Moving from universal health coverage to effective financial protection: Evidence from a health insurance experiment in the Philippines

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Gerald Willis
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1 Moving from universal health coverage to effective financial protection: Evidence from a health insurance experiment in the Philippines SA. Quimbo University of the Philippines School of Economics Prince Claus Chairholder, 2011/13 Prince Claus Chair Symposium on Health Insurance & Access to Health International Institute of Social Studies The Hague, The Netherlands 5 July 2013

Quimbo University of the Philippines School of Economics Prince Claus Chairholder, 2011/13

2 Key Messages The Philippines aspires for universal health coverage (UHC) Effectively measuring effective financial risk protection should be a key element in a UHC strategy In the Philippines, premium subsidies/ and or reducing non price barriers may not be a costeffective way of increasing effective financial risk protection

in a UHC strategy In the Philippines, premium subsidies/ and or reducing non

3 Background Indicator (2011) Philippines Indonesia Population, total 94,852, ,325,638 Population density, people per sq km Per capita GNP, USD* 2,210 2,940 Poverty headcount ratio at 2USD** Health expenditure per capita, current USD Mortality rate, infant (per 1,000 live births)

2,210 2,940 Poverty headcount ratio at 2USD** 41.5 52.

4 Health Care Financing System in the Philippines Source: Philippine HITs (2012)

5 The PhilHealth and the UHC goal PhilHealth protection, in peso terms: - Finances less than 10% of total spending on health care (Philippine National Health Accounts, various years) - Out of pocket payments still the dominant mode of financing PhilHealth protection, in household terms: - Only about 3 percent of households that faced health shocks said that they coped through PhilHealth PhilHealth protection, in coverage terms: - Overall PhilHealth coverage is 69 percent - Sponsored Program beneficiaries account for 35% of total population - Informal sector beneficiaries account for only 11.5% of total population (55% of the workers belong to the informal sector)

health shocks said that they coped through PhilHealth PhilHealth protection, in coverage terms: - Overall PhilHealth coverage is 69 percent - Sponsored Program

6 The near-poor and informal sector are among the least protected Poor and near-poor are equally vulnerable to health shocks, at least in terms of incidence of health shocks The formal sector and the poor have more secure mechanisms for coverage (e.g., Sponsored Program). The near poor and informal sector are expected to voluntarily participate in the Individually Paying Program.

and the poor have more secure mechanisms for coverage (e.g., Sponsored Program).

7 Measurement should be an integral part of the UHC strategy In 2008, we proposed a summary measure of financial risk protection provided by social health insurance (estimated with 2008 PhilHealth data and then with 2011 survey data) Benefit Delivery Rate (BDR)

provided by social health insurance (estimated with 2008

8 BDR timeline At present, the data are not consistent. According to PhilHealth, 87 percent have (PhilHealth) coverage. Other sources say, 53 percent. And according to the National Statistics Office, 33 percent have coverage Start of BDR Research and Dissemination Feb 2009 PhilHealth s Toast to Universal Coverage June 2010 President Aquino s first State of the Nation Address 6 Jan 2012 PhilHealth introduced a performance dashboard Financial risk protection through improvement in NHIP benefit delivery shall be achieved by: Redirecting PhilHealth operations towards the improvement of national and regional benefit delivery ratios. Dec 2010 DOH s Aquino Health Agenda on Universal Health Coverage 2013 Increased interest in BDR by other executive offices

2008 Start of BDR Research and Dissemination Feb 2009 PhilHealth s Toast to Universal Coverage June 2010 President Aquino s first State of the Nation Address 6 Jan 2012 PhilHealth introduced

9 BDR in the news Mr. Aquino was dismayed at the miserable benefit delivery rate of the National Health Insurance Program in the country which stands at only 8 percent.he said the figure translated to only four out of 50 patients who considered PhilHealth beneficial and knew what insurance coverage was all about. Only 50 percent of members who went to private hospitals used their PhilHealth benefits, and only 24 percent in government institutions, Mr. Aquino said. In short, even members don t have sufficient knowledge of how PhilHealth can help with their health care expenses, he said. Source: Philippine Daily Inquirer, October 2, 2010 Tondo poor first of 4.6M set to get free PhilHealth by Christian V. Esguerra 1G /tondo poor first 4.html

Only 50 percent of members who went to private hospitals used their PhilHealth benefits, and only 24 percent in government institutions, Mr. Aquino said.

