The next step: Traditionally a regional leader, the sector has had a difficult few years

After decades of improvements, Egypt has some of the region’s best public health indicators, and in some cases it delivers international-standard care. Nonetheless, the system, both public and private, faces significant challenges, including poor management and inefficient allocation of resources. A rising population, the changing disease profile and the unique burden created by a high hepatitis infection rate mean that the sector faces growing strains.

With public funds limited, an increasing role for the private sector is looking likely, creating new opportunities for international participation in health financing and provision (see analysis). However, Egypt’s precarious political and economic situation means that progress on reform has been patchy.

“We need to further develop infrastructure, the quality of services and coverage of health care per capita,” Amr Shaker, executive chairman of medical equipment firm EG Medical Systems, told OBG. “However, all these challenges are opportunities for local and foreign investment. There are significant opportunities for foreign investment in building up our health care infrastructure, in manufacturing equipment, and in pharmaceuticals.”

BASIC INDICATORS: By both regional and international standards, Egypt performs well on basic health indicators. Regional comparisons are not always as flattering as they may seem, given the serious challenges many Middle Eastern and African nations face with their health systems and public health in general, but nonetheless, Egypt does the basics well.

Average life expectancy at birth stood at 73 years, above both the global and regional average for the Eastern Mediterranean (70 and 68, respectively), as of 2011, according to the World Health Organisation (WHO). The under-five mortality rate was 21 per 1000 live births, again below global and regional levels of 51 and 58, respectively, while the maternal mortality ratio was 66 per 100,000 live births ( versus 201 and 250). The progress that has been made over the past two decades is clear: in 1990 the under-five mortality rate was 86, according to the UN Children's Fund (UNICEF). The under-one mortality rate has similarly been cut from 63 to 18 per 1000 births.

Some 79% of births are attended by trained medical personnel (the regional average is 63%), 66% of mothers have four or more antenatal care visits (44%), and 96% of one-year-olds are immunised against measles (83%). The same proportion are immunised against Hepatitis B (Hep B3).

Basic health is helped by the fact that the vast majority of Egyptians have access to safe drinking water (99%, according to UNICEF) and improved sanitation facilities (95%), with rural areas (99% and 93%) slightly behind urban ones (100% and 97%).

WORKFORCE: Egypt also has a fairly substantial workforce of medical professionals, with 28.3 physicians and 35.2 nurses and midwives per 100,000 people against regional averages of 10.8 and 15.9. “The sector’s biggest advantage is human resources. There is huge demand in the Middle East for Egyptian medical staff; in Saudi Arabia, for example, 50% of the sector’s total manpower is Egyptian,” Dr Hazem Zagzoug, CEO and deputy chairman of Andalusia Medical Services, told OBG. Egypt’s ratio of doctors to population is similar to that of developed countries including the UK, Finland and Qatar. However, these medics do not always work as effectively as they could, as resource allocation is patchy.

CAPACITY: Facilities are also often overstretched. Egypt has 17 hospital beds per 100,000 people, not much more than half the global average of 30, according to the WHO. Developed-country norms do vary widely – countries with a more socialistic system tend to have more – but Egypt is certainly below most of them. Despite the fact that Egypt, like other countries, is moving its health system towards a model emphasising prevention and primary care rather than inpatient treatment, there may be scope for expanding the number of hospital beds as well – somewhere where the private sector could certainly come in, through independent investments, or through public-private partnerships (PPPs), which are starting to emerge. Currently, 91% of beds are in government hospitals, Hossam Badrawi, the founder of Badrawi Hospital, told OBG; the private sector would like the opportunity to expand its capacity.

ALLOCATION: “There is misdistribution of health care provision,” Ghada El Ganzouri, a board member at Ganzouri Specialised Hospital, told OBG. “In Upper Egypt there is relatively little, whereas in the northeast there are a lot of hospitals, but a shortage of intensive care units, so patients come to Cairo.”

As Mohamed Hamad, the project manager of health management and research at the Centre for Development Studies, told OBG, the fact that hospital occupancy rates average 46% – despite there being a low per capita number of beds nationwide – indicates that the beds are poorly allocated.

Specialist hospitals in particular – for example eye hospitals – tend to be clustered around the capital. One of the main reasons for the inadequate geographical allocation of resources is the paucity of reliable data on health care processes, for example on admissions and treatments, and data is often not collected in a structured way.

