HAND-OVER DOCUMENT May 2012
EXECUTIVE SUMMARY There is an unmet need for pre-paid health services in ICTPH’s communities
Healthcare underutilization and high financial risk in rural, low-income populations
However, rolling out an insurance product is a long-term project, typically starting with a limited service offering and breaking-even after 2-5 years
Case studies of Indian CHI programs have revealed three typical models differing by the role of the NGO: provider, insurer and agent. The provider model best meets the identified need but implies a higher financial burden
Operational costs (~Rs 800-1,500 per patient per year, primary care only) and willingness-to-pay (~Rs 4-225) need to be reconciled, e.g. by limiting product offering and/or seeking external financing (e.g. subsidies, donations, funds)
Three options have been identified to design offering and enter pre-paid mkt: Education first, comprehensive pre-paid model later on
Comprehensive pre-paid model and user-fee in parallel
Staged approach pre-paid model
Examples of impactful and cost-effective incentives and marketing tools are: Incentives: group discount, voucher for friend referral
Marketing: word of mouth, direct to customer and audio communication
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WHAT WE HEARD FROM YOU ICTPH IS TRYING TO ACHIEVE
What ICTPH is trying to achieve: Ensure that nobody in the villages where ICTPH is present
suffers from high-risk conditions (impeding day-to-day life)
Demonstrate sustainable healthcare model providing primary care to ~10,000 people per clinic
Provide a knowledge base and best practices that can be applied elsewhere
How this project hopes to create value Review ICTPH’s expansion plan into pre-paid healthcare
Feasibility, potential pit-falls, success factors
Provide short and medium-term implementation steps Pricing, communication guidelines
Conduct Research/case studies of best practices
2 Source: Project Interviews
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WHAT WE HEARD ABOUT ICTPH DURING OUR INTERVIEWS
3
“ ICTPH has a unique offering with a very strong client focus. Likely to produce very positive outcomes for clients in their communities ”
“ This model provides a lot of bang for your buck from a client resources perspective ”
“ICTPH differs from other healthcare institutions in that it offers patients continuous quality care, based on their historic medical records, close to their homes”
“ ICTPH’s strong technology focus is a key selling point. Their clients are almost hypnotized by it”
“ Key to expanding their product range towards an insurance based model will be ensuring that clients understand what an aspirational product they are providing”
Source: Project Interviews
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CONTENTS
Should ICTPH offer a health micro-insurance product?
What might the model look like?
How can costs and willingness-to-pay be reconciled? Price range
Financing options
Services included
Which offering design is most relevant for ICTPH?
How to market the new product?
What are the Key Success Factors to keep in mind moving forward?
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THERE IS AN UNMET NEED FOR PRE-PAID HEALTH SERVICES IN ICTPH’S COMMUNITIES
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5 Source: (1) B. Ekman. Community-based health insurance in low-income countries: a systematic review of the evidence. (2) J. Lammers, S. Warmerdam. Adverse selection in voluntary micro health insurance in Nigeria. AIID research series 10-06; (3) D.M. Dror, et. al. Field based evidence of enhanced healthcare utilization among persons insured by micro health insurance units in Philippines. Health Policy 73;2005: 263-271.
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Low-income levels associated with underutilization of healthcare
Underutilization of healthcare is common among rural and low-income populations Poor lack resources to pay for care they
forego getting necessary care Thought to have a direct negative affect
on health outcomes Many low-income countries have found it
increasingly difficult to sustain sufficient financing for healthcare(1)
Increasingly important role of risk in the lives of the poor Health risks thought to pose the greatest
threat to lives and livelihoods Due to health-related out-of-pocket
expenses, an estimated 150 million people suffer from financial catastrophe worldwide(2)
What global micro-insurance experiences teach us
Micro-insurance has been repeatedly shown to increase not only hospitalization rates but also more frequent primary-care physician encounters, higher rate of diagnosed chronic diseases and better drug compliance among chronically ill(3)
Community-based health insurance reduces out-of-pocket spending thus providing financial protection
Evidence is sparse that voluntary community-based programs can create a viable sustainable solution Difficult to mobilize sufficient people
and resources While data is inconclusive there is some
evidence that increased access has a positive affect patient outcomes
HOWEVER, ROLLING OUT AN INSURANCE PRODUCT IS A LONG-TERM PROJECT
6
Interviewees insist on long-term effort
Will need to role out in phases starting with a limited offering to gain trust before expanding
May be able to break even in medium term (2-5yrs)
Similar model was only able to see 7% community penetration initially
Research shows that, in general, insurance models are difficult to implement
Role of trust and understanding of insurance product
Financial constraints
Purchasers are extremely sensitive to price
Case Studies from around the world confirm this observation
Micro Health Insurance in Nepal: Initial survey – 1 year Initial 6 month period educating
community about concept of micro health insurance
2 years total start enrolling community members in program
FIMRC: 12-yr timeline for implementation due to
extensive community outreach and education necessary
HIF in Nigeria: 1.5yrs after launch still showed low
enrolment (~6% in target population) despite low insurance costs and high satisfaction of the insured(1)
Source: 1. J. Lammers, S. Warmerdam. Adverse selection in voluntary micro health insurance in Nigeria. AIID research series 10-06.
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CONTENTS
Should ICTPH offer a health micro-insurance product?
What might the model look like?
How can costs and willingness-to-pay be reconciled? Price range
Financing options
Services included
Which offering design is most relevant for ICTPH?
How to market the new product?
What are the Key Success Factors to keep in mind moving forward?
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CASE STUDIES OF INDIAN CHI PROGRAMS HAVE REVEALED THREE TYPICAL MODELS
8 8 * Insurer is an entity legally separate from the NGO, can be a third party insurer with interaction only with NGO Source: N. Devadasan, K. Ranson, W. van Damme, B. Criel, 2004. Community Health Insurance in India – An Overview. Economic and Political Weekly July 10, 2004; N. Devadasan et al. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
Provider model Insurer model Agent model
Provider & Insurer*
Community
Pre
miu
m
Pro
vid
es c
are
1 2 3
Community
Pre
miu
m
Provider
Insurer
Community
Insurer
Provider
Pre
miu
m
Car
e Rei
mb
urs
e
NGO
ICTPH are considering utilizing model I for primary healthcare provision and model III for funding of secondary and tertiary care
Insurance for more advanced care to be avoided in a first step as premiums will most likely price users out of the market
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PROVIDER MODEL IMPROVES ACCESS TO HEALTHCARE AND OFFERS FINANCIAL PROTECTION
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Model characteristics
NGO plays the role of both health care provider and patient insurer
Strengths
Clearly defined, continuous health care package
Cashless transactions at own health centres Strict health care cost and quality control
Weaknesses
Need to supplement funds raised from premiums with subsidies or private donors (~20-40% of total reimbursements)
* Insurer is an entity legally separate from the NGO, can be a third party insurer with interaction only with NGO Source: N. Devadasan, K. Ranson, W. van Damme, B. Criel, 2004. Community Health Insurance in India – An Overview. Economic and Political Weekly July 10, 2004; N. Devadasan et al. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
Provider model structure
Provider & Insurer*
Community
Pre
miu
m
Pro
vid
es c
are
Provider model examples
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INSURER MODEL EMPOWERS COMMUNITY; RISK OF COST ESCALATION AND POOR QUALITY OF CARE
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Model characteristics
NGO insures patients and purchases care from independent providers
Strengths
Absence of third-party insurer allows high community empowerment
Weaknesses
Reimbursement within 2-6 months: financial and administrative hurdle filters out the poorest part of population (e.g. Illiterate)
Poor health care cost and quality control
Source: N. Devadasan, K. Ranson, W. van Damme, B. Criel, 2004. Community Health Insurance in India – An Overview. Economic and Political Weekly July 10, 2004; N. Devadasan et al. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
Community
Pre
miu
m
Provider
Insurer
Insurer model structure
Insurer model examples
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AGENT MODEL LEVERAGES EXPERTISES BUT PARTIALLY EXCLUDES POOREST PART OF POPULATION
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Model characteristics
NGO is the intermediary between patients, a third party insurer and the health care providers
Strengths
Highly competent professionals conduct most technical tasks (e.g. Insurance)
Enhanced resource pooling allows coverage of more expensive risks
Weaknesses
Reimbursement within 2-6 months: financial and administrative hurdle filters out the poorest part of population (e.g. Illiterate)
Poor health care cost and quality control Premiums likely to price users out of market Negotiation power of NGO with provider is key
to enrolment levels and cost containment
Source: N. Devadasan, K. Ranson, W. van Damme, B. Criel, 2004. Community Health Insurance in India – An Overview. Economic and Political Weekly July 10, 2004; N. Devadasan et al. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
Agent model structure
Agent model examples
Community
Insurer
Provider
Pre
miu
m
Car
e Rei
mb
urs
e
NGO
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CONTENTS
Should ICTPH offer a health micro-insurance product?
