SKY Impacts

1. SKY Impacts David Levine Rachel Polimeni Ian Ramage Sky Evaluation Dissemination Meeting 4-5 October, 2011 Phnom Penh, Cambodia

2. Micro-health insurance Can health insurance improve health and reduce vulnerability of the poor? (If so, what policies are required for a a financially viable insurance market?)

3. SKY evaluation Afd asked us to evaluate SKY expansion Roll-out to 250 villages in 2008 Targeting a population of over 250,000

4. Evaluation challenge Cannot just compare outcomes of the insured vs. uninsured

5. Self-selection of low cost In the United States health insurance often comes with employment, so the insured are healthier than the uninsured If those who are rich, care about health care, and so forth, buy insurance, insurance can correlate with good health but not cause it

6. Self-selection of high cost Above-average interest in insurance may be due to above-average expected health care costs If those who anticipate needing health care more often buy insurance, insurance can correlate with bad health but not cause it

7. Need a randomized trial

8. Sky already randomized! SKY held village meetings to market the program “Lucky Draw” Coupon lottery at village meetings 20% won a coupon for 5 of first 6 months, others get standard offer of 1 month free Door-to-door insurance agents followed-up to sign up new members

9. SKY Membership 50.0% High Coupon 45.0% Low Coupon 40.0% 35.0% 30.0% Percent Enrolled 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Months since Village Meeting Steep Discount Regular Price

10. Data Collection Baseline survey 2-9 months after village meetings 2500 winners of the deep discount Equal # of those offered regular price Follow-up survey one year later

11. Methods • Instrument is having a deep discount (not regular price) • We estimate the effect of health insurance among those induced to buy by the deep discount • “local average treatment effect”

12. SKY Membership 50.0% High Coupon 45.0% Low Coupon 40.0% 35.0% 30.0% Percent Enrolled 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Months since Village Meeting Steep Discount Regular Price

13. Theory • Overlapping stories of how health insurance can help: • Seek more and higher quality health care • When serious problems arise • Preventative & other care • => better health outcomes • Lower health care costs • => less debt and asset sales • Caution: Out study is too small for some important outcomes

14. Theory • Overlapping stories of how health insurance can help: • Seek more and higher quality health care • When serious problems arise • Preventative & other care • => better health outcomes • Lower health care costs • => less debt and asset sales • Caution: Out study is too small for some important outcomes

15. Theory: Health care when seriously injured or ill • Insurance reduces: • Forego care due to no money • Delay seeking care • Visit ineffective informal providers => Higher rate of using qualified providers & Promptly use qualified providers =>Over time, health improves • But we have very low power for health impacts

16. Results on health care after serious incident • Sample = serious incident, which we define as led to • death or • disability of a week or more • No longer purely experimental variation • Similar rates of regular vs. discounted price offers

17. Hypotheses on care for serious • Insurance reduces: • Forego care • Delay seeking care • Visit ineffective informal providers => Higher rate of using qualified providers & Promptly use qualified providers =>Over time, health improves

18. Forego care • After serious shock (> 6 days disabled or death) • Did not seek treatment or stopped treating due to costs • Controls 5.2% • SKY members 3.2 percentage points lower (but n.s.)

19. Hypotheses on care for serious Insurance reduces: Forego all care Delay seeking care Using informal providers => Higher rate of using qualified providers & Promptly use qualified providers =>Over time, health improves

20. Delay seeking care • %Treated 1st day = 60% of controls • 14 p.p.* loweramong SKY • Longer delay for insured shows up all along the distribution • Largely due to less use of drug-sellers • %“hospital” (including private clinics with a bed) 1st day = • 51% of controls • -0.7 p.p. (n.s.) SKY

21. Hypotheses on care for serious • Insurance reduces: • Forego all care • Delay seeking care • Using informal providers => Higher rate of using qualified providers & Promptly use qualified providers =>Over time, health improves

22. Choose formal, not informal, care (table 4) • First treatment was • Health center: 14% among controls & +18 p.p.** SKY • Drug seller = 14% among controls • & 8 p.p. ** lower among SKY • (Still almost half treat first at private “doctor”)

23. Theory of SKY insurance Seek more and higher quality health care When serious problems arise Preventative & other care => better health outcomes Lower health care costs

24. Birth-related outcomes (table 5) • At least one antenatal care • 92% of controls, +4 p.p. (n.s.) SKY • At least one tetanus shot = .93 + .14 SKY (P < .10)  • Birth attended by public facility = .59 + .21 SKY (n.s.)

