What's next as Egypt rolls out universal health insurance

Health care in Egypt recently embarked on a transformation that will last over a decade. A national health insurance plan offering universal coverage that has been planned for several years is now being implemented, promising widespread change to the nation’s administration of care. Challenges remain, however, namely difficulties in accessing care, long waiting times, and shortages in staff, medicine and equipment – problems that have been exasperated amid the country’s efforts to combat Covid-19.

Structure & Oversight

The Ministry of Health and Population (MoHP) is the body responsible for overseeing the implementation of health legislation and care across the country. The MoHP manages primary health care centres, general hospitals, district hospitals, and integrated and specialised hospitals.

The sector has made advancements since President Abdel Fattah El Sisi introduced a universal health insurance (UHI) law in 2018. There had long been discussions around universal coverage, but momentum picked up following the launch of a pilot project in Port Said in July 2019. In May 2020 Prime Minister Mostafa Madbouly announced that a supreme health council would be created in a bid to strengthen the sector. The council is tasked with forming a unified health strategy for the country and accelerating the development of national hospitals. This comes after an earlier announcement that a centre for health crises and disaster management would be created. Both bodies, especially the latter, are expected to play a vital role in the country’s fight against Covid-19.

Overall spending on health care, however, remains low. Government expenditure decreased from 5.4% of the total budget in FY 2014/15 to 4.7% in FY 2019/20. Despite the country’s constitution mandating that health care spending be valued at a minimum of 3% of GDP, Egypt will spend just 1.2% on the sector in 2020. In 2018 national health spending totalled LE150.1bn ($9.3bn), according to research by Fitch Solutions.

General Indicators

One challenge facing the health sector is Egypt’s growing population. Estimated to have passed 100m in early 2020 and growing at around 1.1% per year, Egypt could see its population add another 60m by 2050. The Two is Enough campaign, launched in 2018, aims to lower the fertility rate from 3.5 children per women to 2.4 by 2030 through better education and decreasing stigma around birth control use. The two-year campaign, aimed at 1.1m low-income families, is funded by the Social Solidarity Ministry, which is contributing LE75m ($4.6m) alongside LE10m ($616,000) from the UN.

According to the most recent World Bank data, the average life expectancy in Egypt is estimated at 71.6 years, or 73.9 years for women and 69.4 years for men, as of 2017 – an increase of almost two years from a decade prior. This means that along with a growing population, age-related diseases may become of increasing concern. At the same time, both child mortality and maternal mortality rates have decreased significantly over the last decade. The UN estimates the mortality rate for children under five fell from 31.6 per 1000 live births in 2008 to 21.2 in 2019. Similarly, the maternal mortality rate per 100,000 live births dropped from 64 in 2000 to 37 in 2017. There are, however, notable differences between health care access for the richest and poorest communities in Egyptian society. The under-five mortality rate among the poorest Egyptians was estimated at 42 deaths per 1000 live births as of 2019, compared to 19 in the wealthiest quintile, according to the US Agency for International Development.

Improvements in access to health care can be seen through the growth of medically assisted births, rising from 35% of births in 1988 to 87% in 2018. This reflects the government’s increased focus on reproductive health and its collaboration with the World Health Organisation (WHO) and the UN in developing reproductive health programmes. A 2019 grant of €27m from the EU has also supported the government in its creation of a national population strategy, a key pillar of which is improving education and increasing access to family planning services.

Covid-19

While long-term development plans are in place for the sector, dealing with the spread of Covid-19 will occupy most of the sector’s attention for 2020. While Egypt has been far from among the worst-hit countries, dealing with the virus has proved challenging. The country imposed a number of social-distancing and lockdown measures during the first quarter of 2002 that it began to lift in late May, at which time the country recorded around 23,500 cases. In late April Hala Zayed, the minister of health, told local media that the country had 17 quarantine hospitals with a total of 3214 beds, and that an additional 30 hospitals would be converted into quarantine facilities. The country also halted exports of masks and introduced a three-phase coexistence plan to return to normal life with adequate containment measures in place. Aid from abroad has included medical equipment sent from China, and $3.2m from the US for community outreach and hygiene kits. Furthermore, in June 2020 the World Bank announced it would provide $400m to the country’s UHI scheme to help finance the response to Covid-19. A shortage of medical staff and supplies, however, remains a threat to the country’s containment efforts.

