Accra, Ghana October 19-23, Extending Health Insurance: How to Make It Work DESIGN ELEMENT 4: BENEFITS PACKAGES AND COST CONTAINMENT 2/9/2014October Hong Wang, MD, PhD HS20/20 Project

Feasibility of Insurance Design and Implementation Monitoring and Evaluation Insurance Financing options Benefits package Population coverage Opera- tional process Organiza- tional structure Provider engage- ment Figure 1: Design elements for a health insurance scheme

Objectives of this element Consider how to determine which services should be in the benefits package Understand the trade-offs between benefits and financial resources availability Getting familiar with key cost containment methods

What should be in benefit package Personal priorities Private goods (foods, curative health services) Rivalrous Exclusive Catastrophic illness - financial risk protection Unpredictable Large financial loss Frequent minor illness - health improvement Health/comfortable Probability of financial return Social priorities Externality One person s action has impact on others External benefit: has positive/good impacts ( treatment of infectious disease, immunization ) External cost: has negative/bad impacts ( smoking ) Merit good Judged based on the needs, should be apply universally to everyone, and not depend on the ability and willingness to pay ( priority services such as family planning service, MCH )

The potential benefits of including priority services/social priorities Improve health through the increase of use of the services Merit goods (i.e. MCH, FP, and other priority services Externality (i.e. immunization services) Prevent from further health damage Improve service delivery Increase availability Increase quality and continuum of care Reduce financial burden Prevent from further catastrophic illness Increase the efficiency of health resource utilization

Providers capabilities Availability of health care providers Types Quantities Distributions Effectiveness of health care interventions Cost-effectiveness

The balance between resource availability and benefit coverage Premium from enrollee Employment benefit Government subsidy Donor support Reimbursements Administrative costs Reinsurance fund Resources = Expenditures

The balance between resource availability and benefit coverage Reimbursements Benefit package Price of services Number of services Reimbursement rates Resources = Expenditures Premium from enrollee Employment benefit Government subsidy Donor support

The statement of a benefits package? What is covered – services, drugs, diseases What is NOT covered Limits on coverage for example: X number of outpatient services per year, y days of hospital care Reimbursement ceiling Deductibles, coinsurance, and ceiling if any (be careful that high user fee may affect the access of services to the poor!)

Potential co-payment from users Deductible Coinsurance % pop ulat ion Medical expenditure Ceiling Sources: Paul Feldstein, Health Care Economics, Delmar Publishers Inc, 1993

Key cost control methods from Benefit package design Demand side Co-payment Mandatory enrollment and eligibility policies Waiting periods for reimbursement Supply side Gate keeper and referral system Case review system development Standardize services Provider payment methods

Discussion questions Who should pay for the services that have externalities and the priority services and how to integrate these services into health insurance system? If the total fund is not available, what should insurance scheme cover first, the catastrophic illness or frequent minor and priority services first? How to increase the services utilization among the poor from benefit design perspectives?

Accra, Ghana October 19-23, Extending Health Insurance: How to Make It Work Thank you