Micro health insurance in Bangladesh: prospects and challenges

Abstract

Micro health insurance (MHI), a healthcare financing tool in the developing world, is the focus of this thesis. MHI is increasingly being seen as a transitional mechanism to establish large-scale health insurance systems, which can potentially turn out-of-pocket (OOP) payments into a pre-payment system that spreads the financial risks associated with ill health across a wide range of clients. Globally, developing countries have the largest proportion of healthcare spending financed by OOP payments. Bangladesh displays characteristics typical of the developing world, including low public spending on health, high OOP expenses, inadequate coverage for quality healthcare and inefficiency in resource use. The current national health financing strategy thus highlights the need for an alternative financing tool that can ensure efficiency by simultaneously increasing the pool of resources available for funding healthcare and reducing dependency on OOP payments. The strategy aims to achieve universal health coverage (UHC) by means of a social health insurance scheme, and MHI has been identified as an intermediate step that will facilitate transition towards this goal. In this context, the thesis aims to explore the prospects and challenges of implementing MHI in rural Bangladesh based on national and international evidence. Using both primary and secondary data, the experience of, and prospects for, MHI in Bangladesh is assessed from the viewpoint of three major stakeholders: the consumer, the insurance provider and policy makers. The Chakaria Health Card Scheme of Chakaria, a remote rural area in Bangladesh, and the population of Chakaria were studied to obtain data for this research. In addition, international experience regarding the prospects and challenges of implementing MHI in a low-income country like Bangladesh is reviewed to provide insights into useful lessons for Bangladesh in progressing its UHC agenda. Among the three players, findings from consumers and providers showcase significant learnings on the level of understanding about MHI, factors influencing demand for MHI, and people’s preferences for alternative health financing mechanisms. The opinions of those responsible for program implementation highlight challenges in implementing MHI on the ground, difficulties in making MHI popular, MHI standing in the face of competitors in the market, and other technological and operational challenges.. Finally, the opinions of the policy makers give a flavor of the policy environment around MHI and its implementation in Bangladesh. The international experience from three other countries of similar socio-economic context, using a health financing framework offers valuable learnings for Bangladesh if it is to implement a social health insurance scheme en route to its journey towards universal health coverage. The research findings help understand the acceptability of, and interest in, MHI among the common people of Bangladesh, and the programmatic challenges in designing an MHI scheme to attract clients and protect them from the potentially impoverishing effects of healthcare costs. The policy implications of these findings are highly relevant to Bangladesh at a time when the government is in a trial phase for introducing an insurance mechanism to move the country towards universal health coverage