1. Abt Associates Inc. In collaboration with: I Aga Khan Foundation I Bitrán y Asociados I BRAC University I Broad Branch Associates I Deloitte Consulting, LLP I Forum One Communications I RTI International I Training Resources Group I Tulane Universitys School of Public Health Hong Wang, MD, PHD Abt Associates Inc. June 14, 2010 Global Health Council Why Health Insurance Is NOT Inherently Pro-poor

2. Equity in Health Conceptually, equity in health can be defined as the absence of systematic differences in health status across different groups of population Practically, equity in health can be defined from two central aspects Equity in financing Equity in delivery/benefit

3. Horizontal and Vertical Representation in FINANCING HORIZONTAL DIMENSION Poorest Group 2 Group 3 Richest VERTICAL DIMENSION

4. Horizontal and Vertical Representation in DELIVERY/BENFIT HORIZONTAL DIMENSION Worst health Group 2 Group 3 Best health VERTICAL DIMENSION

5. Horizontal and Vertical Equity How can health financing and insurance ensure that: 1. People pay for health services according to their ability to pay Vertical equity in financing 2. People use health services according to their need Horizontal equity in delivery

6. Pro-Poor Features of HI Schemes TypesHow is this HI Scheme Financed? Equity Features Availability of Scheme to the Poor in Developing Countries Financing Vertical Equity Delivery Horizontal Equity National Health Service General taxHighDepends on system design, service delivery structure, and population health seeking behaviors Low/Medium Social insurance Payroll taxes paid by employer and employeeMediumNot available Private health insurance Premium contribution from participants and/or their employers LowLimited availability Community financing Premium contribution from membersLow/MediumMedium

7. What Determines Enrollment to Health Insurance? They are risk averse There is a high probability of a sickness or injury event occurring The cost of sickness or injury is high (magnitude of the loss) Price of insurance is affordable Higher household income Paul Feldstein, Health Care Economics, 2005

8. Evidence on the Poor s Demand for Health Insurance Willingness to pay – poor are less willing Enrollment – fewer poor enroll Drop out – poor more likely to drop out

10. Evidence on the Poor s Demand for Health Insurance Willingness to pay – poor are less willing Enrollment – fewer poor enroll Drop out – poor more likely to drop out

11. Levels of Household Enrollment in Health Mutuelles by Household Characteristics, Rwanda Proportion (%) of households enrolled in health mutuelles Household characteristics Income quintilePoorest Quintile 2 Quintile 3 Quintile 4 Richest 28.6 32.8 41.7 31.7 All 34.8 Source: EICV 2005.

12. Impact of Mutual Health Organizations: Evidence from West Africa Slavea Chankova, Sara Sulzbach, and Francois Diop,2008

13. Evidence on the Poor s Demand for Health Insurance Willingness to pay – poor are less willing Enrollment – fewer poor enroll Drop out – poor more likely to drop out

15. What Determines the Use of Health Care Services? Derived from demand for health* From consumption perspective From investment perspective Actual or perceived illness Economic status ( income and price) Cultural-demographic characteristics Health care supply *Grossman 1972

16. Evidence on the Poor s Use of Health Services (Benefit) Service use in general – the poor use fewer services Service use (benefit incidence) from health insurance – the poor get less benefit Service use (benefit incidence) under a free care policy – the poor get less benefit

17. Health Care Utilization by Enrollment and Socio- economic Characteristics, Rwanda Household or Individual Characteristics % of sick individuals who sought care at a modern health care provider Ratio (1)/(2) BeneficiariesNon- beneficiaries Income quintile Poorest Quintile 2 Quintile 3 Quintile 4 Richest 26,2 42,9 40,2 41,9 50,5 13,7 21,3 25,4 30,7 33,3 1,91 2,01 1,58 1,36 1,51 Total 41,624,71,68 Source: EICV 2005

18. Evidence on the Poor s Use of Health Services (Benefit) Service use in general – the poor use fewer services Service use (benefit incidence) from health insurance – the poor get less benefit Service use (benefit incidence) under a free care policy – the poor get less benefit

19. China: Participation in CBHI by Income and Health Status Table 6. The distribution of the Net Benefits among all population by expenditure and health status Health statusL-incomeM-incomeH-incomeRatio of H/L income L-health76.8077.8899.681.30 M-health14.8615.9528.611.93 H-health4.938.1517.453.54 Ratio of L/H health15.589.555.71

20. Evidence on the Poor s Use of Health Services (Benefit) Service use in general – the poor use fewer services Service use (benefit incidence) from health insurance – the poor get less benefit Service use (benefit incidence) under a free care policy – the poor get less benefit

21. Distribution of Benefits from Public Subsidies by Type of Health Facility in Liberia % of public subsidy Public subsidy of hospitals and health centers benefits the rich Public subsidy of health clinics benefits the poor % of population by income decile Line of perfectly equal benefit Benefit Incidence Analysis 2010

22. No type of Health Insurance is Naturally Pro-poor The poor might not be eligible The poor are eligible but might not enroll The poor are enrolled, but might not benefit (use services)

23. Abt Associates Inc. In collaboration with: I Aga Khan Foundation I Bitrán y Asociados I BRAC University I Broad Branch Associates I Deloitte Consulting, LLP I Forum One Communications I RTI International I Training Resources Group I Tulane Universitys School of Public Health Thank you Reports related to this presentation available at www.HealthSystems2020.org