Social Health Insurance
PST 06105: HEALTH FINANCING
Session 5: Social Health Insurance
Learning Tasks
At the end of this session students are expected to be able to:
Define
social health insurance
Explain
how social health insurance operates in the health sector
Enumerate
advantages and disadvantages social health insurance
Activity: Brainstorming
What is social health insurance?
3
Social
Health
Insurance (SHI)
Historically, health insurance developed as a way of solving the problem of access to an
income
to replace earnings when sick, and generally later to secure the provision of
an acceptable
standard of health care
Those
originally covered from the early nineteenth century were the more skilled
workers and
not too poor farmers.
Social
health insurance (SHI) is a modern socio-economic prepayment mechanism that
is based
on mutual support (Norman and Weber, 1994).
Social
Health
Insurance (SHI)
M
inimum
features
of SHI (McIntyre
, et al, 2003):
Is
legislated by governmen
t and requires regular, compulsory contributions by
specified
population groups (usually initially covering those in formal
employment and
their
dependents,
and then gradually extending to other groups);
Has
an
income-related contribution schedule
(i.e. premiums are calculated
according to
ability to pay), which is uniform even if the SHI consists of a number of
health funds
serving as the financing intermediaries for the SHI; and
Has
a standardized, prescribed minimum benefit package
Social
Health Insurance (SHI)
SHI has two functions(Abel-Smith,1992):
It
is a way of raising all or part of the money to pay for health care
It
is a way of securing the provision of services SHI, together with user fee, were initially advocated by the World Bank (1987 and 1993 reports) and strategy to reduce the 1970-1990‟s health finance gap in developing countries
Many countries, including Tanzania, have adopted health insurance to achieve the three health policy
objectives which are:
Improved
financial base for health services;
Improved
health system performance in term of access and equity
Containing
cost escalation
Social
Health Insurance (SHI)
Tanzania Mainland has a social health insurance known as
National Health Insurance
Fund
(NHIF)
Currently NHIF covers several categories of members such as from public
institutions, cooperative
Health (tobacco, coffee, cotton,
cashnut
), staff of Religious
Denomination, Toto
Afya
Card, students, Private Groups of Entrepreneurs, Private
Membership (individuals
and private companies
).
Activity: Brainstorming
How does social health Insurance operate in health sector?
8
Operation
of Social Health Insurance
Operation
of Social Health Insurance
SHI involves three parties:
citizen and users of health services,
insurance
organization,
and
providers
of health
services
Arrangement of SHI
Are compulsory
,risk pooling and prepayment schemes
Individuals
or organizations pay compulsory premiums related to income not health needs
Operation
of Social Health Insurance
Arrangement
of
SHI:
Insurance
organizations
collect,
pool,
manage
and use financial resources to pay or reimburse providers of health services (e.g. doctors, hospitals, and pharmacies).
Providers of health services in turn use the financial resources to acquire health resources (e.g. staff, medicines, buildings, and equipment). The acquired health resources are used by health service providers to give health services to citizen when they need such services
.
Activity:
Small group discussion
What are the advantages and disadvantages of social health insurance?
12
Advantages of
Social Health Insurance
SHI
has potential
for generating sufficient financial
resources to cover large numbers
of
populations, depending on the size of formal sector of a country
Social
health insurance is an
easy and effective
way to raise resources to improve
health
The
funds raised by social health insurance are stable and they are not affected by
these
changes and the income is earmarked solely for health sector
This
stability is maintained by the regulations and laws that govern the allocation and
expenditure
Advantages
of Social Health Insurance
SHI tend to be more equitable: clients tend to pay according to income and
avoids experiential
risk which is common to private insurance
Health insurance can improve and promote efficiency in health service provision.
This can
take place through active contracting and purchasing, accreditation of
health providers
and monitoring health service providers.
Insurance allows individuals to seek treatments early than uninsured people (Hsiao
et al
, 2007) who tend to seek treatment late and at advanced stage of the disease
process and
therefore treated at high cost
Citizens may be more willing to pay their contributions because the destination of
the money
is visible, specific, and related to a vital need
Disadvantages
of Social Health Insurance
There are
difficulties of administration
in informal economies, where income of the
many
members of the community do not have reliable income
There may be
stratification
between various schemes with equity implications
SHI may give
“paper rights” to benefit package
: package stated in document but not
provided
to members of SHI
SHI has potential for inducing
provider moral hazard
, providing unnecessary
treatments
and tests to members of the scheme
Possible
exclusion of the poor,
it first covers civil servants
Disadvantages
of Social Health Insurance
SHI
has potential for inducing
clients moral hazard
, using unnecessary treatments and
tests
included in the package
Potentially, it increases
employment costs
, as employers are required to contribute
financial
resources for their employees
Many insurance schemes use encourage
cream-skimming strategies
to
enroll
members
Social health insurance can
generate an excess demand
for health services, leading to
escalating
costs
Key Points
SHI
is now an important financing mechanisms both in developing and developed
for raising
financing resources for the health sector and for ensuring that people have
access to
health services
SHI
involve three parties in health service: citizen and user of health
services, government-own
health insurance, and an network of providers of the health service
SHI
has both advantages and disadvantages
Evaluation
What
is social health insurance?
What
are the three parties involved in SHI?
What
are advantages and disadvantages of SHI?
Reference
Abel-Smith
, B. (1992). Health insurance in developing countries: lessons
from experience
.
Health policy and Planning, 7(3), 215-226.
Escobar
.,
Griffin,C.C
, & Shaw R.P(2010).
Impact of health insurance in low- and
middle- income
countries.Washington
DC: The Brookings
Institution.
Evans
, R. G.( 2002).Financing health care: Taxation and the alternatives. in
Mossialos
, E.,
Dixon, A.,
Figueras
, J.,
Kutzin
, J.,
Funding Health Care: options for
Europe.
Buckingham
& Philadelphia: Open University Press.
Folland
, S., Goodman, A. C., &
Stano
, M. (2007).
The economics of health and health
care
.New York: Pearson
Getzen
, T. E. (2013).
Health economics and financing. Hoboken, NJ:
Wiley.
Gottret
, P.
Schieber
, G. (2006).
Health financing revisited: a
practioner’s
guide. World Bank
Reference
Jiyenze
, M. K. (2013). Health care financing and resource allocation: handout for teaching
health
care financing.
Arusha
: CEDHA. [Notes:
Unpublished]
Mossialos
, E., Dixon, A.,
Figueras
, J.,
Kutzin
, J. Funding Health Care: Options for Europe.
UK
: Open University Press,
2002.
Olsen
, J. A. (2009). Principles in health economics and policy. Oxford: Oxford University
Press
.
Savedoff
, W. D. (2004). Tax-based financing for health systems: options
and
experiences.Geneva
:
WHO
Tanzania
.
MoHSW
(2014). DHM Healthcare financing module. Dar
es
Salaam:
MoHSW
WHO (2003). Mental health financing. Geneva, WHO.
World
Health Organization. (2017). Developing a national health financing strategy: a
reference
guide. Geneva: World Health Organization.
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