Health Care for the World’s PoorestHealth Care for the World’s PoorestIs voluntary (private) health insurance an option?Is voluntary (private) health insurance an option?

Jacques van der GaagJacques van der Gaag

AIIDAIID

Beijing, October 17, 2007

The Bottom Billion

• in stagnant countries

• the poor in growing countries

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Log GDP/capita

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Relationship between Health Expenditures per capita and GDP per capitaRelationship between Health Expenditures per capita and GDP per capita

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Relationship between Health Expenditures per capita and GDP per capita Relationship between Health Expenditures per capita and GDP per capita

Dependent Variable: Log Total Health Expenditures/capitaDependent Variable: Log Total Health Expenditures/capita

ConstantConstant -3.51-3.51******

Log GDP/capitaLog GDP/capita 1.081.08******

R-squaredR-squared 0.950.95

First Law of Health EconomicsFirst Law of Health Economics

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Protection: Out of Pocket Expenditure ShareProtection: Out of Pocket Expenditure Share

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Log GDP/capita

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-in low income countries, overall resources for health care will be scarce

-conventional efforts (ODA; debt relieve) to change this will not succeed

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Basic conclusions:

The challenges:

-how to increase overall resources without crowding-out private resources

-how to use private resources more efficiently

Health care for the poor in growing countries

Example: Colombia

- Comprehensive health insurance scheme- Two regimes:1. contributory

2. subsidized(thus: ex ante inequality)

- Include public and private insurers- Contract with public and private providers

Results to day: - better health care for all - better health for all

- ex post: more equality

Health Care for the Poor in Stagnant CountriesBackground- low GPD/cap scarce resources for health

- share of out-of-pocket expenditures is high

How to leverage those out-of-pocket expenditures

Pre-paid Low-cost Voluntary Health Insurance

Demand side-keep private resources in system -tailor product to need/means

-increase coverage by directly subsidizing premiums -focus on group insurance

-empower consumers/patients

Supply side- performance contracts with public and private providers

- build-in provider incentives

PHARMACCESS (A Dutch NGO)

• workplace projects with focus on AIDS• expand programs to include general health care• expand coverage by providing health insurance to other groups

• Health Insurance Fund

What is the Willingness-to-Payfor

Health Insurance?

Contingent Evaluation Studies

•Informal sector workers in Wuhan, China

•Rural India

•Rural Iran

•Ethiopia

•Namibia

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CONCLUSION

• Poor people do not need to go without access to health care.• Access can be increased if and when

- available private resources (out-of-pocket payments) stay in the system;

- voluntary (private, preferably group) health insurance is being developed that realistically takes the needs and resources of the poor into account;

- this insurance is suitably subsidized;

- public and private insurance entities are involved;

- performance contracts are written with both public and private providers;

- governments and donors stop insisting on one “public sector model” that is assumed to fit all.