to an increase in the numbers and geographical spread of people under medical aid cover. Further reasons, apart from the formal-sector bias, include the following:
- Innovating to survive – indeed, innovation has always been about business survival and staving off competition, but in an environment where the proportion of the population able to pay for services is decreasing rapidly, and where operational and regulatory uncertainty are increasing, the focus on survival becomes the rule rather than the exception.
- Fallacy of composition – there is competition between the various players, as much as they are in the business to provide a service. This increases and makes it justifiable to focus on the population that can pay.
- Innovation incentives – the supposedly limited economic value from covering the low-income populations serves as a disincentive for business. Government presently acknowledges the need for more players in this sector to augment the services it provides, but they are running short of viable and innovative incentives to encourage investors to enter this segment, which the government has in the past ably covered with the help of mission hospitals and other civil society actors.