What might the model look like?
How can costs and willingness-to-pay be reconciled? Price range
Financing options
Services included
Which offering design is most relevant for ICTPH?
How to market the new product?
What are the Key Success Factors to keep in mind moving forward?
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CURRENTLY PRICING HAS BEEN LOOKED AT BY ICTPH FROM A COST PERSPECTIVE
13 Source: Interviews, Financing Health Systems 2011 Dr Zeena Johar
-
5,000
10,000
15,000
20,000
25,000
Monthly variable costs (Rs) associated with a Rural Micro Health clinic
Resulting impact on pricing
331
587
183
208 480
739
Current Scenario Insurance model
Rs 994
Rs 1,534
Dir
ect
Pri
mar
y In
- d
irec
t p
rim
ary
Seco
nd
ary
/ te
rtia
ry c
are
Anticipated uptake of services
o Accounts for changes in • Incidence of outpatient care • Average primary care expenditure • Incidence of hospitalisation
o Anticipates uplift in reported disease burden
“Calculations of the cost per patient are based on an estimate of the number of families, patients, visits per patient per year and services to be offered based on current needs”
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WHEREAS WILLINGNESS-TO-PAY APPEARS SIGNIFICANTLY LOWER
14
0
20
40
60
80
100
120
140
0 20 40 60
Pri
ce c
har
ged
by
ICTP
H p
er v
isit
Number of patients
per day
When visits were free, ICTPH would see ~120 patients per
day
At a price of 15 Rs per visit around 10 patients would
come each day
At a price of Rs 50 ($1), no patients
would attend
Price sensitivity witnessed by ICTPH
Source: Research, Project interviews
Rs 225
Rs 4
Rs 60
Rs 20
Literature suggests an WTP of Rs 20-60 per patient per year for health insurance
Average
Rs 500
Rs 300
Maximum annual expenditure in current
fee-for service
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2 “The key to success is to understand the difference between what we think people
are willing to pay and what they actually are”
TO BE VALIDATED BY SURVEY RESULTS
THE GAP CAN BE CLOSED BY CHANGING PRODUCT OFFERING AND SEEKING EXTERNAL FINANCING
15
Ave annual cost per person:
Rs 500-800 (1)
Annual willingness to pay by local population:
Rs 4-225 (2)
For the model to be viable, willingness to pay for services need to exceed the costs of providing the services In the literature as well as specific case studies, the gap between willingness to pay and costs has been addressed by: 1) Reducing the range of offered and thus decreasing total costs 2) Seeking external financing (in the form of cross subsidies
across different services within the healthcare providers offering, as government subsidies or charitable donations)
Note: (1) Suggested range in interviews for limited range of services, Financing article suggest Rs 1,534 per person which attributes 51% expenditure towards preventative and primary care services with the remainder allocated to secondary and tertiary services (2) Willingness to pay suggestion of Rs 4-225 from case studies and literature; In survey conducted on behalf of the project ~3/4 of current patients sampled answered “yes” or “maybe” to whether they would be willing to pay a flat fee of Rs 150 per month per person for access to the clinic and its services
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CONTENTS
Should ICTPH offer a health micro-insurance product?
What might the model look like?
How can costs and willingness-to-pay be reconciled? Price range
Financing options
Services included
Which offering design is most relevant for ICTPH?
How to market the new product?
What are the Key Success Factors to keep in mind moving forward?
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MOST SIMILAR MODELS REQUIRED EXTERNAL FINANCING TO BE SUSTAINABLE
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ACCORD-AMS-Ashwini
o 37% of each premium paid to third-party insurer is supplemented by donors
Comparison of Indian CHI schemes
o All Provider model programs supplement locally raised resources with external resources, for ~20-40% of reimbursements
o Insurer and agent model schemes cross-subsidize care provision more extensively than type I, increasing the chance of reaching a sustainable model of provision
Lifespring Hospitals
o “Even with our model of cross-subsidizing general care, we could not achieve sustainability”
o “We had to review the value-proposition and ensure the general wards were also profitable”
Yeshasvini Health Care Program
o 42% revenues from government subsidy o 3% profit from donations o Contingency fund o “At the current level of premium, financial
sustainability is not achievable even with a vast membership base [...] because the program covers high end medical treatment.”
International BOP micro-insurance
o Most NGOs observed in the extensive literature review as part of this project required external financing (mostly charitable donations) to continue to provide care
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Source: Research, Project interviews
CONTENTS
Should ICTPH offer a health micro-insurance product?
What might the model look like?
How can costs and willingness-to-pay be reconciled? Price range
Financing options
Services included
Which offering design is most relevant for ICTPH?
How to market the new product?
What are the Key Success Factors to keep in mind moving forward?
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MOST SERVICE PROVIDERS HAVE DECREASED THE RANGE OF SERVICES OFFERED TO REDUCE COSTS
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The UK utilise a board of practitioners, patients, pharmaceutical and healthcare product manufacturers and health economists (NICE) to assess which drugs and products are “cost effective”. The annual
incremental value of the product in question over the nearest established alternative is compared to the quality life year (QALY) value threshold. Only the treatments creating value over and above the
threshold will be provided under the national monopoly health provider: the NHS
In France, the state have provided a specific list of long term conditions for which (1) incidence is increasing rapidly and for which (2) the cost of preventative care is significantly less than the cost of
treatment once the disease develops. Treatment for these conditions and for core services will be offered by the state. Other care must be covered by individuals .
In Italy, the states have constructed positive and negative lists of services based upon a criteria of effectiveness, appropriateness and efficiency of delivery. Only he services falling onto the positive list
are provided by the state
LifeSpring’s considered expansion of the range of services but 1) Were concerned that it might dilute their brand image in the market place – marketing to a very
specific audience proved most effective 2) Additionally, there was a strong feeling that recruitment of medics was assisted by the offer of
being able to perform more services than would be the case in a more generalist environment 3) Finally, the additional costs relating to increased complexity in service offering – both in the initial
CAPEX outlay and ongoing variable costs – were considered off putting
Source: Project Interviews, International profiles: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
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GIVEN ICTPH’S OBJECTIVES, FOCUS SHOULD BE ON PRIMARY CARE AND HIGH-RISK CONDITIONS
20
Historic cases seen in ICTPH clinics
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1
12
23
34
45
56
67
78
89
10
0
11
1
12
2
13
3
14
4
15
5
16
6
17
7
18
8
19
9
21
0
Perc
en
tag
e o
f to
tal d
iag
no
ses
Service number
90% of cases are treated using 30 protocols. The remaining 180 services offered are only used on a
very ad-hoc basis
Source: ICTPH provided case records
Interpretation and suggestions
In the survey conducted on behalf of the project, only 2% of patients stated that what they value most from ICTPH is the range of services offered
Instead proximity to home and the quality of the services provided are considered the most important elements by patients
ICTPH should analyze the potential change in the cost of service provision and the quality of outcomes that would result from reducing the range of protocols offered
Underused protocols
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CONTENTS
Should ICTPH offer a health micro-insurance product?
What might the model look like?
How can costs and willingness-to-pay be reconciled? Price range
Financing options
Services included
Which offering design is most relevant for ICTPH?
How to market the new product?
What are the Key Success Factors to keep in mind moving forward?