Disease Burden

In terms of dealing with more chronic health conditions, Egypt has initiated several programmes in recent years to increase education and improve outcomes across a number of diseases. The 100 Million Healthy Lives campaign, launched in October 2018, aims to utilise preventive methods and early detection of diseases to enhance the overall health of Egyptians. The campaign has already started to tackle one of the most significant health burdens in the country – Hepatitis C – through widespread screening and treatment. In 2015 the WHO stated that Egypt had the highest prevalence of the infection in the world, at around 5% of the adult population. This has placed significant strain on the health care system and has had spill-over effects on Egypt’s economy, holding back GDP growth by an estimated 1.5% annually. The 100 Million Healthy Lives campaign, the largest of its type in the world, has the goal of eliminating Hepatitis C in Egypt by 2023. Carried out in three phases, the campaign started with the screening of 13m citizens in 2018, followed by a further 40m in 2019, including foreigners and refugees living in the country. Those diagnosed with the infection are referred to designated hospitals for free treatment.

The campaign is also focusing on non-communicable diseases (NCDs) by widening screening for various risk factors. According to the World Bank, in 2015 NCDs accounted for an estimated 92% of all deaths and 67% of premature deaths in the country, largely attributable to lifestyle factors. In 2017 approximately 35.7% of the population was obese, 15.5% had high blood-glucose levels and 19% suffered from high cholesterol. Efforts to tackle NCDs are again focused on prevention, screening and early detection, following MoHP and WHO guidelines for the early detection and treatment of hypertension, diabetes and cancer. The programme is available free of charge in hospitals, screening vehicles and shopping malls.

Egypt is a low-risk country for HIV/AIDS, with around 22,000 positive cases as of 2018, according to data from the UN. However, the number of people reported living with the disease has increased by about 25-35% annually over the past decade, owing largely to a lack of knowledge and awareness. Only 10% of men and 6% of women aged 15-49 claim to have a comprehensive knowledge of the disease, and mother-to-child transmission continues to be a problem. Around 31% of people living with the disease receive antiretroviral medications, as do around 9% of positive pregnant women in order to prevent transmission to their child. The government’s National AIDS Strategy 2018-22 aims to elevate prevention, diagnosis and treatment of HIV/AIDS up to global standards. The government has created a number of other programmes in partnership with the Dutch government, the UN and the WHO, among others, to increase awareness of the disease and reduce the stigma associated with it.

Smoking-related illnesses represent another serious disease burden for the country. A WHO report from 2018 estimated that 22% of the population smokes tobacco in the form of cigarettes or shisha. The rate is significantly higher among men than women, at 46.4% and 0.2%, respectively. Unlike many other countries, Egypt’s rate of tobacco smoking continues to increase alongside the popularity of shisha and other tobacco products, with the rate expected to rise to 62.9% of men by 2025. In response to growing tobacco use, in February 2020 the House of Representatives approved amendments to the value-added tax that would increase the price of cigarettes to both discourage use and boost state income. The tax added LE58.6bn ($3.6bn) to state coffers in FY 2018/19, and the government expects to add an additional LE9bn ($554.7m) in FY 2019/20.

