A catalyst to improve provider performance
Well-implemented public or private health insurance programmes create a platform for pooled strategic purchasing that can drive improvements in quality of care and increase availability of services for poor people (see Figure 2).
Health insurance can lessen some of the traditional problems of quality caused by market failures. Insurance programmes can:
- develop a network of preferred providers for insured patients to choose from
- proactively provide clinical protocols, training, and quality-assured products
- collect information and monitor the quality of providers in the network and, if quality is not up to standards, the insurer can withhold payments or remove the provider from its network—both strong incentives for performance.
Figure 2 How health insurance can influence provider behaviour (Larger version)
Health insurance can also increase the availability of quality services for poor people. It provides a steady stream of revenues to providers, a major incentive for the entry and scale-up of organisations that can meet network quality standards set by health insurers. Steady revenue streams make health care businesses more attractive to investors, allowing them to attract capital for growth and investments that yield greater quality and efficiency.
Importantly, health insurance also provides a mechanism to funnel demand-side subsidies to poor people, which can encourage providers to serve poor populations and allow for more comprehensive benefits packages. However, there are a number of hurdles to the successful implementation of health insurance in low-income countries, including:
- earning the trust of communities
- constructing benefits that are attractive to the population and aligned with the existing supply of services
- ensuring a quality delivery system
- pricing benefits soundly, within the constraints of customer affordability and available subsidies
- mitigating insurance-related risks, such as the tendency for only the sickest community members to enrol, driving up costs and deterring participation from the healthier people
- building institutional capacity to manage the administration of a scheme.
Gina Lagomarsino and Sapna Singh Kundra
Results for Development Institute
1875 Connecticut Avenue NW
Washington, DC 20009, USA
The Hygeia Community Health Plan
There have been numerous attempts to implement health insurance in low-income countries. Many of these have failed to achieve the benefits theoretically available because of the hurdles identified above. However, one example of a programme that uses a number of strategies to improve care quality and availability for poor people is the Hygeia Community Health Plan. Hygeia incorporates risk-pooling, strategic purchasing and demand-side subsidies for poor people. With support from its partner organisations, the Dutch Health Insurance Fund and Pharm Access, Hygeia offers health coverage in Kwara State, Nigeria, providing care through a network of contracted private and public sector clinics and hospitals. Hygeia provides clinical protocols, training, and quality monitoring and directly funds the physical and information technology infrastructure of many facilities. Hygeia is able to offer a more comprehensive benefits package and ensures that providers serve poor patients by supplementing patient premiums with HIF funds.