TOWARDS UNIVERSAL HEALTHCARE COVERAGE LESSONS FROM THE HEALTH EQUITY & FINANCIAL PROTECTION IN ASIA PROJECT

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1 TOWARDS UNIVERSAL HEALTHCARE COVERAGE LESSONS FROM THE HEALTH EQUITY & FINANCIAL PROTECTION IN ASIA PROJECT Eddy van Doorslaer Institute for Health Policy & Management & School of Economics Erasmus University Rotterdam ERSA Symposium, Feb 6, 2014 Stellenbosch Institute for Advanced Study

2 What HEFPA is Health Equity & Financial Protection in Asia EU funded, 4 year research project, Consortium of 12 research teams from Europe and Asia and World Bank Project leaders Eddy van Doorslaer, Owen O Donnell, Adam Wagstaff Project Ellen Van de Poel, Sven Neelsen Aim: identify effective & efficient ways to improve (equitable) access to healthcare & protect people from excess OOP expenditure Output: 23 working papers, 14 publications and 7 policy briefs, accessible via Today: selection of some results that may be of relevance for South Africa s push towards UHC

3 EXTENDING COVERAGE BY VOLUNTARY HEALTH INSURANCE Evidence from The Philippines & Vietnam Papers available on Philippines: Squeezing the Middle: A Randomized Experiment to Promote Voluntary Enrollment in a Social Health Insurance Program. JJ Capuno, AD Kraft, SA Quimbo, CR Tan, Jr. & A Wagstaff. Vietnam: Impacts of information and subsidies on informal sector health insurance enrolment: evidence from a randomized experiment in Vietnam. H Nguyen, A Wagstaff, H Dao, & S Bales

4 UHC s missing middle Top covered Tax-financed or compulsory insurance schemes for public sector employees & dependents Compulsory insurance schemes for formal private sector employees (& dependents)

5 UHC s missing middle Top covered Tax-financed or compulsory insurance schemes for public sector employees & dependents Compulsory insurance schemes for formal private sector employees (& dependents) Bottom covered Tax-financed schemes for the poor and other indigent groups

6 UHC s missing middle Top covered Tax-financed or compulsory insurance schemes for public sector employees & dependents Compulsory insurance schemes for formal private sector employees (& dependents) The missing middle Non-poor informal/self-employed workers & dependents Often low take-up of (subsidized) voluntary insurance & adverse selection problems Bottom covered Tax-financed schemes for the poor and other indigent groups

7 Covering the missing middle Policy options 1. Wait for the informal sector to formalize

8 Covering the missing middle 1 But dynamic growth does not coincide with formalization of the workforce in most of Asia Philippines Indonesia Thailand Vietnam

9 Covering the missing middle Policy options 1. Wait for the informal sector to formalize 2. Give free entitlement the Thai option

10 Covering the missing middle Policy options 1. Wait for the informal sector to formalize 2. Give free entitlement the Thai option 3. Compulsory premium-based insurance for the informal sector

11 Covering the missing middle Policy options 1. Wait for the informal sector to formalize 2. Give free entitlement the Thai option 3. Compulsory premium-based insurance for the informal sector

12 Covering the missing middle Policy options 1. Wait for the informal sector to formalize 2. Give free entitlement the Thai option 3. Compulsory premium-based insurance for the informal sector 4. Increase demand for voluntary, premium-based insurance

13 Why is the middle s take-up so low? Willingness to pay for insurance < premiums Lack of information Low perceived insurance benefits Underestimate probability of getting sick

14 Why is the middle s take-up low? Willingness to pay for insurance < premiums Lack of information Low perceived insurance benefits Underestimate probability of getting sick Low actual insurance benefits Low care quality (providers may even reduce quality if not paying OOP) Limited financial protection (small benefit package, high copayments)

15 Why is the middle s take-up low? Willingness to pay for insurance < premiums Lack of information Low perceived insurance benefits Underestimate probability of getting sick Low actual insurance benefits Low care quality (providers may even reduce quality if not paying OOP) Limited financial protection (small benefit package, high copayments) Low probability of getting sick Limited risk aversion

16 How can we increase take-up? Willingness to pay for insurance < premiums Lack of information Low perceived insurance benefits Underestimate probability of getting sick Low actual insurance benefits Low care quality (providers may even reduce quality if not paying OOP) Limited financial protection (small benefit package, high copayments) Low probability of getting sick Limited risk aversion Premium subsidies and better information should increase ability and willingness to pay for insurance HEFPA experimented how effective these measures are in increasing insurance take-up

17 Case 1: The Philippines Experiment: Results of 50% premium subsidy Uptake in treatment and control groups after voucher expiration (6 months) 14.9% 9.9% 33% 5pp Treatment (N = 801) Control (N = 323) Treatment effect large in relative (33%) but small in absolute (5pp) size 85% of missing middle remain uncovered after treatment