Public Health Sector

According to the most recent World Bank data, Egypt had an estimated 1.6 hospital beds per 1000 people in 2014, considerably less than its 2011 average of 2.7, owing mainly to the country’s growing population. According to Colliers International, in 2014 Egypt had 2062 hospitals, of which 1400 were private. Together, these hospitals put the number of beds at around 131,000 that year. More recently the outbreak of Covid-19 has revealed the extent to which the sector is stretched thin. A report from Reuters in early May 2020 showed Egypt had just 1000 intensive care beds. Much of the public health care infrastructure is outdated and needs to be modernised in order to meet the demands of the UHI scheme, Aly Adel Mohamad, associate VP of healthcare and consumer research at Beltone Financial, told OBG, adding that 70-80% of public hospitals require infrastructure investment. Egypt’s 2017 investment law will likely lead to more opportunities for increased private investment in health care infrastructure. In January 2020 Prime Minister Madbouly called for greater use of public-private partnerships (PPPs) for development projects. A focus on reducing the deficit has limited public investment in infrastructure in recent years, thus increased application of PPPs in the health care sector could provide the necessary support to prepare the country for UHI.

Insurance

Hospitals and health care facilities are expected to see an increased number of patients as the UHI law comes into effect over the next decade. The scheme is expected to have an annual cost of LE210bn ($12.9bn) by the time it is fully implemented in 2032, and is set to improve health facilities, reduce wait times and expand access for low-income citizens.

The pilot phase of the UHI scheme began in July 2019 in the governorate of Port Said, and 506,000 citizens had registered by October. By mid-2020 the scheme began rolling out in other governorates, including Luxor, Ismailia and South Sinai. UHI will be implemented in select hospitals across governorates. In Port Said, for example, approximately seven hospitals and 16 medical units are now a part of the scheme, and several are receiving modernisation investments. Among MoHP investments include LE273m ($14.6m) for Abu Khalifa Hospital, LE316m ($19.5m) for Ismailia General Hospital and LE529m ($32.6m) for Al Qasasin Central Hospital, all located in Ismailia. Phase three of the six-phase rollout is expected to be completed in 2023, by which time 15m to 17m people are expected to be covered. By then, the scheme will cover enough of the population to produce initial results for analysis, Mohamad told OBG. To source funds for the scheme and cover the growing population, the government will rely on the private sector for infrastructure investment, as well as training for doctors and other health professionals, he added. The country’s universal coverage scheme is also expected to lower the comparatively high costs paid by patients. Out-of-pocket spending accounted for around 60.1% of total health expenditure in 2017, according the World Bank’s latest figures, despite the fact that more than half of the population has access to some form of health insurance.

Private Health Sector

Until UHI scheme pilot programme in mid-2019, the public heath care segment had seen relatively little progress in recent years, with few new reforms or investment plans. Private health care offerings, conversely, have grown considerably. The country’s 1400 private hospitals accounted for around 33,000 beds in 2017.

Helping to address the national shortage of hospital beds, in July 2019 MENA Health Partners (MHP) announced that it planned to open three new hospitals by the end of 2022, investing $60m before the end of 2020. MHP will construct an 85-bed hospital in New Cairo as well as one in Mohandessin, and a 100-bed hospital in 6th of October City, which all together are expected to create as many as 1500 jobs. MHP currently owns four hospitals in Egypt and intends to expand its network to comprise 15 facilities with 1500 beds, helping to meet growing demand from mid- to high-income patients.

While other countries in the region have become centres for medical tourism, Egypt has not yet extensively explored what is likely to be considerable potential for this segment. The country is well regarded for health care at the regional level; medical tourists from North, East and West Africa, as well as from countries in the Gulf, have long come to Egypt for medical treatment because of the country’s visa access, and affordable and quality treatment options. In an effort to attract medical tourists from beyond these markets, in June 2019 Ammar Mandour, chairman of the Badr City Development Authority, announced the construction of what is poised to be the largest medical tourism city in the Middle East and Africa, requiring investment of LE20bn ($1.2bn). The mega-project, located 47 km east of Cairo, will include 13 medical institutes with a capacity of 2000 beds, an educational hospital and medicinal plantations, and will be completed in 2024.