SPENDING SOURCES: Egypt spends around 4.9% of its GDP on health care, according to 2011 figures from the WHO; over the past decade, the figure has fluctuated between 4.7% and 6.1%. Per capita spending at average exchange rates was $136.60 in 2011, up from $125.30 in 2010, and showing strong and steady growth from just $73.60 in 2002.

Of total spending, 40.5% comes from the government and 59.5% from private sources. However, only a small proportion of the latter is covered by private insurance schemes – 97.7% of non-government spending is out-of-pocket (OOP), with another 0.5% coming from external sources. While the majority of private payments for health care come from OOP, this is not the case across the board. For example, at the Ganzouri Hospital, 55% of payment comes from insurance and 45% is self-paid; El Ganzouri says this is usual for private hospitals of this kind. In urban areas, in which there is a larger pool of affluent people, insurance coverage tends to be greater; in the country, OOP payments for occasional interactions with the health system are more common.

The government spent 6.9% of its budget on health care in 2011, according to the WHO. While donors are a proportionately small contributor to overall spending, in 2009-10 they brought in $79.65m in 280 separate disbursements, according to the WHO.

The leading donor was the US, contributing 45%, followed by EU institutions, with 24.7% and Spain – independently of the EU – with 8.6%. The largest single disbursement by a wide margin was a $28.6m contribution from the EU into health policy and administrative management. Overall, policy and administration accounted for 49% of all official development assistance disbursements in 2010, a sign of the international community’s emphasis on reform of the system as much as plugging resource gaps that the state and private sector cannot fill.

SHIFT: Like many emerging markets, over the past few decades, Egypt has seen the proportion of deaths attributable to communicable diseases (such as polio) decline, as the health authorities have had considerable success in tackling them.

However, the proportion of deaths by non-communicable diseases (NCDs), such as cardiovascular illness and cancers, has risen. This is due not only to the decline in infectious disease, but also to rising prevalence of risk factors that lead to chronic illnesses, including less exercise and a less healthy diet.

In 2008, the last year for which WHO figures are available, 65% of years of life lost – a measure based on age of death related to life expectancy – in Egypt were attributable to non-communicable diseases, 24% to communicable diseases and 11% to injuries. The regional averages were 31%, 55% and 14%, respectively, indicating that Egypt is somewhat ahead of its neighbours in the shift from communicable to non-communicable causes of death. However, this seems to have as much to do with the country’s success in tackling infectious diseases as a rise in risk factors, on several of which Egypt scores below the regional average. For example, 7% of males and 7.4% of females over the age of 25 experience high blood glucose, against regional averages of 11% and 11.6%, respectively; 27% of Egyptian men and 27.1% of women of the same age have high blood pressure, against 30.7% and 29.1%, respectively, for the region. On the other hand, 40% of males over the age of 15 use tobacco, against 33% for the region – for females, the figures are 0% and 4%, respectively.

OBESITY: More importantly, obesity is a serious problem in Egypt, affecting 22.5% of men and 46.3% of women (the regional averages are 13% and 24.5%). Economic development means Egyptians have the resources to eat more, particularly more meat and other sources of saturated fat. In addition, more people have sedentary jobs and lifestyles than was the case a few decades ago. Deaths linked to cardiovascular disease and diabetes, both related to lifestyle and body weight, stood at 303 per 100,000 people aged between 30 and 70 in 2008, while deaths from cancer were 130 per 100,000. The challenge is being taken seriously – the MoH has established a unit for tackling NCDs, and civil society organisations, government bodies and private firms are increasingly active in addressing the issues.

INFECTIOUS DISEASES: While great progress has been made in tackling infectious diseases, Egypt still has outbreaks – as well as high levels of infection of viral hepatitis C. Some 8-9% of the 15-55 age group have hepatitis C, according to Nasr Eltantawy, an epidemiologist at the WHO in Cairo.

A possible reason for the high incidence is infection from contaminated shared syringes used to immunise against bilharzia in the 1970s and 1980s, when that disease was one of the country’s biggest public health challenges. There are particularly high infection rates among the 50-70 age group, many of whom would have had bilharzia injections.

However, hepatitis is not confined to these age groups, and the use of dirty equipment by dentists, barbers and indeed in the health system is also likely to be a factor. There are 150 to 160 new cases a year, increasing the risk of communication. The high rate of infection is a large burden on the health system and the public purse, with treatment and care of hepatitis absorbing around 25% of the pharmaceutical budget, Eltantawy told OBG.

