Improving Targeting of the Poor and Ensuring Equity: Emerging Systems and Approaches

1. Improving Targeting of the Poor and Ensuring Equity: Emerging Systems and Approaches Dr. Nishant Jain

2. Introduction • Providing Protection from catastrophic health related expenditure is critical not only for poor but also to ensure that people do not fall below poverty line • In an study by Bales and Lu alongwith Equitap team it was found that 67.3 million people, equivalent to 3.6% of the population were pushed below the $1.25 poverty line due to out-of-pocket health payments. (18 territories) • In an study in India it was found that 21% of poorest get indebted due to Outpatient and 64% due to Inpatient • Therefore it is very important to provide cover from health related shocks to poor and vulnerable families • However, it is easier said than done and it is one of the biggest challenges being faced by countries in moving towards UHC

3. Estimated % point increase in poverty estimates after deducting OOP health payments (PPP $1.25 Poverty Line)consumption (PPP$1.25 poverty line)

4. Who is poor and vulnerable? • There are different definitions of defining poor and based on the definition families can be called poor (innovative definitions) • However, irrespective of the definition families with lower and/ or unsteady income are vulnerable • Defining poor is important from the perspective of the Government support as subsidy comes into play • In addition to income there are many other criteria to determine who is poor and a large number of countries are using a version of means testing method • Informal sector workers in most of the developing countries are very large in number and are also very vulnerable to health expenditure related shocks • Most of the informal sector workers are poor

5. Why it is Important to Reach Poor? • Resources are limited with the Government and it should be used effectively for the ones who are poor and vulnerable • If the money is routed through a demand side system then it is important that targeting is correct • It is important to reach families that are near poor so that they do not have catastrophic shocks and fall below poverty line • Protect families that are already poor from catastrophic out of pocket expenditure on health that will put them in a debt trap as they have borrow money or sell assets • Many times poor do not take health services at all as they do not have money to pay for it • Positive effect on the economic productivity of the country

6. What is meant by targeting Poor and Vulnerable and Improving equity? • This means that extremely poor and vulnerable families are: • Identified • Listed • Enrolled in the programme • Financed through Government/ self/ other funds • Aware about the benefits • Aware about the process to get the benefits of the programme • Able to approach the Government in case of any issue in enrolment or access of benefits • This also means that Government is able to execute above through a planned strategy and monitor closely the above through a robust system

7. Country Examples Thailand

8. Introduction • Thailand is one of the very few Asian countries that has reached almost 100% universal health coverage through demand side mechanism • In addition to the two existing schemes that cover formal sector employees another scheme was introduced in 2001 • The Universal Coverage Scheme covers everyone who is working in the informal sector, whether rich or poor. • The co-payment of Baht 30 per visit was abolished at the end of 2006. • Though this scheme focuses not only on poor but almost 80% of the population including poor are covered by this scheme • Non-Poor vulnerable population including informal sector workers are also protected through this scheme

9. Challenges • Since coverage is almost universal, the challenge is less on targeting • Covering of left over small groups is a big challenge now • Main challenges at present are • Availability of adequate number of health care facilities • Enlarging the benefit package • Improving the quality of health care • Costing and revising capitation rates • Human resource availability

10. Country Examples columbia

11. Introduction • Mobilize resources from Treasury and payroll taxes for mandatory insurance • An Equity (equalization) fund was created • Introduced SISBEN (BPL Surveys) to target public subsidies to the poor • Identify health priorities and change budget allocation rules overtime • Choice of insurer & provider for all insured whether in Contributory or Subsidised regime • Two Categories of Beneficiaries • Contributory Regime • Subsidised Regime

12. Targeting of Public Subsidies in Colombia Targeting is not perfect Public subsidies for health are one of the best targeted in Colombia Distribution of social subsidies by income group, 2003 Targeting proved essential to reduce health inequality through public subsidies 100 93 90 80 72 Public services 70 62 Housing subsidies 60 50,6 Education subsidies 47 50 Nutrition and child care 40 33,2 33 programs Subsidized health insurance 30 17 20 11 10 2 0 40% poorest 40% richest Source: Lasso F. et al. Incidencia del Gasto Público. 2005. Source: Slide from Maria Luisa Escobar presentation “Colombia’s Health System Financing; Presented on November 13, 2008

13. Country Examples mexico

14. Mexico • Mexico’s Seguro Popular (Popular Health Insurance) aims to reach the poor and tries to provide adequate coverage to people working outside the formal sector • The purpose of this voluntary program is to provide poor and informal workers with subsidized insurance coverage comparable to that available to formal sector workers • The program initially focused on the poorest families first. Premium payments by the families are subsidized on a sliding scale by the Government, and poorest 20% of the population do not pay. • The gap between income from premium payments and the program’s total cost is covered by government subsidies. • Most of the funding for this programme comes from the federal government, through payments to the state governments

