Why is health a crucial issue for development and poverty reduction?
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Transcript of Why is health a crucial issue for development and poverty reduction?
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Health Insurance for the Poor
in Developing Countries
byJohannes P. Jütting
Development Centre, OECD, Paris
Presentation at the UN Department for Economic and Social Affairs (DESA)
March 11, 2005, New York
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Why is health a crucial issue for development and poverty
reduction?
High and often “hidden costs” of illness for the poor
From estimating “needs” to analyzing channels/conditions
Interesting institutional innovations world wide in coping with health risks
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Economic Costs
Non-economic Costs
Direct CostsIndirect Costs
Financial Costs
Cons & Lab
Bed
Drugs
Transport
Food
Accomodation
Time Costs
Waiting time
Days lost due to illness
Sale of Livestock
Sale of Asset
Weak /Reduction in Labour supply
Low level of Productivity / income
Pain/ Disutility
Exclusion from Social
Activities
Risk of Death
Risk of being handicapped
Travel time
- Reduce productive capacities- Reduce credit worthiness -Less chance to hire out or hire in labour
Low Leisure Time
Costs of Illness
Source:Asfaw 2003
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0 5 10 15 20 25 30 35 40
KERALA
TAMIL NADU
KARNATAKA
ANDHRA PRADESH
HARYANA
ORISSA
MAHARASHTRA
ALL INDIA
NORTH EAST
WEST BENGAL
MADHYA PRADESH
GUJARAT
RAJASTHAN
PUNJAB
UTTAR PRADESH
BIHAR
Percent Falling Into Poverty
Hospitalization and Impoverishment
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Outline
1)Health care financing as a key challenge
2) Institutional innovations: Community-based health insurance
3) Impact of community-based health insurance schemes: What do we know?
4) Lessons learned from successes and failures
5) Policy challenges
6) Conclusions
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Health care financing as a key challenge
• Problems in developing countries
− Social insurance in its current form inadequat to reach the poor
− Limited total expenditure for health
− Health system regressive
− Out of Pocket Expenditure (OOP) remain the main source
• Recent innovations in health care financing
Can these innovations contribute to poverty reduction?
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Different Forms of Health Care Financing
Tax Collector
Risk-Pooling Entity
Social Insurance Revenue Collector
Employers and Consumers
Taxes/Contributions
Health Care Providers
General Taxation Social Insurance OOPPHI
Source: Sekhri/Savedoff (2005)
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Private Health Insurance
Health Insurance
Pre-paymentRisk-pooling
(inter-temporal and/or inter-personal)
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Overview of community financing schemes
• Worldwide development
• From micro-finance to micro-insurance
• Great variety of institutional arrangements
• Small risk pools
• Subsidies
Institutional Innovations:Communtiy-based Health Insurance
(CBHI)
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Figure 2: Urban and Rural Health Insurance Schemes in Sub-Saharan Africa – Year of Inception and Size
Source: own presentation, Data Sources: Bennett et al. 1998, Atim 1998, Musau 1999, Debaig 1999
CBHI in Sub-Saharan Africa
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An example: mutual health organizations in Thies (Senegal)
• Development out of local self help groups
• Operate in rural areas
• Coverage: Hospitalization
• Important provider support
• Co-payments
Institutional Innovations:Communtiy-based Health Insurance
(CBHI)
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Characteristics of community financing schemes
• Community involvement
• Voluntary membership
• Non-commercial
• Risk-sharing
• Solidarity
Institutional Innovations:Community-based Health Insurance
(CHI)
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Hospitalization
Ticket for consultation
Daily cost Surgery
Members
Payment by:
3,000 F CFA*
Member
3,750 F CFA
Mutual
750 F CFA/unit
Member
Non-members
Payment by:
6,000 F CFA
Non-member
7,500 F CFA
Non-member
1,500 F CFA/unit
Non-member
Source: ZEF-ISED survey, 2000
* 3,000 F CFA = 4.6 US-$
How does it work?Example from Senegal
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Data sources
− Concertation (2004): Inventory in 11 francophone African countries
− ILO/WHO/GTZ/OECD project using WHO national health survey data (2002)
− Jütting (2005): field study in Senegal
3) Impact of CHI
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quality of care
utilisation ofsupply of care health care
(better quality) Health Care Provider confidence health status
to get „valuefor money“
resource mobilisation immediate labouraccess to care produc- WELFARE for the sick tivity
membership demand forhealth insu-rance income
administrat. riskcosts per pooling insured
contract (number & Households/Communitycoverage rate)
premium levels
Health Insurance SchemeSource: own presentation
Supply and Demand of Health Insurance
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Who participates?
– The poor? The chronic poor as well?
– Social exclusion?
