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Thoughts on Economics Vol. 17, No.

1&2

Designing an Ideal Social Health Insurance Scheme for Rural Bangladesh


*K. M. Mortuza Ali

Introduction
The historic International Conference on Primary Health Care as hel! in "lma"ta#$%%&' in 1(7) hich calle! for a ne a**roach to health an! health care to attain the goal for +Health for "ll+ #H.,."'. In or!er to achie-e the goal of H.,.", the go-ernments of the !e-elo*ing countries felt the nee! to mo.ili/e a!!itional resources in health care financing. 0any of the !e-elo*ing countries reali/e! that one of the most *romising o*tions as com*ulsory health insurance in the form of social security *rogramme. That is hy in many of the !e-elo*ing countries in "sia, "frica an! 1atin "merica, com*ulsory health insurance is one of the o*tions for the go-ernment to finance health care *rogrammes for the mass *o*ulation. The *rime o.2ecti-e of social insurance is to *ro-i!e .asic economic security to *eo*le against the long3range ris4s of *remature !eath, ol! age, sic4ness, !isa.ility an! unem*loyment. %ocial insurance is *ro-i!e! in a situation here the consumer is face! ith the *ro.lem of not getting a!e5uate insurance co-erage .ecause of either or .oth affor!a.ility an! a-aila.ility. %ocial insurance is generally intro!uce! hen it is im*ossi.le or im*ractical for *ri-ate insurers to sol-e a social *ro.lem. The .asic !istinctions .et een social an! *ri-ate insurance are that social insurance, in contrast to *ri-ate6 #a' is com*ulsory, #.' in!i-i!ual choice of selecting the amount of .enefit is not allo e! #c' *ro-i!es a minimum le-el of .enefit.

Problems of Health Insurance


Health insurance ris4s *ose com*le7 *ro.lems for *ro-i!ers of health insurance. Insurers nee! to a**ly the *rinci*les of insurance to fun! the
8 0anaging 9irector, Prime Islami 1ife Insurance 1t!.

9esigning an I!eal %ocial Health Insurance :::::::

*ro-ision of a tangi.le ser-ice i.e. health care. " -ariety of !ifferent health care ser-ices can .e co-ere! .y an insurance *lan !e*en!ing u*on the nee!s an! ca*acity to *ay *remiums .y the *ros*ecti-e *olicyhol!ers. Health care ser-ices can .e *ro-i!e! un!er !ifferent schemes such as a' .' c' !' Pre-enti-e an! Primary Care 0e!ical Care Tests an! E7aminations 0e!ications.

Insurers are re5uire! to !eci!e hich of these ser-ices are to .e co-ere! an! the le-el of co-erage to .e *ro-i!e!. 9ecision in this regar! is !e*en!ant u*on three main factors namely 6 i' ii' 9eman! "ffor!a.ility an!

iii' "-aila.ility of ser-ices. The high costs of health care ser-ices means that health insurance can only .e ma!e sustaina.le through high *remiums that may sur*ass the insure!, a.ility to *ay. "t the same time ma2ority of the *o*ulation cannot manage to meet the high cost of health care ithout insurance.
Ho often *olicy hol!ers use the ser-ices is a 4ey factor of health insurance e7*enses. Insurers, therefore, must calculate the e7*ecte! li4elihoo! that *olicyhol!ers oul! re5uire treatment an! the ty*e thereof. 0etho!ology for estimating the cost of treatment -aries accor!ing to the ty*e of co-erage they *ro-i!e. Health insurance *lans are highly susce*ti.le to a.use through a!-erse selection an! moral ha/ar!. The re5uirement that *olicyhol!ers enroll as a family re!uces a!-erse selection to some e7tent. ;y enrolling entire families a mi7 of high an! lo ris4 users ithin the insurance *ool is create!. Ho e-er, *olicyhol!ers can also a.use health insurance *lans .y attem*ting to o.tain treatment for non3family mem.ers. This can .e *rotecte! .y *ro-i!ing *hoto319 #i!entity' car!s. ;efore recei-ing the insurance .enefits, *olicyhol!ers shoul! *resent their -ali! *hoto319 car! to the a**ro*riate authority.

Thoughts on Economics

<ne ay to a-oi! a!-erse selection is to ma4e the insurance com*ulsory. It is then *ossi.le to relate the *remium not to ris4 .ut to income. The rich then shoul! *ay more than the *oor. %uch system has or4e! ell in countries that can fully finance the entire *o*ulation to ha-e access to a i!e range of health care relate! .enefits. It is -en !ifficult to e7ten! or4 .ase! social insurance in a !e-elo*ing country li4e ;angla!esh. This is sim*ly .ecause of large rural an! informal or4force. 0oral ha/ar! of the insure! can har!ly .e controlle! an! there is no sim*le solution to this *ro.lem. <ne ay of han!ling this issue is the re5uirement of *reauthori/ation or *re3notification. "s a result, the insure!s nee! to a!-ise the insurer in a!-ance of any *ro*ose! treatment. This affor!s a num.er of .enefits such as6 a' .' c' The insure! is rest assure! that the treatment is co-ere! an! the cost ill .e reim.urse!. The insurer is gi-en an o**ortunity to a!-ise on co-erage, for alternati-e treatment or *referre! *ro-i!ers. The insurer can *refer to settle claims !irect ith *ro-i!ers, hich ill gi-e the insurer the o**ortunity to chec4 charges for accuracy an! or a**ro*riateness.

There is general acce*tance that uni-ersal health insurance is not feasi.le at this moment in ;angla!esh. =et, it is also acce*te! that ays an! means must .e foun! to finance the *otentially large an! une7*ecte! conse5uences of ill health. These t o conclusions suggest that an a**ro*riate strategy is re5uire! that !e-elo* ris4 *ooling schemes tailore! to the nee!s of *articular *o*ulation grou*s.
9ue to lac4 of *u.lic a areness, health insurance is consi!ere! to .e a non33 *rofita.le .usiness. ;esi!es creating *u.lic a areness, infrastructure of me!ical ser-ices nee! to .e im*ro-e! an! e nee! traine! an! suita.le e7ecuti-es to offer this scheme. To *o*ulari/e health insurance scheme, effecti-e mechanism shoul! .e e-ol-e! in or!er to create *u.lic a areness. The N><s may *lay a significant role in this res*ect. Pro*er moti-ation an! *u.licity is necessary to ma4e common *eo*le a are of the .enefit of health insurance schemes.

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9esigning an I!eal %ocial Health Insurance ::::::..

Com*ulsory health insurance is mostly suita.le only for those ho are in formal em*loyment. In ;angla!esh, formal sector em*loyment accounts for less than si7 *ercent of the *o*ulation although this figure ill rise to *erha*s 1?312 *ercent if !e*en!ents, at least s*ouses, are inclu!e! as .eneficiaries of insurance. It inclu!es .oth *u.lic sector as ell as formal *ri-ate sector or4ers or4ing in registere! *remises. "ccor!ing to the 1a.our ,orce %ur-ey, a total of @A *ercent of the *o*ulation currently or4 in the *ri-ate informal sector. Ho e-er, many of them are currently un3 age! or4ers engage! in family enter*rises. 0any oul! fin! insurance either unaffor!a.le or unattracti-e.

eed for Social Insurance


%ocial insurance aims *rimarily at *ro-i!ing society ith some *rotection against one or more ma2or ha/ar!s hich are sufficiently i!es*rea! an! far reaching in effect. $sually these ris4s are not many in num.er, yet if not guar!e! against through some organi/e! means, theB, *ro!uce large !e*en!ency *ro.lems. %ocial insurance is generally com*ulsory gi-ing the in!i-i!ual no choice as to mem.ershi*. Nor it can .e as a rule the incum.ent select the 4in! an! amount of *rotection or the *rice to .e *ai! for it. In!ee!. social insurance -ie s society as a hole an! !eals ith the in!i-i!ual only so far as he or she constitutes one small element of the hole.