15. Ensuring Participation by Poor • Subsidized Premium for the Poor • The premium varies according to the economic status. Families pay up to 5% of disposable income • For poorer families lower percentage of income is to be paid and for poorest 20% there is no premium payment • Identification of the Poor – Different Options • Use existing programme called Progresa/Oportunidades for data OR • Use data created by SP through means testing method OR • States are free to use approach of any federal subsidy programs • Incentive for Enrolling the Poor • The federal SP programme support to States depends on the number of people State serve • The result is an incentives for States to enroll as many people in programme as possible and since there is no premium for poor it is comparatively easier to enrol them

16. Country Examples india

17. Introduction • The National Health Insurance Programme of India called Rashtriya Swasthya Bima Yojana started targeting only Poor and informal workers • Since the target was only poor in the beginning the experience from this experience has interesting insights • The implementation model involved hiring of Private Insurance Companies by the Government to implement the scheme • The premium for poor families was subsidised 100% by the Federal and State Governments together • However, families are mandated to pay a small amount (US$ 0.5) as registration fee

18. Process • A list of poor families is provided by the Government to the Insurance Companies • The model incentivise Insurance Companies to enroll as many families as they get premium per family enrolled • To ensure that people do not have to make extra effort for enrolment, the enrolment process is done at the village level and biometric photo Smart Cards are issued on the spot • To ensure that fake enrolment do not happen a local Government officer verifies the identity of each family getting enrolled through his/ her smart card • The Insurance Company is paid based on the data automatically collected in the smart card of Government officer at the enrolment station

19. Enrollment Station

20. Challenges • Quality of List of Below Poverty Line families prepared by the Government needs not good due to various reasons • Reaching with the message to people about enrolment in the scheme and enrolling the family is critical • Duplication amongst different lists as there is no National ID available for all citizens of the country • People in hard to reach geographical areas are still being left at many places as incentive is not enough • Poor families who are not able to get into the List were excluded – An Employment Guarantee Scheme has started and people working there are not eligible for RSBY • Even if families are enrolled they are not many times aware about utilising the scheme

21. Strategies in Terms of Funding • Poor are Fully Subsidised –The poor are ensured without paying any premium as either it is exempted or fully subsidised • This can work better if targeting is good and people are aware • However, there are opportunity costs involved from people e.g. loss of wages when they go for enrolment • Premium is Partially Subsidised – The poor pay a part of the premium and rest is paid/ exempted/ subsidised by Government • Paying even a subsidised premium is often very difficult for very poor • Income Based Premium – Premium varies based on income of the family • Very difficult to determine income and also to collect premium • Premium paid in kind – People can pay premium through work or food grains etc. • This can work for pilots for difficult for large scale initiatives

22. Challenges and Suggestions • How to effectively Identify poor and vulnerable is one of the biggest challenge for any programme • Start with any reasonable list/ method available as a perfect list/ method will never be available. • Improving the system for identification of Poor is necessary • Once the transparency is increased in terms of families that are getting subsidy for health insurance then slowly the list improves • Getting de-duplicated lists and removing ghost names • If there is National ID programme then it is best to link with that. In its absence a unique ID shall be provided centrally. Biometric data can also help in removing duplicates and ghost names • Whether the premium should be partially or fully subsidised • For the poorest it is advisable to fully subsidise the premium as it is very difficult for them to pay. For near poor also some subsidy should be there so as to encourage them in joining the programme

23. Challenges and Suggestions • Enrolment of Poor and Vulnerable in the programme is quite low • There should be incentive mechanisms built for the agency that has a mandate to enroll them and their performance should also be measured on their ability to reach poor and enroll them in the programme • Additional incentives for enrolment in hard to reach areas to be given • In countries incentives have been built in different ways like third party agencies (e.g. India), through State Governments (e.g. Mexico) or through field level Government functionaries • Involvement of Civil Society Organisations and/ or field level existing Government functionaries is also beneficial in the process • Enrolment at/ near the doorstep can remove barriers to access due to distance, opportunity cost loss and recall value • Using technology in enrolment can improve the efficiency of the process and minimise frauds

24. Challenges and Suggestions • Utilisation of Services after Enrolment by the beneficiaries • Improve the awareness about the programme through media channels suited to the target segment. If the literacy is not very high then visual media, local folk media, Inter personal communication etc. is more important • Government should involve local functionaries, local CSOs, opinion makers etc. to inform people • Local guidance by designated persons to utilise services in the villages and also at the hospital help in improving the utilisation • Partnering with the providers through health camps etc. however, this has potential of provider induced moral hazard if monitoring is weak • Improving the supply side through adequate number of both private and public providers empanelment so that people are empowered through choice and they need not travel far to get the benefits • Including Primary Care in the benefit package will make the product more attractive to the beneficiaries and they will use it

25. Thank You nishant.jain@giz.de