MICRO-INSURANCE AND UNIVERSAL HEALTH COVERAGE: LIMITATIONS AND POTENTIAL

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1 MICRO-INSURANCE AND UNIVERSAL HEALTH COVERAGE: LIMITATIONS AND POTENTIAL HERNAN L. FUENZALIDA-PUELMA Senior Associate, Health Investment & Financing 9 th Micro-insurance Conference 2013 Jakarta, Indonesia November 2013 Plenary Session 3 The Role of Micro-insurance in Achieving Universal Coverage 13 November 2013 Fuenzalida-Puelma 0

2 POLICY CONTEXT A practical understanding of UHC is that on the whole UHC refers to expanding coverage, reducing inequalities, enhancing quality services, and reducing out-of-pocket expenses. Attaining UHC is a long-term endeavor for developing counties and moreover for low income countries. Any attempt towards UHC requires a comprehensive national UHC policy translated into proper legislation. Isolated or disconnected initiatives for health care financing and delivery can create false expectations, duplicate efforts, and financial and delivery fragmentation. UHC and M-I have to be integral part of the health systems. 13 November 2013 Fuenzalida-Puelma 1

3 WHAT IS IN UHC? UHC involves, Universal enrollment into a SHI scheme and/or private HI schemes under a national health care financing strategy. Actual financial protection for access to needed quality health care goods and services. Actual access to health care goods and services. Competent providers and suppliers in delivering the goods and services. Adequate regulation and supervision 13 November 2013 Fuenzalida-Puelma 2

4 SPACE FOR MICRO-INSURANCE In countries with a single payer for health financing, there is limited space for M-I. In countries with limited financial and services coverage (most developing and low income countries), there is space for M-I. In poor countries with large donor presence, there is space for M-I. M-I could be sponsored by the Government or by the private sector. 13 November 2013 Fuenzalida-Puelma 3

5 M-I RATIONALE IN UHC High proportion of Out-of-Pocket health spending. Many low-income countries unable to provide minimal health coverage and far away from universal health coverage. Community-based health insurance as insurance product of M-I to provide minimal financial protection and health coverage in the meantime of UHC. 13 November 2013 Fuenzalida-Puelma 4

6 M-I INITIATIVES Micro-insurance initiatives (government or private non profit) are based more on hopes rather than on evidence that target populations will enroll, obtain health care benefits and continue enrolled. M-I has intrinsic limitations in financing, delivery, and in actual enrollment of populations There a many experiences with M-I (ILO MICRO- INSURANCE PAPER No. 23) in Africa and in Latin America In spite of planning and effort few actually enroll and benefit, and fewer renew participation. Studies account for a range as low as 15% up to 30% reenrollment (Jed Friedman WB Blog 03 July 2013). 13 November 2013 Fuenzalida-Puelma 5

7 MISUNDERSTANDINGS Popular perception that insurance premium are justified only if access to actual health care services takes place. If services are not used (no health needs or no service availability) they premium should be repaid back or used for the next period. Beneficiaries do not have a concept of "risk prevention" and "risk pooling" even in simpler terms. These basic misunderstandings lead to optingout and dis-enrollment. 13 November 2013 Fuenzalida-Puelma 6

8 DETERMINANTS OF LOW Supply side Limited training of staff at dispensaries and health enters Restricted and low quality of services Out of stock medications Usual absence of minimal laboratory Scarcity of communication (in spite of mobile phones everywhere) Lack of transportation PARTICIPATION Demand side: Absence of minimal but adequate knowledge of the meaning of insurance Limited communication and information of benefits and limitations/exclusions. Frustration with unmet expectations and disappointment. Dis-satisfaction with services and availability of supplies 13 November 2013 Fuenzalida-Puelma 7

9 EXAMPLE Tanzania: Community Health Fund with very low enrollment with no differential services from those that do not enroll and pay. Managed under the Primer Minister Office-Regional Administration and Local Government (PMO-RALG) contributes to health financial and management fragmentation. Weak coordination with the NHIF (National Health Insurance Fund), the NSSF-SHIB (National Social Security Fund-Social Health Insurance Benefits), and the MOHSW. In one visited dispensary 1 enrolled family, in a large Health Center, 3 enrolled families (October 2013). 13 November 2013 Fuenzalida-Puelma 8

10 MICRO-FINANCE AND M-I Microfinance (provision of small loans to the poorest socioeconomic sectors for improving earning capacity and standard of living as instrument to fight poverty) can also contribute to the M-I development and to health with payment of premiums to CHF or analogous local or micro-insurance schemes with loans and eventual profits. If microfinance allows higher economic status, better health will become a value to be health and productive. Insufficient information about health risks, healthrelated behaviors and appropriate use of health services 13 November 2013 Fuenzalida-Puelma 9

11 CONDITIONS FOR SUCCESS - 1 UHC has to be an explicit national policy, backed with clear objectives, timeframe, plans and legislation and regulation. Any M-I initiative has to be part of the national UHC policy. M-I initiatives have to be planned, sustainable, approved, and monitored and supervised. M-I initiatives have to be part of local PHC system. 13 November 2013 Fuenzalida-Puelma 10

12 CONDITIONS FOR SUCCESS-2 Communication and information: Enhancing understanding of insurance and M-I programs contribute to the participation, continuity and sustainability and creates awareness useful for expanding UHC. Households with a high level of information are more likely to continue participation. Providers and government have to contribute to the understanding of insurance and the benefits and limitations of M-I programs. 13 November 2013 Fuenzalida-Puelma 11

13 CONDITIONS FOR SUCCESS-3 Sensitivity Address community needs and demands. Experience will bring changes in knowledge and health behaviors that the M-I program has to acknowledge. Orchestrate local health resources (PHC, District Hospital), and local financial resources (businesses) to enhance M-I sustainability. 13 November 2013 Fuenzalida-Puelma 12

14 CONDITIONS FOR SUCCESS-4 Practicality: M-I will contribute to UCH if there is evidence of financial protection and actual access to services. M-I depends on active participation of a community group sharing common needs and status (usually poverty). Empower the community for participation in decisionmaking on the M-I scheme its benefits and capacity to deliver. Providers at the local and PHC level need some degree of autonomy to better serve the needs of the population (use of user fees and other income from the community). Integrate/ coordinate M-I with local PHC and with national policies for UHC. 13 November 2013 Fuenzalida-Puelma 13

15 MANY THANKS 13 November 2013 Fuenzalida-Puelma 14