The great a!-antage of the social insurance a**roach is that it is not -ie e! as a social elfare .enefit, .ut as a .enefit earne! through an insurance *lan. "ffluent nations ha-e foun! that social insurance *lans ha-e i!er *u.lic su**ort an! are more sta.le than social elfare *rograms.
Ce are tal4ing a.out social insurance in ;angla!esh sim*ly .ecause security an! *rotection of life, health etc. is the essence an! function of the %tate. The role of a elfare go-ernment is not com*lete ithout a social insurance system. It is true that all insurance is essentially a social function. ;ut social insurance is the *olicy of organi/e! society to furnish the re5uire! *rotection of insurance to some sections of the *o*ulation ho cannot affor! to *ay for that. ;asic *rinci*le of insurance is the creation of a *ool of resources from hich hel* can .e gi-en to contri.utors hen an insure! contingency occurs. Chen e are tal4ing a.out social insurance as a national security *rogram, it is felt that it shoul! .elong to the *eo*le as a hole. It is also felt that the %tate shoul! ta4e *ositi-e role in *romoting social health insurance scheme.

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The conce*t of a ne social insurance scheme for ;angla!esh nee! to .e !e-elo*e! .ecause the go-ernment cannot em.ar4 u*on this res*onsi.ility alone .y itself. The scheme shoul! .e %tate s*onsore!, community .ase! an! to .e o*erate! .y in!e*en!ent 5uasi3go-ernment organi/ations or frien!ly societies. Co3o*eration .et een the go-ernment an! non3go-ernment organi/ations ill .e re5uire! to *ro-i!e social health insurance schemes through non *rofit institution. %e-eral .asic 5uestions nee! to .e ans ere! .efore !esigning an! im*lementing any social health insurance scheme. These are 6 i' Chom to *rotect an! at hat le-els D hat con!itions D ii' Chat ris4s to .e *rotecte! an! un!er i-' Chat role the go-ernment insurance system.

iii' Cho ill *ro-i!e the ser-ices of social insurance D ill *lay un!er a ne social health

In ;angla!esh, e shoul! ha-e a .asic minimum *rogram of social security. There must .e a .asic le-el of state su**ort to the *oor so that the essentials of life can .e guarantee!. The go-ernment must en!ea-or to !o so in a ay hich !iscourage !e*en!ency. " com*rehensi-e system of social health insurance oul! inclu!e *ro-isions to com*ensate *art of the in-oluntary loss of earning for any common reason .eyon! the control of an in!i-i!ual *oor. %uch reasons may .e grou*e! into those hich cause *rolonge! an! *ermanent loss of earning an! those hich cause more or less tem*orary loss of earnings. It is felt that esta.lishment of a single com*rehensi-e system of social health insurance !ue to sic4ness. !isa.ility. *remature !eath, etc. oul! *ro-e to .e economic an! attracti-e. %ocial Health Insurance shoul! co-er all the family mem.ers ithin the !efine! age limit. The *ro*ose! com*rehensi-e grou* social health insurance system oul! .ring sim*licity an! economy in o*eration. The cost of grou* com*rehensi-e co-er is less in relation to the return to .e antici*ate! in *rotection.
>enerally, social insurance scheme is a go-ernment run *lan ith a stan!ar!i/e! .enefit structure an! contri.ution rates. "s an alternati-e, go-ernment may

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9esigning an I!eal %ocial Health Insurance ::::::..

man!ate that e-eryone in the s*ecifie! grou*s must .e co-ere! .y social health insurance .ut the grou*s may choose from among se-eral schemes offere!. Ho e-er, there may .e a nee! for the go-ernment to retain an interest as insurer of last resort .ecause there is a ris4 that !is*ro*ortionate num.er of *oor ris4s ill aggregate to one *ro-i!er there.y un!ermining sol-ency. $nfortunately, in ;angla!esh a**ro*riate social health insurance schemes ha-e not .een *lanne!, !esigne! an! offere! to meet the nee!s of !ifferent sections of *eo*le. %ocial health insurance can .e o*erate! or finance! .y go-ernment agencies or alternati-ely can .e o*erate! .y *ri-ate agencies un!er close su*er-ision of the go-ernment. %ocial insurance schemes nee! to .e intro!uce! hene-er a social *ro.lem e7ists hich re5uires go-ernment action for solution an! here insurance metho! is !eeme! most a**ro*riate as a solution. This is true for health insurance.

!undamental ob"ecti#es of Social Health Insurance


The .asic o.2ecti-e of %HI is to secure access to .asic health care for all at an affor!a.le *rice. The greatest gains are for the insure! ho shoul! ha-e timely access to health care of assure! 5uality ithout facing financial .arriers. "ll social health insurance schemes normally co-er .oth *re-ention an! health *romotion.

The com*rehensi-e health care system in a !e-elo*ing country shoul! ha-e a strong *rimary health care .ase an! an efficient referral system for secon!ary an! tertiary care. "ll mem.ers of the family shoul! .e entitle! to health insurance .enefits. The contri.ution rate an! amount to .e .orne .y the insure! shoul! .e affor!a.le .y the ma2ority. ,or families an! in!i-i!uals ho can not contri.ute, source of financing shoul! .e i!entifie! an! fun! shoul! .e ensure! through legislation or through a s*ecial re-ol-ing fun! to su.si!i/e or to fully co-er the contri.utions of ultra *oor *eo*le. Ce o.ser-e that many of the "sian countries ha-e intro!uce! %.H.I schemes in recent !eca!es an! their ma2or tas4 is to achie-e uni-ersal co-erage in the near future. 0any countries ha-e intro!uce! cost reco-ery an! cost sharing mechanisms. &ecently, there has .een gro ing interest in health insurance not only as a financing mechanism, .ut also as an effecti-e social safety net that *ro-i!es greater *rotection for the lo 3income *o*ulation

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against health care cost. ;ase! on the e7*erience of those countries, e nee! to !e-elo* gui!elines to !esign an! to *ro-i!e social health insurance to our *eo*le.

eed for high $olitical commitment


;ase! on in3!e*th stu!y, a *olicy frame or4 has to .e !e-elo*e! for intro!ucing social health insurance .y reaching to a consensus an! ste*s shoul! .e e7*lore! to increase the *u.lic health e7*en!iture .y increasing an! rationali/ing the allocation of national .u!get. Ce shall ha-e to a!o*t a**ro*riate legislation for intro!ucing %HI as an alternati-e to health care financing.
In In!onesia, the National %ocial %ecurity ;ill as *asse! .y the *arliament in 2??E, co-ering social health insurance. The >o-ernment of In!ia has recently intro!uce! an insurance scheme calle! +Fanara4sha+ !esigne! to *ro-i!e financial *rotection to the nee!y *o*ulation. They ha-e also *lanne! to *ro-i!e community .ase! uni-ersal health insurance scheme. In or!er to ensure the affor!a.ility of the scheme to .elo *o-erty line families, the >o-ernment of In!ia oul! contri.ute &s.1?? #one hun!re!' *er year *er family to ar!s their annual *remium cost. %imilar contri.ution .y the go-ernment of ;angla!esh can hel* to !e-elo* an i!eal %HI for ;angla!esh.

If the >o-ernment of ;angla!esh is to ensure health care for the *oor .y *rotecting their health an! financial ris4 either through %.H.I, or other means of financing, *olitical commitment is necessary for initiating an! sustaining the *rogram. "n a**ro*riate *olicy frame or4 lea!ing to ar!s the enactment of a**ro*riate la for %.H.I is essential to ensure the i!e acce*tance of the .asic conce*t an! general rule for %.H.I. This is necessary to *ro-i!e an! guarantee e5uita.le health .enefits to all those ith similar health care nee!s, regar!less of the le-el of income an! contri.ution. The essential features of a successful %ocial Health Insurance scheme, therefore, nee! to .e ell un!erstoo!. If e are to intro!uce an a**ro*riate scheme there must .e com*ulsory or man!atory mem.ershi* of in!i-i!ual or grou*s of in!i-i!uals through legislation or through a community in-ol-ement here *eo*le shoul! regularly contri.ute on a -oluntary .asis accor!ing to the a.ility to *ay. ,un!s thus collecte! from contri.utions to .e *oole! an! a!ministere! .y a 5uasi3in!e*en!ent .o!y.

