Marketing Managed Care to Rural Indian Populations - A Pangea Advisors and ICTPH Collaboration

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

Thu

rsday, Ju

ne 2

1, 2

01

2

1

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

Thu

rsday, Ju

ne 2

1, 2

01

2

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

Thu

rsday, Ju

ne 2

1, 2

01

2

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?

Thu

rsday, Ju

ne 2

1, 2

01

2

4

THERE IS AN UNMET NEED FOR PRE-PAID HEALTH SERVICES IN ICTPH’S COMMUNITIES

Thu

rsday, Ju

ne 2

1, 2

01

2

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.

Thu

rsday, Ju

ne 2

1, 2

01

2

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.

Thu

rsday, Ju

ne 2

1, 2

01

2

CONTENTS




Financing options

Services included




Thu

rsday, Ju

ne 2

1, 2

01

2

7

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

Thu

rsday, Ju

ne 2

1, 2

01

2

PROVIDER MODEL IMPROVES ACCESS TO HEALTHCARE AND OFFERS FINANCIAL PROTECTION

9

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

Thu

rsday, Ju

ne 2

1, 2

01

2

INSURER MODEL EMPOWERS COMMUNITY; RISK OF COST ESCALATION AND POOR QUALITY OF CARE

10


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

Thu

rsday, Ju

ne 2

1, 2

01

2

AGENT MODEL LEVERAGES EXPERTISES BUT PARTIALLY EXCLUDES POOREST PART OF POPULATION

11


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

Thu

rsday, Ju

ne 2

1, 2

01

2

CONTENTS




Financing options

Services included




Thu

rsday, Ju

ne 2

1, 2

01

2

12

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”

Thu

rsday, Ju

ne 2

1, 2

01

2

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

Thu

rsday, Ju

ne 2

1, 2

01

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

Thu

rsday, Ju

ne 2

1, 2

01

2

CONTENTS




Financing options

Services included




Thu

rsday, Ju

ne 2

1, 2

01

2

16

MOST SIMILAR MODELS REQUIRED EXTERNAL FINANCING TO BE SUSTAINABLE

17

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

Thu

rsday, Ju

ne 2

1, 2

01

2

Source: Research, Project interviews

CONTENTS




Financing options

Services included




Thu

rsday, Ju

ne 2

1, 2

01

2

18

MOST SERVICE PROVIDERS HAVE DECREASED THE RANGE OF SERVICES OFFERED TO REDUCE COSTS

19

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

Thu

rsday, Ju

ne 2

1, 2

01

2

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

Thu

rsday, Ju

ne 2

1, 2

01

2

CONTENTS




Financing options

Services included




Thu

rsday, Ju

ne 2

1, 2

01

2

21

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

Thu

rsday, Ju

ne 2

1, 2

01

2

22

1

2

3

THESE OPTIONS CAN BE EVALUATED ALONG ICTPH’S VISION AND KEY SUCCESS FACTORS

Thu

rsday, Ju

ne 2

1, 2

01

2

23

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

24

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:

Thu

rsday, Ju

ne 2

1, 2

01

2

CONTENTS




Financing options

Services included




Thu

rsday, Ju

ne 2

1, 2

01

2

25

DEFINING A CLEAR POSITIONING IS KEY TO COMMUNICATING IN A COMPELLING MANNER

Thu

rsday, Ju

ne 2

1, 2

01

2

26

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)


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

Thu

rsday, Ju

ne 2

1, 2

01

2

27 Source: ICTPH – Pangea workshop

PRELIMINARY

MARKETING TACTICS

Thu

rsday, Ju

ne 2

1, 2

01

2

28

Product Mix

Brand

Product Features Price

Distribution

Incentives

Communication


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

Thu

rsday, Ju

ne 2

1, 2

01

2

Are incentives valid for ICTPH’s purpose? If so, which are applicable?


PRIORITISATION OF INCENTIVE INITIATIVES

Thu

rsday, Ju

ne 2

1, 2

01

2

30

Co

st

Impact

Introductory

free trial

Early

adopter

benefits

Premium

guarantee

Voucher

Reimburse

at yr end

Additional

benefits

Add family

for less

Group

discount


PRELIMINARY

EXAMPLES OF COMMUNICATION STRATEGIES

Thu

rsday, Ju

ne 2

1, 2

01

2

31

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


PRIORITISATION OF COMMUNICATION INITIATIVES

Thu

rsday, Ju

ne 2

1, 2

01

2

32

Co

st

Impact

Direct to

customer

Video

Print

Community

leaders

Audio

Community

meetings

Word of

mouth


PRELIMINARY

CONTENTS




Financing options

Services included




Thu

rsday, Ju

ne 2

1, 2

01

2

33

FIVE KEY SUCCESS FACTORS FOR COMMUNITY HEALTH INSURANCE SCHEMES

Thu

rsday, Ju

ne 2

1, 2

01

2

34

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

Thu

rsday, Ju

ne 2

1, 2

01

2

ISSUE OF ADVERSE SELECTION

Thu

rsday, Ju

ne 2

1, 2

01

2

36

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

Thu

rsday, Ju

ne 2

1, 2

01

2

37

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

Thu

rsday, Ju

ne 2

1, 2

01

2

38

INDIAN COMMUNITY HEALTH INSURANCE SCHEMES – OVERVIEW AND KEY FACTS

Thu

rsday, Ju

ne 2

1, 2

01

2

39

Thu

rsday, Ju

ne 2

1, 2

01

2

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

Thu

rsday, Ju

ne 2

1, 2

01

2

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








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

Thu

rsday, Ju

ne 2

1, 2

01

2

42

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

Thu

rsday, Ju

ne 2

1, 2

01

2

43

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

Thu

rsday, Ju

ne 2

1, 2

01

2

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

Thu

rsday, Ju

ne 2

1, 2

01

2

45

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

Thu

rsday, Ju

ne 2

1, 2

01

2

46

APPENDIX

Case Studies

Overview of Indian community healthcare models








Thu

rsday, Ju

ne 2

1, 2

01

2

47

ACCORD-AMS-ASHWINI (AAA) PROGRAM IMPROVES HEALTHCARE ACCESS FOR ADIVASIS IN GUDALUR (TN)

