Subsidized Private Health Insurance in AfricaPharmAccess Foundation and

Health Insurance Fund Programs

Emily Gustafsson-Wright

Brookings Institution and Amsterdam Institute for International Development (AIID)

Presentation Overview

1. Key Players and their Roles

2. Program History –Namibia and Nigeria

3. Program Approach

4. Why Private Health Insurance?

5. Conclusions

Key Players and their Roles

Health Insurance Fund (HIF)

PharmAccess Foundation – Implementing Agency

Dutch Government – Donor Agency

Hygeia - local executing partner of the program in Nigeria - the largest HMO in Nigeria

Amsterdam Institute for Int’l Development (AIID) – Responsible for surveys and all operational research

Program History -Namibia

1. 2004 -PharmAccess successfully launches low-cost insurance pilot in Namibia (Okambilimbili)

2. 2005 – three lower income products available on the Namibian market

3. 2006 – creation of the Health is Vital – Risk Equalization Fund (HIVREF) to share the financial risk of HIV/AIDS -

Program History -Namibia

4. 2008 –To date the Namibia project has made health insurance available to over 13,000 previously uninsured people and provided high quality HIV/Aids care to over 40,000 people throughthe risk equalization fund --Almost 2,000 HIV+ people receiving care and treatment

5. In the Future-the Namibia project has laid the foundations for the development of even lower cost products to reach those that remain uninsured

Program History -Nigeria

1. 2006 -Dutch Government Grant of 100 million Euro over 5 years for replication of this program in other countries

2. 2007 –January, the first PharmAccess/HIF program started in Nigeria under the name Hygeia Community Health Plan (HCHP)• had support of President Obasanjo – would match the program

funds and provide support to additional target groups -workers in the informal sector

Program History -Nigeria

3. 2008 – Nearly 6,000 market women (incl. their dependents) insured in Lagos State and 25,000 farm workers (incl. their dependents) in Kwara State.Quality Improvements• Lagos: 13 clinics/hospitals included in the program, 10 being

upgraded as part of the program, 2 monitoring and evaluation visits carried out

• Kwara 1: 6 clinics/hospitals included in the program, 4 being upgraded as part of the program, 2 monitoring and evaluation visits carried out

• Kwara 2: Medical due diligence carried out , 6 clinics have been reviewed and 4 will be included in the program, All 4 will be upgraded

4. In the Future -71,000 farm workers in Kwara State

Program Approach

• Insurance of low income groups (not individuals) • Primary-care based benefit package: basic primary and limited secondary

health care and medication including HIV/Aids treatment and care• Contracting of local insurance companies and private and public healthcare

delivery infrastructure • Prices and profit margins contractually fixed• Performance-based schemes (demand-driven and output-based)• Use donor funding to subsidize premiums and improve the quality on the

supply side• Quality assurance provided through M&E and independent financial

auditing• Use of (IT) systems to collect actuarial data to determine risk and for

management purposes• Complementary to public sector initiatives to avoid crowding out effects• Impact evaluation through biomedical and socio economic operational

research

Program Approach –Nigeria Example

• Enrollment in the program is voluntary

• Registration is done per family

• Annual premiums are about US$60 per person/year in Lagos and US$27 per person/year in Kwara State

• In first year insurance scheme members pay 5-10% of the annual premiums themselves; the remaining 90-95% is subsidized by HIF

Why Private Health Insurance?

Why Private Health Insurance?

• Impoverishment, ill health and death are the result of inadequate resources to cover health care

• Evidence shows that 150 million people globally suffer financial catastrophe due to out-of-pocket expenditures

• Budgets for health in developing countries are constrained and often public expenditures crowd-out private resources

Provision of low-cost private voluntary health insurance is one innovative method that is being offered as an alternative to existing situation

Virtuous Cycle

Ability to payWillingness to payDemand

QualityCostCapacity

delivery

finan

cing

financing

Demand Supply

Health Insurance Fund

Subsidize health insurance for low/ medium income groups Cover catastrophic risk Encourage local ownership of insurance schemes through existing organizations

Increase stable demand for health care services and recurring revenues for providers Improve quality of medical and

administrative services of private and public sector infrastructure

Investment

Insurance

Conclusions

• Resources scarce and large proportion are private (OOPs)

• Private health insurance may mitigate risk of catastrophic expenditures and may leverage private resources

• This may be one approach to providing treatment for HIV+ individuals who have participated in trials

However, success of such programs depends on

1. The ability to pool risk among risky and not risky (infected and non-infected individuals) or rich and poor

2. Demand for health insurance

3. Appropriate design of contracts with providers

Conclusions

Operational Research Key to Determining Success/Failure/Need for Improvements:

1. Willingness-to-Pay for health insurance (household survey with modules on WTP)

2. Outcomes of the programs

A survey among the Kwara State farmers to measure the 1) insurance uptake and annual renewal 2) the increase in healthcare utilization3) customer satisfaction with the insurance and the provided

health care

3. Randomized Controlled Trial (RCT) -Socioeconomic and Biomedical Impacts (treatment and control groups)

More Information

Websites:

www.pharmacess.org

www.hifund.nl

www.aiid.org

Recommended Reading:

“Private Voluntary Health Insurance in Development: Friend or Foe?” The World Bank.