Page 25 - The Insurance Times June 2020

For those choosing formal providers, while the propensity healthcare provider, insurance company, drug companies and
to seek private care remained about the same (26.1 vs. 25.4, the hospital).
respectively) for programme and control groups, there
appears to be some important differences when it came to A Holistic Design
choose between government and NGO providers. In fact,
Design of an innovative health insurance scheme involves
lacking access to NGO care, which was utilised by about 5.1
complex activities like product design and pricing, product
per cent of the programme patients, control subjects chose
sales and distribution including marketing and monitoring
government care instead (12.5 vs. 9.8 in the programme clients' satisfaction, technical management (membership,
areas).
premium and claims), financial management, management
of agreements with the network of health care providers,
Micro health insurance in Bangladesh: drug companies, and risk bearing.

innovation in design, delivery and
This scheme is a unique holistic model of health insurance
distribution channel which has assembled all relevant parties to ensure universal
In Bangladesh the poor and middle class families face wider health coverage for all the households. This model can be
ranges of risks like illness and injury which often causes viewed as a variant of partner agent model where a third
death. To address those health risks, the community usually party leveraging its expertise mediates with the partners
adopt various self-insurance devices like using up liquid and carry out the functional activities.
savings, informal borrowing, even disposing of productive
assets and the like. Under this model, a chain of mutual interactions among
various partners has been arranged. As already stated, the
We have also found that poor and middle class families often third-party organisation plays the pivotal role in the
heavily dependent on microcredit for quick risk mitigation. functioning of the model through proper coordination of the
In addition, some ex-ante activities (e.g., income entire process involving many partners. Accordingly, a unit
diversification and investing in lower risk assets) may office (consisting of a pilot project manager, a pilot project
themselves increase the risks of future poverty (i.e., officer, an MIS officer and some field staff) has been set up
vulnerability), while the ex-post strategies (e.g., disposing in the hospital premises to serve the clients and
of productive assets) may lead to persistent or deepening policyholders.
poverty.
Structure of and partner of the Scheme:
In the absence of well-targeted safety net measures, poorest
end up relying largely on self-insurance devices to mitigate
risks with high implicit premiums. Evidence reveals that
health is the dominant category of shocks experienced by
the poor in Bangladesh and annually households spend about
five per cent of total expenditure to meet out-of-pocket
(OOP) health care expenses.

There is also evidence that OOP payments is increasing in
each year. Therefore, countries like Bangladesh need to start
afresh with innovative means of raising funds for the
provision of health care.

Micro Health Insurance (MHI) is one such innovation, which
relies on pooling the risk as well as the available resources
for the provision of affordable care.

In order to design innovative health insurance scheme a
holistic approach is required for identification and
congregation of all relevant stakeholders (e.g., government,

The Insurance Times, June 2020 25