Zim’s Health Reform Bill: A Prescription for Unfunded Mandates, Not Universal Care

By Newton M. Mambande

HARARE – PARLIAMENT is currently debating the Health Reform Act, a Bill marketed as the vehicle to achieve “universal health coverage for all” by 2030. The stated objectives are commendable: free primary healthcare at the point of use, mandatory treatment of “indigent and vulnerable persons” by all registered health facilities, price controls on essential medicines, and administrative penalties for private hospitals that turn away patients who cannot pay.

No one disputes the goal. A nation is only as healthy as its poorest citizen. The problem is not the goal. The problem is the instrument.

From a health economics perspective, any serious reform must answer four foundational questions:

1. Who is the purchaser? Who pays the bill?
2. Who is the provider? Who delivers the service?
3. How do we pay? What is the payment mechanism?
4. How do we ensure efficiency and equity? How do we avoid waste and ensure the poor are reached?

The Health Reform Act answers all four questions with one phrase: “the private sector.” That is not health reform. That is fiscal cost-shifting disguised as compassion.

This column critiques the Bill using the standard health economics framework of market failure, fiscal incidence, and incentive alignment. I argue that the private health sector must not be made the default welfare office for the poor, precisely because the government itself admits it does not have the capacity to pay due to perennial financial indiscipline and structural revenue constraints. I further argue, drawing on Adam Smith in The Wealth of Nations, that when the state tries to directly command the business of healthcare without the money to back it, it destroys both equity and efficiency.

1. THE CORE FLAW: UNFUNDED MANDATES AND THE MYTH OF “FREE” CARE
Section 12 of the Bill states: “Every registered health facility, public or private, shall provide emergency and primary healthcare services to any person, regardless of ability to pay.” Section 15 goes further: facilities may claim reimbursement from the Ministry of Health “subject to availability of funds.”

In health economics, this is called an unfunded mandate. It transfers a public obligation to private balance sheets without transferring the corresponding budget.

Let us do the arithmetic. The government currently allocates about 7% of the national budget to health, well below the Abuja Declaration target of 15%. In the last 5 years, the Treasury has accumulated arrears exceeding $30 million to private mission hospitals alone for services already rendered under existing contracts. Pharmacies and laboratories report 6 to 18-month delays in payment.

Now the Bill proposes to make that liability open-ended. Any person who walks into any private facility and declares themselves “indigent” must be treated, with payment promised later.

What happens next is predictable through the lens of provider behaviour:

• Exit: Private hospitals, especially SMEs, will stop accepting cashless patients or will close.
• Voice: They will raise fees for paying patients to cross-subsidise the unpaid ones.
• Loyalty: Only large corporate chains with deep pockets will survive, reducing competition.

The consequence is not more care for the poor. It is less care for everyone. Paying patients face longer queues and higher premiums. Insurers raise rates. The poor, whom the Act intends to help, are turned away informally because no facility can afford to absorb unlimited losses.

You cannot legislate capacity. You cannot legislate foreign currency for drugs. You cannot legislate cash that the Treasury does not have. Compassion without a budget line is cruelty with better PR.

2. ADAM SMITH AND THE LIMITS OF STATE INTERVENTION IN HEALTH
Critics will say invoking Adam Smith in a discussion about health is cold and market-fundamentalist. That misreads Smith.

In The Wealth of Nations (1776), Smith was not arguing against helping the poor. He was arguing against the method by which governments typically try to help. Two principles are directly relevant:

First: The Division of Labour and Comparative Advantage
Smith observed that wealth is created when each actor specialises in what they do best. The government’s comparative advantage is not in running pharmacies or managing hospital procurement. Its advantage is in pooling risk, setting rules, and redistributing resources.
The private sector’s comparative advantage is in responsiveness, cost control, and service delivery. When you force the private sector to become a social welfare department, you destroy that specialisation. A surgeon becomes a debt collector. A pharmacist becomes a grant applicant. Productivity collapses.

Second: The Dangers of Directing Private Capital
Smith warned: “The statesman who should attempt to direct private people in what manner they ought to employ their capitals… would assume an authority which could not safely be trusted.”
The Bill does exactly this. It directs how private capital must be employed—to treat non-paying patients—and at what price—controlled by regulation. The result, as Smith predicted, is shortages. When price is controlled below cost and volume is mandated above capacity, suppliers leave the market.