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The a!ministrator shoul! .e res*onsi.le for ensuring health care for all its mem.ers accor!ing to the health nee!s .y *ro-i!ing a *re3set .asic .enefit *ac4age an! also .y allo ing the mem.ers to *urchase su**lementary health care ser-ices .y ma4ing a!!itional co3*ayment contri.utions. The a!ministrator must .e a.le to achie-e sta.le financing for a *ac4age of health insurance .enefits, hile at the same time ensuring greater access to health care for the target grou* of *o*ulation. The *ro*ose! *ilot scheme shoul! ensure that all *eo*le ho ma4e contri.utions, recei-e a *re3!efine! entitlement of health care, irres*ecti-e of their income an! social status. The scheme shoul! co-er the minimum health an! financial ris4s, that, in the a.sence of %HI scheme, oul! entail a financial .ur!en on the househol!s as a result of the cost of health care. If an! hen com*ulsory mem.ershi* is not *ossi.le the scheme shoul! aim at reaching uni-ersal co-erage an! must inclu!e the *oorest an! the -ulnera.le *eo*le, hich at the same time must .e manage! as a self sustaining health care financing mechanism.

%&$eriences of 'ommunit( Health Insurance )'HI*


Community .ase! health financing co-ers !ifferent mechanisms of mo.ili/ing resources such as micro insurance, community health fun!s, mutual associations, coo*erati-es etc. Community financing arrangements can significantly !iffer from each other in terms of their o.2ecti-es, structures, management, organi/ation etc, .ut the *rimary consi!eration of a community finance scheme is not commercial. It is not !ri-en .y *rofit moti-e .ut .y elfare moti-e. E-i!ence suggests that cost reco-ery le-el of these schemes are -ery lo . Therefore, go-ernment nee! to *lay a *ositi-e role to offset the ga*s. %ustaine! !onor an! or go-ernment su**ort is necessary to ma4e CHI successful in the long run. 0ost community finance! *rogram are run .y N><s or non3*rofit organi/ations. %ome of the community schemes are esta.lishe! an! manage! .y community lea!ers. Community .ase! fun!s refer to those schemes, here mem.ers *re*ay a set amount each year for s*ecifie! ser-ices. These schemes are ty*ically targete! at *oorer *o*ulation li-ing in communities. The .enefits offere! are mainly in terms of *re-enti-e care. "m.ulatory an! in3*atient care is also co-ere!. %uch schemes are usually finance! through minimum fees from insure!, grants an!

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!onations. 0any community .ase! insurance schemes suffer from *oor !esign an! management an! fail to inclu!e the *oorest of the *oor, ha-e lo mem.ershi* an! re5uire e7tensi-e financial su**ort. In ;angla!esh, !ifferent N><s an! community .ase! organi/ations ha-e come for ar! ith their o n schemes. These schemes are generally .ase! on *re *ayment ones. The mo!e of collection as ell as the a!ministration an! other !etails !iffer. "lmost all the schemes are create! in res*onse to the nee!s of the most economically -ulnera.le *o*ulation of a *articular area or areas. Ho e-er, one inherent *ro.lem of the -arious schemes continues to .e the financial sustaina.ility o-er the years. <utsi!e fun!ing or su.si!ies seem to .e a real felt nee!. In general, it is o.ser-e! that, the larger the *ooling, the higher is the *ro.a.ility of self sustaina.ility an! lo er the nee! for outsi!e fun!ing. Ho e-er, the main strengths of community financing schemes are6 #a' High !egree of outreach *enetration through community *artici*ation, #.' Contri.ution to financial *rotection against cost of illness, #c' Increase in access to health care .y lo income rural an! informal sector. Chen community schemes are esta.lishe! an! manage! .y community lea!ers, community in-ol-ement in management allo s social control o-er the .eha-ior of mem.ers an! *ro-i!ers that mitigates moral ha/ar!, a!-erse selection an! in!uce! !eman!. %uccess story of %elf3em*loye! ComenGs "ssociation in In!ia is ell 4no n. This scheme as esta.lishe! in 1((2. It *ro-i!es health, life an! assets insurance to omen or4ing in the informal sector an! their families. Present enrolment is near to a million. The scheme o*erates in colla.oration ith t o national insurance com*anies.
Community .ase! health insurance #CHI' schemes in!uce a large num.er of in!i-i!uals to *ool their ris4s into a large grou* to minimi/e o-erall ris4. CHI ena.les the *oor to co-er the costs of me!icines, hos*ital stay an! treatment as ell as *rotecting the loss of income !ue to sic4ness, !isa.ility an! in2ury. CHI ena.les access to .etter me!ical ser-ices an! a .etter 5uality an! longer life.

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Chile the .enefits of health insurance for the *oor are clear, there are still -ery fe CHI schemes hich ha-e *ro-e! their -ia.ility an! sustaina.ility. It is therefore, im*ortant to loo4 into the common *ro.lems associate! ith *ro-i!ing insurance to the *oor. ,irst of all, insurance is not i!es*rea! in !e-elo*ing countries, s*ecially in ;angla!esh. 0oreo-er, there is a negati-e image of insurance. There is also lac4 of interest .y the *ri-ate sector to ser-e the *oor, .ecause of high cost, high ris4 an! uncertain *rofita.ility.

+aining 'redibilit(
,or any scheme to .e sustaina.le in the long3term, there is a nee! for access to a sufficiently large grou* to s*rea! the ris4 an! costs. "n efficient an! effecti-e CHI re5uires sufficient *remium to co-er the cost, hich oul! effecti-ely mean e7clu!ing access for most of the *oor. <ne solution to the *ro.lem is !ifferent co-erage for !ifferent *remiums. This can .ring in *eo*le at the lo er le-el ith a -ie to encouraging them to ta4e on a!!itional co-erage for a!!itional *remium later on.

The *oor *eo*le nee! to .e e!ucate! a.out ho a small amount of *remium can .uil! a common fun! for all the *artici*ants. They nee! to .e assure! on the integrity of the system an! there ill .e clear accounta.ility an! trans*arency. ;uil!ing trust among the users is most im*ortant. In this res*ect a -ery high challenge for the CHI *ro-i!ers is to fin! staff ho has the integrity an! inter *ersonal s4ills to effecti-ely un!erta4e the role of real an! i!eal ser-ice *ro-i!er.
0aintaining the cre!i.ility of the organi/ation is *aramount in ensuring that *eo*le ha-e faith in the *rotection *romise!. The organi/ation nee! to .e accounta.le an! trans*arent in its o*eration an! em*loyees nee! to .e a!e5uately *ai! to !eter corru*tion an! high turno-er. In an en-ironment, here corru*tion is in highest scale, there is -ery little trust in any institution. This is more a *ro.lem in the informal sector here the *oor ha-e no rights at all an! are constantly mani*ulate! .y -illage touts an! social elites. In or!er to o-ercome the situation, it is felt that *artici*atory in!e*en!ent non3 *rofit organi/ations .e create!, hich nee! to .e .ase! on the *rinci*les of .rotherhoo! an! soli!arity. This oul! ensure .etter 5uality an! more e5ual access to me!ical ser-ices for the *oor. 0utual or grou* insurance ser-ice *ro-i!ers an! community3 .ase! Health ser-ice *ro-i!ers, *erha*s can com.ine the conce*t of insurance at lo cost an! mass *artici*ation of the *oor.