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THERE ARE THREE OPTIONS FOR ICTPH’S OFFERING DESIGN & MARKET ENTRANCE STRATEGY
1. Comprehensive pre-paid model and user-fee services in parallel
Same price for all patients
One original price for all patients, reimbursement of those who do not require chronic care
Different prices based on patients’ pre-conditions
Education first, comprehensive pre-paid model later on
1. Staged approach pre-paid model
Healthy patients first, user-fee services for others
Specific diseases covered only, user-fee services for others
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1
2
3
THESE OPTIONS CAN BE EVALUATED ALONG ICTPH’S VISION AND KEY SUCCESS FACTORS
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Vision and key success
factors
Education first
Comprehensive pre-paid model Staged approach pre-
paid model
One price Reimburse
ment Different
prices Healthy patients
Specific diseases
Vision 3 3 3 1 2 2
Affordability 2 2 1 3 2 2
Simplicity 3 3 1 2 2 2
Trust 3 2 1 1 1 2
Flexibility 3 1 2 2 3 2
Effectiveness 3 2 2 2 2 2
Overall 17 13 10 11 12 12
1 = No / very limited alignment, 2 = Medium alignment, 3 = Excellent alignment
Source: ICTPH – Pangea workshop
PRELIMINARY
PRO’S AND CON’S OF SELECTED OFFERING DESIGN OPTIONS
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Both pre-paid and user fee model
Advantages:
Gives patients choice and flexibility
Slowly introduces the concept of insurance while maintaining what currently offered and understood model
Can provide comprehensive offering with financing that best suites customer
Disadvantages
Likely that patients will choose what they are familiar with and what is cheaper
In the short term, volume will be the major issue
Needs external financing
Primarily Pre-paid w/ addt‘l user fee
Pre-paid for the healthy w/ user fee for high risk and more advanced services Allows slower introduction of insurance
model to facilitate education Predisposed to success likely to stay healthy Aspirational good, seen as benefit for the
healthy and for others to strive toward Major disadvantage: not addressing major
need of high risk patients of providing affordable primary and preventative care
Select specific diseases to pre-pay while others remain user-fee Flexibility in allowing the community to
choose which disease are covered Addresses high-risk, chronically ill patients Major disadvantage: cost may sky-rocket as
have adverse selection for worst diseases
Two options for implementation in a staged approach:
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CONTENTS
Should ICTPH offer a health micro-insurance product?
What might the model look like?
How can costs and willingness-to-pay be reconciled? Price range
Financing options
Services included
Which offering design is most relevant for ICTPH?
How to market the new product?
What are the Key Success Factors to keep in mind moving forward?
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DEFINING A CLEAR POSITIONING IS KEY TO COMMUNICATING IN A COMPELLING MANNER
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Value proposition: All benefits and costs of the offering to target customers
Positioning: Primary reason for choosing the offering
…………………………….. is the best ……….…………………………… (offering) (product category) for ……………………………………………………………………………..… (target customers) because ……………………………………..………..……………………… (primary reason)
Source: ICTPH – Pangea workshop
SUMMARY OF POSITIONING STATEMENT SUGGESTIONS
Offering Product Category Target customers Primary reason
Pre-paid primary care package Packaged healthcare Rural population Unlimited access to quality healthcare: we are a guide to better health for your family
Pre-paid health product (comprehensive & preventative)
Packaged healthcare families (rich & poor) with frequent needs
"once I possess this, I'll be healthy". High quality & cost effective care - helps them not to delay seeking care
Prepaid healthcare healthcare savings family basic health needs understand risk & prevention the best
Pre-paid primary care package Packaged healthcare Take care of wellness with simultaneous capping of health expenditure
Pre-paid primary care package primary healthcare product chronic & non-chronic families your health is in our interest
Pre-paid primary care package Packaged healthcare don't have to worry about families health ever again
Pre-paid primary care package microhealth insurance "you" helps meet the expense of unexpected incidences
Pre-paid primary care package Packaged healthcare help you stay healthy
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27 Source: ICTPH – Pangea workshop
PRELIMINARY
MARKETING TACTICS
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Product Mix
Brand
Product Features Price
Distribution
Incentives
Communication
Source: ICTPH – Pangea workshop
EXAMPLES OF INCENTIVES
29
Acquisition
Free trial in the beginning
Benefit for being an early adopter
Premium discount
Ability to get next year for same price as this year
Premium back guarantee
Discount/voucher if recommend your friends
Group discount
Retention
Reimburse at year-end if made all appointments and followed all recommendations
Offer ICTPH voucher (rather than reimburse cash)
Discount for next year’s package
Access to additional benefits for continued use of clinic
one medication for free
Ability to add on a family member to policy at discount rate after a year
Primarily two types: Acquisition and Retention
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Are incentives valid for ICTPH’s purpose? If so, which are applicable?
Source: ICTPH – Pangea workshop
PRIORITISATION OF INCENTIVE INITIATIVES
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Co
st
Impact
Introductory
free trial
Early
adopter
benefits
Premium
guarantee
Voucher
Reimburse
at yr end
Additional
benefits
Add family
for less
Group
discount
Source: ICTPH – Pangea workshop
PRELIMINARY
EXAMPLES OF COMMUNICATION STRATEGIES
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Print: pamphlets, flyers, posters
Media: video, audio messages, loudspeaker announcements
Direct to consumer: patients in clinic, rapid risk assessment interactions
Community Leaders: community presidents, local heros
Community meetings: self-help groups, women’s meetings, town hall, 100 day worksite, school education, post church congregation etc.
Word of mouth: neighbors who are happy users
Channels
Type
Source: ICTPH – Pangea workshop
PRIORITISATION OF COMMUNICATION INITIATIVES
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Co
st
Impact
Direct to
customer
Video
Community
leaders
Audio
Community
meetings
Word of
mouth
Source: ICTPH – Pangea workshop
PRELIMINARY
CONTENTS
Should ICTPH offer a health micro-insurance product?
What might the model look like?
How can costs and willingness-to-pay be reconciled? Price range
Financing options
Services included
Which offering design is most relevant for ICTPH?
How to market the new product?
What are the Key Success Factors to keep in mind moving forward?
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FIVE KEY SUCCESS FACTORS FOR COMMUNITY HEALTH INSURANCE SCHEMES
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Trustful environment
Trustworthy NGO and healthcare provider Strong anchor in local community for maximum
awareness and minimum costs
Practicality
Affordability
Continuity of care
Public-private-cooperative partnerships
Cashless transactions, minimum administrative burden Short distance to patients for accessibility and fluid transfer
of information
Annual premiums, flexible modes of payment and collection period to correct for financial barriers to health care access
Prices driven by patient willingness-to-pay
Comprehensive health package with concrete patient benefits Incentives to follow-up and preventive care
Services offered complement existing structures Optimal integration with and referral to public / private /
cooperative sectors for services beyond scheme’s competences
THE VISION
Provide comprehensive care to the rural population… Key success factors: Affordable(1), Accessible Pitfalls: Pricing users out of the market,
…In a sustainable manner… Key success factors: Trusted, Easy to Understand Pitfalls: Implementing too quickly, complex offering
…Including addressing the needs of chronic disease sufferers Key success factors: Widely used, effective care Pitfalls: Adverse selection
35 (1) Willingness-to=pay of the local population needs to be investigated and taken into consideration. Currently pricing appears to exceed national benchmarks for willingness to pay for health care insurance
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ISSUE OF ADVERSE SELECTION
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Current pricing of our pre-paid service (~ Rs 1,500) assumes that chronic diseases will be represented with the same frequency as they are found in the population
However, it is likely that the population to first adopt the pre-paid product will be those with chronic diseases who better understand annual healthcare costs and can see greater potential savings
To cover the cost of the increased frequency of chronic disease, costs would have to be further increased
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THANK YOU!
