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Extending Health Insurance: How to Make It Work
Improving Access to Health Care through Insurance
Catherine Connor, MBA
Abt Associates Inc.
February 2010
What we will do in this session
Produce technically sound, responsible policy recommendations regarding insurance for our
health ministers
Technical and political working together Why health insurance?What type of health insurance?Political promises and technical realitiesGroup discussion of recommendations
How can policy makers and technical experts work together?
Health insurance is primarily a political process
95% political
5% technical
Politicians and technocrats often do not “speak the same language”
Political LeadersLeave a legacyDrive to achieve universal
coverage Accountable to voters
Fulfil an electoral mandate Enlarge electoral baseSensitive to social groups
(poor and vulnerable) or powerful interests
Success stories
TechnocratsWorry the details and
complexitiesEnsure sustainability Control costsUse purchasing power to
increase quality and efficiency among providers
Learn what works
Atim,Chris 2009
Together they can build consensus for health insurance
Political LeadersProvide the vision and
directionPush diverse
stakeholders to compromise
Task technocrats to design and implement
TechnocratsEvidence-based
decisionsObjective analysisDesign must be
attuned to political leaders’ objectives while offering best advice
Atim,Chris 2009
Effective technical advocacy for health insurance
Before we analyze the political and technical aspects of health insurance, take a minute for personal reflection:
What are your country’s political priorities?What are your minister’s priority political commitments?How does health insurance link to these priorities?
Why health insurance?
Why Insurance? African countries have 2nd highest level of out-of-pocket (OOP) health expenditures
No financial protection!
ECSA countries have lower OOP
expenditures than the average for SSA
Low OOP High OOP
Why insurance? Absence of financial protection leads families to sell assets or borrow
A. Leive and K. Xu 2008
Why insurance? “Big picture” reasons for MoF and Presidents
Out-of-pocket health payments increase poverty and inequity
Poor can’t access services – never reach the MDGs
Healthy population and equity are key to economic growth and stability
After presentation – Group Discussion
What will be our recommendation toHealth Ministers regarding
Why health insurance is needed
What type of health insurance?
Types of health insurance
Type of scheme Financing Defined-income or -benefits?
Management system
Examples
Public or national health service
General tax revenue Income defined by national budget
Public sector UK, Canada, Scandinavia, Eastern Europe
Social health insurance
Earmarked payroll taxes by employers and employees
Benefits defined by law
Social security agency, health or sickness funds
Germany, Belgium, France, Medicare in US
Private voluntary schemes
Premiums from individuals or employers and employees
Defined benefit Commercial for-profit or non-profit insurance co
South Africa (Medical Aid Societies), USA (HMOs, Blue +/Blue Shield)
CBHI and MHOs Premiums from members /community
Neither income nor benefits fixed (in law)
Community, members or association
Senegal, Mali, India, Cameroon,
Advantages and challenges
Scheme type Advantages Challenges
Public or national health service
Maximum population coverage if funding is availableProgressive revenue collection (depends on tax regulations)National budget offers wide resource baseAdministrative simplicity (lowest admin costs)
Funding variable; limited by tax base, MoFLimited provider competition or choice Quality issues Inefficient bureaucracies
Social health insurance
Mobilizes additional resources from employersEarmarked funding insulates revenue from annual budget roundTransparency or visibility of system enhances legitimacy /population support
Unemployed, informal sector not coveredTaxes usually capped, so less progressivePayroll contributions may adversely affect employment and economyMore complex management and legislative systems
Private voluntary schemes
Financial protection to those who can affordConsumer choiceIncreases sources of funding for sectorCan increase competition for quality and efficiencySupplement public insurance
May reinforce inequities in access PVI enroll rich and healthyCannot provide 100% coverageHigh admin costs (marketing, enrolment, premium collection)
Advantages and challenges (2)
Scheme type Advantages Challenges
CBHI and MHOs Targets population groups such as rural and informal sectorsMay help equity by closing social protection gap with formal sectorFacilitate donor and Govt support /subsidiesAssist Govt and donors to better target subsidies and extend protection to informal sectorDevelop tools and techniques used by NHIS
Small risk pools result in low revenue and limited benefits which in turn result in limited financial protectionHard to scale-up Hard to sustain (bankruptcies)Cannot cover poorest unless subsidizedLess able to affect providersHigh admin costs (marketing, enrolment and premium collection)
Universal coverage
Intermediate stage of coverage
Absence of financial protection
Carrin, Mathauer, Xu, Evans. 2008
Dominance of out-of-pocket spending
Mixes of community, cooperative, and enterprise-based health insurance, SHI, and limited tax-based financing
Mix of tax-based and social health insurance
We are here
What type of health insurance?