Medical Staff

While plans for more hospitals move ahead, there remains a chronic shortage of health professionals. According to World Bank figures, in 2018 Egypt had an estimated 0.45 physicians per 1000 people, well below the organisation’s estimate of 1.3 for the entire MENA region. Low wages, abuse from patients and poor facilities are among the factors that have led a large number of Egyptians to work abroad – as many as 10,000 since 2016, according to the Egyptian Medical Syndicate. Compensation for doctors working in public hospitals is low, at LE2, 000-3,500 ($123-216) per month. This drives many to seek second jobs in private sector institutions.

The government has made various efforts to increase the number of physicians working within the country. In 2018 it reduced the required number of pre-medical education years from six to five, and in June 2019 instructed schools to allow medical students to graduate early and to increase their intake of such students, despite some opposition from medical professionals and other stakeholders. An estimated 47,000 doctors graduated from Egypt’s 30 medical schools between 2014 and 2018.

Following graduation, medical professionals have long been required to work as general practitioners in one of the country’s 5300 primary care centres, many of which are in rural areas, for two years before receiving specialist training. The system, known as takleef, has ensured that all areas of the country receive adequate medical resources and professionals. In October 2019, however, the MoHP announced that it would merge takleef with a fellowship programme whereby graduates would receive specialist training for nine months of the year and then spend the remaining three months in a rotation at a primary care centre. While the new programme should increase the speed at which specialist doctors are put to work, the Egyptian Medical Syndicate has questioned whether the new medical system will be able to accommodate and adequately compensate the imminent influx of new doctors – which is expected to increase from 2000 to 9000 annually in the coming years – and how primary care centres in rural areas will cope with a shortage of professionals.

Pharmaceuticals

With more doctors able to see more patients, Egypt’s pharmaceutical segment is poised for growth. Pharmaceutical sales in the country rose from LE38bn ($2.3bn) in 2017 to LE41.3bn ($2.5bn) in 2018, according to Fitch Solutions. This value is expected to see a compound annual growth rate of 8.4% to reach LE84.8bn ($5.2bn) by 2028. According to the MoHP, local production accounts for around 80% of pharmaceuticals. The government is hoping to leverage the country’s geographic position to become a leading pharmaceuticals exporter to MENA and sub-Saharan Africa. Egypt made progress towards this end in 2019. US-based pharmaceutical company Johnson & Johnson invested LE125m ($7.7m) in the country that year, while the UK’s GlaxoSmithKline announced that its total investment in Egypt as of the end of 2019 totalled LE800m ($49.3m).

Still, counterfeit and sub-standard pharmaceutical products pose a serious issue for the industry. In 2017 the prevalence of counterfeit drugs was thought to have cost pharmaceutical companies around LE100m ($6.2m) in losses. In an effort to streamline and enhance regulation and reduce the amount of fake drugs on the market, the MoHP established the Egyptian Drug Authority (EDA) in 2019. The new pharmaceutical regulator is poised improve standards and slow counterfeit drug sales, as well as manage pharmaceutical product registration and pricing, and ensure the availability of medicine.

With some antibiotics available over the counter, there is significant opportunity for manufacturers to produce high-quality generic and bio-similar versions, Mohamad told OBG. Generic medicines dominate Egypt’s pharmaceutical market, generally accounting for 60-70% of all medicines sold. Generics do not have the same low reputation in Egypt that they may have in other countries due to the strict regulations placed upon their composition. Both imported and Egyptian-manufactured generic medications must comply with the same rigorous standards as patented medications, meaning that they are a popular and cheaper alternative to such drugs.

Outlook

Though there are hurdles to overcome in 2020, there is significant potential for Egypt’s health sector in the medium and long term. While the global spread of Covid-19 has placed exceptional strain on the country’s health systems and infrastructure, the pandemic provides Egypt with an opportunity to streamline reforms, and locate and strengthen weak spots in its health system. The rollout of the UHI scheme, along with encouragement from the government for pharmaceuticals production, is making Egypt a more lucrative destination for investment from international firms, which places the country in good stead to reap the benefits that lie ahead.