APPENDIX
Case Studies Overview of Indian community healthcare models
Maternity provision in India: LifeSpring
Health Insurance in Gudalur: AAA
The Yeshasvini Health Care Program
Micro health insurance in Nepal
Foundation for international medical relief of Children
Indian CHI Backup materials
International profiles
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INDIAN COMMUNITY HEALTH INSURANCE SCHEMES – OVERVIEW AND KEY FACTS
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Premium and maximum costs covered
Premium
• WTP ~Rs 20-60 per person per year,
although some programs charge Rs 100+
• Usually fixed, sometimes income-dependent
• Annual cash contribution, collection period,
sometimes payable in kind
• Collected by community or NGO
Maximum costs covered: $50 on average
Population enrolled
From a few thousands to 25 lakh
30-40% of target population (median)
Pre-conditions and chronic diseases
usually excluded
Enrolment unit is individual or family
Design / model
Provider model
Insurer model
Agent model
Services offered
Hospital / inpatient care + primary care
Sometimes outpatient care, outreach services and
other insurances (e.g. Life)
Financial sustainability
4 of 12 schemes observed are self-sustained
All provider models raise external funds,
accounting for 20-40% total reimbursements
See details
on next slide
Source: N. Devadasan, K. Ranson, W. van Damme, B. Criel, 2004. Community Health Insurance in India – An Overview. Economic and Political Weekly July 10, 2004; N. Devadasan, K. Ransonm W. van Damme, A. Acharya, B. Criel, 2005. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
THREE DIFFERENT TYPES OF SCHEME DESIGN
40 Source: N. Devadasan, K. Ranson, W. van Damme, B. Criel, 2004. Community Health Insurance in India – An Overview. Economic and Political Weekly July 10, 2004; N. Devadasan, K. Ransonm W. van Damme, A. Acharya, B. Criel, 2005. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
Provider model allows
• Cashless transactions
• No reimbursement procedure several months after treatment
• Control over cost and quality of health care
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Provider model Insurer model Agent model
Provider & Insurer
Community
Pre
miu
m
Pro
vid
es c
are
1 2 3
Community
Pre
miu
m
Provider
Insurer
Community
Insurer
Provider
Pre
miu
m
Care
Re
imb
urs
e
NGO
Case studies group the models for community healthcare insurance into 3 groups
APPENDIX
Case Studies Overview of Indian community healthcare models
Maternity provision in India: LifeSpring
Health Insurance in Gudalur: AAA
The Yeshasvini Health Care Program
Micro health insurance in Nepal
Foundation for international medical relief of Children
Indian CHI Backup materials
International profiles
Thu
rsday, Ju
ne 2
1, 2
01
2
41
SITUATION: LIFESPRING DEFINED IT’S ORGANISATIONAL GOALS IN REACTION TO INDICATORS OF AN UNMET NEED
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Organisation Goal
To make high quality maternity healthcare affordable and accessible to lower-income women across
India
Existing service provision
Four main types of providers available
Government hospitals: largely in urban areas,
services cited as free though frequently required
payments to staff. Quality of care variable and
access difficult to more vulnerable groups
Small private hospitals: more conveniently
located but services provided frequently sub-
optimal as practitioners often lacked standard
protocols for management of common ailments
Large private hospitals: High quality but
frequently too expensive for poorer populations to
access
Midwives: Hired privately for births at home.
Some variation in training and experience
Indicators of an unmet need
More than 100,000 women in India die each year
as a result of pregnancy-related complications.
Another ~100,000 suffer moderate to severe
infections
Majority of deaths were avoidable if effective
institutional services could be provided
Substantial service gap between low-resource,
low-quality government hospitals and high-quality
high-cost private hospitals for lower income
families
Millions of women did not attempt to utilise the
services of a medical institution when delivering
Customers
APPROACH: LIFESPRING IDENTIFIED THEIR TARGET MARKET AND FACTORS THAT INFLUENCE THIS GROUP
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Provision of high quality, accessible maternity healthcare to lower-income
women at affordable prices
Note: (1) B70 population: people from the bottom 70% of India’s income pyramid
All inclusive pricing of services
with cross subsidising of care
Targeted communication
strategy
Provision of superior quality of
care with transparent pricing
Customers:
• B70(1) population (earnings
typically between 36,000 and
66,000 rupees per year total)
• Two major segments:
informal, daily wage earners
and formal job sector with
annual wages
Cultural elements
• Tradition dictates pregnant
woman’s mother pays for the
cost of delivering her first child
• Middle classes tend to view
those catering to the lower
classes as providing sub-par
quality of care
Competition
• In an effort to overcome the
pervasive distrust of hospitals
government has begun
offering families a stipend to
deliver babies at a
government facility
DESIGNING THE SERVICE: CUSTOMER PROFILING IDENTIFIED TWO MAIN GROUPS OF POTENTIAL PATIENTS
Target customers were defined as
the B70 population
living in peri-urban areas
within a 5km radius of the clinic
Further research segmented these customers into two groups
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44
Segment Earnings Preferences Communication
1
• 36,000 – 66,000 rupees per year
• Family earnings from informal sector
daily wages)
• Typically had to borrow money for
institutional deliveries
• Products with proven
track record
• Value opinions of others
in community
• Low literacy rates
• Limited access to
mainstream media
2
• 36,000 – 66,000 rupees per year
• Formal job sector with annual wages
• At lower end of wage profile but tend
to have more savings for out of
pocket expenses vs segment 1
• High quality of service
• Attentive care
• Privacy
• Transparent pricing
• Clean environment
• Higher literacy rates vs
segment 1
• Improved media access
TO SERVE BOTH GROUPS, LIFESPRING WOULD DIFFERENTIATE THE SERVICE AND CROSS-SUBSIDISE CARE
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Services provided at the
all-inclusive price
(including all related
medicinal and
administrative charges):
• Deliveries (normal
and caesarean)
• Antenatal care
• Postnatal care
• Family-planning
services
• Pediatric care
(including
immunisations and
diagnoses)
• Healthcare
education to the
communities
General wards
• No air conditioning
or food services
• No frills service with
focus on quality of
medicinal care
1: Informal sector (lower
willingness-to-pay)
Customer segment
Medicinal Service
Clinic services Communication
method
Private & semi-private
wards:
• Provided some
comfort (air-con,
improved furniture)
• Focus on providing
individual attention
Outreach workers
provide health
education in
community
Loyalty program to
encourage word of
mouth referrals
Media advertising on
kiosks, buses, TV
Customer
relationship
management to
track follow up care
2: Formal sector (higher willingness-to-
pay)
Cross
subsidise
DESIGNING THE SERVICE: CLOSE ATTENTION HAD TO BE PAID TO OPERATIONAL COSTS
Maintained only simple, low cost equipment (most sophisticated was an ultrasound)
Defined a narrow range of services which could be offered effectively and inoffensively. Complicated cases were referred to other facilities Allows utilisation of less-trained nurses, standardising protocols,
purchasing medicines in bulk
Oursourced lab and pharmacy services and partnered with neighbour organisations
Utilised technology to facilitate efficiency and information sharing
Kept turnover rates high (required impactful marketing)
Paid doctors fixed salaries (allows to focus on care provision rather than distracting with need to provide repeat service)
Offered workers non-monetary incentives e.g. social mission and opportunity to gain more experience than would in a general public hospital
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46
APPENDIX
Case Studies
Overview of Indian community healthcare models
Maternity provision in India: LifeSpring
Health Insurance in Gudalur: AAA
The Yeshasvini Health Care Program
Micro health insurance in Nepal
Foundation for international medical relief of Children
Indian CHI Backup materials
International profiles
Thu
rsday, Ju
ne 2
1, 2
01
2
47
ACCORD-AMS-ASHWINI (AAA) PROGRAM IMPROVES HEALTHCARE ACCESS FOR ADIVASIS IN GUDALUR (TN)
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2
48 Source: N. Devadasan, B. Criel, W. van Damme, S. Manoharan, P. Sankara Sarma, P. van der Stuyft 2010. Community health insurance in Gudalur, India, increases access to hospital care. Health Policy and Planning 25:145-254
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To whom?
All AMS members are eligible to join system
Three categories of patients with different levels
of reimbursement at Ashwini hospital:
• Insured AMS member
• Uninsured AMS member
• Insured non adivasi
What is the AAA program?
ACCORD: local NGO engaged in overall
development of the Adivasis
Adivasi Munnetra Sangam (AMS): union
defending rights of the Adivasis is Gudalur
Ashwini: hospital providing general medicine,
surgery, obstetrics and paediatrics At what price?
