In much of Asia, accessing healthcare involves incurring high out-of-pocket (OOP) payments. Many sick people forgo needed treatment, get inadequate care or incur medical expenses that threaten their financial security. HEFPA evaluates the effectiveness of various demand and supply side policy interventions intended to increase utilization of appropriate care and/or provide better protection from medical expenditure risks. The project conducts research in six countries at different stages of socioeconomic and health system development: Cambodia, China, Indonesia, the Philippines, Thailand, and Vietnam.
Findings reveal that voluntary insurance enrolment is unlikely to achieve large scale extensions of health coverage; that, when achieved, coverage extensions generally lead to increased utilization but that improved protection from the financial consequences of illness is much harder to achieve and likely depends on complex interactions between the design of insurance and provider payment systems; that provider incentives can be used to improve access to appropriate, quality health care; and that illness-induced income loss continues to pose a substantial financial risk to Asian households even when comprehensive health coverage is achieved.
Throughout the developing world, billions of people experience great difficulties in accessing adequate health care when ill. Partly, this is a problem of affordability. Where health insurance coverage is low and insured benefits shallow, the burden of paying for medical care is concentrated on those falling sick rather than being spread across the population. Heavy reliance on OOP payments forces a dire choice upon many households: forgo adequate care or incur high expenditures that crowd out consumption and possibly investments, e.g. in education, that determine long-term income potential. Access to adequate care is also hampered by supply side inefficiencies that compromise care quality. Reducing such inefficiencies is paramount in developing country health systems that typically face tight budget constraints.
The benefits of improved access to medical care go beyond the health sector. Improved population health and reduced exposure to health expenditure risks can directly and indirectly (through investments in income-generating assets) increase human capital and productivity - basic ingredients of economic development.
Although adequate health insurance coverage is still woefully lacking throughout much of Asia – in particular for poor and informal sector households – cover is being extended in a number of countries through a variety of approaches ranging from compensating public providers for granting fee waivers to the poor, through subsidising voluntary insurance enrolment of the informal sector, to universal population coverage financed by taxation.
HEFPA uses these developments in six countries of East and South-East Asia—Cambodia, China, Indonesia, the Philippines, Thailand and Vietnam— to learn about both the feasibility of approaches to extending coverage and the impact of coverage extensions on access to care and protection from the financial risks associated with illness. Recognising the importance of provider behaviour in making coverage effective, the project evaluates interventions designed to improve the appropriateness and efficiency of care delivery.
Two randomized experiments conducted in the Philippines and Vietnam reveal the difficulty of covering substantial proportions of informal sector populations through voluntary insurance even when premiums are subsidized and information on the operation and benefits of insurance is provided. In the Philippines, a 25-50% subsidy plus an information kit increased enrolment by five percentage points, which is 50% of the (very low) enrolment rate achieved without these inducements. While this is an impressive relative gain, it is insufficient to push enrolment substantially closer to full coverage. Among those initially not induced to enrol, the percentage consenting to sign up was raised by over one third when there was an option to have the application form completed and delivered to the insurance office on behalf of the applicant. Inconvenience and time costs appear to be a greater barrier to enrolment than affordability, which is an important lesson for the design of insurance programs.
The message that raising voluntary insurance coverage is not all, or even mainly, about increasing affordability of the premium is reiterated by the experiment conducted in Vietnam. A 25% premium subsidy offered along with an information pack had no significant impact on insurance uptake. In this case, it appears that it is the low value of the insurance, given low out-of-pocket prices of medical care and low perceived quality of the care accessed through insurance that is responsible for the low uptake.
When insurance coverage is extended, or deepened, utilization of medical care tends to increase. HEFPA studies confirm this with respect to the impact of: i) increased generosity of subsidized insurance for the rural population in two Chinese provinces; ii) entitlement to tax-financed public healthcare for the poor in Indonesia; and iii) entitlement to public care for all citizens not covered by formal sector insurance programs in Thailand. While full insurance coverage would eliminate households’ out-of-pocket (OOP) payments, the impact on financial protection of incomplete insurance that changes the relative prices of different levels of medical care and interacts with provider payment incentives is more ambiguous. This is illustrated by comparison of the findings from the HEFPA studies.
Health Equity Funds (HEF), which are administered by NGOs and compensate public providers for waiving the fees of poor patients, are found to reduce average OOP payments, among those household incurring them, by a very substantial 35%, with a greater impact on the poor. This is achieved not simply by granting a fee waiver but by providing facilities with the incentive to provide treatment without charging the patient.
By contrast, the program providing tax-financed care for the poor in Indonesia (Askeskin/Jamkesmas) did not reduce OOP expenditure. In fact, OOP payments increased among the urban population. This unexpected result may derive from the increased utilization of partially covered, but more affordable, services, in particular inpatient care. Provider incentives to favour treatments generating revenue from OOP payments may also play a role. This problem is even more evident in the program providing coverage to China’s rural population – the New Chinese Medical Scheme (NCMS). Despite a tremendous expansion of NCMS coverage, tripling of its subsidy between 2008 and 2012 and a reduction in OOP as a percentage of total health expenditure from 50% to 35%, prevalence of catastrophically high household payments for medical care has not been reduced. This appears to reflect the design of insurance and provider payments. Initially, NCMS only (partially) covered expenditures on inpatient care. A HEFPA experiment found that extending coverage to ambulatory care and raising reimbursement for treatment at primary facilities above that at secondary and tertiary facilities reduced the prevalence of catastrophic OOP from one-third to less than a quarter.
By studying countries at different levels of economic and health system development, the evidence provided can potentially inform health policy not only in these countries but is relevant to other countries striving to achieve better healthcare access and financial protection.
The main lessons for policy are:
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