Improving Targeting of the Poor and Ensuring Equity: Emerging Systems and Approaches

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Improving Targeting of the Poor and Ensuring Equity: Emerging Systems and Approaches

Dr. Nishant Jain

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Introduction Providing Protection from catastrophic health related

expenditure is critical not only for poor but also to ensure that people do not fall below poverty line

In an study by Bales and Lu alongwith Equitap team it was found that 67.3 million people, equivalent to 3.6% of the population were pushed below the $1.25 poverty line due to out-of-pocket health payments. (18 territories)

In an study in India it was found that 21% of poorest get indebted due to Outpatient and 64% due to Inpatient

Therefore it is very important to provide cover from health related shocks to poor and vulnerable families

However, it is easier said than done and it is one of the biggest challenges being faced by countries in moving towards UHC

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Estimated % point increase in poverty estimates after deducting OOP health payments (PPP $1.25 Poverty Line)

consumption (PPP$1.25 poverty line)

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Who is poor and vulnerable? There are different definitions of defining poor and based on the

definition families can be called poor (innovative definitions)

However, irrespective of the definition families with lower and/ or unsteady income are vulnerable

Defining poor is important from the perspective of the Government support as subsidy comes into play

In addition to income there are many other criteria to determine who is poor and a large number of countries are using a version of means testing method

Informal sector workers in most of the developing countries are very large in number and are also very vulnerable to health expenditure related shocks

Most of the informal sector workers are poor

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Why it is Important to Reach Poor? Resources are limited with the Government and it should be

used effectively for the ones who are poor and vulnerable If the money is routed through a demand side system then it is

important that targeting is correct It is important to reach families that are near poor so that they

do not have catastrophic shocks and fall below poverty line Protect families that are already poor from catastrophic out of

pocket expenditure on health that will put them in a debt trap as they have borrow money or sell assets

Many times poor do not take health services at all as they do not have money to pay for it

Positive effect on the economic productivity of the country

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What is meant by targeting Poor and Vulnerable and Improving equity?

This means that extremely poor and vulnerable families are: Identified Listed Enrolled in the programme Financed through Government/ self/ other funds Aware about the benefits Aware about the process to get the benefits of the programme Able to approach the Government in case of any issue in enrolment or

access of benefits

This also means that Government is able to execute above through a planned strategy and monitor closely the above through a robust system

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Thailand

Country Examples

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Introduction Thailand is one of the very few Asian countries that has

reached almost 100% universal health coverage through demand side mechanism

In addition to the two existing schemes that cover formal sector employees another scheme was introduced in 2001

The Universal Coverage Scheme covers everyone who is working in the informal sector, whether rich or poor.

The co-payment of Baht 30 per visit was abolished at the end of 2006.

Though this scheme focuses not only on poor but almost 80% of the population including poor are covered by this scheme

Non-Poor vulnerable population including informal sector workers are also protected through this scheme

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Challenges Since coverage is almost universal, the challenge is less on

targeting Covering of left over small groups is a big challenge now Main challenges at present are

Availability of adequate number of health care facilities Enlarging the benefit package Improving the quality of health care Costing and revising capitation rates Human resource availability

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columbia

Country Examples

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Introduction Mobilize resources from Treasury and payroll taxes for

mandatory insurance An Equity (equalization) fund was created Introduced SISBEN (BPL Surveys) to target public subsidies to

the poor Identify health priorities and change budget allocation rules

overtime Choice of insurer & provider for all insured whether in

Contributory or Subsidised regime Two Categories of Beneficiaries

Contributory Regime Subsidised Regime

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Targeting of Public Subsidies in Colombia

Targeting is not perfect

Public subsidies for health are one

of the best targeted in Colombia

Distribution of social subsidies by income group, 2003

Source: Lasso F. et al. Incidencia del Gasto Público. 2005.

2

93

33

50,647

33,2

62

17

72

11

0

10

20

30

40

50

60

70

80

90

100

40% poorest 40% richest

Public services

Housing subsidies

Education subsidies

Nutrition and child careprograms

Subsidized health insurance

Targeting proved essential to reduce

health inequality through public

subsidies

Source: Slide from Maria Luisa Escobar presentation “Colombia’s Health System Financing; Presented on November 13, 2008

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mexico

Country Examples

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Mexico Mexico’s Seguro Popular (Popular Health Insurance) aims to reach the poor

and tries to provide adequate coverage to people working outside the formal sector

The purpose of this voluntary program is to provide poor and informal workers with subsidized insurance coverage comparable to that available to formal sector workers

The program initially focused on the poorest families first. Premium payments by the families are subsidized on a sliding scale by the Government, and poorest 20% of the population do not pay.

The gap between income from premium payments and the program’s total cost is covered by government subsidies.