Enrolment in program: Rs25 ($0.54) per year
Hospital costs (at Ashwini hospital):
• Insured AMS members: Rs10 ($0.22)
admission fees (all costs covered up to
Rs2,500 per year per patient)
• Uninsured AMS members: meet cost of
medicines ($2-5)
• Non Adivasi: pay entire bill ($15-20)
Primary care provided to all Adivasis free of
charge in local health centres
What services are offered?
Hospital care in Ashwini hospital
Primary care in village and health centres
COLLABORATING WITH DONORS AND PRIVATE INSURER GUARANTEES PROGRAM’S FINANCIAL SUSTAINABILITY
49 Source: N. Devadasan, B. Criel, W. van Damme, S. Manoharan, P. Sankara Sarma, P. van der Stuyft 2010. Community health insurance in Gudalur, India, increases access to hospital care. Health Policy and Planning 25:145-254
WHAT ICTPH CAN LEARN FROM THIS EXPERIENCE
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Trustful
environment
Key success factors Initiatives Implications for ICTPH
Family/village as the enrolment unit
Credible hospital providing quality care
Trustworthy organizations
Practicality
Accessible health care centre or
travel costs reimbursement
No cash transactions, low co-payments
Minimal paper work at health care centre
Continuity of care Comprehensive health care program
Public-private
partnership
Government provides stability and
administrative man power
NGO ensures integrity and provides
management capabilities
Leverage local anchor
Carefully select communication
channels that create trust
Minimize cash transactions, co-
payment and paper work
Gradually expand services offered
Consider alliances and integration
with public and private sectors
Consider partnerships with public
sector, donors and insurers to
reach and maintain financial
sustainability
Source: N. Devadasan, B. Criel, W. van Damme, S. Manoharan, P. Sankara Sarma, P. van der Stuyft 2010. Community health insurance in Gudalur, India, increases access to hospital care. Health Policy and Planning 25:145-254
APPENDIX
Case Studies
Overview of Indian community healthcare models
Maternity provision in India: LifeSpring
Health Insurance in Gudalur: AAA
The Yeshasvini Health Care Program
Micro health insurance in Nepal
Foundation for international medical relief of Children
Indian CHI Backup materials
International profiles
Thu
rsday, Ju
ne 2
1, 2
01
2
51
YESHASVINI HEALTH CARE PROGRAM OFFERS ADVANCED SURGICAL TREATMENTS TO RURAL KARNATAKA
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52
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2
To whom?
Poor rural population in Karnataka
What is the Yeshasvini Health Care
program?
Cooperative venture between public, private
and cooperative sectors
• Yeshasvini Cooperative Farmers’ Health
Care Trust
• Department of Cooperation (DOC)
Organizational goal: insuring the rural population
of Karnataka against advanced and expensive
surgical treatments
At what price?
Initial premium: Rs60 per person per year
• Raised to Rs120 and Rs130
• Maximum Rs200,000 covered per year
• 15% rebate for families of 5+ members
Major sources of revenues and profit:
• 42% revenues from government subsidy
• 3% profit from donations
• Contingency fund
“At the current level of premium, financial
sustainability is not achievable even with a vast
membership base [...] because the program covers
high end medical treatment.”
What services are offered?
Hospital care mainly in private hospitals, in
charitable, public and cooperative sector hospitals
in Karnataka
Free out patient department consultations
Diagnostic laboratory tests at special rates
Adapted regularly based on demand
Source: A. Aggarwal 2011. Achieving Equity in Health through Community-based Health Insurance: India’s Experience with a Large CBHI Programme. Journal of Development Studies 47,11:11657-1676
WHAT ICTPH CAN LEARN FROM THIS EXPERIENCE
Thu
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53
Trustful
environment
Key success factors Initiatives Implications for ICTPH
High quality hospital network
Dissemination of sufficient information
Transparency on service exclusions
Discrimination for poor patients
Affordability and
accessibility
Low premiums balanced by alternative
sources of revenues
Payment/enrolment over 5 months
Flexible modes of payment
Cashless transactions, no paper work
Cross-subsidies between rich and poor
Penetration into high risk villages
Trained community
staff
Ensure continuity of care, prevention
Effective information channels
Public-private-
cooperative
partnership
Using public administrative
infrastructure limits costs
Government backing creates trust
Access to local cooperative networks
Private sector for quality health services
Quality of care and transparency
regarding services offered are key
factors of enrolment in poor areas
Carefully investigate financial
sustainability and define sources of
revenues
Design insurance system for
affordability and practicality
Consider cross-subsidies
Empower network of local health
care professionals
Consider strategic partnerships
with public, private and
cooperative sector
Source: A. Aggarwal 2011. Achieving Equity in Health through Community-based Health Insurance: India’s Experience with a Large CBHI Programme. Journal of Development Studies 47,11:11657-1676
APPENDIX
Case Studies
Overview of Indian community healthcare models
Maternity provision in India: LifeSpring
Health Insurance in Gudalur: AAA
The Yeshasvini Health Care Program
Micro health insurance in Nepal
Foundation for international medical relief of Children
Indian CHI Backup materials
International profiles
Thu
rsday, Ju
ne 2
1, 2
01
2
54
MICRO HEALTH INSURANCE IN NEPAL
• 2009: Baseline Survey completed
12% of households reported illnesses (72% acute, 20% chronic
Children <5yrs and elderly have higher incidences of illnesses
but have little access to health insurance
Many households forced to borrow money (19% of illnesses,
53% of hospitalizations)
• April-Oct. 2010: Workshops conducted to educate target
communities on micro health insurance
Engaged participants in processes necessary to begin programs
Community members finalized structure and benefit packages for
the two programs
Prepared various awareness tools (e.g., posters, songs, street
plays for insurance education campaigns)
20 facilitators used tools to raise awareness about micro health
insurance for 2 months
• Nov. 2010: Executive and administrative members for microfinance
programs selected by community members
Four trainings provided including one on management
information system used to organize data on beneficiaries
• Dec. 2010: Enrollment started in Dhading
• Jan. 2011: Saubhagya Micro Health Protection Fund launched
5 claims settled in the first month
• June 2011: Banke program launched
5,000 enrollments thus far
Timeline and Implementation
• Location: Nepal (Dhading and Banke)
• Objective:
Lower health risks and increase utilization of health care by
poor families though two community based health
insurance schemes
• Organizations: Micro Insurance Academy in conjunction with
a number of other international and local partners
• Financing: Primarily donations
Background
• Develop affordable and inclusive micro insurance for
households belonging to the female clients of micro finance
institution
• Tailored to respond to needs and willingness to pay of target
population based off relevant data from baseline survey
• Benefit package:
Complements services that are accessible at no cost to
the community already
May cover any combination of hospitalization,
maternity care, transportation costs, income-loss
compensation, testing and imaging
• Women (from existing women’s groups) in charge of
building and finalizing benefit packages
Also administer and run the microinsurance programs
Concept
Source: http://www.microinsuranceacademy.org/content/micro-health-insurance-nepal-deprosc-dhading-and-nirdhan-banke
APPENDIX
Case Studies
Overview of Indian community healthcare models
Maternity provision in India: LifeSpring
Health Insurance in Gudalur: AAA
The Yeshasvini Health Care Program
Micro health insurance in Nepal
Foundation for international medical relief of Children
Indian CHI Backup materials
International profiles
Thu
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ne 2
1, 2
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56
FOUNDATION FOR INTERNATIONAL
MEDICAL RELIEF OF CHILDREN (FIMRC)
• Construction of pediatric clinics in areas without reliable source
of healthcare:
Facility serves as center for healthcare administration and base
for health education programs
Improves basic knowledge about normal body and common
diseases endemic to the area
Before construction member of project development team visits
proposed site, conducts population survey and health assessment
Follow-up visits subsequent to initiation help monitor and ensure
proper use of resources and monitor clinic success
• Charting system for each child:
Provides continuity of care
Documents care each child receives over time
• Innovation is key strategic component:
Combine incentive programs with access to acute care and
preventative services
Establishes itself as partner in the community with singular goal
of motivating community members to take active interest in their
own health
Engage community members to learn about their health in health
education sessions
Mission Implementation and Strategy
• Founded: 2002 as 501C3 nonprofit organization
• Location: multiple cities throughout the developing world
Costa Rica, Peru, Uganda, among others
• Mission:
To improve pediatric and maternal health in the developing
world through innovative and self-sustainable health
improvement programs
• Structure:
Network of outpatient clinics and partnerships provide
clinical services, extensive community outreach efforts and
health education programs
Background
• Project related financing provided from business
operations:
>90% revenue is derived from volunteer program
Global Health Volunteer Program engages ~700
medical and non-medical individuals/yr who volunteer
time and make a contribution in exchange for the
experience FIMRC provides
Volunteers supplement care being delivered by local
professionals
Clinics are directly funded by volunteers’ contributions
• Cost: $900-$1,300 (site dependent)
Generally covers everything except for flight and
additional spending money
Financing Details
Source: http://fimrc.org/
FOUNDATION FOR INTERNATIONAL
MEDICAL RELIEF OF CHILDREN – CONT.
