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Friday, 21 September 2012

A new tax for health?

Health Minister Joseph Kasonde says Government plans to set up a National Health Fund and that every Zambian will have to contribute towards the new health fund. He say the diminishing resources in the health sector have forced his ministry to find other means of raising funds to mitigate the problem.  The Health Fund will underpin what he calls "the creation of a national health insurance scheme". In other words this will be mandatory contribution. A tax by another name. Since Zambia has poor health infrastructure the scheme can only work if it is mandatory otherwise few would opt-in! 

It is not obvious what such a proposal would solve. Before deciding whether to create this scheme, surely the first thing we must ask is what is wrong with the current system. There is general consensus that Zambia's health care provision suffers from two areas - inadequate resources which has resulted in poor and insufficient provision, demotivated work force, significant brain drain, frequent shortages of essential medicines and dilapidated health infrastructure; and, institutional and informational failures. Our current health system is not fit for purpose because it is inefficient and does not know its user population. There are huge structural information gaps. Without information you can't serve the people.

Now clearly Joseph Kasonde wants to address inadequate resources by taxing people more and then ring fencing the money as a "national health insurance". But this will be difficult for people to accept because the current system is grossly inefficient and corrupt. What Zambians want to hear is that Government is doing everything it can to first reduce public waste in the health sector. But equally worrying is that the proposal for mandatory contributions as envisaged will amount to more inequality. He is asking the poor to pay more to have health services when such money can be raised from other sectors (e.g. mining). The case has not been made for this scheme. 


  1. President Sata mentioned yesterday what he and Dr. Chituwo did when they realized the heathcare system was under funded: they introduced user fees. It appears they want to do the same again which i totally agree with. I do disagree with your idea of getting from the mines. How many projects are we going to fund from mining tax? What we have at the moment is a system of consumption, way too much consumption. We can't keep running a welfare state, it puts so much strain on the budget. It means each time we borrow money, which we must do by the way, we will be using that money on social programmes that are not profitable. It's true that healthcare is important. But it is not an entitlement. The user must pay at least even just for using the hospital, it will boost how much money we have in the system so that we dedicate the borrowed money to constructing a better road network, more high schools and whatever else repays those loans.

    1. He is asking the poor to pay more to have health services when such money can be raised from other sectors (e.g. mining). The case has not been made for this scheme.


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