Social Reinsurance : A New Approach to Sustainable Community Health Financing

by Dror, David M.; Preker, Alexander S.

• ISBN13: 9780821350416
• ISBN10: 0821350412
• Format: Paperback
• Copyright: 2002-10-01
• Publisher: World Bank

Summary

Traditional sources of health care financing are often inadequate leaving many of the 1.3 billion poor people in low- and middle-income countries without access to the most basic health services. Governments in these countries have tried to reach these excluded populations through public clinics and hospitals. To help pay for these services, governments often use a combination of broad-based general revenues, contributions from the formal labor force, and user fees, similar to the financing mechanisms used by Western industrial countries. However, these mechanisms are not always effective in many developing countries, leaving many of the poor without essential health care or financial protection against the cost of illness.'Social Reinsurance' details community-based approaches to insuring people against medical risk not based on individual risk rating as in private insurance, but rather using decentralized social insurance based on the average risk. This book shows how the concept of social insurance can be implemented in countries that do not have the capacity to finance or organize large-scale systems. It also details the strategies and public policies that countries can use to mitigate the shortcomings of community-financing plans designed along the lines of micro-insurance. Reinsurance is stressed as a tool for enlarging the risk pool and spreading risks across larger population groups, which no single micro-insurance scheme can do on its own. Social Reinsurance also discusses other measures to strengthen micro-insurance-based community-financing programs.This volume provides an important review of health-financing policy for rural and informal-sector workers in low- and middle-income countries.

