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By Admin

Pakistan | New health insurance solutions for the poor

Background 

In cooperation with our local partner, the “National Rural Support Programme of Pakistan” (NRSP) we assess the impacts of several new health and accident insurances for poor households in Pakistan and aim at determining the most suitable insurance contract for poor clients. Lessons drawn from this research have important implications for neighboring low-income countries in South Asia.

According to the Pakistan Ministry of Health public health expenditures comprise about 0.6% of the GDP, which proves exceptionally low in comparison to other countries. Moreover, health related expenses are the largest source of risk in the country, with patients’ out-of-pocket expenses reaching 60 percent, according to the Pakistan Ministry of Health. Due to the limited capacity and availability of public providers patients are forced to seek expensive private medical care in some situations. There is no universal health insurance system in Pakistan, but several arrangements that coexist at a time. In total, only 1.9% of the households are estimated to use any kind of formal insurance product. The most vulnerable households are generally not the target group. If social insurance exists in Pakistan, it is often insufficient to absorb the losses. In addition, it does not reach the population working in the informal sector, which represents a majority of workers in Pakistan. This makes health shocks a substantial economic risk for poor households. Indeed, in developing countries like Pakistan shocks such as illnesses, death of family members, natural catastrophes, price fluctuations, unemployment are likely to create real economic threats. Without proper health insurance, households may be forced into ineffective labor supply allocations. Moreover, the absence of health insurance may also incur long-lasting reductions in labor productivity due to the inability to treat health shocks.

Evaluation 

Innovative health insurance solutions are designed and implemented by microfinance clients, particularly targeting low-income and vulnerable households. The effects of different program variations, i.e. individual, household and group-based insurance contracts will be evaluated, considering their effects on adult labor input, child labor activities, schooling and health status. Impacts will be estimated both on financial outcomes of direct importance to NRSP (e.g. re-payment, client retention, adverse selection, moral hazard) as well as on household outcomes (i.e. social impact measurement). The large sample size allows for detailed recommendations for different subgroups of clients: small entrepreneurs, farmers, males and females, and different wealth groups. The rigorous evaluation design used (randomized control trial) will therefore teach about which insurance solutions are most suitable for poor clients in Pakistan and permit the development of tailored and targeted solutions.

By Admin

Philippines | Health emergency savings accounts

Background 

In 2014 we initiated a randomized controlled trial in more than 600 branches of our local partner Negros Women for Tomorrow Foundation (NWTF), a Filipino microfinance institution. Based on a small scale initial pilot intervention in two branches, which indicated promising results, the new larger study extends the product. The new product offers different types of “emergency funds” where clients save parts of their incomes for emergency situations.

In many parts of the world, including in the Philippines, the lack of protection against financial risks induced by illnesses, accidents and disability, for instance, are an important constraint faced by the poor. When and where traditional social protection is not available, micro insurances, along with other programs such as cash transfer, represent a potential vehicle to mitigate risks and shocks. Micro insurance is a powerful tool to enhance the poor’s resilience to risks. Scientifically supported impact evaluations are especially needed in the field of social protection in order to provide better understanding and evidence clarifying which programs are more suitable to the specific contexts and population groups.

Evaluation 

The innovative product combines the concept of health insurance with emergency savings, where parts of the clients’ income are saved for emergency situations. The emergency fund is an individual insurance endowed by the Foundation as a reward for successfully completed loan cycles. The innovative product is randomly introduced on top of an existing individual compulsory fund. The fund aims at alleviating clients’ financial distress caused by natural and man-made emergencies, such as confinement in a hospital or outpatient health treatment, death of the client or of a member of her family, destruction of property, or loss of assets. In the additional fund, the reward amounts to a rebate of a certain percentage of the total interest payment, and is transferred into the new emergency fund, where the rebate varies in quantity (between 10, 15 and 20 percent). The impact of the innovation is evaluated using a rigorous design (randomized control trial). Large increases in health savings have been found, as well as positive effects on the amount of withdrawals in cases of emergencies.

By Admin

Pakistan | Social health protection program

Picture: courtesy of A. Avdeenko

Background 

In two provinces of Northern Pakistan, we evaluate a large scale health insurance extension supported by the German Development Bank (KfW). In Pakistan, where patients pay about 60% of their health expenditure out of the pocket (Pakistan Ministry of Health) and where access to traditional social protection is scarce, health expenses are an important source of financial shocks. In the absence of health insurance, illnesses or accidents often induce various negative outcomes in terms of health, adult and child labor, among others.

 

Evaluation

In this project, affordable hospitalization insurance is offered to all households in five districts of Khyber Pakhtunkhwa and Gilgit-Baltistan. The insurance premium is income dependent. The evaluation component pays special attention to the lives of the most disadvantaged population groups: the poorest (identified through a poverty score) benefit from a full subsidization of their premiums. The evaluation combines difference-in-differences and regression discontinuity analyses. It focuses on health outcomes, health awareness and intra-household distribution of health service utilization.

Pakistan | New health insurance solutions for the poor
Philippines | Health emergency savings accounts
Pakistan | Social health protection program