In a world where the Pandora's Box opened a long time ago, every day new diseases are being discovered. New cases with new (or old) illnesses come up every day in huge numbers before the medical fraternity. While prevention and control measures safeguard the majority of the population from transmittable diseases, developing nations still find it hard to curb transmissible illnesses, thus increasing the incidences of illness or a disease in a household by manifold. In such a scenario, the point to ponder is how the citizens across the world, especially those of developing nations afford to pay for the medical treatments.
Now while the first world nations have several nationally established health care systems, private or by the government, to help the citizens combat these health problems, it is the third world nations that lag behind the most when it comes to making use of a health insurance. According to a report by WHO, even till date, the maximum expenditure on health care is being done by the personal pockets of the citizens. For example, while only 11.3% of the households in Germany pay out-of-pockets for health care, almost 90% households in Congo pay out-of-pockets to get medical attention (WHO, 2007). In a report by Jacobs et al (2012), every household in India faces 1.2 monthly illness incidences. Further, 85% of the cases of impoverishment in India are owing to the medical expenditure. This not only adds an economic burden on the households, but also prevents the patients from receiving proper medical attention as and when required. The report further states that "an additional 78 million people in 11 Asian countries will fall below extreme poverty line if conventional poverty estimates incorporated out-of-pocket expenditure for health." Studies show that the main reason for impoverishment within third world nations is the medical expenses (Hsiao and Shaw, 2007). Before we move forward, let us first understand what exactly a health insurance does.
A social health care system or health protection program simply means creating a risk pool where the citizens pay a certain amount of money to the private or government firms to stave off the health financial risk (WHO, 2007). This "risk pool" basically has several people funding the pool, where at any point of time, those in need of expensive medical attention will draw the funds available in the pool. This "risk pool" therefore offers much respite to those who are a part of such schemes from sudden and expensive medical issues, thus ensuring that proper medical attention is given to the patients.
So what can be done in order to make the majority of the population opt for a proper health care insurance? While the passages to follow will focus on discovering a solution to the problem aforementioned, let us first identify the forces that form a barrier for the people towards accessing any health care system or insurance for their benefit.
Barriers to Adopting Health Care System in Developing Nations
While the benefits of health care insurance are several, we need to realise, why, despite these plus points, the citizens of developing nations still stay devoid of any health insurance policy? Some of the reasons are:
- In developing nations, unlike the developed nations, there is a dearth of supply-chain and human resources. Despite the third world nations trying to establish a good health care system where citizens get good subsidies and insurance benefits, a lack of funding for the government to establish good medical facilities discourages people from adopting a health care system. Thus, even though a person might have health insurance, he might not get the best of medical facility since the national medical resources are few or not upgraded to the best of quality.
- Secondly, the developing nations do not really have a proper health care system in place to offer benefits and relief to the citizens. The health care insurance is generally played out by private firms, who focus more on profit making than on providing relief to the clients. Besides, claiming the insurance from these firms becomes a headache (what with corruption and bribery), discouraging people from getting a health insurance.
- Thirdly, there is a pattern for underfunding when it comes to health insurance in developing nations, thus, the insurance does not seem viable at the time of need. This feeling, particularly, discourages people from taking up a health insurance plan for themselves and their family (Hsiao and Show, 2007).
- Another point, seemingly negligible, yet strong being that focus is given more on enrolling boys for health insurance, whereas insurance for girls is often ignored. This pattern is probably consistent with the patrilineal system of inheritance within third world nations.
How Health Insurance improves Resource Utilization
According to a report by Patrick O. Asuming (2013), "Insurance coverage has strong effect on utilization of healthcare. My two-stage least square local average treatment effect (LATE) estimates suggest that insurance coverage increases utilization by 120% to 211%, which is consistent with the evidence on adverse selection on health." He further stated that insurance helped improve the health outcome, that is, the number of days it took to cure an illness reduced considerably when the health insurance was used to avail of the healthcare facility. Adding on to the benefits of using a health insurance, it reduced the household expenditure on healthcare by manifold, thus ensuring that better medical services were provided to the patient.
How to Improve Health-Insurance Take-ups
Research studies have proved that in most third world nations, where the household incomes are low, the major deciding factor on whether households opt for a health insurance or not is the premium or fees. When the households are provided subsidy over the premiums or fees for the health insurance, the number of enrolments for the insurance increased by almost double (Asuming, 2013).
Another factor that helped increase the health insurance enrolments was education. It had been found that in most cases, the citizens (from extremely poor, uneducated households) were not aware of any health care schemes being provided by the government or privately for them. Even if they were aware, their lack of knowledge about the schemes and subsidies discouraged them from buying themselves a health care insurance. Hence, by providing these citizens proper information and education about the schemes, subsidies and benefits of the health care insurance, the number of enrolments for the same can be increased.
In recent years, developing nations have seen a rush of social health system initiatives. However, these nations are still dependent on a global mandate that could guide them or establish certain norms for developing a national health system. On similar lines, World Health Organisation passed a policy resolution in 2005 that enabled WHO to make use of social health insurance to mobilize resources for risk pool and development of health facilities so that these poor nations can provide equitable medical facilities to its citizens (WHO, 2005). Thus, nations which cannot support the development of medical facilities will be supported by the WHO. Other international aid agencies like World Bank have also agreed to assist such nations in funding health care.
Developing nations need to take great care when it comes to implementing the Social Health Insurance (SHI) plans for the populations. Massive scale education to the population needs to be done, while legislations need to be passed in order to make the SHI the chief source of payment for healthcare. One point to understand here is that unless the initiative comes from the government, that is, a centralised approach for SHI's is adopted, the implementation for SHI on a national scale will become a difficult task to achieve (Hsiao and Shaw, 2007).
Lastly, one of the biggest reasons that populations in developing nations do not take up a health insurance is the low payment scenario owing to the rate of corruption. The government, unless, actively and relentlessly looks upon this issue and cleanses it from the core, the mass of population will remain apprehensive about the scope of health insurance in their lives, thus affecting the take-up rates.
Asuming, Patrick O. "Getting the Poor to Enroll in Health Insurance, and Its Effects on Their Health: Evidence from a Field Experiment in Ghana." Columbia.edu. January 2013. Pdf. 21 April 2014. <http://www.columbia.edu/~poa2102/jmp_asuming_2012.pdf>
Hsiao, W.C., and Shaw, R.P. "Social Health Insurance for Developing Nations." World Bank Publications. 2007. Print.
Jacobs, Bart, et al. "Addressing access barriers to health services: an analytical framework for selecting appropriate interventions in low-income Asian countries." Oxford University Press. 12 May 2011. Pdf. 21 April 2014. <http://www.who.int/alliance-hpsr/resources/alliancehpsr_jacobs_ir_barriershealth2012.pdf>
"Paying For Health Services." WHO. February 2007. Pdf. 21 April 2014. <http://www.who.int/mediacentre/factsheets/fs320.pdf>
Shrestha, L.B. "Population aging in developing countries." Health Affairs 19, no.3 (2000):204-212. Pdf. 21 April 2014. <http://content.healthaffairs.org/content/19/3/204.full.pdf?origin=publication_detail>
"Sustainable health financing, universal coverage and social health insurance." WHO. 25 May 2005. Pdf. 21 April 2014. <http://www.who.int/health_financing/HF%20Resolution%20en.pdf>