• Non-monetary model established in 2008 to address lack of
educational and economic resources:
12-yr timeline for implementation due to level of community
outreach and health education required to foster sense of
ownership among community members
FIMRC modifies program to fit the needs and readiness of each
community prior to implementation
Combines health education and community development projects
with improved access to medical services to provide
comprehensive health care for the entire family
Zero financial cost to participants
Services offered compliment government system and currently
available options
• Incentives:
Participants accrue health credits which can be used to acquire
tangible goods that improve baseline health (e.g., water filters
and mosquito nets)
Earn health credits for active participation and demonstrated
positive behavioral change
• Results - June 2008 to April 2010
Started with 13 families (30 children) compared to test group of
20 families -> now 31 families (78 children enrolled)
Living conditions in the test families' homes have greatly
improved
Children in test group diagnosed with fewer cases of diarrhea,
parasites and anemia suggesting holistic and proactive approach
to care is effective
Micro Health Insurance Program (MHIP)
1. Health education sessions:
Essential to avoiding preventable illnesses and improving
overall baseline health
Weekly health sessions presented by staff members and
FIMRC volunteers address immediate and long-term health
concerns of individual families and community at large
Topics include nutrition, health and hygiene, upper
respiratory infections, and breast cancer
2. Home visits:
After informed of health risks and how to prevent them
participates must demonstrate application of the knowledge
and pro-active attitude towards health
Staff perform regular home visits to monitor and reinforce
application of information shared during health lessons
3. Community participation:
Program participants organize and implement projects and
health related events that encourage community-wide
positive behavioral change
4. Monthly Wellness Visits:
Program participants attend monthly wellness visits to
monitor healthy growth and development and to catch
illness before it becomes too advanced
Visits foster trustful and communicative relations between
the attending physicians and participants
5. Quarterly feces exams:
Provides quarterly testing of feces and treatment in the
event a child is diagnosed with parasites or worms
5 Major Initiatives
Source: http://fimrc.org/
APPENDIX
Case Studies
Overview of Indian community healthcare models
Maternity provision in India: LifeSpring
Health Insurance in Gudalur: AAA
The Yeshasvini Health Care Program
Micro health insurance in Nepal
Foundation for international medical relief of Children
Indian CHI Backup materials
International profiles
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1, 2
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BACKUP: INDIAN CHI SCHEMES (1/7)
60 Source: N. Devadasan, K. Ranson, W. van Damme, B. Criel, 2004. Community Health Insurance in India – An Overview. Economic and Political Weekly July 10, 2004
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BACKUP: INDIAN CHI SCHEMES (2/7)
61 Source: N. Devadasan, K. Ranson, W. van Damme, B. Criel, 2004. Community Health Insurance in India – An Overview. Economic and Political Weekly July 10, 2004
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BACKUP: INDIAN CHI SCHEMES (3/7)
62 Source: ; N. Devadasan, K. Ransonm W. van Damme, A. Acharya, B. Criel, 2005. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
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BACKUP: INDIAN CHI SCHEMES (4/7)
63 Source: ; N. Devadasan, K. Ransonm W. van Damme, A. Acharya, B. Criel, 2005. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
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BACKUP: INDIAN CHI SCHEMES (5/7)
64 Source: ; N. Devadasan, K. Ransonm W. van Damme, A. Acharya, B. Criel, 2005. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
Thu
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BACKUP: INDIAN CHI SCHEMES (6/7)
65 Source: ; N. Devadasan, K. Ransonm W. van Damme, A. Acharya, B. Criel, 2005. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
Thu
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BACKUP: INDIAN CHI SCHEMES (7/7)
66 Source: ; N. Devadasan, K. Ransonm W. van Damme, A. Acharya, B. Criel, 2005. The landscape of community health insurance in India: an overview based on 10 case studies. Health Policy 78 (2006): 224-234
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APPENDIX
Case Studies
Overview of Indian community healthcare models
Maternity provision in India: LifeSpring
Health Insurance in Gudalur: AAA
The Yeshasvini Health Care Program
Micro health insurance in Nepal
Foundation for international medical relief of Children
Indian CHI Backup materials
International profiles
Thu
rsday, Ju
ne 2
1, 2
01
2
67
INTERNATIONAL PROFILE: CONTENTS
Executive Summary
Healthcare expenditure vs health outcomes
Country profiles
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68
EXECUTIVE SUMMARY: DESIGN OF CARE PROVISION
With the exception of the United States, public funding of healthcare services tends to account for 2/3 or more of total healthcare costs
There is no correlation between either the total healthcare expenditure or the out-of-pocket expense incurred with avoidable deaths
Healthcare provision does not fall into a simple division of state provided vs. insurance or out-of-pocket expense. Instead countries tend to decide upon a range of core services that should be provided by the state, with additional products and services provided by insurance or out-of-pocket expenditure. A number of different mechanisms are utilised in deciding which services are free to patients at the point of consumption, for example In the UK, drugs and service provision is decided based on a cost-effectiveness
measurement In Italy, the government construct positive and negative lists of services based on a
criteria of effectiveness, appropriateness and efficiency in delivery In France, the decision is made based on the nature of the condition whereby core
services and treatments for a specific list of long term conditions are provided by the state
Fragmentation of care has been seen in the US to lead to poor communication between providers and sometimes conflicting instructions for patients and higher rates of medical errors
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EXECUTIVE SUMMARY: INSURANCE DESIGN
Insurance design can affect access and cost
Low-income patients, especially those with chronic diseases, are highly sensitive to price for both essential, and less essential care
Insurance design comes both in the forms of a system of charging a flat premium regardless of the historical health or risk
factors of the individual being insured (as in the Netherlands)
and as a system of charging increasing / decreasing amounts according to age and health status of the persons being insured (e.g. Switzerland and Germany)
It is common to cap total out-of-pocket payments (frequently as a percentage of family income)
Complex and changing benefits designs plus a lack of transparency regarding what insurers will or will not pay for contributes to the high proportion of US adults reporting surprises in reimbursements and delaying care
Thu
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70 Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; Muennig and Glied: What changes in survival rates tell us about US Health Care, Nov 2010
INTERNATIONAL PROFILE: CONTENTS
Executive Summary
Healthcare expenditure vs health outcomes
Country profiles
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AVOIDABLE DEATHS VS TOTAL HEALTHCARE EXPENDITURE
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01
2
72
0
10
20
30
40
50
60
70
80
90
100
110
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500
Mo
rtal
ity
Am
enab
le t
o H
ealt
h C
are
(D
eath
s p
er 1
00
,00
0 p
op
ula
tio
n)
HC Expenditure per Capita ($)
US UK
Sweden Norway
New Zealand
Netherlands
Italy
Germany
France
Denmark
Canada Australia
Source: E. Nolte and CM McKee, Measuring the Health of Nations: Updating an Earlier Analysis, Health Affairs, Jan/Feb 2008; OECD Health Data, June 2009
AVOIDABLE DEATHS VS OUT OF POCKET HEALTHCARE EXPENDITURE
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01
2
73
0
10
20
30
40
50
60
70
80
90
100
110
120
0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900
Italy
Germany
France
Denmark
Canada Australia
US UK
Sweden Norway
New Zealand
Netherlands
HC Expenditure per Capita ($)
Mo
rtal
ity
Am
enab
le t
o H
ealt
h C
are
(D
eath
s p
er 1
00
,00
0 p
op
ula
tio
n)
Source: E. Nolte and CM McKee, Measuring the Health of Nations: Updating an Earlier Analysis, Health Affairs, Jan/Feb 2008; OECD Health Data, June 2009
HEALTH CARE EXPENDITURE VS 15-YEAR SURVIVAL RATES, 13 COUNTRIES OVER TIME
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74
Per capita Health Spending and 15 year Survival for 45 year old women, US and 12
Comparison Countries 1975 and 2005
Source: Muennig and Glied: What changes in survival rates tell us about US Health Care, Nov 2010
IMPACT OF PERCEPTION OF COST ON SEEKING CARE
Country (Sample Size)
Confident / very confident
able to afford care if
needed
Saw a doctor or nurse the
last time they required care
the same or next day
Waited 6 days or more to
see doctor or nurse the
last time they required care
AUS (3,552) 64% 65% 14%
CAN (3,302) 68% 45% 33%
FRA (1,402) 73% 62% 17%
GER (1,005) 70% 66% 16%
NETH (1,001) 81% 72% 5%
NZ (1,000) 75% 78% 5%
NOR (1,058) 69% 45% 28%
SWE (2,100) 70% 57% 25%
SWI (1,306) 78% 93% 2%
UK (1,511) 90% 70% 8%
US (2,501) 58% 57% 19%
Thu
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75 Source: 2010 Commonwealth Fund international health policy survey in 11 countries
INTERNATIONAL PROFILE: CONTENTS
Executive Summary
Healthcare expenditure vs health outcomes
Country profiles
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76
AUSTRALIA
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77
Health care expenditure per capita, 2007 $3,137
Ave annual real growth in HC spend per capital
(1997 – 2007) 3.8%
Number of practicing physicians per 1000
population, 2007 2.8
Ave number of physician visits per capita 6.3
Use of GPs as gatekeepers?
