1. Subsidized Private Health Insurance in Africa PharmAccess Foundation and Health Insurance Fund Programs Emily Gustafsson-Wright Brookings Institution and Amsterdam Institute for International Development (AIID)

2. Presentation Overview 1. Key Players and their Roles 2. Program History –Namibia and Nigeria 3. Program Approach 4. Why Private Health Insurance? 5. Conclusions

3. Key Players and their Roles Health Insurance Fund (HIF) PharmAccess Foundation – Implementing Agency Dutch Government – Donor Agency Hygeia - local executing partner of the program in Nigeria - the largest HMO in Nigeria Amsterdam Institute for Int’l Development (AIID) – Responsible for surveys and all operational research

4. Program History -Namibia 1. 2004 -PharmAccess successfully launches low-cost insurance pilot in Namibia (Okambilimbili) 2. 2005 – three lower income products available on the Namibian market 3.2006 – creation of the Health is Vital – Risk Equalization Fund (HIVREF) to share the financial risk of HIV/AIDS -

5. Program History -Namibia 4. 2008 –To date the Namibia project has made health insurance available to over 13,000 previously uninsured people and provided high quality HIV/Aids care to over 40,000 people throughthe risk equalization fund -- Almost 2,000 HIV+ people receiving care and treatment 5. In the Future-the Namibia project has laid the foundations for the development of even lower cost products to reach those that remain uninsured

6. Program History -Nigeria 1. 2006 -Dutch Government Grant of 100 million Euro over 5 years for replication of this program in other countries 2. 2007 –January, the first PharmAccess/HIF program started in Nigeria under the name Hygeia Community Health Plan (HCHP) had support of President Obasanjo – would match the program funds and provide support to additional target groups -workers in the informal sector

7. Program History -Nigeria 3. 2008 – Nearly 6,000 market women (incl. their dependents) insured in Lagos State and 25,000 farm workers (incl. their dependents) in Kwara State. Quality Improvements Lagos: 13 clinics/hospitals included in the program, 10 being upgraded as part of the program, 2 monitoring and evaluation visits carried out Kwara 1: 6 clinics/hospitals included in the program, 4 being upgraded as part of the program, 2 monitoring and evaluation visits carried out Kwara 2: Medical due diligence carried out, 6 clinics have been reviewed and 4 will be included in the program, All 4 will be upgraded 4. In the Future -71,000 farm workers in Kwara State

8. Program Approach Insurance of low income groups (not individuals) Primary-care based benefit package: basic primary and limited secondary health care and medication including HIV/Aids treatment and care Contracting of local insurance companies and private and public healthcare delivery infrastructure Prices and profit margins contractually fixed Performance-based schemes (demand-driven and output-based) Use donor funding to subsidize premiums and improve the quality on the supply side Quality assurance provided through M&E and independent financial auditing Use of (IT) systems to collect actuarial data to determine risk and for management purposes Complementary to public sector initiatives to avoid crowding out effects Impact evaluation through biomedical and socio economic operational research

9. Program Approach –Nigeria Example Enrollment in the program is voluntary Registration is done per family Annual premiums are about US$60 per person/year in Lagos and US$27 per person/year in Kwara State In first year insurance scheme members pay 5-10% of the annual premiums themselves; the remaining 90-95% is subsidized by HIF

10. Why Private Health Insurance?

11. Impoverishment, ill health and death are the result of inadequate resources to cover health care Evidence shows that 150 million people globally suffer financial catastrophe due to out-of-pocket expenditures Budgets for health in developing countries are constrained and often public expenditures crowd-out private resources  Provision of low-cost private voluntary health insurance is one innovative method that is being offered as an alternative to existing situation

12. Virtuous Cycle Ability to pay Willingness to pay Demand Quality Cost Capacity delivery financing DemandSupply Health Insurance Fund  Subsidize health insurance for low/ medium income groups  Cover catastrophic risk  Encourage local ownership of insurance schemes through existing organizations  Increase stable demand for health care services and recurring revenues for providers  Improve quality of medical and administrative services of private and public sector infrastructure Investment Insurance

13. Conclusions Resources scarce and large proportion are private (OOPs) Private health insurance may mitigate risk of catastrophic expenditures and may leverage private resources This may be one approach to providing treatment for HIV+ individuals who have participated in trials  However, success of such programs depends on 1. The ability to pool risk among risky and not risky (infected and non-infected individuals) or rich and poor 2. Demand for health insurance 3. Appropriate design of contracts with providers

14. Conclusions Operational Research Key to Determining Success/Failure/Need for Improvements: 1. Willingness-to-Pay for health insurance (household survey with modules on WTP) 2. Outcomes of the programs A survey among the Kwara State farmers to measure the 1)insurance uptake and annual renewal 2)the increase in healthcare utilization 3)customer satisfaction with the insurance and the provided health care 3. Randomized Controlled Trial (RCT) -Socioeconomic and Biomedical Impacts (treatment and control groups)

15. More Information Websites: www.pharmacess.org www.hifund.nl www.aiid.org Recommended Reading: “Private Voluntary Health Insurance in Development: Friend or Foe?” The World Bank.