Thoughts on Economics

17

In most cases, it is o.ser-e! that lo 3income grou* or the *oor are initially reluctant to acce*t the i!ea of *aying in a!-ance for ser-ices that they may or may not use. "s a result the sale *rocess shoul! focus on e!ucating the *eo*le a.out the collecti-e .enefits of insurance. <nce a family is intereste! in .ecoming a mem.er, they may .e in!uce! to moti-ate se-eral other families in the area to 2oin as a grou*. ,orming these grou*s, re!uces the ac5uisition costs, !ecreases the ris4 of a!-erse selection, facilitates *remium collection an! re!uces transaction costs as the grou* *ool their *remiums to ma4e a single *ayment. Community .ase! health insurance scheme for the *oor hich is affor!a.le, a!e5uate, an! sustaina.le is !ifficult to achie-e !ue to lac4 of financial ca*ital, technical su**orts, 5ualifie! an! honest staff, a!e5uate num.ers, trust an! trans*arency . The roa! to *ro-i!e a com*rehensi-e health insurance co-erage for the common mass in a *o-erty *rone $*o/illa is su**ose! to .e full of *itfalls an!, therefore, must .e un!erta4en cautiously an! carefully ith goo! cor*orate go-ernance at the heart of each ste*. 0utual or coo*erati-e conce*t of the scheme ill ma4e it easier to in the heart of the mem.ers. Trust is ma2or factor as it encourages a greater num.er of transactions an! commitment from the mem.ers an! to act in the .est interest of their organi/ation an! im*ro-es its efficiency. Peer *ressures from ithin esta.lishe! social grou*s can encourage mem.ers to a-ail morally ha/ar!ous .eha-ior *articularly in small grou*ing an! communities. In community .ase! mutual health insurance system, each mem.er -irtually, .ecomes an o ner of the scheme. It must .e un!erstoo! that the *rimary consi!eration of community health insurance scheme is not commercial. It is not !ri-en .y the *rofit moti-e, .ut .y the elfare moti-e. The conce*t of ris4 sharing lea!ing to an inno-ati-e *remium setting, can .e use! in such a ay as to entail a su.si!y from the healthy to the sic4. This ill hel* to gro stronger community feeling. Theoretically, in ;angla!esh all 4in!s of health ser-ices are su**ose! to .e a-aila.le for all, free of charge. The go-ernment assumes the role of health care *ro-i!er .y !ra ing the necessary resources from its general re-enue .ase. If an! hen all health care ser-ices are free, there is no nee! of *romoting or organi/ing community .ase! health care system .y creating

1)

9esigning an I!eal %ocial Health Insurance ::::::..

common fun! through su.scri*tion or !onation. $nfortunately such an i!eal situation !oes not e7ist. It is true that, a free *u.lic health care system e7ists .ut co-erage is -ery limite! in com*arison to !eman! of the society. It is re*orte! that only a**ro7imately 1AI of the rural *o*ulation has access to the >o-t. run health care *ro-i!ers. E-en ithin this limite! access, there are serious .iases hich !iscriminates against rural an! the *oor *eo*le. The *ro.lem of *oor access to health ser-ices is com*oun!e! .y the *oor utili/ation of ser-ices *ro-i!e! .y the go-ernment 1a 5uality of health care, su.stan!ar! !iagnostic facilities, a.sence of !rugs an! su**lies are some of the ma2or reasons for *oor use of health care facilities *ro-i!e! .y the go-ernment. Therefore, initiati-es shoul! .e ta4en for community in-ol-ement in health care financing an! health care !eli-ery. In ;angla!esh, there are a num.er of nota.le an! inno-ati-e community insurance schemes, largely run .y ci-il society elfare organi/ations. 0ost of these organi/ations follo the integrate! mo!el of insurer an! health care *ro-i!er. In some cases schemes are run on the .ac4 of micro cre!it schemes. The a!-antage of this is that consi!era.le social mo.ili/ation has alrea!y .een achie-e! *rior to the im*lementation of health care ser-ices an! micro health insurance mechanism. In or!er to encourage further !e-elo*ment of these schemes, >o-ernment shoul! ta4e acti-e ste*s to encourage similar schemes to !e-elo*.

,ni#ersal 'o#erage through 'ommunit( -rganizations


Intro!uction of social health insurance *rogramme must .e *rece!e! .y a thorough analysis of the -aria.les that hel* an! hin!er such a *rogramme, an! if it is feasi.le, !esign this *rogramme in such a ay as ill moti-ate the society to acce*t it. Creating an a areness a.out social health insurance is most im*ortant, .ecause, *eo*le are familiar ith free ser-ices *ro-i!e! .y the go-ernment hos*itals, clinics an! !is*ensaries. The only alternati-e to free ser-ice, they .elie-e is *urchasing me!ical ser-ices !irectly from *ri-ate !octors an! clinics against rea!y cash as an! hen necessary. Therefore it is -ery im*ortant that ho the %HI system o*erates is to .e ma!e 4no n to them .y -arious mo!es an! means.

Thoughts on Economics

1(

In ;angla!esh, much of the *o*ulation is rural an! or4ing in the informal sector. Tra!itional go-ernment le! social security schemes are not generally a**ro*riate for these grou*s .ecause of the !ifficulties in i!entifying contri.utors an! assessing an! collecting contri.utions. Ho e-er, the go-ernment, N.>.<., *ri-ate sector insurer an! community institutions can or4 together to e7ten! co-erage to these grou*s. 9e-elo*ing the sco*e for ci-il society organi/ations inclu!ing consumer .o!ies, coo*erati-es or mutual organi/ations can .e effecti-e. In or!er to ma4e the system more attracti-e an! acce*ta.le .y the *eo*le, the contri.utors shoul! ha-e some form of *artici*ation either through !esignate! re*resentati-es or through an electe! .o!y. Partici*atory management a**roach of the social health insurance scheme can gi-e a s*ecial im*etus an! hel* to create oneness ith the organi/ation. Community mo.ili/ation also hel*s to remo-e the .arriers of !eman! si!e. ;angla!esh has gaine! e7*erience in community financing schemes inclu!ing micro health insurance. These schemes ha-e inherent limitations of ina!e5uate ris4 *ooling an! not co-ering !isa.ility an! catastro*hic treatment cost. Pri-ate commercial, -oluntary health insurance is insignificant. Therefore, it is necessary to e7*lore the feasi.ility of the lin4age .et een the *ri-ate sector insurer an! community health insurance schemes. ;oth >o-ernment an! ci-il society organi/ations ha-e an im*ortant role to *lay in the !e-elo*ment of health insurance in ;angla!esh. The o-erall o.2ecti-e is to e7ten! ris4 *ooling to a i!e cross3section of society in a *ragmatic ay. ,or this to .e successful a true *artnershi* of *u.lic an! *ri-ate organi/ations is necessary to *romote *iloting of -oluntary community .ase! health insurance schemes. This is sim*ly .ecause of the structural !i-ersity of the ;angla!esh *o*ulation, hich is not con!uci-e to uni5ue social health insurance in ;angla!esh. No one financing system can a!e5uately co-er all sections of *o*ulation, instea! a -ariety of mechanisms are re5uire!. Chile it is unli4ely to e7ten! social insurance .eyon! the formal sector, community .ase! micro3health insurance is more suita.le for co-ering !ifferent informal sections of *eo*le. Ho e-er, the ultimate o.2ecti-e of community .ase! health insurance ought to .e the conce*t of uni-ersal co-erage.

2?

9esigning an I!eal %ocial Health Insurance ::::::..

" fun!amental *rinci*le of CH<Gs or4 on health financing is the conce*t of uni-ersal co-erage. This re5uires access of all *eo*le to a**ro*riate *romoti-e, *re-enti-e, curati-e, an! reha.ilitati-e health care at an affor!a.le cost. This is the .asic re5uirement of health for all an! is consistent ith the *rinci*le of e5uity in access. The o.2ecti-e of uni-ersal co-erage is also associate! ith e5uity in financing , here.y househol!s contri.ute to financing the health care system on the .asis of their a.ility to *ay. %ome form of su.si!y for *oorest families is a *rere5uisite to *a-e the ay for e7*ansion an! enhancement of the CHI *rogramme. It is necessary to *ro-i!e e5uita.le health .enefit to all ith similar health care nee!s, regar!less of their le-el of income an! contri.ution. ,urthermore, hen these schemes are esta.lishe! an! *artici*atory management system is use!, it hel*s to mitigate moral ha/ar! an! a!-erse selection. 0anagement of health insurance *rogramme re5uires greater le-el of technical e7*ertise. It re5uires s*ecialist actuarial s4ills to un!erta4e the com*le7 calculation of *ricing. Therefore, it is im*ortant that community health insurance *ro-i!ers create a strategic *artnershi* arrangement ith the *ri-ate commercial health insurer. This ill hel* the CHI *ro-i!er to e7*an! the areas an! le-els of insurance co-erage at the least cost. It has .een o.ser-e! that the health insurance *ro-i!er re5uires to esta.lish close relationshi* ith the *ro-i!ers of health care an! the users. They nee! to ha-e a right match to achie-e the t o !esire! goals i.e. mass *artici*ation as ell as closer !istri.ution relationshi*. These t o goals nee! to .e achie-e! .y creating community s*irit an! organi/ing the *eo*le in small grou*s. Voluntary small organi/ations shoul! .e integrate! into a large scale *artici*ant grou*. "rea .ase! -oluntary grou*s nee! to .e organi/e! for integration into a large scale insurance mechanism. ;y creating community s*irit an! organi/ing the *eo*le in small grou*s to ha-e access to necessary health care ser-ices, affecti-ity an! efficiency of CHI schemes can .e enhance!.