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
18%
How is the healthcare system financed?
Mixed public and private health care system: a public, taxation funded health insurance provides universal access to
subsidised medical services and pharmaceuticals, with free hospital treatment as a public patient. This is
complemented by a private health system in which insurance assists with access to hospital treatment as a private
patient. There is a reliance on private insurance (7-8% of total Health Care expenditure) and out-of-pocket payments
(16-17% of total health care expenditure) to supplement cost sharing and expand benefits – purchase of optional
insurance is encouraged with taxes and subsidies
What is covered?
The National public health insurance scheme,
Medicare, provides universal health coverage for
citizens, permanent residents and visitors from
countries that have reciprocal agreements
Cost sharing arrangements
• Medicare usually reimburses 85-100% of ambulance
services and 75% of the schedule fee for in-hospital
services
• 50% buy coverage for supplementary cost sharing
and access to private facilities
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
CANADA
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78
Health care expenditure per capita, 2007 $3,895
Ave annual real growth in HC spend per capital
(1997 – 2007) 3.8%
Number of practicing physicians per 1000
population, 2007 2.2
Ave number of physician visits per capita 5.8
Use of GPs as gatekeepers?
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
15%
How is the healthcare system financed?
Taxation funded public health insurance plans provide universal coverage for physician and hospital services and have
accounted for approx. 70% of total health expenditure over the last decade. Approx 2/3 of the population have
supplementary private insurance coverage – may through employment based group plans – to cover other services.
Duplicative private insurance to cover publically funded physician services is not available.
Payments through private insurance and out of pocket expenditure together account for around 30% of total health
expenditures
What is covered?
Medically necessary physician and hospital services
for all eligible residents plus supplementary benefits
for children, senior citizens and social assistance
recipients
Cost sharing arrangements
• National health insurance program has no cost
sharing for primary care or other covered benefits
• Core benefits do no include out-patient prescription
drugs or dental or home health care
• Approx 67% buy coverage for extra benefits
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
DENMARK
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79
Health care expenditure per capita, 2007 $3,512
Ave annual real growth in HC spend per capital
(1997 – 2007) 3.5%
Number of practicing physicians per 1000
population, 2007 3.2
Ave number of physician visits per capita n/a
Use of GPs as gatekeepers?
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
14%
How is the healthcare system financed?
Mainly through a centrally collected tax set at 8% of income earmarked for health. Government distributes these funds
to the 5 regions using a risk-adjusted capitation formula and some activity based payment.
Private insurance is common to cover co-payments and additional services such as physiotherapy
General practitioners in primary health care are self-employed, paid through a combination of capitation and fee-for
service. All hospitals are state owned entities
What is covered?
Coverage is universal and compulsory. All registered
Danish residents are entitled all primary and specialist
services based on medical assessment of need.
These services are largely free at the point of
consumption
Cost sharing arrangements
• None for hospitals and primary care services
• Some cost sharing for dental care for adults,
corrective lenses and outpatient drugs – which are
reimbursed on a graded scale rising from 50% for the
cheapest products to 85% for any over $511 annually
FRANCE
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80
Health care expenditure per capita, 2007 $3,601
Ave annual real growth in HC spend per capital
(1997 – 2007) 2.5%
Number of practicing physicians per 1000
population, 2007 3.4
Ave number of physician visits per capita 6.3
Use of GPs as gatekeepers?
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
7%
How is the healthcare system financed?
Public health insurance scheme accounts for ~77% of total health expenditure which also covers measures intended
to decrease demand for medical services e.g. patient education and hotlines
Reliant on private insurance to supplement cost sharing and expand benefits: co-insurance rates vary depending on
the type of care (hospital vs non), type of patient (those suffering from long term conditions vs rest of population),
effectiveness of prescription drugs (a greater co-pay percentage is requested for drugs with decreasing impact) and
whether or not patients comply with the recently implemented gatekeeping system (i.e. the GPs)
What is covered?
• All residents are entitled to publically financed health
care
• Special program which eliminates cost sharing for
people with any of 30 specified chronic conditions
Cost sharing arrangements
• Significant cost sharing in public health insurance
system, but generally covered by supplementary
private insurance bought by most residents or
government provided if low income
• 90% buy coverage for supplementary cost sharing
and some extra benefits
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
GERMANY
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81
Health care expenditure per capita, 2007 $3,588
Ave annual real growth in HC spend per capital
(1997 – 2007) 1.7%
Number of practicing physicians per 1000
population, 2007 3.5
Ave number of physician visits per capita 7.5
Use of GPs as gatekeepers? no
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
13%
How is the healthcare system financed?
Health insurance has been mandatory in Germany for all citizens since 2009: Higher income individuals may opt out of
social insurance and buy market-based private coverage
Social insurance schemes are operated by approximately 180 competing health insurance (“sickness”) funds – each of
which are autonomous, not-for-profit and regulated by law. Schemes are funded by compulsory contributions levied as
a percentage of gross wages (the government contribute on behalf of the long-term unemployed). All contributions are
pooled centrally and then allocated based on a risk adjusted capitation formula
What is covered?
Hospital care, preventative services, mental health,
dental, prescription drugs, rehabilitation and sick leave
compensation are covered by the public insurance.
Long term care is covered by a separate insurance
scheme which is mandatory for the whole population
Cost sharing arrangements
• Income related out of pocket maximums limiting costs
for patients and families to 1-2% of income
• Approx 20% buy coverage for supplementary cost
sharing and amenities; 10% buy a substitute and opt
out of social insurance
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
ITALY
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82
Health care expenditure per capita, 2007 $2,686
Ave annual real growth in HC spend per capital
(1997 – 2007) 2.4%
Number of practicing physicians per 1000
population, 2007 3.7
Ave number of physician visits per capita 7.0
Use of GPs as gatekeepers?
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
20%
How is the healthcare system financed?
Public financing accounts for approximately 77% of total health spending. Finances are collected primarily through two
taxes:
- A business tax collected into a central pool and distributed – typically to the source region
- A value added tax, collected by the government and distributed to regions as grants (designed to reduce the
inequalities resulting from the business tax base)
Private insurance plays a very small role in the system, accounting for approximately 1% of overall expenditure
What is covered?