Table of Contents

Foreword	xiii
Acknowledgments	xv
Abbreviations and Acronyms	xix
Introduction	1	(1)
Definition of Community-Based Health Financing	2	(1)
Objective and Scope of this Volume	3	(1)
Target Audience	3	(1)
Background to Research	4	(1)
Roadmap for Volume	4	(12)
Conclusions	16	(3)
PART 1 DEVELOPMENT CHALLENGES IN HEALTH CARE FINANCING	19	(38)
Rich-Poor Differences in Health Care Financing	21	(16)
Alexander S. Preker
Jack Langenbrunner
Melitta Jakab
Achieving Financial Protection against the Cost of Illness	21	(1)
Exclusion of Low-Income Rural Populations and Informal Workers	22	(1)
Understanding the Origins of Rich-Poor Differences in Health Care Financing	23	(3)
Key Obstacles in Extending Financial Protection through Formal Arrangements	26	(11)
The Role of Communities in Combating Social Exclusion	37	(20)
David M. Dror
Alexander S. Preker
Melitta Jakab
Origins of Social Exclusion from Formal Health Care Financing	37	(7)
Role of Communities in Providing Financial Protection against Illness	44	(5)
Recent Evidence of Communities' Role in Combating Social Exclusion	49	(2)
Conclusions	51	(6)
PART 2 INSURANCE, MICROINSURANCE, AND REINSURANCE	57	(166)
Introduction to Insurance and Reinsurance Coverage	59	(16)
J. Francois Outreville
What Does Reinsurance Do?	59	(2)
What Are the Traditional Reinsurance Methods?	61	(4)
What Is Nontraditional (Financial) Reinsurance?	65	(1)
What Principles Govern a Reinsurance Program?	66	(3)
What Do Community-Based Health Insurance Funds Need?	69	(2)
How Does a Reinsurance Program Work?	71	(2)
Summary	73	(2)
From Microfinance to Micro Health Insurance	75	(28)
Bernd Balkenhol
Craig Churchill
The Evolution of Microfinance	75	(4)
Understanding Microfinance Today	79	(8)
Microfinance Subsidies	87	(3)
Microinsurance as Part of Microfinance	90	(3)
Some Lessons for Microinsurance	93	(7)
Conclusions	100	(3)
Health Insurance and Reinsurance at the Community Level	103	(22)
David M. Dror
Insurance	103	(5)
Reinsurance of Health Insurance for the Informal Sector	108	(17)
To Insure or Not to Insure? Reflections on the Limits of Insurability	125	(28)
Michel Vate
David M. Dror
The Problem of Insurability	126	(1)
Multiplying Criteria or Dividing the Concept	127	(2)
Actuarial Limits	129	(3)
Economic Limits	132	(8)
Political Limits	140	(1)
A Practical Delimitation of the Scope of Insurance	141	(5)
Conclusions	146	(2)
Annex 6A Dual Theory of Risk and the Safety Coefficient	148	(5)
A Model of Microinsurance and Reinsurance	153	(34)
Stephane Bonnevay
David M. Dror
Gerard Duru
Michel Lamure
The Problem	153	(3)
The Principles Underlying the Reinsurance Model	156	(1)
Formulation of the Model	156	(3)
Simulation of the Relationship between Microinsurers and Reinsurer	159	(1)
Simulation Results	160	(13)
Conclusions	173	(1)
Annex 7A A Mathematical Model	174	(4)
Annex 7B Calculating the Reinsurance Premium	178	(1)
Annex 7C Calculating the Mean Benefit Expenditure and Its Variance	179	(4)
Annex 7D Calculating the Effects of Reinsurance	183	(4)
Local Consensus and Estimates of Medical Risk	187	(16)
Jean P. Auray
Robert Fonteneau
Local Consensus at the Community Level	187	(1)
From Consensus to Methodical Estimates	188	(1)
Estimating the Probability p of an Unknown Event	189	(3)
Estimates Based on Consensual Expert Opinions: NGT or Delphi Methods	192	(3)
Estimates Based on Nonconsensual Expert Opinions: ``Maximum Likelihood'' and Bayesian Methods	195	(2)
Conclusions	197	(2)
Annex 8A	199	(4)
Insurance and Market Failure at the Microinsurance Level	203	(20)
Axel Weber
Typical Challenges of Microinsurers	203	(7)
Solutions to Typical Challenges of Microinsurers	210	(7)
Conclusions	217	(1)
Annex 9A Insurance Problem Solving, Selected Countries	218	(5)
PART 3 IMPLEMENTATION ISSUES	223	(104)
Building Capacity and Strengthening Implementation at the Community Level	225	(20)
Sara Bennett
George Gotsadze
Capacity Concepts	226	(1)
Experience Designing and Implementing Microinsurance	227	(6)
Learning from Experience	233	(5)
Building Capacity for Microinsurance Schemes---The Role of Reinsurance	238	(2)
Conclusions	240	(5)
Role of Central Governments in Furthering Social Goals through Microinsurance Units	245	(22)
M. Kent Ranson
Sara Bennett
Conceptual Framework	246	(4)
Potential and Actual Mechanisms for Influencing Microinsurance Schemes	250	(9)
Summary, Discussion, and Conclusions	259	(2)
Annex 11A Five Case Studies	261	(6)
Regulatory Environment for Microinsurance and Reinsurance	267	(10)
Frank G. Feeley
Basic Regulations that May Apply	268	(4)
Additional Regulations that May Apply	272	(5)