Applied to health: the government should finance care for the poor and regulate quality. It should not try to be the provider, the price-setter, and the payer all at once, especially when it has no money. That is the fastest way to undermine the 60% of formal healthcare currently delivered by private and mission facilities in Zimbabwe.

Smith’s “invisible hand” is not a call for heartlessness. It is a call for alignment. A private doctor who must remain solvent will keep the lights on, stock drugs, and pay nurses. A doctor forced to work for IOUs will stop showing up.

3. THE HEALTH ECONOMICS DIAGNOSIS: A FINANCING FAILURE, NOT A DELIVERY FAILURE
Health economists distinguish between two types of market failure:

Demand-side failure: People are sick but cannot afford care.
Supply-side failure: There are no drugs, no staff, no equipment, no beds.

The Health Reform Act assumes we have a supply-side failure and tries to fix it by conscripting private suppliers. But our core problem is demand-side failure caused by a financing gap.

Households are impoverished. Insurance penetration is below 10%. Government revenue is thin and unpredictable due to perennial financial indiscipline: late disbursements, leakages, off-budget expenditures, and poor public financial management.

Forcing private providers to absorb demand-side failure does not create new money. It just moves the liability. This is what economists call crowding out. Private capital that could have built a new clinic instead goes to pay for last month’s unpaid government patients. Donors who could have funded a new programme instead pull back because the policy environment is now unpredictable.

The evidence is already here. After similar directives in 2018, several private hospitals stopped accepting government patients. Mission hospitals threatened closure. The public system, which the Act assumes can take up the slack, is already operating at 40% of required staffing and drug levels.

In short, the Bill treats the symptom with a prescription that worsens the disease.

4. THE SOCIALIST PRETENCE: WHY STATE-CENTRED HEALTH PLANNING FACES CHALLENGES IN ZIMBABWE
Beyond bad economics, the Bill reflects a deeper ideological problem: the persistence of a socialist approach to service delivery by a government that lacks socialist resources.

For decades, Zimbabwe’s public policy has leaned on state-led provision as the default. In health, this has translated into centralised procurement, price controls, mandatory service obligations, and the expectation that the state will fund everything. The weaknesses of this socialist model are now glaring in our context:

1. Fiscal Overreach Without Fiscal Capacity
Socialist ideology assumes the state can and should be the primary provider and financier. But the Zimbabwean state is in perpetual fiscal distress. Revenue collection is weak, expenditure is undisciplined, and debt is high. Promising “free” services without a tax base to fund them creates arrears, not access. The $30 million owed to mission hospitals is not an accident. It is the logical outcome of promising what cannot be paid for.

2. Perverse Incentives and the Erosion of Productivity
When the government sets prices below cost and mandates volumes, it removes the profit motive that keeps facilities open. Socialist planning assumes that duty and patriotism will substitute for payment. They do not. Nurses emigrate, pharmacists close shop, and equipment is not replaced. The result is a hollowed-out public system that no one, rich or poor, wants to use.

3. Centralisation Breeds Inefficiency and Corruption
Centralised procurement and allocation create bottlenecks. Drugs that expire in one province are in shortage in another. Tenders are delayed. Political considerations override clinical need. The socialist model concentrates power without dispersing accountability.

4. Crowding Out of Civil Society and the Private Sector
By positioning the state as the sole legitimate provider, socialist policy undermines mission hospitals, NGOs, and private clinics that have historically filled gaps. When these are then ordered to provide “free” care without payment, they are effectively nationalised without compensation. Investment flees.

5. Equality of Poverty, Not Equality of Access
The promise of socialist health is equal care for all. The reality in Zimbabwe has been equal queues, equal stock-outs, and equal disappointment. The wealthy opt out to South Africa or private cash practice. The poor are left with a system that cannot deliver. That is not equity. It is shared deprivation.

The Health Reform Act repeats this mistake. It assumes state command can substitute for state cash. It cannot.

5. EQUITY VERSUS EFFICIENCY: WHY BOTH ARE LOST UNDER THIS MODEL
The Bill claims to promote equity. But equity in health economics means two things: horizontal equity – equal treatment for equal need – and vertical equity – more resources for those with greater need.

This Act fails both.

• Horizontal inequity: Two people with pneumonia will get different treatment depending on whether they walk into a public or private facility, and whether that facility has hit its informal quota for “free” patients that month.
• Vertical inequity: By driving private providers out, the poorest will be left with only the underfunded public system, while the wealthy will fly to South Africa or pay cash under the table.