After presentation – Group Discussion
What’s our recommendation toHealth Ministers regarding
Type of health insurance
Political promises and technical realities
Political promises and technical realities Insurance increases funding for health
Yes, if:New taxes on companies and workers (social health
insurance). Affect on formal economy?Insurance pays providers fee-for-service, utilization and
costs rise. Can be good or bad.Insurance attracts new donors funds. Sustainable? Depends, if national health insurance budget is negotiated
each yearNo, if administrative costs are high (Kenya’s hospital
insurance in 90’s)
After presentation – Group Discussion
What’s our recommendation toHealth Ministers regarding
Potential for health insurance toincrease funds for health
Yes, if designed to do so
Financial contributions based on wealth vertical equity in financing
Service utilization based on need horizontal equity in service
Political promises and technical realitiesInsurance will benefit the poor
Yes, if designed to do soRevenue collection
General taxes are progressive (the rich pay higher income or property tax rates; no consumption tax on staples such as food)
Earmarked taxes for health are progressive (taxes on luxury goods) Poor populations are exempt from user fees or copayments; or fees
are based on incomePooling
Compulsory universal coverage so the rich cannot opt out Outreach to enroll poor populationsRedistribution among multiple fund pools, e.g. rich districts subsidize
poor districts
Political promises and technical realitiesInsurance will benefit the poor
Purchasing Exclude high-end, expensive, elective care from
the benefit package. Shift from inpatient to outpatient care (Kyrgyz)Adequate supply of health providers and
facilities where the poor live (Korea, Thailand)Incentives for providers to serve poor
populationsVouchers or other incentives for poor to use
priority services
Political promises and technical realitiesInsurance will benefit the poor
Insurance can worsen inequities: US (Filmer 2003), Africa (Gwatkin 2004), China (Wang 2005); Brazil, Sri Lanka (Wagstaff 2007)
Insurance can improve equity, if: Design prevents richer groups from gaining more from public
spending than poorer groupsTarget populations where access is limited (rural,urban poor)
Adequate supply of health providers and facilities Vouchers Community outreachProvider incentives
Political promises and technical realitiesInsurance will benefit the poor
After presentation – Group Discussion
What’s our recommendation toHealth Ministers regarding
The potential for health insurance to benefit the poor
Yes, if: Benefits package covers priority services
(reproductive health, infectious diseases)Target populations with low use of priority services
Adequate supply of health providers and facilities for these services
Vouchers Community outreachProvider incentives
Political promises and technical realitiesInsurance will increase use of priority services (MDGs)
After presentation – Group Discussion
What’s our recommendation toHealth Ministers regarding
The potential for health insuranceto increase use of priority services
and contribute to health MDGs
Political promises and technical realitiesLet’s implement universal coverage next year
0 20 40 60 80 100 120
1
2
3 100 YEARS - UK, Germany, most European countries
25 YEARS - Costa Rica,Thailand, Korea – progress since 1970s
15 YEARS - Columbia, Chile, Brazil – progress in 1980s and still working
YEARS
Transition getting faster
Carrin and James 2005, Mills 2007
Thailand: Expanding Access in Stages
Source: Thaworn Sakunphanit, “Universal Health Care Coverage Through Pluralistic Approaches: Experience from Thailand”, http://www.nhso.go.th/eng/content/uploads/files/research_pub_04.pdf; accessed Oct 17, 2009
Formal sector focus and exclusion of rural and informal sectors
Directly imported from and based on European models
Economic crises threaten welfare state
Collapse or deterioration of services
User fees
Growth of private sector and civil society
Legitimized and validated HI for rural /informal sectors
Provided model, tools, skills, etc for renewed state interest and approach to SHI – decentralized, participatory, etc
Atim,Chris 2009
Political promises and technical realitiesLet’s implement national health insurance next year
1. The need for health insurance
2. Type of health insurance
How insurance can: 3. increase funding for health4. benefit the poor5. Increase use of priority services (MDGs)
6. How long it takes to expand health insurance (reach universal coverage)
Group DiscussionOur recommendations to Health Ministers
Thank you www.healthsystems2020.org