Modus -$erandi
0o!us o*eran!i of *ro-i!ing ser-ices is an im*ortant !ecision for the scheme o*erator. In or!er to ma4e the system easier, it is a!-isa.le that each

Thoughts on Economics

21

househol! is *ro-i!e! ith an I!entification ,amily Health Car! #I,HC' hich oul! entitle the incum.ent family mem.ers to get s*ecifie! health care ser-ices from the !esignate! health care *ro-i!ers. In case of illness, they nee! not *ay to the health care *ro-i!ers e7ce*t the co3*ayments as an! hen re5uire! as *er terms of the *lan. The re5uire! *remium or contri.ution to .e *ai! to the o*erator of the *ilot scheme. The househol! mem.ers may .e su**lie! ith the +-oucher+ for ha-ing consultation, me!ication, la.oratory tests an! hos*itali/ation costs against those -ouchers. The o*erator of the scheme shall *ay to the health care *ro-i!ers on su.mission of utili/e! -ouchers. Ho e-er, in or!er to ma4e the ser-ices a-aila.le at the !oorste*s of the mem.ers, the health care *ro-i!er or the o*erator of the scheme shoul! ha-e arrangement of am.ulatory ser-ices in each -illage on ee4ly .asis. "n am.ulatory team e5ui**e! ith instruments shoul! -isit at regular inter-als to the -illages an! shoul! *ro-i!e e!ucati-e, *re-enti-e, curati-e an! *rimary care ser-ices !irectly to mem.ers. %ince all the ser-ices cannot .e *ro-i!e! in a cost effecti-e manner .y the am.ulatory team there shoul! .e one or se-eral +!e!icate!+ health care centres in the su.3!istrict hich ill .e *ro-i!ing con-enient an! 5uality health care ser-ices. E7*erience! micro health or community health care *ro-i!ers such as >rameen, 9ha4a Community, >ono %asthya or ;&"C can act as health care *ro-i!ers at the agree! cost an! mechanism. The *rice an! mechanism may .e in line ith their e7isting *ractices ith slight mo!ifications if an! hen re5uire!. The most im*ortant consi!eration for an o*erator is to !etermine the insura.le unit. ;ase! on the e7*erience of CHI schemes in ;angla!esh an! a.roa!, it is suggeste! that *ro-i!ing co-erage on a family .asis oul! .e i!eal an! con-enient for the users as ell as for the *ro-i!ers. To .ecome a mem.er of the scheme, all family mem.ers must agree to .e a mem.er of the scheme an! contri.ute accor!ing to their a.ility. Ho e-er, the !efinition of family is -ery im*ortant. In ;angla!esh conte7t a*art from mother, father an! chil!ren it may inclu!e *arents, .rothers, sisters, in la s, ser-ants etc. E-eryone + ho eats from the same *ot+ oul! .e *erha*s too i!e a !efinition of family an! may lea! to misuse .y the mem.ers. This !eman!s an acce*ta.le !efinition of

22

9esigning an I!eal %ocial Health Insurance ::::::..

family an! a limit on the si/e of each family. &egar!less of ho a family is !efine!, contri.utions may.e collecte! either on a flat rate for the entire family or *er family mem.er ith lo er *er *erson rates for larger families. ,lat rate collection is sim*ler an! easier to e7*lain, hile *er *erson *ricing eliminates o*eratorsJ nee! to ca* the mem.er of family mem.ers inclu!e! on a single car! or *olicy co-er. Consi!ering all these as*ects, a family of fi-e or si7 mem.ers may .e enrolle! on a flat rate an! fee for other mem.ers if any shoul! .e as *er fi7e! rate *er *erson. "nother im*ortant factor in connection ith collecting contri.ution is the fre5uency. It may .e either ee4ly, monthly, 5uarterly or annually. %etting an a**ro*riate fre5uency of *remium collection re5uires consi!eration of househol!Js a.ility to accumulate the re5uire! contri.ution, collection cost an! financial soun!ness of the o*erator. It is o.-ious that less fre5uent collection gi-es the o*erator an o**ortunity for in-esting the collecte! fees, hich in turn hel*s to co-er the costs of the scheme. Therefore, it is a!-isa.le that an annual contri.ution shoul! .e encourage! ith the *ro-ision of more fre5uent inter-als i.e. monthly or 5uarterly. ,or e7am*le, if an annual contri.ution is fi7e! at ta4a three hun!re! only *er family for the entire *ac4age of ser-ices un!er the scheme, monthly rate may .e fi7e! at ta4a thirty an! 5uarterly contri.ution of ta4a Eighty fi-e only may .e fi7e!. Chate-er may .e the mo!e of *ayment an! the amount of contri.ution, the e7treme *oor *eo*le might not affor! to *ay it at all. Therefore, it is necessary to set sli!ing scale accor!ing to the *artici*ants income. If an! hen annual contri.ution is fi7e! for e7am*le at ta4a @??.??, it oul! .e a!-isa.le that the o*erator creates a re-ol-ing fun! for the e7treme an! mo!erate *oor *artici*ants. In this case, for e7am*le if ta4a @??.?? is to .e generate! for contri.ution against an e7treme *oor family, an annual fun! of ta4a @@??.?? *er family ill .e re5uire!. Ta4a three hun!re! ill .e contri.ute! as first year *remium an! .alance ta4a @???.?? ill .e in-este! to generate at least 1?I return to co-er future costs of *remium. This is 2ust an e7am*le.

Thoughts on Economics

2@

In case the o*erator nee!s to .ear entire contri.ution of 1??? families in the su.!istrict, an initial re-ol-ing fun! of #@@??K1???' ta4a @.@ million nee! to .e 4e*t reser-e! for the *ur*ose. In case, it is !eci!e! to su.si!ise A?I of the annual *remium for further 1??? househol!s, an a!!itional fun! of #117? K 1???' ta4a 1.7 million to .e 4e*t for the *ur*ose. In-estment of total fi-e million ta4a ill generate *rofit to co-er the full an! *artial su.si!y of a**ro7imately 2??? househol!s of the target grou*. &emaining househol!s of the target grou* ill .e re5uire! to *ay full amount of contri.ution *er annum.

-$erational Mechanism
Chile *ro-i!ing social health insurance, !ifferent ty*e of institutions may .e .etter *ositione! to *erform certain acti-ities than the others. Ce suggest for a community .ase! thir! *arty a!ministrator #o*erator' on the *rinci*les of .rotherhoo! an! soli!arity consi!ering its relati-e strengths in *erforming the acti-ities re5uire! to !esign, monitor an! !eli-er a**ro*riate health care an! insurance ser-ices for the househol! mem.ers.
Community organi/ations in most cases are the most truste! institutions for most lo income househol!s. &e*resentation of the local househol!s #through the lea!ersLmoti-ators' in general .o!y of the o*erator, it is .elie-e!, ill lea! to a greater un!erstan!ing an! integration of househol!Gs nee!s. ,urther more, grou* insurance against less fre5uent, high cost ris4s can .e ma!e a-aila.le for these *re3esta.lishe! grou*s at the least *ossi.le costs. It may .e note!, ho e-er, that almost all the ea4nesses of a community .ase! health o*erator has .een a!!resse! a**ro*riately. ,or e7am*le, in one su.3 !istrict there ill .e at least one local association for a**ro7imately 1?? househol!s. The lea!er of each grou* ill 4ee* liaison ith the o*erator an! shall act as agent of the o*erator. "s a result, the ea4nesses of limite! geogra*hical sco*e an! small client .ase *er unit #grou*' ha-e .een o-ercome. %ince small grou*s cannot attract interest of commercial insurers, a**ro7imately A? to 1?? grou*s in one $*a/ila ill .e *oole! together to get insurance co-er for them .y the o*erator. The o*erator in this case ill .uy an! *ro-i!e a**ro*riate insurance co-er for the entire *o*ulation. This ill also ena.le the o*erator to ha-e greater access to re5uire! financing an! thus the o*erator can *ro-i!e ser-ices to entire community inclu!ing the ultra *oor.

