Govt initiates Health Insurance Service reform

Kathmandu, May 18: As health insurance continues to become more complicated, the government and the ruling party, Rastriya Swatantra Party (RSP), have initiated reforms to the system.

As the budget session is in progress in the House, the government has been working intensively on these reforms. In particular, several members of parliament with a background in health have been discussing reforms to insurance services.

In a recent discussion initiated by the health section of RSP, a number of MPs, health experts, senior officials, and technology experts expressed concerns about reforming health insurance services.

The discussion on effective insurance services focused on a policy brainstorming session titled “Roadmap for Strengthening Health Insurance” held on Saturday, aiming to make health insurance stronger, more effective, and people-oriented.

Dr. Dipendra Pandey’s presentation highlighted weaknesses in the implementation of health insurance, including a lack of coordination with service providers and declining public trust. In his presentation, titled “Existing Problems and Challenges of Health Insurance: Where Did We Go Wrong?”, he discussed policy shortcomings and inefficiencies.

During the programme, health financing expert Dr. Suresh Tiwari stated that structural reforms are essential for making insurance sustainable. He presented a study titled “Restructuring of Health Insurance: What and How?”

Similarly, health economist Dr. Raghu Kafle emphasized the need for management reforms, transparency, digital systems, and cost-control measures.

Global health leader Dr. Shambhu Acharya suggested that Nepal should learn from the successful practices of other countries and develop a long-term financial model. He presented a study on financial resources and health insurance models based on international practices.

Likewise, the Prime Minister Balendra Shah’s health advisor, Prof. Dr. Jagdish Agrawal, expressed his commitment that the Prime Minister’s Office would appropriately address the ideas and conclusions raised during the discussion.

Furthermore, Dr. Manohar Pradhan, expert advisor to the Minister of Health and Population, stated that the ministry would address the concerns raised by the experts.

Concluding the programme, head of RSP’s health section, Dr. Toshima Karki, expressed her commitment to bringing change through interventions from both parliament and the government.

After the programme concluded, Dr. Karki told The Rising Nepal that her Health and Population Section has been working intensively on insurance reform.

“We are working seriously on health insurance reforms. Based on the issues raised by experts and their suggestions, we are working on restructuring the health insurance system. In a few days, we will prepare a report and submit it to the government and the Insurance Board as a recommendation,” said Dr. Karki.

Dr. Bikash Devkota, Secretary at the Ministry of Health, stated that the ministry has initiated reforms in collaboration with other relevant ministries, including the Ministry of Labour and Employment.

Speaking with The Rising Nepal, Secretary Dr. Devkota said that Minister Nisha Mehta recently held discussions with the Minister of Labour and Employment, initiating efforts to expand the insurance programme.

“The Minister of Health is working to remove the obstacles seen in the health insurance programme and make it sustainable. The results of these efforts will be seen soon. In particular, preparations are under way to address issues such as integrated and digital payment processes and service misuse. Similarly, the ministry is also working to improve the current practice in which mainly sick patients enroll in insurance,” said Dr. Devkota.

According to Dr. Devkota, the ministry has already paid some large hospitals and is moving forward with the process of settling insurance payments for additional hospitals.

Many experts noted that one of the major problems affecting the health insurance system is financial imbalance. Under the current system, the government bears a huge financial burden in operating the insurance programme. Experts also criticized the programme for becoming ineffective because service-providing hospitals have not received billions of rupees in payments.

Some large hospitals have already stopped providing services under the scheme. The insurance programme, which covers nearly 10 million Nepalis, is in crisis due to the government’s inability to pay hospitals billions of rupees in outstanding claims.

According to the latest details from the Health Insurance Board, the amount owed to service-providing health institutions has exceeded 16 billion rupees.

Health institutions receive insurance claims worth about 80 million rupees daily. The board is facing an additional financial burden averaging 2.5 billion rupees per month. It is estimated that 25 to 26 billion rupees are required annually to operate the programme regularly.

However, the gap between income and expenditure remains very wide. Insurance premiums collected annually amount to only about 4 billion rupees. Even after the government adds its annual subsidy of 10 billion rupees, the total still does not cover even half of the programme’s expenditure.

According to senior officials at the ministry, the government will primarily focus on preventing leakages in the insurance system to improve health insurance services. There are complaints that large amount of money is being wasted due to unnecessary testing, duplication of services, and managerial weaknesses.

Officials added that preparations are under way to tighten the system and streamline service management in order to prevent such leakages.