Thu

rsday, Ju

ne 2

1, 2

01

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

Thu

rsday, Ju

ne 2

1, 2

01

2

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

Thu

rsday, Ju

ne 2

1, 2

01

2

50

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









Thu

rsday, Ju

ne 2

1, 2

01

2

51

YESHASVINI HEALTH CARE PROGRAM OFFERS ADVANCED SURGICAL TREATMENTS TO RURAL KARNATAKA

Thu

rsday, Ju

ne 2

1, 2

01

2

52

Thu

rsday, Ju

ne 2

1, 2

01

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

rsday, Ju

ne 2

1, 2

01

2

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









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









Thu

rsday, Ju

ne 2

1, 2

01

2

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









Thu

rsday, Ju

ne 2

1, 2

01

2

59

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

Thu

rsday, Ju

ne 2

1, 2

01

2


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

Thu

rsday, Ju

ne 2

1, 2

01

2


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

Thu

rsday, Ju

ne 2

1, 2

01

2



Thu

rsday, Ju

ne 2

1, 2

01

2



Thu

rsday, Ju

ne 2

1, 2

01

2



Thu

rsday, Ju

ne 2

1, 2

01

2



Thu

rsday, Ju

ne 2

1, 2

01

2

APPENDIX

Case Studies









Thu

rsday, Ju

ne 2

1, 2

01

2

67

INTERNATIONAL PROFILE: CONTENTS

Executive Summary

Healthcare expenditure vs health outcomes

Country profiles

Thu

rsday, Ju

ne 2

1, 2

01

2

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

Thu

rsday, Ju

ne 2

1, 2

01

2

69

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

rsday, Ju

ne 2

1, 2

01

2

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


Executive Summary


Country profiles

Thu

rsday, Ju

ne 2

1, 2

01

2

71

AVOIDABLE DEATHS VS TOTAL HEALTHCARE EXPENDITURE

Thu

rsday, Ju

ne 2

1, 2

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

Thu

rsday, Ju

ne 2

1, 2

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

Thu

rsday, Ju

ne 2

1, 2

01

2

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

rsday, Ju

ne 2

1, 2

01

2

75 Source: 2010 Commonwealth Fund international health policy survey in 11 countries


Executive Summary


Country profiles

Thu

rsday, Ju

ne 2

1, 2

01

2

76

AUSTRALIA

Thu

rsday, Ju

ne 2

1, 2

01

2

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

Thu

rsday, Ju

ne 2

1, 2

01

2

78



(1997 – 2007) 3.8%





100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

15%


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


• 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


DENMARK

Thu

rsday, Ju

ne 2

1, 2

01

2

79



(1997 – 2007) 3.5%



Ave number of physician visits per capita n/a


100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

14%


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


• 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

Thu

rsday, Ju

ne 2

1, 2

01

2

80



(1997 – 2007) 2.5%





100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

7%


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


• 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


GERMANY

Thu

rsday, Ju

ne 2

1, 2

01

2

81



(1997 – 2007) 1.7%




Use of GPs as gatekeepers? no

100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

13%


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


• 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


ITALY

Thu

rsday, Ju

ne 2

1, 2

01

2

82



(1997 – 2007) 2.4%





100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

20%


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


• 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

Thu

rsday, Ju

ne 2

1, 2

01

2

83



(1997 – 2007) 4.2%





100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

6%


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


• 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


NEW ZEALAND

Thu

rsday, Ju

ne 2

1, 2

01

2

84



(1997 – 2007) 4.5%





100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

14%


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 outpatient hospital services and prescription

drugs and dental care


• 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


NORWAY

Thu

rsday, Ju

ne 2

1, 2

01

2

85



(1997 – 2007) 2.4%



Ave number of physician visits per capita n/a


100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

15%


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


• 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


SWEDEN

Thu

rsday, Ju

ne 2

1, 2

01

2

86



(1997 – 2007) 4.1%





100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

16%


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


• 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


SWITZERLAND

Thu

rsday, Ju

ne 2

1, 2

01

2

87



(1997 – 2007) 2.3%




Use of GPs as gatekeepers? (1)

100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

31%


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


• 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


Notes: (1) Use of gatekeeping mechanism varies according to different insurance plans

UK

Thu

rsday, Ju

ne 2

1, 2

01

2

88



(1997 – 2007) 4.9%






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


• 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%


US

Thu

rsday, Ju

ne 2

1, 2

01

2

89



(1997 – 2007) 3.7%




Use of GPs as gatekeepers? no

100% Out of Pocket

expenditure

0% Out of Pocket

expenditure

12%


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 varies by type of insurance

• Out of pocket spending (co-pay with insurers and

direct expenditure) accounts for ~12% of total

national health expenditures


Marketing Managed Care to Rural Indian Populations - A Pangea Advisors and ICTPH Collaboration

Health & Medicine

mind moving

indian chi

indian chi

large cbhi

administrative

entity legally

cost sharing

healthcare