Fiscal challenges on the path towards universal health coverage in Benin

Introduction: In its pursuance of universal health coverage (UHC), the government of Benin has launched an ambitious reform of the health sector governance and has recently started to implement a policy of mandatory social insurance for health through the so-called Assurance pour le Renforcement du Capital Humain (ARCH) project. This raises important fiscal challenges, both at the revenue mobilisation and at the spending levels.
Aim: We analyse the fiscal challenges raised by the launch of State-subsidised mandatory social health insurance in Benin.
Methods: We analysed fiscal data and ARCH documents, and performed interviews with over 40 representatives of the government, development partners, private insurers and other resource persons during two mission in Benin in March 2018 and April 2019. Results are presented along the three classical objective or functions of public expenditure management.1
Results: The government of Benin faces important fiscal challenges to implement the ARCH social insurance project: (i) regarding aggregate fiscal discipline, the fiscal space is quite limited, there is little room for raising new revenues, hence the necessity to re-prioritise fiscal resources without jeopardising other areas; (ii) regarding resource allocation and use based on strategic priorities, purchasing of health services will need to be more strategic so as to increase allocative efficiency and equity; (iii) regarding efficiency and effectiveness of programmes and service delivery, the fluidity of the expenditure process will have to be improved, and more autonomy will have to be devoted to the operational level, so as to ensure health facilities are reimbursed in time for insured people’s health costs, so as not to jeopardize their financial equilibrium.
Conclusion: Benin faces important fiscal challenges to implement its UHC policy, which are also faced by many other African countries. An important risk to be avoided is to ensure that the resources dedicated by the government to the social health insurance system are not compensated by a reduction in the financing of preventive and promotional health services.

Reference(s):
1. World Bank. Public Expenditure Management Handbook. 1998; Washington, D.C.; 178 pages.