Hong Wang, MD, PHD Abt Associates Inc.

1. Why Health Insurance Is NOT Inherently Pro-poor Hong Wang, MD, PHD Abt Associates Inc. June 14, 2010 Global Health Council

2. Equity in Health • Conceptually, equity in health can be defined as the absence of systematic differences in health status across different groups of population • Practically, equity in health can be defined from two central aspects • Equity in financing • Equity in delivery/benefit

3. HORIZONTAL DIMENSION Poorest Group 2 Group 3 VERTICAL DIMENSION Richest Horizontal and Vertical Representation in FINANCING

4. HORIZONTAL DIMENSION Worst health Group 2 Group 3 VERTICAL DIMENSION Best health Horizontal and Vertical Representation in DELIVERY/BENFIT

5. Horizontal and Vertical Equity How can health financing and insurance ensure that: • People pay for health services according to their ability to pay Vertical equity in financing • People use health services according to their need Horizontal equity in delivery

6. Pro-Poor Features of HI Schemes

7. What Determines Enrollment to Health Insurance? • They are risk averse • There is a high probability of a sickness or injury event occurring • The cost of sickness or injury is high (magnitude of the loss) • Price of insurance is affordable • Higher household income Paul Feldstein, Health Care Economics, 2005

8. Willingness to pay – poor are less willing Enrollment – fewer poor enroll Drop out – poor more likely to drop out Evidence on the Poor’s Demand for Health Insurance

10. Willingness to pay – poor are less willing Enrollment – fewer poor enroll Drop out – poor more likely to drop out Evidence on the Poor’s Demand for Health Insurance

11. Levels of Household Enrollment in Health Mutuelles by Household Characteristics, Rwanda Source: EICV 2005.

12. Impact of Mutual Health Organizations: Evidence from West AfricaSlavea Chankova, Sara Sulzbach, and Francois Diop ,2008

13. Willingness to pay – poor are less willing Enrollment – fewer poor enroll Drop out – poor more likely to drop out Evidence on the Poor’s Demand for Health Insurance

15. What Determines the Use of Health Care Services? • Derived from demand for health* • From consumption perspective • From investment perspective • Actual or perceived illness • Economic status (income and price) • Cultural-demographic characteristics • Health care supply *Grossman 1972

16. Evidence on the Poor’s Use of Health Services (Benefit) • Service use in general – the poor use fewer services • Service use (benefit incidence) from health insurance – the poor get less benefit • Service use (benefit incidence) under a “free care” policy – the poor get less benefit

17. Health Care Utilization by Enrollment and Socio-economic Characteristics, Rwanda Source: EICV 2005

18. Evidence on the Poor’s Use of Health Services (Benefit) • Service use in general – the poor use fewer services • Service use (benefit incidence) from health insurance – the poor get less benefit • Service use (benefit incidence) under a “free care” policy – the poor get less benefit

19. China: Participation in CBHI by Income and Health Status

20. Evidence on the Poor’s Use of Health Services (Benefit) • Service use in general – the poor use fewer services • Service use (benefit incidence) from health insurance – the poor get less benefit • Service use (benefit incidence) under a “free care” policy – the poor get less benefit

21. Distribution of Benefits from Public Subsidies by Type of Health Facility in Liberia Public subsidy of health clinics benefits the poor % of public subsidy Public subsidy of hospitals and health centers benefits the rich Line of perfectly equal benefit % of population by income decile Benefit Incidence Analysis 2010

22. No type of Health Insurance is “Naturally” Pro-poor • The poor might not be eligible • The poor are eligible but might not enroll • The poor are enrolled, but might not benefit (use services)

23. Thank you Reports related to this presentation available at www.HealthSystems2020.org