WHO INVOLVEMENT: The WHO plays an active role in tackling infectious diseases, including hepatitis. In cooperation with the government, each branch of the health sector and international partners including France’s Pasteur Institute, it has drawn up a plan to address these issues. With its UN partner, the Food and Agriculture Organisation, it is also leading the campaign against avian influenza, particularly improving monitoring and risk assessment. Eltantawy is confident that there is now a system in place that can predict new outbreaks. HIV/AIDS: Prevalence of HIV is low, though reported rates vary widely. UNICEF estimates around 10,000 living with the virus, and gives an upper estimate of 18,000, but Hamad suggests that 70,000-100,000 is more realistic. Due to social stigma and lack of public understanding, many will be living with HIV without knowing or reporting it. Addressing the issue and preventing infection is thus problematic. Another challenge is the cost of antiretrovirals.

MANAGEMENT & CHALLENGES: Egypt’s health system management is highly centralised, with the Ministry of Health (MoH) driving decision-making. A first step to improving allocation of scarce resources might be addressing unnecessary overlap between the state and private providers. For example, in some rural areas many patients go to doctors operating privately. Hamad said that, rather than expanding state primary care facilities in these areas, the MoH could pay the private practitioners to see publically insured and uninsured patients. He said that the situation is likely to push the government to outsource private care in the medium term, in rural areas at least.

Transparency and accountability are serious issues in the sector. Egypt’s lack of patient rights and medical malpractice laws makes it hard for patients to make claims against health care providers; instead, they must address these issues through other criminal law, a lengthy process and one which rarely ends in remuneration. The absence of a codified legislative framework on relations between providers and clients makes the development of a patient-centred health system, and a market in health care, much harder. Physicians are often opposed to the establishment of rights laws, which would increase their accountability and the risk of sanctions.

One criticism of the medical education system is that it does not give students enough practical experience, overemphasising theory. Furthermore, the established model that health care managers are physicians means there is a paucity of course offerings in health administration, finance and law – all areas in which Egypt has shortcomings. Talented doctors do not necessarily have the skills to manage hospitals, clinics and the system administration. “One of the big problems that we have is that senior people in the service are physicians, not finance people or business managers,” Hamad told OBG.

Poor allocation of resources is not limited to the public sector. Too often, according to El Ganzouri, new private hospitals are opened by people with medical expertise but no commercial experience, who choose to invest in Cairo merely as the easiest option and to follow other investors’ lead. Decisions are not always taken with sufficient consideration and research of market needs – again, development is too often the responsibility of medical specialists rather than business development professionals.

El Ganzouri suggests that investors and the government alike should conduct research into where the demand is, and Egypt should adopt a “certificate of need” process, as used in the US, to channel investment into regions in which it is needed through tax breaks and other incentives, preventing oversupply in others. “Perhaps competition from abroad would be an incentive for local investors to go where the demand is,” El Ganzouri told OBG. “The government could also encourage this by offering incentives for investment in Upper Egypt and the Nile Delta. However, at the moment there is neither information on where the demand is, nor the vision.”

PREVENTION & PRIMARY HEALTH CARE: Reform does not just entail changes in management and greater private sector participation. As in many other countries, particularly emerging markets, it also includes changing the approach to public health to put an emphasis on prevention and local primary care, and a shift away from a hospital-based model.

The aims of this shift include lowering the disease burden by tackling risk factors and promoting early treatment, encouraging greater engagement with public health at community level, and reducing pressure on hospitals, to free up resources for treating serious cases. In other words, gains should be made both in terms of the public’s health, and the efficiency of health service administration, and reflect a reality that many ailments are best first addressed at the primary health care level, with referrals to hospitals and specialist units if necessary.

In some areas this process is already well advanced. For example, in the Monufia governorate – located in the Nile Delta, in the north of the country – hospitals that were seeing 500-1000 outpatients a day are now seeing fewer than 100, freeing them to devote more resources and time to patients with serious and complex conditions, according to Hamad.

MIXED COVERAGE: Since 1964 all Egyptians have been constitutionally entitled to primary health care access. That year, the publically owned Health Insurance Organisation (HIO) was established to fund care for all workers in the formal sector, as well as newborn children, students, pensioners and widowers. The HIO covers around 45% of Egyptians; a further 25% are covered by private or parastatal (eg. military) insurance plans, including those offered by private health management organisations (HMOs), which often work with corporate employees to cover their health care costs. HMOs are not strictly speaking insurers, as they do not take insurance licences, being accredited under investment law instead; they are not required to take reinsurance.