Role of Subsidies in Microinsurance: Closing the ``Recovery Gap''	277	(16)
Reinhard Busse
Whence the Recovery Gap?	277	(4)
Closing the Recovery Gap: A Model	281	(4)
Closing the Recovery Gap: Europe's Experience	285	(3)
Do More Subsidies Mean More Equity?	288	(1)
Conclusions	289	(4)
Linking Ability and Willingness to Contribute to Microinsurance	293	(10)
Logan Brenzel
William Newbrander
The Application of Willingness to Pay to Microinsurance Units	294	(3)
The Affordability of Microinsurance Units	297	(1)
Willingness to Pay and Reinsurance	298	(1)
Conclusions	299	(4)
Creating a Favorable Market Environment for Microinsurance at the Community Level	303	(10)
William Newbrander
Logan Brenzel
Link between Market Factors and Development of Microinsurance Units	303	(2)
Creating a Favorable Environment for Growth in Microinsurance	305	(2)
Protection against Financial Insolvency	307	(1)
The Need for Reinsurance for Microinsurers	307	(1)
Reinsurance Options for Microinsurance Units	307	(2)
Possible Formats for Reinsurance for Microinsurance Units	309	(1)
Factors Facilitating Reinsurance for Microinsurers	310	(3)
Minimum Accounting and Statistical Framework	313	(14)
David M. Dror
Data Needs	313	(1)
Identification of the Benefit Package and Its Cost	313	(3)
Establishing the Income Side	316	(2)
Balance between Income and Expenditure	318	(4)
Other Information Needed to Calculate Variance	322	(1)
General Management Information	322	(1)
Data Template	323	(1)
Conclusions	324	(3)
PART 4 TOWARD A REINSURANCE PILOT IN THE PHILIPPINES	327	(160)
Social Health Insurance in the Philippines: A Review of the Context	329	(24)
Jonathan Flavier
Elmer S. Soriano
Anne Nicolay
Health Care Delivery	330	(3)
Health Services Financing and Spending	333	(2)
Health Insurance	335	(1)
Household Income, Ability to Pay, and Health Expenditures	336	(2)
The Community-Based Health Care Organization Market	338	(1)
CBHCOs: What Type of Partnership in Health Care Financing and Delivery?	338	(2)
Selected Survey Results	340	(6)
Risks and Opportunities	346	(2)
Conclusions	348	(5)
Epidemiological Data on Health Risks in the Philippines	353	(24)
Jeannie Haggerty
Tracey Reid
The Contribution of Epidemiology	353	(3)
First Impressions: Demographics	356	(2)
Profiling Health Needs: The Epidemiological Snapshot	358	(12)
Profiling Future Health Needs: Health Risk Factors	370	(1)
Predicting Health Care Demand at the Local Level	371	(2)
Conclusions	373	(4)
Attitudes toward Solidarity, Risk, and Insurance in the Rural Philippines	377	(18)
Elmer S. Soriano
David M. Dror
Erwin Alampay
Yolanda Bayugo
A Brief Overview of Philippine Social History	379	(1)
Salient Cultural Traits	380	(1)
Perspectives on Organizational Behavior in Microinsurance Units	381	(4)
Evidence from Philippine Rural Microinsurers	385	(2)
Spiral Evolution of Microinsurers	387	(1)
Sectoral Cultures and Risk	388	(1)
Stakeholder Interest and Risk	388	(2)
Conclusions	390	(5)
Structuring Demand and Supply in Community Health in Philippine Insurance	395	(18)
Avi Kupferman
Aviva Ron
Environment Conducive to Microinsurance Development	396	(5)
Demand Issues Linked to the Target Population	401	(3)
Demand Issues Linked to Scheme Design	404	(2)
Supply Factors	406	(2)
Conclusions	408	(5)
Actuarial Assessment of the ORT Health Plus Scheme in the Philippines	413	(10)
Hiroshi Yamabana
Coverage	413	(1)
Medical Facilities and Personnel	413	(1)
Benefits	414	(1)
Financing	414	(1)
Economic and Demographic Context	415	(1)
Financial and Actuarial Assessment of the Scheme	416	(4)
Conclusions	420	(3)
Assessment of Piloting Social Reinsurance in the Philippines	423	(64)
Frank G. Feeley
Donato J. Gasparro
Katherine Snowden
Social, Re: The Concept, the Questions, the Assumptions	423	(1)
Method of Analysis	424	(2)
Assessing the Market in the Philippines	426	(1)
Structuring the Pilot	427	(2)
Implementation Plan	429	(2)
The Financial Model	431	(4)
Scenarios Tested	435	(2)
Results	437	(2)
Critical Uncertainties and Risks	439	(2)
Annex 22A	441	(6)
APPENDIXES
A. Data Template: A Framework for Accounting and Statistics	447	(12)
David M. Dror
Rakesh Rathi
The Social Re Project	447	(1)
Overview of the Data Template: Options and Navigation	448	(8)
How the Data Template Works	456	(1)
Platform	457	(2)
B. Toolkit Users' Manual	459	(6)
Stephane Bonnevay
Gerard Duru
Michel Lamure
How to Launch a Simulation	459	(2)
Displaying the Results	461	(1)
An Interactive Window	462	(3)
C. Glossary of Terms	465	(22)
Glossary of Terms, General	465	(16)
Glossary of Terms, Data Template	481	(3)
Sources	484	(3)
About the Coeditors and Contributors	487	(8)
The Coeditors	487	(1)
The Contributors	487	(8)
Index	495