25. Preventive and other care (A3) • No effect on • Any visit to public doctor in last 3 months • (A surprising result) • Immunizations (low precision) • (Already free) • Use of modern contraceptives

26. Theory of SKY insurance Seek more and higher quality health care When serious problems arise Preventative & other care => better health outcomes Lower health care costs

27. No detectable change in health Same death rate, 0.7% Almost identical rate of disabled a week or more No detectable improvement in children’s growth Height for age z-score = -1.47** controls & +.31 SKY (n.s.)

28. Theory of SKY insurance Seek more and higher quality health care When serious problems arise Preventative & other care => better health outcomes Lower health care costs

29. Theory: Lower health care costs Insurance reduces costly private care & and pays public-sector co-pays Lower out-of-pocket costs after serious health problems Health care does not require new debt or selling assets such as land Accumulate physical and human capital But low power for capital accumulation after only one year

30. Hypotheses: Health care costs Insurance reduces costly private care & and pays public-sector co-pays • Lower out-of-pocket costs after serious health problems • Health care does not require new debt or selling assets such as land • Lower precautionary savings • freeing up resources for consumption & productive investment • Accumulate physical and human capital

31. Reduces costly private care • Household spent $5 or more for private care for at least one incident = 61% of controls • -12 p.p. for SKY

32. Hypotheses: Health care costs Insurance reduces costly private care & and pays public-sector copays Lower out-of-pocket costs after serious health problems Health care does not require new debt or selling assets such as land Lower precautionary savings freeing up resources for consumption & productive investment Accumulate physical and human capital

33. Hypotheses: Health care costs Insurance reduces costly private care & and pays public-sector copays =>Lower out-of-pocket costs after serious health problems Health care does not require new debt or selling assets such as land Lower precautionary savings Accumulate physical and human capital

34. Incident costs Costs per serious incident (compressed, including transport) = US$104 for controls - $46* SKY Sample = serious incidents

35. Health care cost per HH • We cumulate cost of care for incidents leading to: • death • disabled a week or more • cost >$100 • Captures most lumpy costs important for insurance

36. SKY provides financial protection • For households • Pr(cost of care for all serious or costly incidents totals > $100) = 39% of controls • -10.9 p.p. of SKY (P = .06)

37. Hypotheses: Health care costs Insurance reduces costly private care & and pays public-sector copays Lower out-of-pocket costs after serious health problems Health care does not require new debt or selling assets such as land Lower precautionary savings Accumulate physical and human capital

38. Borrowing • Amount borrowed (top-coded): All HH: $195 for controls – $68* SKY • Reduction only among HH with a serious incident • Loans for health = $29 - $22** SKY • Several other measures support

39. Hypotheses: Health care costs Insurance reduces costly private care & and pays public-sector copays Lower out-of-pocket costs after serious health problems Health care does not require new debt or selling assets such as land Lower precautionary savings Accumulate physical and human capital

40. Reduces selling land • Sell asset = 22% of controls 8 p.p. fewer (P < .10) SKY • Land sales due to health care costs = .011 -.016 (P = .06) SKY

41. Hypotheses: Health care costs Insurance reduces costly private care & and pays public-sector co-pays Lower out-of-pocket costs after serious health problems Health care does not require new debt or selling assets such as land Over time, accumulate physical and human capital

42. No detectable change in physical capital (low precision) • Theory • Liquid assets • weaker precautionary motive reduces • lack of health care outflows and eventual higher income from assets might increase • Productive assets • Lower precautionary savings + no health care shocks should increase • No detectable difference in assets • Cash savings • Gold • Land

43. Summary • Health care when seriously injured or ill • Preventive health care • Health care costs

44. Health care when seriously injured or ill • SKY insurance reduces: • Foregoing all care Probably • Delaying seeking care No • Visiting informal providers Yes • Higher rate of public providers Yes • Promptly get health care from qualified providers unclear =>Over time, health improves No evidence(but low power)

45. Other health care SKY increases • Use public facilities for minor No • Preventative care No evidence (but low power)

46. Health care costs • SKY reduces costly private care maybe • & increases SKY pays for copaysYes =>Lower out-of-pocket costs after serious health problems yes • Health care does not require new debt Yes • Health care does not lead to selling assets such as land Probably • Over time, accumulate physical and human capital No evidence

47. Cautions • Absence of evidence is not evidence of absence • So “not significant” (n.s.) results can still be important

48. Supplements

49. Health care in rural Cambodia • Private caregivers good at handing out pills (“polypharmacy”) • Untrained drug sellers • Private “doctors” • Typically modest formal training • Some traditional healers

50. Public facilities • Three-tiered public sector • Local health centers • Referral hospitals (in English, closer to “clinics”) • Provincial hospitals • Poor reputation • Copays • Financial and in-kind • Hospital stays have no incremental financial copay after 6 days