On efficiency, the Act creates massive deadweight loss. Administrative costs will balloon as facilities try to verify “indigence,” submit claims, and chase payments. Clinical time will be spent on paperwork, not patients.

A proper health economics approach aligns incentives. This Act misaligns them.

6. RECOMMENDATIONS: A MARKET-FRIENDLY PATH TO UNIVERSAL COVERAGE
Universal coverage is possible. But it requires honesty about money and roles. Here is a 5-point alternative grounded in health economics and fiscal reality:

1. Separate Financing from Provision: The Purchaser-Provider Split
The government must stop trying to be everything. Its job is to be the strategic purchaser.
Establish a ring-fenced National Health Insurance Fund, funded by: a 1% health levy on VAT, sin taxes on alcohol and tobacco, and donor grants. The Fund’s sole job is to buy services on behalf of citizens.
It then contracts both public and private providers through competitive tender. This introduces competition, transparency, and choice. This is the model used successfully in Ghana, Rwanda, and Thailand.

2. Targeted Subsidies Through Vouchers, Not Blanket Mandates
Instead of forcing every clinic to treat everyone for free, the government should identify and verify indigent households through the Department of Social Welfare. Issue them a “health voucher” or smartcard loaded with an annual benefit package.
Providers redeem the voucher for cash from the NHI Fund within 30 days. The liability is now budgeted, predictable, and auditable. The private sector is not a bank for the government. This also preserves patient dignity—no one has to beg at reception.

3. Enforce Fiscal Discipline: Pay on Time or Do Not Contract
Parliament should amend the Public Finance Management Act to include a 30-day payment rule for health providers, with automatic interest penalties. No private provider should be expected to finance the government.
Without this, no provider, public or private, will trust the system. Financial indiscipline is a policy choice, and it can be un-chosen.

4. Enable Innovation: Regulate for Quality, Not Price
Remove price controls on drugs and services. They create black markets and stock-outs. Instead, publish reference prices and let the market compete below them.
Allow innovation: telemedicine, mobile clinics, micro-insurance products delivered via platforms like O’MARI, and corporate wellness programmes. The private sector can expand access faster than the government can build hospitals, if we let it.

5. Focus Public Money on Public Goods
The government’s limited budget should be spent on what only the government can do: disease surveillance, vaccination campaigns, water and sanitation, health education, and regulation.
Let the market handle curative care. Let the state handle prevention and protection. That is the division of labour Smith described.

7. ADDRESSING THE OBJECTIONS
“Won’t the private sector just chase profits and ignore the poor?”
Not if the purchaser pays. In the voucher model above, treating a poor patient becomes revenue, not cost. Profit and equity align.

“What about rural areas where there are no private providers?”
Use the Fund to contract NGOs, mission hospitals, and mobile providers. Pay them per capita, not per service, to incentivise prevention.

“Isn’t health too important to leave to the market?”
Health is too important to be left to unfunded mandates. Markets don’t provide charity. Governments do, by financing. The question is who delivers most efficiently. The evidence globally is that contracted private providers, with proper oversight, deliver faster and more cheaply.

CONCLUSION: LEGISLATE FINANCING, NOT BANKRUPTCY
The Health Reform Act is born from a good impulse: no one should die because they are poor. But good intentions do not pay for sutures, oxygen, or nurse salaries.

By forcing private providers to carry the burden of treating the poor without guaranteeing payment, the Act ignores three realities:

1. The government does not have the cash due to perennial financial indiscipline.
2. The private sector is not a public treasury.
3. As Adam Smith taught us 250 years ago, when you misdirect private capital, you don’t get more service. You get less.

And when you add a socialist delivery model without socialist resources, you get what we already have: facilities without drugs, staff without pay, and promises without budgets.

If we are serious about universal health coverage, we must do the hard work: mobilise and ring-fence money, target it to those who need it, and pay providers promptly to deliver it.

Compassion must be budgeted. Equity must be financed. And efficiency must be incentivised.

Anything else is legislation without resources. And legislation without resources is not policy. It is performance.

The poor deserve better than performance. They deserve a system that works.

Newton M. Mambande is an entrepreneur and researcher with published scientific research scholarship in journals. He can be reached at newtonmunod@gmail.com or +263 773 411 103