However, some 30% of Egyptians – mainly adults working in the informal sector and the unemployed – have no coverage. While they are theoretically entitled to primary care, it is difficult for them to access it and many are reluctant to do so. Some rely on care provided by religious organisations. Many Egyptians in full-time employment also have access to health insurance schemes through syndicates (trade unions), which offer low-price packages.

SOCIAL HEALTH INSURANCE: Egypt is in the process of drawing up reforms that would see social health insurance (SHI) established, replacing the current mix of coverage systems, with the aim of ensuring universal access to health care.

The basic concept behind the proposal is similar to that used by many European countries – that employees pay monthly contributions to a health insurance fund, with their employers making a further contribution. Importantly, payments would be compulsory for all but the poorest 20-30%, meaning that those with existing private insurance would have to pay into SHI as well. The previous government insisted that even those without addresses would be given insurance cards to access health care, while the many Egyptians employed in the informal sector would pay into the fund through unions and trade organisations. The scheme has the potential to change the face of health care in Egypt; “With proper price setting and funding, SHI could be a game changer, bringing new opportunities for the private sector,” Zagzoug told OBG.

STRUCTURE: In an October 2012 interview with the local press, Abdel Hamid Omar Abaza, an assistant to the minister of health, outlined the structure of the law that would establish SHI, and addressed criticisms of the legislation. He said that the insurance fund would be controlled by a committee working with a range of medical professionals from both the public and private sectors, but with a clear distinction between care providers and those regulating and financing the system. Abaza has said that there will be opportunities for international organisations to become involved in the SHI scheme once the law is issued, although he gave no details.

OPPOSITION: The SHI scheme has already run up against some resistance. Those who are already covered under HIO and parastatal insurance fear that the contribution system means that they will have to pay more for the same standard of service. And many of those currently paying for private insurance want the option of opting out of SHI to avoid paying twice for coverage; this would drain the system of a considerable amount of funding.

Another concern is the lack of capacity – in terms of administration and financial resources – to overhaul the insurance system and put in place a complex and expensive new scheme. “We do not have the infrastructure, administrative systems and experience to implement SHI at present,” said Hamad. “The government cannot afford it. We need to find a decent system, however it is financed. And the government definitely needs to partner with the private sector and civil society to do so.” The requirements that are expected to be placed on private providers are another concern: “The new scheme allows private hospitals to participate, but the criteria to do so are so burdensome that not many hospitals will be able to comply,” Assem Abdel Razek, the director of the German Hospital, told OBG.

Hamad said that an alternative would be a decentralised system of care funded by communities, though how this would work in poorer areas is unclear.

A SUCCESS STORY: While the sector faces some serious challenges in both the public and private sectors, there are some success stories that could be adapted as models for development – if not universally, then at least in some cases. One example is the Children’s Cancer Hospital Egypt (CCHE), also known as 57375, after the hospital’s bank account, which was widely publicised as the institution is funded entirely by donations. The potential of this model for raising substantial amounts of money is evident from the fact that the CCHE is the world’s largest paediatric cancer centre. Indeed, not only rich philanthropists are involved, as much of the funding came from small donations, and 90% of the total from Egypt. The hospital provides care on an ability-to-pay basis, and has treated children from across the MENA region and beyond.

OUTLOOK: Egypt has made great progress over the post-war decades in establishing a functioning health care system that is accessible to the majority. However, with population pressures, new and old health care challenges – including rising NCD rates and a high level of hepatitis infections – alongside a scarcity of resources, there is no doubt that the current system is stretched. “There is potential for improvement and consolidation in diagnosis, ambulatory, inpatient and initial care in Egypt,” Zagzoug said. Standards of care vary widely. Successive governments have at least shown that they are aware of the challenges, and moves to improve access, tackle the disease burden and increase private and social sector participation are encouraging.

However, progress has been patchy. The model of social insurance proposed by the previous government has its flaws and there is still a reluctance to engage private expertise and capital, and decentralise control. Successive governments have, understandably, focused on the security situation and acquiring international funding.

Although SHI was designed in these recent turbulent years, the laborious and politically delicate process of health care reform has not necessarily been a priority. In fact, the political and economic position strengthens the logic for the central government increasingly becoming a regulator, guarantor and only partial funding source of health care, rather than the primary provider. The private sector would like to expand, and international and local non-governmental organisations have shown that they can play an important role. Their greater participation could help address sector challenges.