Design Element 7: Health Insurance Scheme Operations

1. Design Element 7: Health Insurance Scheme Operations October 21, 2009

2. Objectives • Understand keys to operational success for Health Insurance schemes • Understand your organizations role in health insurance operations • Identify operational strengths and weaknesses • Understand capacity building strategies

3. Key Considerations • Health insurance schemes have many organizational models • What is your role in each operational area • Responsible for the function • Supervisor of the function • Either as government regulator or contract administrator • Organization builder

4. Your Role in Operations • Responsible for Function • E.G., You are responsible for contracting • Internal SWOT type analysis • Identify Gaps • Organizational Development plan • Implementation Plan

5. Your Role in Operations • Regulator or supervisor of function • E.G., Insurance supervisor • Policies and regulations in place specific to health insurance • Capital requirements • Reserve requirements • Licensing requirements • Financial and other reporting requirements • Skill set for oversight of health insurance activities • Oversight of other types of organizations • TPAs • Health providers • Agents and brokers

6. Your Role In Operations • Organization Builder (mentor) • E.G., NGO, implementing organization, self-help group • Choice of organization (contracting) • Capacity diagnostic • Training needs assessment • Capacity building program • OTJ mentoring • Outsource assistance

7. Key Operational Areas • Financial processes and management • Contract management • Marketing and communications • Enrollment and member services • Utilization and quality management • Premium collections • Claims management • Information systems and monitoring

8. Financial Processes and Management • Budget system • Planning and budgeting for revenues and expenses • Administrative, claims, marketing, legal, education costs • Revenue estimates from all sources • Usually an iterative process and may need adjustment throughout a year • Budget Execution • Management of the flow of funds • Cash and asset management, internal controls , Accounts receivable and payable • Financial Information Management System

9. Public Expenditure Management Overview Budgeting Process Macroeconomic Budget Circular Macroeconomic Framework Policy Budget Proposals Budget Classification Proposed Budget Funds Structure Organic Budget Law Revenue/Expenditure Projections Enacted Budget Cash Flow Forecasts Financial Management Processes

10. Public Expenditure Management Overview Enacted Budget Financial Management Budget Execution Processes Cash Flow Forecasts Budget Revisions Budget Fund Authorizations Requests to Ministries Government Financial Management System Payroll/HR Cash & Debt Management Management Revenue Management Asset Management Commitment Accounting Internal Audit General Ledger Procurement & Accounts Payable External Audit

11. Contract Management • Many functions can be contracted out • Risk bearing, claims processing, enrollment, premium collection, education, ombudsman, provider payment • Contracts should • Identify functional responsibilities • Be enforceable under local laws • Clearly state roles and responsibilities • Contract management skills required • Legal, management, negotiation • Illustration of contract specifications

12. Marketing and Communications • Health insurance is not easy for people to understand • Eligibility, covered benefits, premiums, accepted providers, exclusions, copayments, claims etc. • Need to educate for • Enrollment • Use of benefits • Dispute resolution • Marketing controls: role of regulation • Consumer education: Techniques and skills

13. Enrollment and Contribution Collection • Enrollment • Need strategies for getting people to join in voluntary scheme • Rwanda example: Incentives for CBHI leadership to achieve targets – community mobilization/pressure to join • Need unique identifier for obtaining services • Not as easy as it sounds (same names, similar or no addresses) • Collections (how to collect and how to get to HI scheme) • Depends on type: social contribution (tax); VAT; individual or family premiums • How to determine the amount of contribution (e.g., income and family size variation) • How to collect (particularly for the poor (both urban & rural)

14. Utilization and Quality Management • Focus on Utilization Management • Too many and too few services are both problems • Utilization Review and Management • Utilization review - retrospective • Utilization management - prospective • Case management • URAC defines utilization management as "the evaluation of the medical necessity, appropriateness and efficiency of the use of healthcare services, procedures and facilities under the provisions of the applicable health benefits plan."

15. Claims Processing • Can be most time consuming, slow and error-prone part of health insurance operations • Process of receiving claims, adjudication, payment, dispute resolution • Often the responsibility of TPA • Can be cashless or by reimbursement • Paper or electronic systems (or both) • Involves coding, eligibility determination, detection of potential fraud, mapping to payment terms etc.

16. Group Exercise • Scenario • Your Health Insurance scheme will contract with: • Insurance company • Assumption of risk; coverage of acute care, contracting with providers; provider payments • Implementing organization (NGO) • Enrollment; premium collection; education and outreach; primary care; ombudsman • Task • Identify key elements that need to be in Request for Proposals for each entity to permit you to evaluate and choose the best organizations

17. Thank you

18. Slide Title • Objectives • Bullet two • Bullet three • Bullet four