The East African Federation Should Go Single-Payer

Efforts are accelerating to form a new super state, composed of seven East African countries: Burundi, the Democratic Republic of the Congo, Kenya, Rwanda, South Sudan, Tanzania and Uganda.

With the wheels in motion to define how this East African Federation (EAF) will be governed, now is the time to begin serious consideration of the institutional outline of this future country.

I’m advocating that EAF seize this opportunity to create a single-payer healthcare system.

The 7

1. The East African Federation

East Africa is at a crossroads and a profoundly important one.¹

We can probably safely assume that most countries, particularly the developed ones, will be roughly the same in 10 years. Maybe 20% better or worse here and there, but roughly the same.

That is not the case for East Africa.

East Africa is in the midst of its demographic dividend as child mortality rates fall. It has enormous untapped natural resources, including 80% of the world’s coltan deposits and vast stores of natural gas. GDP growth frequently exceeds 5% annually. There is untapped potential for foreign investment. And with notable, highly problematic exceptions, some East African countries grant their citizens many civil liberties. [A lot of caveats in that last sentence.]

That adds up to a huge potential upside.

But there is serious downside potential as well. Several countries are headed by lifelong presidents — and they are getting old, without clear succession plans in place.¹ Corruption is excessive and endemic. Youth unemployment is high. Violence continues, and several factors, such as active rebel groups in the Congo-Uganda-Rwanda border zones, leave open the possibility of rapidly increasing instability.

Within that context exists an idea: the East African Federation.

Reaching back to independence, East Africa’s leaders have considered the creation of a superstate. With 312 million people and 1.9 million square miles, it would be the fourth most populous and seventh largest country in the world. The East African Community, the countries’ regional bloc, is fast-tracking the process, working now on a constitution. [Wikipedia provides a good synopsis of the history and status of the effort.]

The benefits of integration could be enormous.

A massive new democracy uniting a group of economies poised for rapid development. A currency union unleashing intra-federation trade and investment. An African country with the political clout to bargain with the Global North for real restitution. A powerful national identity for people long connected through shared history, culture, society, migration, economic exchange and global outlook. [I predict EAF will deliver this upside, but it is worth noting there are downside risks: disordered governance dragging down otherwise functioning economies or a single authoritarian regime replacing the current mix of democratic & authoritarian.]

Is unification happening? East Africa’s leaders seem to think so. President Ruto of Kenya said in October, “The possibility of an East African Federation is no longer a wild imagination.” President Museveni of Uganda and President Kagame of Rwanda have been agitating for unification since the mid-2000s.

Political union raises the prospect of an extremely complex process of integrating seven countries’ worth of institutions; one which at this scale has perhaps never been attempted. I want to focus in on one: health system finance.

2. Current models of healthcare financing in East Africa

Four facts lend credence to the possibility of a single-payer system. A fifth fact is cautionary. [An in-depth comparative analysis is out of scope here, but will get to it at some point.]

1. These governments already operate, and therefore pay for, a significant portion of healthcare in their countries. A single-payer system would not be a major aberration.
2. One country, Rwanda, already provides high-quality universal health coverage, demonstrating this is possible.
3. Healthcare is still very cheap in these economies. Uganda per capita annual spending is $32.
4. Foreign donors already pour billions into health, which could fund the system. EAF could negotiate for more.
5. But, many health systems in East Africa are beset by corruption. This suggests there is a chance that EAF expanding its role to be the single payer, if corruption remains commensurate or increases, might not expand access. Given the major gaps in care now, and a sensible implementation, that seems unlikely; though not impossible.²

3. EAF integration must include single-payer

There are four basic modes of funding healthcare: private insurance (e.g. much of the US), out-of-pocket (also the US and much of the developing world), direct government provision that are definitionally also single-payer (e.g. the UK or Rwanda) and single-payer with mostly private services provision (e.g. Canada). [The world is more complex than that reductive list, but that’s the gist.]