2E

9esigning an I!eal %ocial Health Insurance ::::::..

-$eration
The o*erator of the scheme ill act as in!e*en!ent, non3go-ernment, non3 *artisan an! non3*rofit organi/ation ith a -ision an! goal. The a!-isory .o!y of the o*erator ill .e constitute! from re*resentati-es of the community grou*s #lea!ers of local community', go-ernment #$N.<', *oliticians #mem.er of *arliament' ci-il society #teachers, imams, tra!ers, *rofessionals'M local go-ernment .o!ies #chairmenLmem.ers of $nion Parisho!L $*a/ila Parisho!L0unici*ality'. The mission of the o*erator shoul! .e to *romote an! !e-elo* local grou*s of househol!s #Health %er-ice "ssociationLClu.' to organi/e an! arrange *artici*atory social health insurance scheme an! esta.lish an efficient an! trans*arent system of go-ernance. The o*erator ill *ro-i!e the frame or4 of gui!ing *rinci*les an! *ractices aime! at ensuring highest stan!ar! of health care ser-ices an! health care financing mechanism. Through a *artici*atory *rocess, the o*erator ill !e-elo* nee! .ase! action *lans hich ill .e im*lemente! .y a small team of management committee com*rising of *rofessional managersLinsurance *rofessionals, full time 5ualifie! community *hysicians, *arame!ics an! health care -olunteers.

Ser#ice Deli#er(
;ase! on the *reliminary assessment of !ifferent mo!els, it has .een suggeste! to follo the +*artner3agent+ mo!el of ser-ice !eli-ery ith esta.lishe! *ri-ate insurers an! non3go-ernment health care *ro-i!er. In this case, the o*erator ill act as !istri.ution channel of health care *ro-i!er an! health insurer. It ill organi/e grou*s, asses nee! an! also *ool the ris4, collect contri.utions from househol!s an! other sources. Chen the o*erator acts as agent of the insurer, it ta4es on none of the insurance ris4, .ut is a.le to *ro-i!e the .enefits of insurance to all its househol! mem.ers. This mo!el allo s the institutions in-ol-e! #health care *ro-i!er an! *ri-ate commercial insurer' to s*eciali/e an! focus on tas4s they 4no .est an! +!oing hat they !o .est+. This ill .e .eneficial for the health care *ro-i!er, insurer as ell as the o*erator. The o*erator ill not .e re5uire! to hire actuarial e7*erts for *ro!uct !esign an! fi7ation of *remium an! to .uil! u* reser-es for meeting future lia.ilities. <n the

Thoughts on Economics

2A

other han! the *ri-ate insurer ill get the .enefit of large scale grou* little or no e7*ense for sales, mar4eting an! ser-icing.

ith

In ;angla!esh, *ri-ate insurers ha-e not !e-elo*e! health *ro!ucts for lo income grou*. This mo!el of *artner3agent ser-ice !eli-ery ill gi-e them an o**ortunity to !e-elo* an! *ro-i!e a com*rehensi-e healthLacci!entLlife insurance *ro!uct for the rural *oor. Pro-i!ing social health insurance for the informal sector ill .e e7tremely !ifficult for the go-ernment. 1ac4 of e7*erience an! lac4 of goo! go-ernance of a go-ernment institution ill ma4e this scheme not -ia.le through *u.lic .o!y. Ho e-er, go-ernment can *lay an acti-e an! *ositi-e role .y framing a**ro*riate insurance regulation so that the *ri-ate insurers are moti-ate! an! encourage! to !e-elo* suita.le micro healthLacci!entLlife insurance *lans for the rural *oor. The go-ernment can also transfer the management an! o*eration of the e7isting clinics, !is*ensaries an! the $*o/ila health com*le7 to the o*erator or to a !esignate! health care *ro-i!er for the *ur*ose of ser-ice !eli-ery to the community. Non3go-ernment <rgani/ations ha-e *ro-e! themsel-es as the most truste! ty*e of institutions for most lo income househol!s. Therefore N><s li4e >ono3%asthya, ;&"C, >rameen, Plan International an! others can act as *artners of the o*erator. Househol! mem.ers ill get health care ser-ices from the outlets of these N><s or from the >o-t. infrastructures to .e manage! .y o*eratorL!esignate! N><. ,urthermore, in or!er to ensure ser-ice at the !oor ste*, the o*erator itself or the health care *ro-i!er shoul! ha-e num.er of fully e5ui**e! am.ulances. These am.ulance along ith *rofessional me!ical *ractitioner, *arame!ics an! technicians shoul! -isit on a regular .asis #*refera.ly once in a ee4' to the community clinics or to certain *lace of $nionLVillage or Clu.L;a/ar to *ro-i!e consultancy an! *rimaryLe!ucati-eL*re-enti-e an! curati-e health care ser-ices.

.($es of 'o#erage
$sually micro health insurance non3go-ernment agencies *ro-i!e a limite!

2H

9esigning an I!eal %ocial Health Insurance ::::::..

co-erage mainly .ecause they !o not ha-e sufficient fun! an! or they lac4 the mechanism to *ro-i!e a i!e range of health insurance co-er or health care ser-ices. They feel that gra!ually they ill increase the range of .enefits ith more com*lete ris4 management ser-ices. They feel that it is easier to stea!ily .uil! on small success. The arguments seem con-incing .ut not free of its loo*holes. The -ery mechanism of insurance re5uires large num.er of e7*osures to a**ly the +la of large num.er+. Chen an institution can offer a i!er range of ser-ices, it can attract a larger segments of the society. 9ifferent grou*s of *eo*le re5uire !ifferent ty*es of co-erage accor!ing to their s*ecific nee! an! a.ility to *ay. I!eally in a social health insurance scheme a uniform co-erage for all mem.ers nee! to .e *ro-i!e!. Ho e-er, in or!er to *ersua!e each an! e-ery househol! o ner to .e a mem.er of the scheme, it is a!-isa.le to offer a com*lete health an! health relate! insurance *rotection co-ering curati-e health care, limite! hos*itali/ation cost, !rea! !ecease co-er, *ersonal acci!ent ris4s #inclu!ing total an! *artial !isa.ility' an! small grou* term life insurance co-er. The *ro!uct shoul! .e !esigne! in such a ay that a uniform co-er is gi-en to all un!er the scheme, .ut a!!itional to* u* co-er can .e e7ten!e! to those ho can affor! to contri.ute more or hen a!!itional fun!s are a-aila.le to su.si!i/e the cost for ultra *oor or -ulnera.le *oor. Ce are con-ince! that small co-erage of *ersonal acci!ent an! or term life insurance along ith micro health insurance ill .e e7tremely hel*ful. Personal acci!ent an! or term life insurance #*ayment against !eath only' ris4s are lo in fre5uency .ut may .e catastro*hic to lo income househol! mem.ers hen the .rea! inner e7*ires as a result of an acci!ental in2ury an! or cause! .y illness lea!ing to a total or *ermanent !isa.ility. This ty*e of insurance co-er is less costly an! li4ely to .e affor!a.le .y a large section of the target grou*.

