Accra, Ghana October 19-23, 2009

Extending Health Insurance: How to Make It Work

DESIGN ELEMENT 4: BENEFITS PACKAGES AND COST CONTAINMENT

October 19-23

Hong Wang, MD, PhDHS20/20 Project

Feasibility of Insurance Design and Implementation

Monitoring and Evaluation

Insurance

Financing

options

Benefits package

Population

coverage

Opera-tional

process

Organiza-

tional structur

e

Provider engage-

ment

Figure 1: Design elements for a health insurance scheme

Objectives of this element

Consider how to determine which services should be in the benefits package

Understand the trade-offs between benefits and financial resources availability

Getting familiar with key cost containment methods

What “should” be in benefit package

Personal priorities

Private goods (foods, curative health services) Rivalrous Exclusive

Catastrophic illness - financial risk protection

UnpredictableLarge financial loss

Frequent minor illness - health improvement

Health/comfortableProbability of financial return

Social priorities

Externality One person’s action has impact on others

External benefit: has positive/good impacts (treatment of infectious disease, immunization)

External cost: has negative/bad impacts (smoking)

Merit good Judged based on the needs, should be

apply universally to everyone, and not depend on the ability and willingness to pay (priority services such as family planning service, MCH)

The potential benefits of including priority services/social priorities

Improve health through the increase of use of the servicesMerit goods (i.e. MCH, FP, and other priority servicesExternality (i.e. immunization services)Prevent from further health damage

Improve service delivery Increase availability Increase quality and continuum of care

Reduce financial burdenPrevent from further catastrophic illness Increase the efficiency of health resource utilization

Provider’s capabilities

Availability of health care providersTypesQuantitiesDistributions

Effectiveness of health care interventions

Cost-effectiveness

The balance between resource availability and benefit coverage

•Premium from enrollee•Employment benefit•Government subsidy•Donor support

•Reimbursements•Administrative costs•Reinsurance fund

Resources = Expenditures

The balance between resource availability and benefit coverage

Reimbursements• Benefit package• Price of services• Number of services• Reimbursement rates

Resources = Expenditures

•Premium from enrollee•Employment benefit•Government subsidy•Donor support

The statement of a benefits package?

What is covered – services, drugs, diseasesWhat is NOT coveredLimits on coverage

for example: X number of outpatient services per year, y days of hospital careReimbursement ceiling

Deductibles, coinsurance, and ceiling if any (be careful that high user fee may affect the access of services to the poor!)

Potential co-payment from users

Deductible

Coinsurance

% population

Medical expenditure

Ceiling

Sources: Paul Feldstein, Health Care Economics, Delmar Publishers Inc, 1993

Key cost control methods from Benefit package design

Demand sideCo-paymentMandatory enrollment and eligibility policiesWaiting periods for reimbursement

Supply sideGate keeper and referral systemCase review system developmentStandardize services Provider payment methods

Discussion questions

Who should pay for the services that have externalities and the priority services and how to integrate these services into health insurance system?

If the total fund is not available, what should insurance scheme cover first, the catastrophic illness or frequent minor and priority services first?

How to increase the services utilization among the poor from benefit design perspectives?

Accra, Ghana October 19-23, 2009

Extending Health Insurance: How to Make It Work

Thank you