18 Case 1: The Philippines Experiment: Results: Results of 50% premium subsidy Uptake in treatment and control groups after voucher expiration (6 months) 14.9% Unsatisfactory so we designed an additional intervention to increase uptake 9.9% 33% 5pp Treatment (N = 801) Control (N = 323) Treatment effect large in relative (33%) but small in absolute (5pp) size 85% of missing middle remain uncovered after treatment

19 Case 1: The Philippines Follow-up experiment Sample: 628 households that received original treatment but did not enroll after 6 months Treatment: Random assignment of extended intervention packages A and B. this on take-up A Experiment tests additional effect of Premium voucher = 50% subsidy Information kit SMS enrollment reminder Partially completed enrollment form Assistance in completing and submitting enrollment form B

20 Case 1: The Philippines Experiment: Results of 50% premium subsidy Insurance uptake in intervention packages A (treatment) and B (control) after 2 months 39.7% 1,168% 36.3pp 3.4% Treatment (N = 312) Control (N = 290) Assistance in enrollment form completion and mailing increases uptake of missing middle by 36.5%-points (a more than 11-fold improvement over the control group) But 60% of missing middle remain uncovered after extended treatment package

21 Case 1: The Philippines Experiment: Results of 50% premium subsidy Insurance uptake in intervention packages A (treatment) and B (control) after 2 months 39.7% Even with large subsidy and extensive enrollment efforts, up to half of the missing middle remains uninsured 1,168% 36.3pp 3.4% Treatment (N = 312) Control (N = 290) Assistance in enrollment form completion and mailing increases uptake of missing middle by 36.5%-points (a more than 11-fold improvement over the control group) But 60% of missing middle remain uncovered after extended treatment package

22 Case 2: Vietnam Background: Financial resources for health, 2011 Health expenditure per capita (current US$) Health expenditure, total (% of GDP) $95 $95 6.8% 2.7% Indonesia Vietnam

23 Case 2: Vietnam Background: Financial protection, 2011 % insured Out-of-pocket health expenditure (% of total expenditure on health) 46% 50% 60% 56% Indonesia Vietnam

24 Case 2: Vietnam Experiment: Results change in uptake after voucher expiration Treatment 1: Subsidy 2.70% 2.30% Treatment 1: Subsidy (N = 1,316) Control: Nothing (N = 1,309) Subsidy alone does not increase uptake

25 Case 2: Vietnam Experiment: Results change in uptake after voucher expiration Treatment 1: Subsidy 2.70% Treatment 2: Leaflet 2.70% 2.30% 2.60% Treatment 1: Subsidy (N = 1,316) Control: Nothing (N = 1,309) Treatment 2: Leaflet (N = 1,353) Control: Nothing (N = 1,309) Subsidy alone does not increase uptake Leaflet alone does not increase uptake

26 Case 2: Vietnam Experiment: Results change in uptake after voucher expiration 3.80% Treatment 3: Subsidy & Leaflet 2.70% 41% 1.1pp Treatment 3: Leaflet & subsidy (N = 1,242) Control: Nothing (N = 1,309) Combination of leaflet + subsidy increase uptake by 41% compared to no intervention - but effect small in absolute size (1.1pp) & not statistically significant

27 Case 2: Vietnam Experiment: Results change in uptake after voucher expiration 3.80% Treatment 3: Leaflet & subsidy (N = 1,242) Treatment 3: Subsidy & Leaflet 2.70% > 90% of missing middle remains uncovered receiving both subsidy and leaflet Control: Nothing (N = 1,309) 41% 1.1pp Combination of leaflet + subsidy increase uptake by 41% compared to no intervention - but effect small in absolute size (1.1pp) & not statistically significant

28 Covering UHC s missing middle HEFPA Conclusion Even with large premium subsidies and extensive enrollment efforts, voluntary health insurance will not achieve Universal Coverage Actually, you won t get anywhere near UHC if you do not subsidize almost fully

29 Covering UHC s missing middle HEFPA Conclusion Even with large premium subsidies and extensive enrollment efforts, voluntary health insurance will not achieve Universal Coverage Actually, you won t get anywhere near UHC if you do not subsidize almost fully This is in line with the evidence from other countries In China and Rwanda however, voluntary schemes achieved near universal enrollment a decade after their introduction But backed up by strong positive & negative incentives for local authorities to enroll people

30 Covering UHC s missing middle HEFPA Conclusion Even with large premium subsidies and extensive enrollment efforts, voluntary health insurance will not achieve Universal Coverage Actually, you won t get anywhere near UHC if you do not subsidize almost fully This is in line with the evidence from other countries In China and Rwanda however, voluntary schemes achieved near universal enrollment a decade after their introduction But backed up by strong positive & negative incentives for local authorities to enroll people Thailand has taken the easier route cover the middle with a tax-financed entitlement in 2001