!unding
It is e7*ecte! that initial fun!ing of the *ilot scheme shoul! .e the res*onsi.ility of go-ernment an! CH<. Ho e-er a!!itional fun!s ill .e re5uire! for o*erating e7*enses, ca*ital e7*ense as ell as for creating a Ca*ital ,un!. Ca*ital ,un! ill .e use! as re-ol-ing money for generating income to su.si!i/e the *oor an! ultra *oor. It is e7*ecte! that

Thoughts on Economics

27

the no.leness of the *ro2ect an! its uni5ue o*erational mechanism hel* to attract !ifferent ai! gi-ing agencies.

ill

Contri.ution from the *artici*ant mem.ers ill .e -ery insignificant say a**ro7imately 1?I to 2?I only. ;ut o-er the years, the amount of su.si!y nee! to .e re!uce! gra!ually .y increasing the co-er net an! raising co3 *aymentsLuser fees. The target ought to .e to re!uce su.si!y .y AI annually o-er 1A years. This ill turn the *ro2ect near to self sufficiency an! a**ro7imately 2?I su.si!y ill .e ultimately re5uire! from the >o-ernmentL !onor. "*art from initiators fun!, e ha-e suggeste! for grants an! ai!s from go-ernment an! non3go-ernment sources. Charita.le fun!s .y ay of contri.utions from ell off *eo*le of the society an! +-ouchers+ to .e !onate! .y cor*orate .o!ies. This ill hel* to .uil! u* fun! ca*ital to .e use! as su.si!ies. ,un!s can also .e raise! .y creating sa-ings scheme for the mem.ers. 0em.ers may .e encourage! to sa-e a small amount say one ta4a *er !ay. " *erson sa-ing one ta4a *er !ay for fifteen years ill get .ac4 say ten thousan! ta4a. " *erson sa-ing say t o ta4a *er !ay for eight years ill get .ac4 ta4a ten thousan! an! so on. The sa-ings ill generate fun! an! can .e use! to *ro-i!e loan or !e!uction for *ayment of mem.ersJ regular contri.ution to the o*erator. &ather than acce*ting intermittent *ayment of contri.utions from !efault househol! mem.ers, the o*erator can !e!uct *remiums on an annual .asis from the fun!s accumulate! in the Target %a-ings "ccount. Chen mem.ers can accumulate fun!s, they may .e in a .etter *osition to affor! to* u* -oluntary insurance *rotection an! *ay re5uire! *remium for the *ur*ose.

Partnershi$
"n im*ortant ste* in the *rocess of im*lementation oul! .e to loo4 for *artners. " *ri-ate insurance com*any can .e a *artner for *ro-i!ing grou* insurance co-er. "n a**ro*riate agreement nee! to .e signe! regar!ing ris4s to .e co-ere!, mo!e of *ayment, *roce!ure for settlement of claims etc. The *olicy or!ing shoul! .e clear an! concise an! co-ers ought to .e fle7i.le.

2)

9esigning an I!eal %ocial Health Insurance ::::::..

" secon! *artner un!er the scheme can .e a health care *ro-i!er ha-ing e7*erience, e7*ertise an! commitment for rural micro health care an! health care financing. " !etaile! terms an! con!itions of ser-ices to .e offere!, 5uality of ser-ices to .e maintaine! an! *roce!ure of reim.ursement from the o*erator nee! to .e formulate!. The ><; can .e an effecti-e *artner of the scheme through fun!ing an! commissioning the *ilot *ro2ect. Pu.lic3 *ri-ate3N><3community *artnershi* is e7tremely essential to ensure access to health care ser-ices at the grass root le-el. This ill im*ro-e health care ser-ices !eli-ery through the e7isting clinics as ell as ones to .e esta.lishe! in future.
%HI ser-ices can .e easily a!o*te! if the *u.lic *ri-ate *artnershi* can .e forme! an! hen the structures are han!e! o-er to the o*erator for !eli-ering ser-ices through N>< as facilitator. This ill ensure !ecentrali/e! management *ractices, local le-el *lanning, resource *ooling, sta4e hol!ersJ *artici*ation, targeting the *oor an! su.si!i/ing the ultra *oor. It is e7*ecte! that such a *u.lic3*ri-ate3N>< community *artnershi* ill ensure -ia.ility of the %HI scheme .y ma4ing o*timum utili/ation of a-aila.le *u.lic, *ri-ate an! !onors resources.

+o#ernance Manual
In or!er to cataly/e an! strengthen a *artici*atory social health insurance scheme an! esta.lishing an efficient an! trans*arent system of go-ernance, a manual nee! .e *re*are! .ase! on the -ision, -alues an! mission of the scheme. The 0anual shoul! .e a li-ing gui!eline !ocument to *ro-i!e the frame or4 of *rinci*les an! *ractices aime! at ensuring highest stan!ar! efficiency, integrity, accounta.ility an! trans*arency in go-ernance of %HI *ilot scheme.
The %HI >o-ernance 0anual shoul! consist of the rules an! *roce!ures for com*osition, tenure, turno-er of the "!-isory ;oar!. It shoul! also state clearly the *o ers, roles an! functions of the mem.ers of the "!-isory ;oar! #";'. The mem.ers of the "!-isory ;oar! ill or4 on -oluntary .asis an! therefore, ill not .e entitle! to any form of salary, honoraria or com*ensation. They ill .e acting as trustees of *eo*leGs fun! an! no *ortion of the assets, income or any other fun!s shall inure to the *ri-ate or *ersonal .enefit of any mem.er or to any imme!iate family mem.er thereof, ho shall also not .e entitle! to any form of gainful em*loyment of the o*erator.

Thoughts on Economics

2(

The mem.ers of the "; shoul! .e firmly committe! to ta4e all *ossi.le measures to *re-ent actual, *otential or *ercei-e! conflict of interest that coul! affect the integrity, fairness, trans*arency an! accounta.ility of the o*erator. " +co!e of ethics an! con!uct+ can also .e frame! for the "; mem.ers an! staff of the management committee. The co!e of ethics may .e anne7e! to all contracts of a**ointment an! signe! .y the incum.ents.

Sustainabilit(
>enerally, househol!s are slo to un!erstan! the conce*t of social insurance an! are reluctant to commit for *aying regular contri.utions for an uncertain .enefit. The .enefits of insurance nee! to .e *u.lici/e! in the i!est ay so that at least A?I of the target househol!s enroll themsel-es an! ma4e regular *ayments. This is a necessity for long3term sustaina.ility of the scheme. Pu.licity through au!io3-i!eo materials, mi4ing, social gathering has to .e !one on a continuous .asis. 0ass me!ia *u.licity *rogram has to .e an integral *art of the !ay to !ay o*erational acti-ities. The mem.ers of the "; must reali/e that if the see! money is ith!ra n or e7hauste!, the sustaina.ility ill .e in 5uestion. To ensure sustaina.ility, the mem.ers shoul! ma4e a list of rich *eo*le of the locality an! mo.ili/e them to !onate fun!s as %a!a4a, Na4at, charity for the sur-i-al of the scheme. The mem.ers shoul! e7ert allout efforts to mo.ili/e an! recei-e !onations, contri.utions, grants, gifts an! un!erta4e any other means of raising fun!s from *ersons or institutions in the interest of achie-ing the o.2ecti-es of the %HI scheme. The mem.er of the "; in!i-i!ually an! collecti-ely shall ensure that the o*erator has sufficient resources to satisfactorily fulfill its mission. The ;oar! shoul! !e-elo* fun! raising *lan an! strategy an! shoul! ta4e acti-e *art in im*lementing the same. It shoul! regularly analy/e outcome of o*erational acti-ities, im*acts an! ris4s an! shoul! !e-elo* ris4 management strategies for *romotion an! sustaina.le gro th for all the times to come.

/aunching
Pro-i!ing health care an! social health insurance *oses many challenges for the o*erator. 9es*ite the schemes *hiloso*hy of *ro-i!ing self hel* mutual

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9esigning an I!eal %ocial Health Insurance ::::::..

coo*eration an! cross su.si!ies for the *oor, *eo*le in general ill e7*ect some material su**ort from the *ro2ect. They ill .e more intereste! to see some imme!iate tangi.le gain. Therefore, the *rocess of *ro-i!ing ser-ices an! gaining su**ort of the community is li4ely to .e slo . %ince the *eo*le in *o-erty *rone su.3 !istrict might ha-e ha.itually recei-e! relief materials -ery often, it ill .e -ery !ifficult for the -illagers to .elie-e that material su**ort oul! not .e forthcoming from the *ro2ect. 0oreo-er, the mechanism of social health insurance is li4ely to .e misun!erstoo!, .ecause, insurance has a negati-e image in the society. It ill re5uire lot of literature, grou* meetings, mi4ing, *ostering, along ith e7hi.ition of -i!eo, !rama, musical soirre etc. to sell the i!eas an! *hiloso*hy of the *ro2ect. Ho e-er, .efore em.ar4ing u*on *u.licity an! *ro*agan!a for the *ilot scheme, it oul! .e necessary to un!erta4e a !etaile! feasi.ility stu!y. The .ase line sur-ey in a su. 3!istrict gi-e us an o-er-ie of se-eral as*ects, .ut cannot .e treate! as final an! conclusi-e fin!ings for im*lementation *rocess.

