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Why Health Insurance Is NOT Inherently Pro-poor. Hong Wang, MD, PHD Abt Associates Inc. June 14, 2010 Global Health Council. Equity in Health. Conceptually, equity in health can be defined as the absence of systematic differences in health status across different groups of population
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Why Health Insurance Is NOT Inherently Pro-poor Hong Wang, MD, PHD Abt Associates Inc. June 14, 2010 Global Health Council
Equity in Health • Conceptually, equity in health can be defined as the absence of systematic differences in health status across different groups of population • Practically, equity in health can be defined from two central aspects • Equity in financing • Equity in delivery/benefit
HORIZONTAL DIMENSION Poorest Group 2 Group 3 VERTICAL DIMENSION Richest Horizontal and Vertical Representation in FINANCING
HORIZONTAL DIMENSION Worst health Group 2 Group 3 VERTICAL DIMENSION Best health Horizontal and Vertical Representation in DELIVERY/BENFIT
Horizontal and Vertical Equity How can health financing and insurance ensure that: • People pay for health services according to their ability to pay Vertical equity in financing • People use health services according to their need Horizontal equity in delivery
What Determines Enrollment to Health Insurance? • They are risk averse • There is a high probability of a sickness or injury event occurring • The cost of sickness or injury is high (magnitude of the loss) • Price of insurance is affordable • Higher household income Paul Feldstein, Health Care Economics, 2005
Willingness to pay – poor are less willing Enrollment – fewer poor enroll Drop out – poor more likely to drop out Evidence on the Poor’s Demand for Health Insurance
Willingness to pay – poor are less willing Enrollment – fewer poor enroll Drop out – poor more likely to drop out Evidence on the Poor’s Demand for Health Insurance
Levels of Household Enrollment in Health Mutuelles by Household Characteristics, Rwanda Source: EICV 2005.
Impact of Mutual Health Organizations: Evidence from West AfricaSlavea Chankova, Sara Sulzbach, and Francois Diop ,2008
Willingness to pay – poor are less willing Enrollment – fewer poor enroll Drop out – poor more likely to drop out Evidence on the Poor’s Demand for Health Insurance
What Determines the Use of Health Care Services? • Derived from demand for health* • From consumption perspective • From investment perspective • Actual or perceived illness • Economic status (income and price) • Cultural-demographic characteristics • Health care supply *Grossman 1972
Evidence on the Poor’s Use of Health Services (Benefit) • Service use in general – the poor use fewer services • Service use (benefit incidence) from health insurance – the poor get less benefit • Service use (benefit incidence) under a “free care” policy – the poor get less benefit
Health Care Utilization by Enrollment and Socio-economic Characteristics, Rwanda Source: EICV 2005
Evidence on the Poor’s Use of Health Services (Benefit) • Service use in general – the poor use fewer services • Service use (benefit incidence) from health insurance – the poor get less benefit • Service use (benefit incidence) under a “free care” policy – the poor get less benefit
Evidence on the Poor’s Use of Health Services (Benefit) • Service use in general – the poor use fewer services • Service use (benefit incidence) from health insurance – the poor get less benefit • Service use (benefit incidence) under a “free care” policy – the poor get less benefit
Distribution of Benefits from Public Subsidies by Type of Health Facility in Liberia Public subsidy of health clinics benefits the poor % of public subsidy Public subsidy of hospitals and health centers benefits the rich Line of perfectly equal benefit % of population by income decile Benefit Incidence Analysis 2010
No type of Health Insurance is “Naturally” Pro-poor • The poor might not be eligible • The poor are eligible but might not enroll • The poor are enrolled, but might not benefit (use services)
Thank you Reports related to this presentation available at www.HealthSystems2020.org