31 The fast route to UHC % uninsured in Thailand, Source: Thai Health and Welfare Survey (HWS) data

32 EFFECTIVE COVERAGE FOR THE MISSING MIDDLE - AND EVERYONE ELSE Thailand s Universal Coverage Scheme Underlying paper Universal coverage on a budget: Impacts on health care utilization and out-of-pocket expenditures in Thailand. Limwattananon S, Neelsen S, O'Donnell O, Prakongsai P, Tangcharoensathien V, van Doorslaer E, Vongmongkol V. and

33 Case 3: Thailand Background: Financial resources for health prior to UHC reform (Thailand 2001, Indonesia 2011) $167 $95 2.7% 3.3% Indonesia Health expenditure per capita (current US$) Thailand Health expenditure, total (% of GDP)

34 This is still way lower than what South Africa spends on health care Healthcare expenditure (2011: Indonesia, RSA; 2001: Thailand) Health expenditure per capita (current US$) Health expenditure, total (% of GDP) $689 $167 $95 8.5% 2.7% 3.3% Indonesia RSA Thailand

35 Case 3: Thailand Background: Financial protection prior to UHC reform (Thailand 2001, Indonesia 2011) 71% 46% 50% 33% Indonesia Thailand % insured Out-of-pocket health expenditure (% of total expenditure on health)

36 Very different again from the South African picture Financial protection (2011: Indonesia, RSA; 2001: Thailand) % insured Out-of-pocket health expenditure (% of total expenditure on health) 100% 71% 46% 50% 33% 7% Indonesia RSA Thailand

37 Case 3: Thailand Background: health insurance Coverage 1. Tax-financed cover for public sector workers (retirees) & their dependents 2. Mandatory payroll-based cover for formal sector workers 3. Tax-financed free care for indigent population: poor households, children, age 60+, and other indigent groups 4. Voluntary & subsidized premium based HI targeted to nearpoor households but open to entire Middle US$/year premium for 1 year covers entire family Covers 21% of the population

38 Case 3: Thailand Background: health insurance Coverage 1. Tax-financed cover for public sector workers (retirees) & their dependents 2. Mandatory payroll-based cover for formal sector workers 3. Tax-financed free care for indigent population: poor households, children, age 60+, and other indigent groups 4. Voluntary & subsidized premium based HI targeted to nearpoor households but open to entire Middle US$/year premium for 1 year covers entire family Covers 21% of the population Benefits: comprehensive in all schemes (at least in theory)

39 Case 3: Thailand Background: health system challenges Missing middle: 29% remain uninsured Underfunding of voluntary and indigent programs (13 US$ per beneficiary for treatments) Adverse selection into voluntary scheme Poor targeting of indigent program Regional disparities in healthcare access and health outcomes

40 Case 3: Thailand The UCS reform Universal Coverage key in Thai Rak Thai party s 2001 election campaign that it wins by landslide Universal Coverage Scheme (UCS) roll-out begins 04/2001, is complete within a year

41 Case 3: Thailand The UCS reform Universal Coverage key in Thai Rak Thai party s 2001 election campaign that it wins by landslide Universal Coverage Scheme (UCS) roll-out begins 04/2001, is complete within a year UCS entitles everyone not insured through formal sector schemes to mainly tax-financed healthcare Covers uninsured Missing Middle and replaces public voluntary health insurance scheme and free healthcare scheme for the indigent Entitlement comprehensive: OP, IP, medicines (stepwise inclusion of some initially excluded high cost treatments) 30 Baht (US$ 1) copayment for non-poor, non-elderly (abolished in 2006)

42 Case 3: Thailand The HEFPA study Giving entitlements is easy, but is coverage effective in reality? UCS budget: is this feasible for a capitation of 1202 Baht (31 US$) per beneficiary (risen to 2020 Baht in 2009) Shallow/ineffective coverage may fail to reduce OOP spending and/or increase utilization like in China, Colombia, Mexico, Indonesia, Research question: has UCS increased utilization and reduced OOP spending?

43 Case 3: Thailand Evaluation design Nationwide reform: difference-in-differences method 2001 (before UCS introduction) (after UCS introduction) UCS target group UCS beneficiaries Control for differences in SES before and after UCS Public sector scheme beneficiaries Public sector scheme beneficiaries Impact UCS

44 Case 3: Thailand Evaluation design Nationwide reform: difference-in-differences method 2001 (before UCS introduction) (after UCS introduction) UCS target group UCS beneficiaries Control for differences in SES before and after UCS Public sector scheme beneficiaries Public sector scheme beneficiaries Impact UCS

45 Case 3: Thailand: Did UCS improve access? Results not using ambulatory care when sick 11% reduction in probability to forgo care when sick overall *p<.1, **p<.05, ***p<.01 Data: Thai Health and Welfare Survey (HWS)