Direct impact: access to health care and better financial protection
Indirect impact: labour productivity, health outcomes, income and well-being
Impact of CHI on Poverty
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100.0%366Total
100.0%9.8%36Unknown
90.2%8.5%31>100,000
81.7%5.5%2050,000-100,000
76.2%4.6%1730,000-50,000
71.6%20.2%7410,000-30,000
51.4%16.7%615,000-10,000
34.7%8.7%323,000-5,000
26.0%11.7%431,000-3,000
14.2%14.2%52< 1,000
CumulativePercent# of MHITarget Group of HMI
* according to micro-survey of African insurance providersSource: La Concertation (2004: 23).
Target Groups of CBHI in Western
and Central Africa
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Dependent variable: Membership in a mutual
Variable Marginal effects
Constant -0.100* Individual characteristics Sex (1= male) -0.042** Age group 1 (age <26) Age group 3 (age >50)
0.000 0.077**
Literacy (can read/ read and write, 1= yes) 0.109*** Other organization (membership in other group, 1= yes) 0.070** Relationship ( self, spouse, parents, children, 1 = yes) 0.115*** Frequency of illness (No. of cases ill in last 6 months) -0.011 Household characteristics Wolof (household belonging to ethnic group of Wolof, 1= yes)
0.182***
Religion (1= Christian) 0.386*** Income terzile: Lower Income terzile: Upper
-0.047** 0.219***
* Significant at 0,1 level ** Significant at 0,05 level *** Significant at 0,01 level
Who participates? Senegal Field Study
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Variable Model 1b (hospitalisation)
Model 2b (expenses)
Constant -0.137*** 9.445*** Individual characteristics Sex (1= male) -0.014** 0.401 Age group 1 (age < 26) Age group 3 (age > 50)
-0.016** 0.022**
-0.520*** -0.141
Literacy (can read/ read and write, 1= yes) -0.010 -0.035 Membership (in health insurance without Ngaye Ngaye, 1=yes)
0.020** -0.514**
Frequency of illness (number of cases ill in last 6 months)
0.008 -0.03
Type of illness (complications during pregnancy/ childbirth, 1=yes)
1.125**
Severity of illness (number of days hospitalized) 0.015*** Household characteristics Wolof (household belonging to ethnic group of Wolof, 1 = yes)
-0.005 -0.033
Religion (1 = Christian) -0.004 0.142 Income terzile: Lower Income terzile: Upper
-0.008 0.016**
-0.120 0.67***
* Significant at 0,1 level ** Significant at 0,05 level *** Significant at 0,01 level
Results: Access to Health Care and Financial
Protection
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0 20 40 60 80 100
%
Styed overnightin a hopsital
(last 5 y)
Hospitalizedthe same day
needed
Received out-patient care
(last 12 m)
He
alt
h C
are
In
dic
ato
rs
Fig. 3.10. In and out -patient Care Utilization by Insurance Status
Insured
Non-insured
Utilization of Health Services
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Fig 6.1. Welfare Threatening Ways of Health Care Financing by Exp. Quintile and Insurnce Status
0.000
0.200
0.400
0.600
So
ld i
tem
s
Bor
row
dfr
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fam
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orr
owe
dfr
omou
tsid
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Sol
d it
em
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Bo
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from
fam
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orro
wed
fro
mo
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1st quinti le 5th quintile
Per
cen
tag
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f H
Hs
Insured
Non-insured
Health Care Financing Strategy
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• Participation
− The poor participate, but the chronic poor are generally excluded
− Risk of social exclusion (kinship, ethnic groups, religion)
− Overall coverage very low
• Access to health care and financial protection
− Some positive evidence > more studies needed (randomized experience ideally)
− Strengthening of demand side
− Promotion of preventive health care; education
Summary of Findings
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• Broader poverty impact
– So far only anecdotal evidence
– More research needed
• Overall assessment
– Very limited evidence so far
– Most CBHI schemes seem to have pro poor impact for their members, but only on limited scale
– Although CHI promise improvement of status quo (OOPs; user fees), donor expectations too high
Summary of Findings II
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Scheme design and management
• Flexibility in payment procedure and benefit package
• Controlling for adverse selection and moral hazard
• Degree of community participation
Existence of a viable health care provider
• Quality
Household and community characteristics
• Level of welfare in the village
• Perception of illness/insurance
• Traditional risk sharing arrangements
Lessons Learned
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Increasing poverty of CBHI impact requires:
• Scaling up of schemes and institutional strengthening
• Improvement of scheme design; e.g. link to MFI, broader coverage, modalities of paying fees
• Training and education
• Improving link to the public health sector (PPP)
• Linking up with PRSPs and decentralization
• Donor support
5) Policy Challenges
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• Improved access to health care key determinant for poverty reduction
• Community financing interesting option to be further explored, but ...
• ...scaling up crucial for further development
• Improving social insurance
• Experimenting and evaluation of private health insurance beyond community financing
6) Conclusions and Outlook