Government defines the minimum national benefits
package that must be offered to all residents – based
on a criteria of effectiveness, appropriateness and
efficiency in delivery both positive and negative lists of
drugs and services have been defined
Cost sharing arrangements
• Primary and inpatient care is free at the point of use
• Co-payments have been applied for ambulatory
specialist services and outpatient drugs
• A charge has ben introduced for the unwarranted use
of emergency services (non-critical or non-urgent
cases)
NETHERLANDS
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83
Health care expenditure per capita, 2007 $3,837
Ave annual real growth in HC spend per capital
(1997 – 2007) 4.2%
Number of practicing physicians per 1000
population, 2007 3.9
Ave number of physician visits per capita 5.7
Use of GPs as gatekeepers?
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
6%
How is the healthcare system financed?
All residents and those paying income tax in the Netherlands are required to pay premiums towards coverage
(exceptions are made for conscientious objectors and members of the armed services). Income related assistance
given to 30-40% of population and asylum seekers covered by the government
Rely on private insurers to provide required core benefits in tightly regulated market place. Most patients purchase
additional coverage. Government provides “health care allowances” for low-income citizens if the average flat rate
premium exceeds 5% of household income
What is covered?
Insurers are legally required to provide a standard
benefit package covering medical care including GPs,
hospitals and midwives, dental care, medical aids,
maternity and ambulance care
Cost sharing arrangements
• Private insurance plans provide core benefits – the
same premium is charged regardless of the patients
age or health status
• 80% purchase extra insurance to complement the
basic package
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
NEW ZEALAND
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84
Health care expenditure per capita, 2007 $2,510
Ave annual real growth in HC spend per capital
(1997 – 2007) 4.5%
Number of practicing physicians per 1000
population, 2007 2.3
Ave number of physician visits per capita 4.7
Use of GPs as gatekeepers?
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
14%
How is the healthcare system financed?
Public funding from general taxation, levies on employers and local government accounts for about 78% of total
health care expenditure. Approximately 30% of New Zealanders have private insurance, mostly to cover cost-sharing
requirements, elective surgery in private hospitals and specialist outpatient consultations.
Healthcare is mostly free for children under the age of 6 and subsidised to a significant for 95% of the population.
Subsidies for long-term aged care are asset tested
What is covered?
All residents have access to a broad range of health
and disability services including preventative and
promotional services, hospital care and primary health,
in- and out- patient hospital services and prescription
drugs and dental care
Cost sharing arrangements
• Recent reforms have lowered or eliminated the
significant cost sharing for primary health care
• Approx 33% buy coverage for supplementary cost
sharing, private facilities and specialists – a small
share of total spending
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
NORWAY
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85
Health care expenditure per capita, 2007 $4,763
Ave annual real growth in HC spend per capital
(1997 – 2007) 2.4%
Number of practicing physicians per 1000
population, 2007 3.9
Ave number of physician visits per capita n/a
Use of GPs as gatekeepers?
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
15%
How is the healthcare system financed?
Public spending (financed through general taxation) made up approximately 85% of total health care expenditure.
Taxpayers with high expenses due to permanent illnesses receive a deduction
Private insurance does not play a significant part in Norway’s health care system; fewer than 5% of the population buy
coverage for faster access and use of private providers. Typically this coverage is received from employers
What is covered?
Coverage is universal. All European Union residents
have the same access to health services in Norway as
residents. Steadfast to the principle that all inhabitants
should have equal access to health services
regardless of social status, income and geography
Cost sharing arrangements
• Moderate requirements – in 2007 out-of-pocket
expenditure made up 15% of total health expenditure
• For primary care, copayment accounts for 42% of
total costs
• All care received in a public hospital (including drugs)
are free to patients
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
SWEDEN
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86
Health care expenditure per capita, 2007 $3,323
Ave annual real growth in HC spend per capital
(1997 – 2007) 4.1%
Number of practicing physicians per 1000
population, 2007 3.6
Ave number of physician visits per capita 2.8
Use of GPs as gatekeepers?
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
16%
How is the healthcare system financed?
Public funding accounts for more than 80% of total health care expenditure and is raised from central and local
taxation. (Central taxation funds drug purchasing whilst municipal taxation supports local services. The government
may contribute one-off grants to address specific issues such as waiting times, etc.)
Approximately 5% of the population are enrolled in supplemental insurance plays providing faster access to care and
care in the private sector, however this accounts for less than 1% of the total healthcare expenditure
What is covered?
Coverage is universal: all residents are entitled to
publically financed health care including primary and
hospital care, preventative services, prescription
drugs, mental health, dental care, rehabilitation
services, patient transport and nursing home care
Cost sharing arrangements
• Patients pay per visit for primary and specialist care
(whereupon price varies by case) though prices are
significantly subsidised (US $14-21 per GP visit, $11
per day for stay in hospital)
• Outpatient drugs are paid for by patients up to US
$127 per year above which costs are subsidised
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
SWITZERLAND
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87
Health care expenditure per capita, 2007 $4,417
Ave annual real growth in HC spend per capital
(1997 – 2007) 2.3%
Number of practicing physicians per 1000
population, 2007 3.9
Ave number of physician visits per capita 4.0
Use of GPs as gatekeepers? (1)
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
31%
How is the healthcare system financed?
Citizens required to pay premiums towards coverage with income related assistance given to 30-40% of the
population. Funds are redistributed among insurers from a central fund according to a risk equalisation scheme based
on age and gender. Social insurance finances less than 45% of total health expenditures (this includes the 35%
financed by mandatory insurance
Rely on private insurers to provide required core benefits in tightly regulated market place. Most patients purchase
additional coverage
What is covered?
Coverage is universal with a law passed in 1996
mandating that residents purchase basic health
insurance. This basic package covers most GP and
specialist services, a list of pharmaceuticals and some
preventative measures
Cost sharing arrangements
• Health funds are required to offer a minimum annual
deductible of US $300, though enrollees may opt for
a higher deductible and lower premium
• Private plans provide core benefits; 70% buy extra
benefits
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
Notes: (1) Use of gatekeeping mechanism varies according to different insurance plans
UK
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Health care expenditure per capita, 2007 $2,992
Ave annual real growth in HC spend per capital
(1997 – 2007) 4.9%
Number of practicing physicians per 1000
population, 2007 2.5
Ave number of physician visits per capita 5.0
Use of GPs as gatekeepers?
How is the healthcare system financed?
National health service (publically funded) covers 87% of total health expenditure. Funded by general taxations and
National Insurance contributions. General practitioners act as gatekeepers for access to secondary care. Both
hospitals and general practitioners are contracted by Primary care trusts (PCTs) to whom government funds are
distributed
Private insurance offers choice of specialists, faster access to elective surgery and higher standards of comfort and
privacy than the NHS
What is covered?
Coverage is universal. All those considered “ordinarily
resident” in England are entitled to health care that s
largely free at the point of use
Preventative services, dugs, dental and rehabilitation
services are also covered
Cost sharing arrangements
• Little to no cost sharing for medical care
• Comprehensive benefits including dental care and
prescription drugs
• Approx 10% buy coverage for benefits and private
facilities
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
15%
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
US
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Health care expenditure per capita, 2007 $7,290
Ave annual real growth in HC spend per capital
(1997 – 2007) 3.7%
Number of practicing physicians per 1000
population, 2007 2.4
Ave number of physician visits per capita 3.8
Use of GPs as gatekeepers? no
100% Out of Pocket
expenditure
0% Out of Pocket
expenditure
12%
How is the healthcare system financed?
Medicare is a social insurance program financed through taxation and administered by the federal government for the
elderly, some of the disabled under 65 and those with end stage renal disease
Medicaid is a joint federal-state health insurance program designed to cover certain groups of poor persons
Approximately 66% of population have private primary insurance to supplement and substitute for Medicare
Private health insurance can be purchased by individuals or by employers
What is covered?
Benefits packages vary according to type of insurance,
but often include in- and out-patent hospital care and
physician services. Most also include preventative
services and prescription drugs. Medicare was
expanded in 2006 to cover prescription drugs
Cost sharing arrangements
• Cost sharing varies by type of insurance
• Out of pocket spending (co-pay with insurers and
direct expenditure) accounts for ~12% of total
national health expenditures
Source: Health Affairs, Schoen et al: How health insurance design affects access to care and costs by income in 11 countries; The Commonwealth Fund: International Profiles of Health Care Systems, June 2010
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