Contents

1. Extending SHI to the Informal Sector in the Philippines:the conceptual frameworkCHF Best Practice Workhop 1st February 2007Dar es Salaam, TanzaniaArsenia B. Torres OIC, Office of the Vice President for Membership & MarketingPhilippine Health Insurance Corporationin collaboration withMatthew Jowett (PhD)GTZ Advisor to PhilHealth

2. Contents • The problem • The response – KaSAPI • Potential reach • Progress and challenges

3. PhilHealth covers approximately 74% of the population as of 2005 Govt. NPM OFW 12.5% 1.5% 4% IPP 21% Govt. 1,678,880 Private 5,616,220 Sponsored 2,492,356 IPP 2,839,455 OFW 545,429 NPM 196,650 Total 13,368,990 Sponsored Prvt. 42% 19%

4. 15.5 Million workers or 49% of Labor Force are in the Informal Sector Source: DOLE News dated May 8, 2005

5. Problems on demand-side • De facto voluntary decision for household. As a result, low coverage levels – approx 14% of the target group enrolled. • Premium $24 per annum for family; generally acceptable but people want to pay weekly/monthly given uncertain income. Many remote communities, with little health infra. • Irregular contributions / coverage: • only one-third of members registered in PhilHealth’s voluntary ‘individual paying programme’ pay regularly • Adverse selection creates financial instability:

6. Problems on supply-side • Large public sector bureaucracy has limitations in: • Marketing and selling health insurance • Developing flexible payment systems which meet demands of target group • PhilHealth ideally wants annual premium payments (to stabilise irregular payments), but target population want the opposite • Chasing individual households administratively expensive and highly inefficient

7. EXPANDING PHILHEALTH PARTNERSHIPS WITH ORGANIZED GROUPS

8. OBJECTIVES • Increase enrollment and sustain membership • Implement an alternative premium payment scheme • Provide Informal Sector access to quality health care • Identify and develop innovative approaches of marketing SHI • Strengthen collaboration with OGs • Minimize adverse selection • Strengthen solidarity and risk sharing

9. Target clientele • Microfinance groups • Cooperatives • NGOs • People’s Organizations • CBHCOs

10. Organized Groups and PhilHealth Partners in implementing NHIP (Conceptual framework)                                         Members of OrganizedGroups ORGANIZED GROUPS PhilHealth Premium payment Hosp. & regular outpatient • Recruitment/enrollment • Conduct of IEC/Advocacy • Collection & remittance of members’ contribution • Submission of reports • Capability building (IEC) • ID Generation • Benefit Payment • Group Premium

11. Monitoring GENERAL STEPS FOR KaSAPI IMPLEMENTATION Benefit Availment Policy Agreement Collection and Remittance Enrollment of Members KaSAPI Training MOA Signing PhilHealth Evaluation and Decision Letter of Intent & Application for Membership Organization’s Board Resolution Attendance in NHIP Orientation Pre-Selection of Organized Groups

12. Criteria: • No. of members • Size of assets/capital • Clientele • Area of coverage • Track Record • Accredited health facilities ACCREDITATION OF OG Pre-selection of OG

13. Compliance with legal requirements • Strength of leadership, operational and management systems in place • Assessment/Evaluation • Organizational Stability • Financial Performance • Profitability • Efficiency • Return on Investment • Liquidity

14. Response to unstable coverage / contributions • Rather than targeting individual households directly, target groups, and mirror employer-employee relationship (admin efficiency gains, limit adverse selection). • Piggy-back on collection systems of microfinance / cooperative organisations who collect very regularly from clients (greater flexibility for client). • This partnership allows PhilHealth to respond to household’s demand to pay small amounts regularly, whilst the organisation remits annual/semi-annual/quarterly payments to PhilHealth. Up to each partner how to organise internally.

15. Response to adverse selection • Promote mandatory enrolment within microfinance organisation (efficient risk-sharing). Strong demand for health insurance by MFI/Coop management for their members. • Set minimum group size. Currently set at 70% (counter adverse selection). • How to enforce? Offer discounted premium. Similar approach to private health insurance approaching companies. • Should also help to limit coverage instability – partner loses income (through discounted premium) if enrolment drops below 70%.

16. KaSAPI - triple win Increased, sustained coverage; improved financial stability of Individual Paying Prog PhilHealth More than a nice idea Informal economy workers Partner organisation Fulfil social mission; additional membership; reduced delinquency / bad debts Payment flexibility; lower premium; more benefits; time & hassle savings

17. Current KaSAPI partners

18. Consolidated Status of Implementation as of November 2006

19. Challenges / issues • Internal PhilHealth systems require further strengthening and development. • Policy design needs continually improvement, needs further simplification – but avoid too many policy changes. • Need to manage impact of indigent programme. • Continue to make group enrolment more attractive than individual enrolment e.g. benefits, waiting period. Potential for introduction of technology e.g. electronic ID card, payment through cell phone.

20. Challenges / issues • Generate broader movement; involve range of stakeholders in implementation e.g. federation of co-operative organisations. • Limitation: drawn towards areas with better health facility infrastructure (exacerbate equity in access?). • Partners potentially have consumer advocacy role for quality health services; link between government and civil society. • The answer to universal coverage? No, but can make significant impact.

21. HAVE A NICE DAY!