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Community Based Health Financing
Community Based Health Financing
Description: CBHF aims to meeting community's financing needs through pooling of resources to pay for health care as a group.
I) STRENGTHS/ WEAKNESSES
Strengths: -The extent of outreach penetration achieved through community participation -Contribution to financial protection against illness -Increase in access to health care by low-income rural and informal sector workers -Increase in utilization of health services -Reduce cost of health care per person -Increased sense of investment and ownership of community members in their health care
Weaknesses -The low volume of revenues that can be mobilized from poor communities -The frequent exclusion of the very poorest from participation in such schemes without some form of subsidy -The small size of the risk pool -The limited management capacity that exists in rural and low-income contexts - Isolation from the more comprehensive benefits that are often available through more formal health financing mechanisms and provider networks -Risk selection if membership is voluntary – sicker people more likely to buy insurance -Financial sustainability for chronic conditions (e.g. HIV) that is more costly -People might not have money to pay out of pocket for premiums regularly to offset the risk of ending to pay large health care fees upon falling sick (even modest premiums can be too high for the poorest to pay, simply to defray the possibility of future health care costs)
sources: http://publications.worldbank.org/ecommerce/catalog/product?item_id=1230886
II) POTENTIAL APPLICATION FOR NYAYA
A. Issues to consider -What services should/can be covered under the insurance? -Can community based health insurance sustain? -Can the insurance generate enough income to cover the cost of medical services not covered by other sources? -How can we prevent people at lower-risk dropping out? -How can we control overuse of services? -Who manages and collects the money? -How can we monitor fraud? -How do we ensure that the system does not deter patients from joining the insurance program and/or using the clinic when in need? -Will people even be coming in to the clinic? Who’s using it? What services? -Form a committee and ask the community to come up with their solutions or options?
B. Possible ways to address issues/problems -to improve financial accessibility, government and philanthropic organizations (e.g. religious institutions, external donors) can subsidize premiums for the very poor -CBHF have “solidarity funds” whereby small mark-ups on premium are used to provide low-cost or free membership to the very poor (e.g. 5% of total membership) -sliding scales for premiums based on income -have savings scheme for households to set aside small amounts over a period of time in order to pay their premiums
C. Possible Financial Structures -Pre-payment Out of pocket charge paid by an uninsured individual at time of seeking care. --Insurance: Voluntary and contributory schemes for the community handling small-scale cash flows to address community risks; may encompass a variety of different types of risks, including the risk of health care expenditures. See section on Microfinance. -Payment in kind:
Payment for health services that are not in the form of cash but commodities (e.g. crops) or labor. See the section on Alternative Financing.
World Bank Descriptions of Financial Structures (from http://go.worldbank.org/SEYRG5C5K0)
(a) Community cost-sharing. In these types of arrangements, the community participates in mobilizing resources for health care through user fees. The health financing instrument in this case is out-of-pocket payments but the community is involved in setting user fee levels, allocating the collected resources, developing and managing exemption criteria, and general management and oversight. The community may also be involved on management of at least the first level of health care, the health centers, through participatory structures. The most important characteristics that distinguishes this type of financing arrangement from the other 3 modalities is the lack of pre-payment and risk sharing. The Bamako initiative is a good illustration of this kind of health financing mechanism.
(b) Community prepayment or mutual health organizations. These schemes are characterized by voluntary membership, pre-payment of usually a one-time annual payment, and risk-sharing. Some of these schemes cover catastrophic benefits (including hospital care and drug expenditures) others do not. The community is strongly involved in designing and managing the scheme. Schemes are typically not-for-profit. Examples include: Grameen Health Plan in Bangladesh, Boboye District Scheme in Niger. (The "Concertation" initiative –www.concertation.org –provides a census of MHO in francophone Africa).
(c) Provider based health insurance. These schemes are often centered around single provider units such as town or city or regional hospital. They are characterized by voluntary membership, pre-payment of usually a one-time annual payment, risk-sharing, and coverage of catastrophic risks. They are often started up by the providers themselves or through donor support. The involvement of the community is often more supervisory than strategic. Examples include: Bwamanda Hospital insurance scheme in the Democratic Republic Congo, Nkoranza Community Health Financing Scheme in Ghana.
(d) Government or social insurance supported community driven scheme. These community based health financing schemes are attached to formal social insurance arrangements or government run programs. The community actively participates in running the scheme but the government (Thailand) or the social insurance system (Ecuador) contributes a significant amount of the financing. These schemes are not always voluntary (Burundi) and some have referred to this category as district or regional health insurance. Often such financing initiatives are initiated by the government and not the community. Examples include Ecuador's Seguro Social Campesino.
