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Willingness to pay for private voluntary health insurance in southeast Nigeria

Willingness to pay for private voluntary health insurance in southeast Nigeria. Obinna Onwujekwe a and Edit V. Velényi b a Health policy Research Group/Department of Health Administration and Management, University of Nigeria, Enugu-Campus, Enugu b The World Bank, Washington DC. Rationale.

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Willingness to pay for private voluntary health insurance in southeast Nigeria

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  1. Willingness to pay for private voluntary health insurance in southeast Nigeria Obinna Onwujekwea and Edit V. Velényib a Health policy Research Group/Department of Health Administration and Management, University of Nigeria, Enugu-Campus, Enugu b The World Bank, Washington DC.

  2. Rationale • A real challenge of health care financing in Nigeria is the paucity of insurance mechanisms for financial risk protection. • Public expenditures in Nigeria account for 20-30% of total health expenditures whilst private expenditures accounts for 70-80% and the dominant private expenditure is out-of-pocket spending (OOPS) (Soyibo, 2004) • The dominant reliance on OOPS and the considerable absence of risk sharing is largely responsible for catastrophic health expenditures

  3. Rationale CONTD • The National Health Insurance Scheme(NHIS) was launched in 2005 but its coverage is limited to federal government civil servants. • What happens to other people? • The National Health Financing Policy provides for the use of private voluntary health insurance (PVHI) as one strategy for ensuring universal coverage with health insurance in the country • It is important to understand the willingness of consumers to enroll and pay for PVHI for developing and implementing viable PVHI schemes

  4. Objectives • To determine the willingness to enroll and to pay for PVHI • To understand the determinants of willingness to enroll and WTP for PVHI

  5. Research Methods • The study was conducted in an urban area and a rural area in Enugu State, located in southeast Nigeria • Pre-tested interviewer administered questionnaire was used to collect data from a random sample of 200 households from the rural and 250 households from the urban area

  6. Research Methods II • The Contingent valuation method (CVM) was used to elicit willingness to pay (WTP) for PVHI using the bidding game question format. • Before eliciting WTP, a scenario was presented to the respondents describing PVHI, its potential benefits, benefit package and payment vehicle. • All the respondents were read an introductory explanation (in the local language) about PVHI and the CVM scenario.

  7. Data analysis • The data was examined for links between socio-economic status (SES), geographic location and occupation with WTP and willingness to enroll • Ordinary least squares (OLS) multiple regression analyses were undertaken to tests for theoretical (construct) validity of elicited WTP for PVHI

  8. Results Willingness to enroll and to pay for PVHI • 380 (86.0%) respondents were willing to personally enroll in PVHI and 377 (85.7%) were willing to enroll other household members. • 220 (52.1%) respondents were willing to pay a monthly premium of 500 Naira ($4.2) for themselves, whilst 98 (23.6%) were willing to pay $4.2 for other household members. • 226 (53.2%) were willing to contribute some money so that the poorest people in their communities would benefit from health insurance.

  9. Results II • For the full sample of the respondents, the median monthly WTP for personal premium was 500 Naira ($4.2), whilst it was 200 Naira ($1.7) per person for other household members. • The median monthly altruistic WTP amount was 33.3 Naira ($0.3). • The mean WTP for respondents and for other household members were $3.3 and $2.2 respectively for the full sample. • For only the respondents that were willing to pay, the mean WTP for respondents and for other household members were ($5.2) and ($5.0) respectively.

  10. Results III • Rural dwellers and worse-off socio-economic status (SES) groups stated smaller WTP than urbanites and better-off SES groups.

  11. Results III: Geographic differences in willingness to enroll and to pay for PVHI

  12. SES differences in willingness to enroll and pay for PVHI

  13. SES differences CONTD • As SES increases so does the level of WTP to pay for PVHI (p<0.01). • For only the positive WTP cases, the mean WTP for the respondents was $4.4, $5.1, $4.8 and $5.9 for Q1,Q2,Q3 and Q4 • For only the positive WTP cases, the mean WTP for the other household members was $4.6, $5.1, $4.8 and $5.3 for Q1,Q2,Q3 and Q4

  14. Construct validity • WTP was positively statistically significantly related to acceptability of health insurance and socio-economic status of the households (p<0.05). • The regression models were statistically significant (p<0.01).

  15. Conclusion I • PVHI is a promising strategy for health financing in southeast Nigeria • Unsubsidized PVHI may never cover everybody especially indigents, but if it covers some of the people willing and able to pay such as the better-off SES classes, that is at least better than having them face high OOPS

  16. Acknowledgement: • We are grateful to The World Bank, Washington DC for funding the study.

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