10 What is the BDR? The benefit delivery rate (BDR) is a summary measure of social health insurance performance that reflects The capacity of social health insurance to cover/enrol the target population (coverage rate) The accessibility of social health insurance benefits to beneficiaries who utilize health care (claim rate) The magnitude of social health insurance benefits relative to medical expenditures (reimbursement rate) = Coverage rate x claim rate x reimbursement rate PHILHEALTH VALUE CHAIN Enroll Claim Reimburse

health insurance to cover/enrol the target population (coverage rate) The accessibility of social health insurance benefits to

11 Motivating the BDR The BDR is the average reimbursement rate for the general population needing health care Example 1: Reimbursement rate is 36% Coverage rate =100% Claim rate=100% BDR = 36% Reimbursement rate Example 2: Reimbursement rate is 36% Coverage rate is 50% Claim rate is 59% BDR is 50% x 59% x 36% = 11% The 36% reimbursement rate is expected for only 29% of the population who used health care

Reimbursement rate Example 2: Reimbursement rate is 36% Coverage rate is 50% Claim rate is 59% BDR is

12 Inpatient BDR, by sector

13 Effect on BDR of reducing barriers to health insurance 3P randomized experiment from Insurance subsidies amounted to 50 percent of premiums Information Fill up and pick up of forms Covered 15 of 17 regions nationwide, 954 households in treatment sites, and 647 households in control sites Part of the Health Equity and Financial Protection in Asia (HEFPA) Project, a four year, EU funded research project of a consortium of ten research institutions in East Asia and Europe.

households in treatment sites, and 647 households in control sites Part of the Health Equity and Financial Protection in

14 Reducing barriers to health insurance: Premium subsidies and information 100 percent subsidy for the first 6 months of coverage, or 50 percent subsidy for 12 months of coverage

15 Reducing barriers to health insurance: Reducing the burden of documentation

16 Experiment Results Premium subsidies and information increased insurance take up rates by 13 percent Reduced burden of documentation increased insurance take up rate by 13+ percent However, these levels of increase in insurance take up rate is small compared to the cost Source: Squeezing the Middle: A Randomized Experiment to Promote Voluntary Enrollment in a Social Health Insurance Program. JJCapuno, ADKraft, SAQuimbo, CARTan,Jr. & Awagstaff. (In progress)

take up rate is small compared to the cost Source: Squeezing the Middle: A Randomized Experiment to Promote

17 Policy Simulations BDR 35.00% 30.00% 30.44% 25.00% 20.00% 15.00% 10.00% 9.05% 11.14% 12.81% 14.43% 5.00% 0.00% OVERALL BDR (ACTUAL, BASELINE) OVERALL BDR (ACTUAL, POST EXPERIMENT) POLICY SCENARIO 1 POLICY SCENARIO 2 POLICY SCENARIO 3 SCENARIO 1: all indigent and formal sector covered + take up due to experiment + 100% reimbursement in public hospitals SCENARIO 2: all indigent and formal sector covered + second poorest quintile + 100% reimbursement in public hospitals SCENARIO 3: all indigent and formal sector covered + second poorest quintile + 100% reimbursement in public hospitals + 80% claim rate

and formal sector covered + take up due to experiment + 100% reimbursement in public hospitals SCENARIO 2: all indigent and formal sector covered +

18 Conclusions Measuring, monitoring, and giving feedback should be integral to any UHC strategy In the Philippines, the BDR measure and process has partly addressed this need Beyond the Philippines, MMF could be generally useful Premium subsidies, information and reduced transaction costs aimed at the near poor and informal sector can increase BDR only in a limited way Increased enrolment efforts need to be combined with other interventions to ensure effective financial protection More cost effective method to increase coverage would be to expand the Sponsored Program to include the nearpoor

at the near poor and informal sector can increase BDR only in a limited way Increased enrolment efforts need to be combined with other interventions

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

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