Health financing for universal coverage

What is the impact of social health protection on access to health care, health expenditure and impoverishment? A comparative analysis of three African countries

Discussion paper, Number 2/2006

World Health Organization, International Labour Organization

Publication details

Number of pages: 26
Publication date: 2006
Languages: English
WHO reference number: EIP/HSF/DP.06.2




Despite progress, the achievement of the Millennium Development Goals (MDGs) will not be easy and remains an important challenge. A better protection of the poor against health risks is crucial in this endeavour. Obviously, poor health drastically impedes the social and economic development of a country: beyond directly affecting people’s well-being (reduced life expectancy, high infant mortality, spread of infectious diseases etc.) poor health also lowers the productivity of labor and menaces the entire economy.

Access to health services typically requires out-of-pocket payments. According to WHO (2003) data, out of pocket payments (OOP) account for 1/3 of total health care spending in 2/3 of all low-income countries. In most African countries the amount of OOP is well above this average (Drechsler and Jütting 2005). Such payments can lead individuals or households to reduce their expenditures for basic needs such as for food, housing and clothing, to borrow money and to sell household assets.

As a result, some households are pushed into poverty. Furthermore, out-of-pocket payments may lead to denied access to needed services or preventing from receiving a full course of needed treatment. This might result in a vicious cycle of poverty from which it is difficult to escape in an already impoverished environment. Providing access to affordable health services can alleviate the financial burden of households and improve their ability to generate income.

Recently, there is an increasing focus on social health protection via health insurance as a potential promising way to better to deal with health risks in developing countries. However, the empirical basis for a profound analysis of the effects of health insurance is still very thin. Against this background the ILO, WHO, and the OECD Development Centre sponsored by GTZ have undertaken a collaborative research project in this field.


This paper summarizes the results of three individual research projects (Asfaw, 2005; Lamiraud et al., 2005; Xu et al., 2005) measuring the impact of membership in a health insurance scheme in three African countries, namely Kenya, Senegal and South Africa.

Structure of the paper

The first section of this paper is briefly outlining the health care systems in Kenya, Senegal and South Africa followed by a short description of the methodology and data used. The later sections focus on empirical results and policy implications.