Private Health Insurance
PST 06105: HEALTH FINANCING
Session
7:
Private Health Insurance
Learning Tasks
At the end of this session students are expected to be able to:
Define private health insurance
Explain how private health insurance operates in the health sector
Enumerate advantages and disadvantages private health insurance
Activity: Brainstorming
What is a private health insurance?
3
Private
health insurances
Private health insurances are voluntary and for profit prepayment schemes
operated by
individuals
or private
organizations
Individual
persons
voluntarily subscribes
to the insurance by paying the prescribed
premium
The
premium
is determined based
on individual health status, individual and risk rated
premium
They
complement coverage
provided by national or social health insurances
Activity: Brainstorming
What parties
are involved
in a private health insurance?
5
Operation
of Private Based Financing
Operation
of Private Based Financing
Private health insurance, like SHI, involves three parties:
citizen
and users of
health services
,
profit
making and private insurance organization, and
providers
of
health services
.
The
arrangement of private health insurance is shown in
the previous figure
In
private health insurance, a segment of population pays premium to
privately-owned insurance
organizations before they fall sick on voluntary basis.
Private
Insurance organizations are responsible for collection,
pooling,
management
and using
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 private health insurance?
8
Advantages of
Private Health Insurance
They
generate financial
resources for health services
They
are prepaid schemes for financing covered for enrolled members
Private
health insurance reduces the burden of health services provided by the state;
so that
the poor may get more coverage in public health services
Disadvantages
of Private Health Insurance
They pools risk based on individual risks (premium based on individual
risks)experiential or risk rating
There
are significant administrative costs in relation to population coverage (size)
of the
insurances
They
tend to be curative oriented
There
are may be difficulties in controlling costs
Key Points
Private
health insurances are now providing health insurance to people not covered
by community
or social health insurance in Tanzania and other countries.
Private
health insurance involve three parties in health service: citizen and user of
health services
, private health insurance organization, and providers of the health service
Private
health insurances have both advantages and disadvantages
Evaluation
What
is private health insurance?
What
are the parties involved private health insurance
What
are three advantages and disadvantages of private health insurance?
Reference
Drechsler
, D., & Jutting, J. (2007). Different countries, different needs: the role of
private health
insurance in developing countries. Journal of Health Politics, Policy
and Law
, 32(3), 497-534
Folland
, S., Goodman, A. C., &
Stano
, M. (2017). 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
Green, A. (2007). An introduction to health planning for developing health systems. Oxford:
Oxford
University Press
Guinness
Mainhead
:
Open University
Press
Sekhri
, N., &
Savedoff
, W. (2005). Private health insurance: implications for developing
countries
. Bulletin of the World Health Organization, 83, 127-134
Tanzania
.
MoHSW
(2014). DHM Healthcare financing module. Dar
es
Salaam:
MoHSW
WHO
(2003). Mental health financing. Geneva, WHO.
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