Islamabad (Sapeher Times) Ubaid Azher Health Systems Consultant and Strategic Purchasing Health Economist

Islamabad (Sapeher Times) Ubaid Azher Health Systems Consultant and Strategic Purchasing Health Economist “The Invisible Architecture: How the Sehat Card is Rewiring Pakistan’s Healthcare” Healthcare is never truly “free.” Every health system in the world, including Pakistan’s public sector, is fundamentally an insurance model based on risk pooling. The critical difference lies in how that pool is managed. For decades, Pakistan relied on a flawed system of “passive purchasing” — blindly funding brick-and-mortar hospitals regardless of performance. Today, however, the Sehat Sahulat Program (SSP) has triggered a paradigm shift by utilizing demand-side financing, ensuring that money finally follows the patient rather than the facility.
The trajectory of the SSP offers a masterclass in health economics, illustrating the inevitable tension between political ambition and fiscal reality. The program initially launched as a targeted Social Health Protection scheme, using poverty data to safeguard the most vulnerable from catastrophic medical expenses. It then took an ambitious leap toward Universal Health Insurance (UHI), covering 100 percent of citizens. While this expansion mobilized billions of rupees into the private healthcare sector, the absence of primary care gatekeeping led to uncontrolled provider-induced demand — including unnecessary procedures and surgeries — threatening the state’s fiscal sustainability.
To remain viable, the system eventually course-corrected into its current “rationalized hybrid” model. By removing public hospitals from the insurance pool to prevent double funding, and introducing a 50 percent co-payment for non-critical procedures in the private sector, the SSP now functions as a strategic pressure valve. This approach helps curb moral hazard while maintaining high-value catastrophic coverage for severe conditions such as cancer and cardiac diseases.
A persistent public misconception concerns the perceived distinction between “government hospitals” and “health insurance.” In reality, when a provincial government allocates a multi-billion-rupee health budget, it effectively functions as a massive single-payer insurance provider. The premium is collected through general taxation, and the beneficiaries are the citizens. However, the traditional system lacked proper systematization. A rural Basic Health Unit, for example, received its allocated budget whether it treated ten patients or one hundred, creating little incentive for efficiency and often resulting in absent staff and medicine shortages.
The true innovation of the SSP lies in its ability to rewire this outdated structure through demand-side financing. Instead of allocating budgets to buildings, the program introduced strategic purchasing. Funds are released from the risk pool only after a verified patient receives treatment. This output-based payment mechanism generates real-time, granular morbidity data, enabling actuaries to forecast healthcare risks more accurately than ever before in Pakistan’s history.
This transformation has also altered the power dynamics within the health system. Historically, low-income patients were geographically bound to under-resourced public hospitals. By empanelling private hospitals — which manage more than 70 percent of healthcare traffic in Pakistan — the SSP granted poorer citizens unprecedented purchasing power to seek quality care. At the same time, this shift compelled public hospitals to compete for patients and improve service delivery.
Yet a critical vulnerability remains. The SSP currently operates largely as a “sickness fund.” It reimburses hospitals heavily when patients become critically ill but provides little financial incentive for preventing or managing diseases at an early stage.
The future sustainability of Pakistan’s health system depends on integrating a capitation model for primary healthcare. Instead of paying hospitals per procedure, the state would compensate general practitioners with a fixed, prepaid monthly amount to manage and maintain the health of a defined population. Under the traditional model, healthcare providers benefit when patients are sick. Under capitation, providers benefit when patients remain healthy — managing hypertension, for instance, with affordable medication before it escalates into a costly, insurance-covered stroke.
By transforming primary care physicians into effective gatekeepers, the central risk pool can be protected, ensuring that large insurance payouts are reserved strictly for unavoidable medical catastrophes. The outdated debate between public and private healthcare is increasingly irrelevant; the future lies in strategic pluralism and intelligent purchasing.