1. The Sehat Sahulat Program – Some thoughts, observations, and questions.

2. The Sehat Sahulat Program (SSP) has been heralded by the government as an important step towards providing universal healthcare in Pakistan. Still being rolled out, the scheme ultimately aims to provide health insurance worth up to Rs. 1 million to all families in Pakistan.

3. At present, the SSP covers all families in KPK and has been introduced for beneficiaries making less than $2/day in Punjab, Islamabad, AJK, and GB, with the goal of extending the program to all families in these parts of Pakistan over the next two years.

4. How does the SSP work? The government pays the State Life Insurance Corporation of Pakistan a premium of Rs. 2849/family to provide insurance coverage to families enrolled in the program. Treatment can be sought at authorized public and private hospitals across Pakistan.

5. In 2020-21, the Federal and Punjab governments have set aside Rs. 85 billion to provide coverage to 30 million families, while a further Rs. 21 billion has been allocated to provide coverage to 8 million families in KPK.

6. What healthcare coverage does the SSP offer? At present, the program covers inpatient services – medical expenses that require hospitalization. This includes services ranging from childbirth and the treatment of broken bones to heart surgery and chemotherapy.

7. In my opinion, the SSP represents an interesting and important development in the expansion of social welfare in Pakistan. However, I also believe there are some challenges and limitations that need to be addressed going forward.

8. According to the National Health Accounts published by the Pakistan Bureau of Statistics (PBS) in 2015-16, total health expenditure in Pakistan came to about 3.1% of GDP. Of this, 57.6% was Out-of-Pocket Expenditure (OOP) by private households and 34% was government spending.

9. An estimated 81% of OOP expenditure was for medical services provided by the private sector. In rupee terms, World Bank data suggests that in 2018 OOP came to about Rs. 551 billion while government spending in that same period amounted to around Rs. 428 billion.

10. Data from the Pakistan Household Integrated Economic Survey (PHIES) tells us more about how households spend money on health. In 2018-2019, households spent Rs. 1197/month on healthcare, coming to about Rs. 2303 per person per year.

11. The Pakistan Bureau of Statistics supplemented PHIES data with its own survey to arrive at what it claims is a more accurate figure for OOP expenditure by households on healthcare – Rs. 2802 per person per year in 2015-16.

12. According to the PHIES 2018-19, 70% of OOP was on medicines and equipment, with the rest being spent on inpatient and outpatient services. According to the PBS in 2015-16, the split was 47% on medicine and supplies, 24% for inpatient services, and 29% for outpatient services.

13. This is important because, as explained above, the SSP does not currently cover outpatient expenses as well as those incurred for medicines and equipment – the bulk of household spending on healthcare.

14. In India, recent studies have shown that the Rashtriya Swasthya Bima Yojana (RSBY), a health insurance scheme similar to the SSP has failed to significantly reduce OOP expenses due to a combination of factors including low coverage and rising outpatient healthcare costs.

15. The RSBY is less generous and less universal than the SSP but demonstrates some of the limitations the SSP will have to overcome. For one, as long as outpatient services are excluded from SSP coverage, families will continue to incur high healthcare costs in Pakistan.

16. This problem will inevitably be compounded by how the costs of outpatient services –
particularly in the private sector – will continue to rise in the years to come, especially if there is a lack of regulation of the private healthcare providers and services.

17. The government has indicated that it intends to eventually include outpatient services in the SSP. This makes sense, and would be the logical next step, but raises issues of funding and sustainability.

18. In a context where the government spends only around 1.1% of GDP on healthcare, providing universal healthcare coverage that caters to a wider range of needs would require significantly more funding than is currently – or has historically been – available.

19. This is not an insurmountable problem but would, at the very least, require a recalibration of Pakistan’s spending priorities as well as improvements in its capacity to collect revenue – both of which would entail taking on entrenched elite and state interests.

20. It might also be worth considering what the impact of subsidizing private healthcare might be on the public healthcare system in Pakistan. For instance, would this model disincentivize the government from investing in public health infrastructure?

21. If healthcare provision is outsourced to the private sector, with the government essentially footing the bill through insurance, will this impede the development of a more efficient and effective public health infrastructure?

22. This issue assumes more importance when considering how a reliance on private healthcare providers is likely to lead to increasing costs over time in a context where the government’s ability to regulate the private sector is low.

23. Most mature welfare states usually have a combination of public and private provision, but usually in a context where the former is relatively well-developed and effective. In places where that isn’t the case, such as the US, costs are prohibitively high.

24. Finally, what exactly is the legislative basis of the SSP? Has it been debated in parliament? Can it be modified and improved in response to democratic pressures or will it be administered by executive fiat? Can it be easily rolled back without statutory protection?

25.The SSP is a significant and welcome step in the right direction. However, can it be sustained and expanded without challenging the elite interests that have historically shaped policy, stymied reform, and dominated politics in Pakistan?

26.Similarly, might the SSP – and even something like the Ehsaas Cash Transfer scheme – impede the development of public sector welfare provision by relying on cash payments to subsidize expensive private services?