Single-payer is the appropriate choice for EAF. Many East African countries already enshrine a right to healthcare in their constitutions, and so any system that is heavily reliant on out-of-pocket or private insurance would be a major step backward.

[In the off chance someone reading this still needs convincing … why are out-of-pocket and private insurance a step back? The explicit choice to operate an out-of-pocket or private insurance system (without a strong universal mandate and subsidies) has become a fringe idea in world politics. The only remaining systems of this nature are either in poor countries or countries with extreme political dysfunction. The argument against these systems is twofold: first, humans have a right to health (obviously true; and also codified by the United Nations, if that’s the sort of thing you care about, since the 1940s). Second, economists have long established that due to extreme market failures in an unregulated healthcare market, particularly around moral hazard and imperfect information, the most efficient system is one with a central payer.]

So why not opt for direct government provision of healthcare?

There is much to be said of that model, and many countries have implemented it successfully. But government provision requires extremely high levels of institutional capacity, which are currently lacking and, while robust institutions are a realistic future for EAF, they will take years to achieve. However, this proposed model for EAF should better be described as a hybrid. Where governments already operate health facilities — which is often — those should be preserved. But those facilities, from a funding perspective, should be treated roughly the same way as private for-profit and not-for-profit facilities. In other words, the key reform to prioritize during integration is the creation of the single-payer system which will work through all facilities, regardless of operator.

4. Three strategies to up the odds of success

Get the West to pay

East Africa is still owed an enormous debt. EAF will immediately be the second most powerful developing country in the world, after India. EAF must exploit that position to demand — not request — a re-organization of all international donor health dollars (multilateral, bilateral, private) to fund the single-payer system. This will be a disruption, as the West continues to wantonly and unstrategically play and meddle in these countries’ health systems. East Africa must put a stop to this, demanding centralized funding and more of it.

Establish an independent authority to administer the system

Administering a single-payer system for 312 million people is a gargantuan task. Beyond that, an environment of high corruption raises the possibility there will not be enough resources to deliver universal care.

[What follows is an intuitive claim, not an evidence-based one. I’m continuing to explore this point, as these type of institutional design questions are critical but so rarely capable of being tested with compelling empirical methods.]

It stands to reason that institutional corruption breeds in complex, multi-faceted, low visibility entities. The US political system illustrates that independent offices with clear, narrowly defined mandates — such as the SEC or FDA — while not immune to problems, can be less susceptible to corruption and political pressure.

So, rather than being folded into a larger entity, such as the Ministry of Health or Ministry of Finance, the single-payer agency could be set up to operate independently, with regular audits conducted both by EAF and foreign funders and an inspector general reporting to some supra-institutional body. This could[note not “will”] decrease the odds of significant corruption and increase the odds of overall efficient delivery.

Go slow

The ethical mandate, in terms of both outcomes (i.e. improved health) and fairness, insists on a rapid rollout. The rollout should be as rapid as it can be. That may take a few years, but the end result will be worth it. [This just seems like common sense. But there are many tricky ethical questions embedded in these choices that need careful work to resolve.]

The formation of EAF presents an opportunity for novel policy. EAF should jump on this opportunity and guarantee its citizens the right to health.

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¹ Uganda’s President Museveni: 36 years in office, age 78
Rwanda’s President Kagame: 22 years in office, age 65
South Sudan’s President Kiir: 17 years in office, age 71.

² Here’s a thought exercise to show how a transition to single-payer with similar rates of corruption could not lead to a boost in coverage. This seems highly unlikely, but not unthinkable.

Ok, imagine 30 people today. The government has enough budget to reach 10 of them, 10 can afford to self-pay and 10 don’t have access. But due to corruption, the government’s budget is reduced, meaning it can only reach 5, not 10, for a total of 15 people with care and 15 without care. Moving to a universal system means the government now has budget to cover all 30. But, if still half of that budget is lost to corruption, the actual number of people who receive care stays the same (15). Like I said, this extreme level of corruption is unlikely (and likely arrangements would arise for people to buy in if they are denied government-funded care), but not inconceivable.