46 Case 3: Thailand: Did UCS improve access? Results not using ambulatory care when sick Especially large effects for elderly, rural & poor *p<.1, **p<.05, ***p<.01 Data: Thai Health and Welfare Survey (HWS)

47 Case 3: Thailand: Did UCS improve access? Results inpatient admission 18% increase in inpatient admissions overall *p<.1, **p<.05, ***p<.01 Data: Thai Health and Welfare Survey (HWS)

48 Case 3: Thailand Results inpatient admission Especially large effects for elderly & poor *p<.1, **p<.05, ***p<.01 Data: Thai Health and Welfare Survey (HWS)

49 Case 3: Thailand: Did UCS improve access? Results inpatient admission But small & insignificant increase for rural *p<.1, **p<.05, ***p<.01 Data: Thai Health and Welfare Survey (HWS)

50 Case 3: Thailand: Did UCS improve financial protection? Yes, it did Results OOP spending The higher the spending, the higher the reduction *p<.1, **p<.05, ***p<.01 Data: Thai Socioeconomic Survey (SES)

51 Case 3: Thailand Results Public share of total health expenditure Micro data mirrored in national accounts: OOP down

52 Case 3: Thailand: How did it do it? How Thailand made the entitlement effective Cannot pin down what part(s) of UCS reform package/thai healthcare system was most crucial But can describe the reform package

53 Case 3: Thailand: How did it do it? How Thailand made Universal Coverage effective Cannot pin down what part(s) of UCS reform package/thai healthcare system was most crucial But can describe the reform package A comprehensive entitlement Broad benefit package no enrollment fee, premiums, no/small copays Aggressive campaigning to avoid stigmatization

54 Case 3: Thailand How Thailand made Universal Coverage effective Cannot pin down what part(s) of UCS reform package/thai healthcare system was most crucial But can describe the reform package A comprehensive entitlement Broad benefit package no enrollment fee, premiums, no/small copays Aggressive campaigning to avoid stigmatization An effective supply side Presence of an already developed public provider system (facilities, workforce) Introduced integrated primary care provider networks (health volunteers, health centers & district hospitals closely collaborating) Regulating from the center while granting the budget autonomy to the district level Over time increase in UCS resources, doubling over first 10 years

55 Case 3: Thailand: How did it do it? An efficient supply side Replaced retrospective budgeting with globally capped budget, negotiated with MoF annually Single payer system powerful position in negotiations with e.g. pharmaceutical firms Gradually introduced a purchaser-provider split Provider reimbursement by a mix of capitation (ambulatory & preventive) and DRGs (inpatient) Gatekeeper system with a focus on primary care Focus on public providers, private if necessary

56 Case 3: Thailand: How did it do it? An efficient supply side Replaced retrospective budgeting with globally capped budget, negotiated with MoF annually Single payer system powerful position in negotiations with e.g. pharmaceutical firms Gradually introduced a purchaser-provider split Provider reimbursement by a mix of capitation (ambulatory & preventive) and DRGs (inpatient) Gatekeeper system with a focus on primary care Focus on public providers, private if necessary A dynamic economy Robust economic growth to finance increase in healthcare spending

57 Case 3: Thailand: How did it do it? Supply side effectiveness & efficiency enabled UHC on a budget GDP share of health about stable thanks to robust growth THE per capita doubles in first 10 years after UCS but still low in intl. comparison

58 Case 3: Thailand Conclusion: UHC on a budget is possible with the right amount of political will

59 Case 3: Thailand: Conclusion Conclusion: UHC on a budget is possible with the right amount of political will But getting the supply side right is crucial and a challenge Despite many steps taken to improve effectiveness & efficiency, Thailand continues to wrestle with Underservicing of rural areas (IP) A large spending gap between its public servant scheme and the UCS And the financial sustainability of the UCS in light of an ageing population that is ever more affected by costly chronic illnesses

60 Summary of HEFPA findings that may be relevant for South Africa 1. Voluntary health insurance is not an effective tool to achieve universal coverage

61 Summary of HEFPA findings that may be relevant for Indonesia 1. Voluntary health insurance will is not an effective tool to achieve universal coverage 2. Rather, tax financed entitlements are the way to go

62 Summary of HEFPA findings that may berelevant for Indonesia 1. Voluntary health insurance will is not an effective tool to achieve universal coverage 2. Rather, tax financed entitlements are the way to go 3. But paramount is an effective and efficient supply side Focus on primary care Prospective provider payment

63 Summary of HEFPA findings that we consider relevant for Indonesia 1. Voluntary health insurance will is not an effective tool to achieve universal coverage 2. Rather, tax financed entitlements are the way to go 3. But paramount is an effective and efficient supply side Focus on primary care Prospective provider payment 4. Political will and momentum are crucial

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