'ost Based !easibilit( Stud(


Each su.3!istrict an! each -illage is !ifferent an! its re5uirements are also uni5ue. Therefore, to *ut for ar! a stan!ar!i/e! a**roach for *iloting the scheme oul! .e im*ractical. Chat the *eo*le really nee!, hen they nee! the ser-ices an! hat are their *erce*tion a.out the scheme nee! to .e stu!ie! on a systematic fashion. This is sim*ly .ecause health is crucially lin4e! ith the economic, *olitical, en-ironmental, cultural an! social factors characteri/ing the *eo*le of a su.3!istrict. Therefore, .efore launching the scheme an! formulating *lans an! *olicies for the scheme, it is necessary to assess the o*erational costs in-ol-e! in the *rocess.<*erational cost of the *ro2ect ill !e*en! on se-eral factors such as6 a' %ocio3 !emogra*hic an! economic le-els of all the househol!s. .' <ccu*ational category of househol! o ner. c' 9istri.ution of househol! income .ase! on !ifferent income grou*.

Thoughts on Economics

@1

!' 9istri.ution of househol! .y !isease category. e' 9istri.ution of househol! .y ty*es of health care ser-ices use!. f' 1e-els of e7*en!iture incurre! .y househol!s recei-ing health care *er *atient.

g' 9istri.ution of *o*ulation .y the sources of treatment. 9etaile! sur-ey shoul! inclu!e all the rele-ant as*ects of all the househol!s -i/ the target *o*ulation grou*. The target of the scheme shoul! .e to ha-e sufficient num.er #say E?I' of househol! enrolle! .efore the scheme .egins its o*eration for a grou*.

'oncluding Remar0s
In ;angla!esh, a high *ro*ortion of the rural an! ur.an *oor, *articularly omen an! chil!ren !o not ha-e enough access to *u.lic health care facilities. Those ho !o ha-e access recei-e little care an! in most cases, they are not satisfie!. There are also many -illages ha-ing no health care facilities at all. The -illagers are to !e*en! largely on 5uac4s, tra!itional *ractitioners an! other in!igenous sources. Peo*le in general are not conscious a.out health issues. In cases of minor illness, they !o not feel for going to !octors. In case of serious illness, they nee! to go all the ay to a %u.3!istrict Health Com*le7 or to a !istrict le-el hos*ital. ;angla!esh has signe! u* for +Health for "ll+ an!, struggling to achie-e uni-ersal health co-erageM trying to remo-e the rural3ur.an, *oor3rich an! gen!er .iase! ine5ualitiesM creating *ro-isions for health care financing of rural *o*ulation *articularly to the *oor. This has .ecome !ifficult for the go-ernment an! this is the ma2or challenge of the health sector reform. In or!er to a!!ress this ma2or *ro.lem, e ha-e suggeste! for im*lementation of an a**ro*riate social health insurance scheme for rural areas of ;angla!esh. The scheme has .een !esigne! in such a fashion that it *ro-es to .e sustaina.le an! can .e re*licate! gra!ually an! thus can co-er entire *o*ulation of rural ;angla!esh. The mo!el e ha-e suggeste! has .een .ase! on the e7*eriences of community micro health insurance o*erations .y N><s an! *u.lic3*ri-ate *artnershi* mo!el *ractise! in ;angla!esh an! other neigh.oring countries.

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9esigning an I!eal %ocial Health Insurance ::::::..

The mo!el has .een terme! as +%oli!arity 0o!el+ to reflect the inner s*irit an! i!ea of social insurance mechanism. This mo!el, hen im*lemente! in its right s*irit an! as *er gui!elines *ro-i!e! in the stu!y, e e7*ect that it oul! .e a milestone ahea! to achie-e the most !esire! goal of +health for all+ ithin the short s*an of time #say fifteen years'. The last health sector *rogram #HP%P' ha! .een o*timistic ith e7*ectations that community le-el Essential %er-ices 9eli-ery #E%9' outlets oul! .e set u* an! run solely .y the *u.lic sector an! manage! effecti-ely. It has .een allege! that the so calle! community clinics in most cases are misuse! an! or not use! at all for the *ur*oses those ere .uilt. 0anagement of $nion Health centres an! %u.3!istrict Health Com*le7 are also not u* to mar4 an! go-ernment alone cannot ensure o*timum utili/ation of these infrastructures. $n!er the *resent circumstances, it is e-i!ent that *u.lic3*ri-ate3N><3 Community *artnershi* ill hel* to *ro-i!e health care ser-ices through community .ase! grou*s ith the resources a-aila.le. The soli!arity mo!el of %HI ill *ro-i!e an integrate! o*eration, hich *laces consi!era.le im*ortance on the in-ol-ement of local *eo*le in !e-elo*ing an! im*lementing the *ro2ect. Integrating local *eo*le an! local go-ernment institutions in health sector is *ossi.le only through a *u.lic3*ri-ate3N>< *artnershi* conce*t of %HI. This ill hel* to ma4e o*timum use of a-aila.le *u.lic an! *ri-ate resources. N><s alrea!y in-ol-e! in this sector, can *lay an im*ortant role for facilitating !e-elo*ment of *u.lic *ri-ate *artnershi*. If an! hen this scheme is o*erate!, it ill ensure a cost effecti-e affor!a.le care through a i!e safetynet of *oor other ise they cannot affor! to access health care ser-ices through their o n resources.

Thoughts on Economics

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BIB/I-+RAPH1
1. "hme! 0osleh $. Islam %. Ohairul an! others3Health 0icro insurance6 " com*arati-e %tu!y of Three E7am*les in ;angla!esh %e*tem.er 2??A. C>"P or4ing >rou* on 0icro insurance >oo! & ;a! Practices #Case stu!y'. "li O.0. 0ortu/a3&e5uirement for Pro-i!ing %ustaina.le Health Care an! Health Insurance %chemes in ;angla!esh3Insurance Fournal Fuly32??2. Vol3A@. " al ".0.0. "nisul3Nutrition6 The ,oun!ation of Health 9e-elo*ment3 Fuly 2??E. >anesan % & Foya*ra4ash % 3 Ne mo!el for Health Insurance for Informal %ector an! %ocial Efficiency in In!ia %cenario3Insurance Fournal Fuly 2??E. >reen 0.&. &is4 & Insurance 3 %outh3Cestern Pu.lishing Co. <hio. Hami! %."., ;hyiyan %.0. %ultana N. 9eli-ery of Health Care through 0icro Health Insurance %cheme6 "n assessment of the Health Program of >rameen Oalyan. Health Economics $nit #0<H,C' &esearch Note 1( 3 Health Insurance in Thailan! an! the Phili**ines an! lessons for ;angla!esh. Health Economics unit39esigning a *ilot of &ural %ocial Health Insurance in ;angla!esh. Health Economics $nit3 &esearch note 2? %trategies for !e-elo*ing health insurance in ;angla!esh %e*t32???.

2. @. E. A. H. 7. ). (.

1?. I1<3CEEH3>rameen Oalyan3 " case stu!y. "ugust 2??A 11. I1< CEEH3 0icro Health Insurance of ;&"C. "*ril 2??E 12. I1<3In!ia6 "n In-entory of micro3insurance schemes32??A. 1@. 0aria Eufemia C =a*, 3 "n <-er-ie of %ocial Health Insurance Initiati-es in the Phili**ines3 Pa*er *resente! in the Foint International Conference at 9ha4a, Fuly 2???. 1E. 0EH& &.I. & <%1E& &.C 0o!ern 1ife Insurance. The 0acmillan Com*any, Ne =or4. 1A. &ahman 0as oo!ur, The In!e*en!ent ;angla!esh =ear ;oo4 1((( 1H. %igma, #1L1(()'% iss &e $O, 1ife an! health insurance in the emerging mar4ets 6 assessment, reforms an! *ers*ecti-es. 17. Tim Ensor 3 Co-ering the *o*ulation6 e7ten!ing health insurance in ;angla!esh. &esearch note 1) 0ay 2??? Health Economics $nit #0<H,C'. 1). CH<, &egional <-er-ie of %ocial Health Insurance in %outh East "sia. Fuly32??E 1(. CH<3 %ocial Health Insurance, 0arch32??A 2?. CH<3 %ocial Health Insurance3%electe! case stu!ies from "sia an! the Pacific.

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