Universal Healthcare, with a Pakistani twist

Universal Healthcare, with a Pakistani twist | Reform That Works

In this week’s piece, MHRC’s series, Reform That Works, sits down with the former KP minister to understand the planning and aspirations underpinning the province’s largely successful universal healthcare programme, the Sehat Card. 

The UN Sustainable Development Goal 3.8 marks universal healthcare coverage (UHC) as an important target to meet by 2030. According to the World Health Organisation, UHC is a mechanism that allows all people of a designated governance territory (in this case, a province) to be able to access ‘the full range of quality health services they need, when and where they need them, without financial hardship.’ 

The Premise

The Sehat Card was originally introduced to a very small proportion of the population in a pilot set of 4 districts of Khyber Pakhtunkhwa, as part of an initial health sector reform programme launched by a new KP government in 2015. In a second phase, it was expanded to BISP (Benazir Income Support Program) beneficiaries in 4 districts, then BISP beneficiaries across the board in the province. Eventually, it became universal as Sehat Card Plus (SCP) in four phases across 90 days: Malakand Division in November 2020; followed by Hazara division; the Peshawar valley; and the entire province by the 1February 2021. 

The difference between the cost of excluding people and the impact/ease of including everyone was a game changer and almost cost neutral, because we would have had to spend Rs 10-15 billion on a new BISP survey just to update beneficiaries. Admittedly, universal inclusion raises planning questions for the long-term future (discussed further in this piece), but, at the time, the inclusive strategy worked exceptionally well for state-society trust: the Sehat Card Plus was perceived as a policy intervention that directly addressed a gaping market failure (inaccessible healthcare). 

Additionally, by targeting everyone in a sequential manner, the programme was able to offset rent-seeking practices by not discriminating between which citizens to serve or not, and where. It is important to remember here that apart from the top 1%, or even fewer, out-of-pocket critical health costs are a huge burden on Pakistanis anywhere in the country. Over the 2 years in which SCP operated universally, the province recorded a monthly usage range of 120-130,000 patients (over 2 million people before it was suspended illegally by a caretaker government in KP). 

Systematic reviews of UHCs by income level suggest low-income contexts do not normally plan rigorously for their programmes, which is why they are met with limited to no success. By combining financial planning with technical evaluations, KP, a low-income context, stands out. In KP, success stemmed from the overtly lowered financial and mortality risks associated with treatment choices, especially in tertiary or chronic disease situations; typology of facility to use (public/private); and where (in or out of district). Again, all indications of thoughtful planning decisions or recommendations. 

How to Fund a UHC Program 

Universal healthcare costs far less in developing countries like Pakistan than in a context where transactional and procedural costs of policy levers add to the overall package. Much of the proto-democratization of healthcare provision discussed in the previous section was possible because per capita allocation cost of USD 2/person, and aggregate cost of PKR 30-40bn annually, was still just 2-3% of the budget. 

In the short term, therefore, universal health coverage can be covered by the public exchequer simply through intelligent trade-offs, such as by prioritizing service delivery innovation over traditional brick-and-mortar (infrastructural) expansionary schemes. But whether this choice sustains eventually comes down to two elements: political will; and a public finance culture that emphasizes governance/quality of service delivery indicators rather than access/infrastructure targets and development bills. In KP, over 1.5 terms, the government was able to demonstrate both, suggesting this policy shift is possible right here in Pakistan’s complex political economy. 

In the medium-to-long term, of course, structural reform will be required. An obvious measure is in the development of an affordable/nominal provincial tax head, such as a professional tax or other options available to provinces. Improving governance and service delivery will require investing in operational expenditure (for existing health units) alongside complementary service delivery innovations in which the public sector moves from employer to curator, such as in the public-private partnership (PPP) model exemplified by the Sehat Card. 

Identifying Policy Complements

As a PPP, there was a persistent recognition that one or the other partner may not keep up their end of the deal. Having the technical assistance partner on the programme (GIZ) lend support to institutionalizing the programme was a bonus for the reason that development aid in Pakistan does not maintain a strong track record of policy localization or successful transfer. 

One aspect built into the programme was a performance-based qualification for participating hospitals to keep receiving funding. Eventually, this condition helped channel money more efficiently (even if not perfectly so) towards where patients preferred to go because of a satisfaction with, or confidence in, the type and quality of service provided. To improve this allocation mechanism, an iterative process of state (departmental) regulation and review would still be more cost-effective than rolling back the policy altogether. 

A rollback almost happened, though. During the tenure of unconstitutionally long caretaker government (s) in KP between early 2023 and February 2024, the SCP (through its payments) was suspended across the province for unexplained reasons – policy discontinuity despite legislative protections for the programme through the KP Universal Health Coverage Bill 2022 passed into law in June of that year. A member of the Finance Department offered this logic, ‘…where the Constitution is not being obeyed, what chance does a law have?’

The incident threw up important questions about adherence to shared rules of the (political and legislative) game as well as the relationship between policy continuity and political economy of representative governance (who stays ‘in’; who gets ‘put out’), or between policy continuity and risk endurance as a bureaucratic norm. This suggests that if Pakistan is to witness sustained transformative governance, the wider system within which bureaucracy operates will have to be continuously nudged into a more protective space for decision-making. In such a space, preservation of the status quo is not the main objective, and risk-taking, if well-thought through, is not disproportionately penalised. 

The Way Ahead

For any system interested in human welfare, achieving a UHC regime appears both a policy gold standard, and a dream. In May 2023, the results of the Aga Khan University’s evaluation of KP’s Sehat Card Plus programme pointed out the presence of ‘good evidence that given its performance the Sehat Card Plus KP needs to be sustained and institutionalized in KP province to be among the first to achieve universal health coverage (UHC) in Pakistan.’ The detailed report examines issues of awareness, access, provision, levels of healthcare, and financial sustainability. 

The findings suggest there is potential to such policy endeavours in the Pakistan context and that, rather than rolling them back or scrapping them altogether, there is serious prospect to improving and institutionalizing them. Foremost among these findings is the lesson that a universal healthcare mechanism does provide residents of the province a financial risk protection scheme; for instance, users of the Sehat Card Plus option incurred nearly 6x fewer out-of-pocket expenditures (medical + non-medical) than those not using the Sehat Card Plus option. 

Other obvious sustainability options for the new government in KP to consider include:

  1. A well-crafted voluntary opt-out component for civil servants (currently about 500,000 of them) that takes them off the mandatory cover programme, but allows the funds allocated for them to be pooled into a top-up programme for public servants (ie: additional funds available as and when required to prescribed criteria). This could save about PKR 15bn to create the next tier of Sehat Card programmes that don’t just cover basic elements, but allow improved coverage (such as OPD and medicine procurement coverage).

    This was an element the KP government had already started to discuss with insurance providers, especially with a view to expand this kind of pay-in model into middle and professional classes of the general public. The big outcome of this? A, yes, paid programme, but one with greater breadth of service provision.

  2. Integrate Sehat Card provision into public sector budgeting so that the proportion of public hospitals (or services) driven directly by universal coverage can be anticipated and planned for efficiently ahead of time.
  3. Find a balance between cost-effective/efficient new capital expenditures (physical investments) and improvements to service delivery through operational reallocations within existing infrastructure. 


Taimur Khan Jhagra is the former Finance Minister of the Government of Khyber Pakhtunkhwa.


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