D. Steps in Establishing CBHF
1. Inform and educate the population on the concept of CBHF schemes. 2. Establish a working group in the community to oversee the process of starting a CBHF scheme. 3. Conduct a feasibility study with technical assistance providers and the CBHF scheme working group. 4. Establish several benefits package options. 5. Disseminate the results of the feasibility study to the target population. 6. Convene a general assembly to agree on the benefits package, premiums, and operational modalities. 7. Require a waiting period before members can begin to use the CBHF scheme. 8. Strengthen the CBHF scheme during the waiting period (membership campaign, member education, provider contracts). 9. Begin full operation of the CBHF scheme.
Above steps taken from the procedure used by PHRplus regional technical advisors and their community partners in West Africa to set up CBHF schemes. (http://www.phrplus.org/Pubs/sp11.pdf)
III) SAMPLE MODELS IN OTHER PLACES
a. Uganda Title: An Assessment of Community-Based Health Financing Activities in Uganda (Feb 2005) By: USAID Summary: Aims:collect basic information about currently funcioning CBHF schemes and support organizations in Uganda, identify best practices and examine key obstacles methods: key informant interviews, focus groups, review of documents findings: see pg 33-35 of report for best practices, key obstacles, & recommendations http://www.phrplus.org/Pubs/Tech060_fin.pdf
b. India Title: Design of Incentives in Community Based Health Insurance Scheme By: Indian Council for Reserach on International Economic Relations Aims: This paper discusses solutions to important incentive problems in micro-health insurance schemes which threaten their sustainability. In particular, three issues explored are : (i) if defining household as unit of insurance always mitigates adverse selection problem; (ii) how ex ante moral hazard problem can be circumvented through group insurance contract; and (iii) how to set incentives for scheme managers. Various public policies are discussed that help to set appropriate incentives to better manage health insurance schemes in low-income country environments. methods: modeling? findings: -Ways to mitigate adverse selection & moral hazard is different -See pg. 33-34 -Compared informal insurance vs. market insurance -“To sum up, we find that household as unit of insurance is not always superior to defining individual as membership unit. Therefore, in defining appropriate unit of insurance the characteristics of target population are important.” -“A potential solution to encourage preventive action in a low-income community is not through co-payments or deductibles as it is suggested to deal with ex-post moral hazard but through a group contract designed to induce peer monitoring by limiting the number of claims.” http://www.icrier.org/pdf/WP-95.pdf
c. India Title: The feasibility of a Community Based Health Insurance (CBHI) at Wayanad, Kerala http://www.srtt.org/downloads/healthfinancingforpoor-report.pdf description: -have details of some health insurance policies for the poor -3 models of CBHI in india 1. Provider Model: a provider (usually a NGO hospital) provides health insurance for the community around 2. Insurer model: NGO takes the role of insurer, collects money from the community and purchases health care for its members 3. Linked model:NGO collects premium, but passes it onto a formal insurance company; company then takes the risk of running the insurance
aims: feasibility study: 1) to understand whether a community health insurance would be feasible in the 4 panchayats of Wayanad district 2) To understand the conditions for a community health insurance to be feasible 3) To determine the CBHI model that would be optimal for the given conditions methods: focus group, survey with providers, interviews, census data, seminar results: p32 for recommendations
d. Nepal Krishna Man Shakya of the Lalitpur Medical Insurance Scheme.
IV) POSSIBLE CONTACTS a. Yale elizabeth.bradley@yale.edu - health management program director (http://publichealth.yale.edu/faculty/bradley.html) hong.wang@yale.edu - community based health financing in china
b. Nepal
c. Worldwide -Professor teaching health financing E-mail: Shepard@Brandeis.edu, Tel: 781-736-3975 Web: http://www.sihp.brandeis.edu/shepard Draft syllabus:
d. Organizations -USAID: people listed in the Uganda assessment report: http://www.phrplus.org/Pubs/Tech060_fin.pdf -PHRplus: http://www.phrplus.org/about_new.html
V) Additional Sources
Excellent article on CBHI in india http://www.prb.org/Articles/2006/CommunityBasedHealthInsuranceShowsPromiseinIndia.aspx
WHO community based health insurance
http://www.who.int/health_financing/mechanisms/en/index4.html
World Bank: Community based financing background
Info from world bank on Nepal: -has some info. on current projects going on - has publications: access to financial services in nepal :http://siteresources.worldbank.org/INTNEPAL/Resources/Access_to_Financial_Services_in_Nepal.pdf -Choosing, designing, and implementing programs -Delivery mechanisms and institutional issues -Financing and cost effectiveness - poverty reduction strategies Nepal: lots of background info. http://siteresources.worldbank.org/INTPRS1/Resources/Country-Papers-and-JSAs/cr07176.pdf
Additional readings from a syllabus:
community financing:
PHRplus: USAID looks to PHRplus to provide technical assistance in, and to help maintain, USAID’s worldwide leadership role in health care reform, health policy, management, health financing, and systems strengthening. http://www.phrplus.org/about_new.html http://www.phrplus.org/cbhfpubs.html
Summary of literature on community-based health financing schemes based on nature of study and by region
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