Most of the funding for this programme comes from the federal government, through payments to the state governments

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Ensuring Participation by Poor Subsidized Premium for the Poor

The premium varies according to the economic status. Families pay up to 5% of disposable income

For poorer families lower percentage of income is to be paid and for poorest 20% there is no premium payment

Identification of the Poor – Different Options Use existing programme called Progresa/Oportunidades for data OR Use data created by SP through means testing method OR States are free to use approach of any federal subsidy programs

Incentive for Enrolling the Poor The federal SP programme support to States depends on the number of

people State serve The result is an incentives for States to enroll as many people in

programme as possible and since there is no premium for poor it is comparatively easier to enrol them

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india

Country Examples

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Introduction The National Health Insurance Programme of India called

Rashtriya Swasthya Bima Yojana started targeting only Poor and informal workers

Since the target was only poor in the beginning the experience from this experience has interesting insights

The implementation model involved hiring of Private Insurance Companies by the Government to implement the scheme

The premium for poor families was subsidised 100% by the Federal and State Governments together

However, families are mandated to pay a small amount (US$ 0.5) as registration fee

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Process A list of poor families is provided by the Government to the

Insurance Companies The model incentivise Insurance Companies to enroll as

many families as they get premium per family enrolled To ensure that people do not have to make extra effort for

enrolment, the enrolment process is done at the village level and biometric photo Smart Cards are issued on the spot

To ensure that fake enrolment do not happen a local Government officer verifies the identity of each family getting enrolled through his/ her smart card

The Insurance Company is paid based on the data automatically collected in the smart card of Government officer at the enrolment station

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Enrollment Station

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Challenges Quality of List of Below Poverty Line families prepared by the

Government needs not good due to various reasons Reaching with the message to people about enrolment in the

scheme and enrolling the family is critical Duplication amongst different lists as there is no National ID

available for all citizens of the country People in hard to reach geographical areas are still being left at

many places as incentive is not enough Poor families who are not able to get into the List were excluded –

An Employment Guarantee Scheme has started and people working there are not eligible for RSBY

Even if families are enrolled they are not many times aware about utilising the scheme

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Strategies in Terms of Funding Poor are Fully Subsidised –The poor are ensured without paying

any premium as either it is exempted or fully subsidised This can work better if targeting is good and people are aware However, there are opportunity costs involved from people e.g. loss of

wages when they go for enrolment

Premium is Partially Subsidised – The poor pay a part of the premium and rest is paid/ exempted/ subsidised by Government

Paying even a subsidised premium is often very difficult for very poor

Income Based Premium – Premium varies based on income of the family

Very difficult to determine income and also to collect premium

Premium paid in kind – People can pay premium through work or food grains etc.

This can work for pilots for difficult for large scale initiatives

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Challenges and Suggestions How to effectively Identify poor and vulnerable is one of the

biggest challenge for any programme Start with any reasonable list/ method available as a perfect list/ method

will never be available.

Improving the system for identification of Poor is necessary Once the transparency is increased in terms of families that are getting

subsidy for health insurance then slowly the list improves

Getting de-duplicated lists and removing ghost names If there is National ID programme then it is best to link with that. In its

absence a unique ID shall be provided centrally. Biometric data can also help in removing duplicates and ghost names

Whether the premium should be partially or fully subsidised For the poorest it is advisable to fully subsidise the premium as it is very

difficult for them to pay. For near poor also some subsidy should be there so as to encourage them in joining the programme

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Challenges and Suggestions Enrolment of Poor and Vulnerable in the programme is quite low

There should be incentive mechanisms built for the agency that has a mandate to enroll them and their performance should also be measured on their ability to reach poor and enroll them in the programme

Additional incentives for enrolment in hard to reach areas to be given In countries incentives have been built in different ways like third party

agencies (e.g. India), through State Governments (e.g. Mexico) or through field level Government functionaries

Involvement of Civil Society Organisations and/ or field level existing Government functionaries is also beneficial in the process

Enrolment at/ near the doorstep can remove barriers to access due to distance, opportunity cost loss and recall value

Using technology in enrolment can improve the efficiency of the process and minimise frauds

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Challenges and Suggestions Utilisation of Services after Enrolment by the beneficiaries

Improve the awareness about the programme through media channels suited to the target segment. If the literacy is not very high then visual media, local folk media, Inter personal communication etc. is more important

Government should involve local functionaries, local CSOs, opinion makers etc. to inform people

Local guidance by designated persons to utilise services in the villages and also at the hospital help in improving the utilisation

Partnering with the providers through health camps etc. however, this has potential of provider induced moral hazard if monitoring is weak

Improving the supply side through adequate number of both private and public providers empanelment so that people are empowered through choice and they need not travel far to get the benefits

Including Primary Care in the benefit package will make the product more attractive to the beneficiaries and they will use it

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Thank You

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Improving Targeting of the Poor and Ensuring Equity: Emerging Systems and Approaches

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