Review of community-based health insurance initiatives in Nepal

Abstract

Executive Summary: This study assesses community-based health insurance (CBHI) schemes in Nepal, both government operated (public) and private. Provider-based health insurance was introduced in Nepal in 2003 as six pilot schemes. In parallel, some privately-operated CBHI schemes have been established and are supported by non-governmental organisations (NGOs) and cooperatives. CBHI schemes in Nepal complement a number of specialised programmes of the Government of Nepal for improving people’s access to health care services. Renewed interest in a contributory insurance mechanism arose in January 2012 when a directive was sent by the Prime Minister’s Offi ce to the Ministry of Health and Population (MoHP) directing the Ministry to formulate and implement a “health insurance policy for all Nepalis”. However, the only experience the Ministry has in operating health insurance mechanisms is from the six pilot schemes it is running. Against this background, there is a great need to understand Nepal’s experience in implementing health insurance and to assess the role that government-supported CBHI schemes play in the current health financing system in Nepal, as well as their possible future role. In this study, existing CBHI schemes were analysed using a number of common standards and indicators (e.g., coverage, resource generation, pooling and purchasing, quality of delivered health services, patient satisfaction) and by looking at the contribution of CBHI schemes to health care financing in the main areas of universal coverage (financial protection, services covered, population covered). Specific attention was given to determining whether or not CBHI schemes improve their members’ access to health services and the quality of health care, and are technically and financially viable. The study revealed the following about private and public CBHI schemes: Benefit packages: In general, both private and public CBHI schemes provide members with access to health services beyond those covered by the government’s Free Health Care programme. There is no clear difference between private and public schemes in terms of the content of their benefit packages. Coverage: CBHI schemes have achieved very limited coverage of the population. As all public schemes are facility-based, their geographical coverage is generally limited to the working area of that particular facility. However, even within their catchment area an average of only 3.4 per cent of the population are covered, which demonstrates the low range of influence of these schemes. The coverage rate of the six private schemes sampled is even lower at 2.7 per cent. Membership composition and poverty orientation: The study found that disadvantaged groups (Dalits, disadvantaged janajatis, disadvantaged non-Dalit Terai caste groups) enrol more in public CHBI schemes (constituting 53 per cent of members) than in private ones (26 per cent of members). This refl ects the subsidy inflow into public schemes linked to the number of poor families enrolled. Enrolment: Enrolment in both public and private CBHI schemes is done through local motivators, female community health volunteers (FCHVs) and management committee members. Targets for enrolment are set in the public schemes, but hardly achieved. Premiums and subsidies: Premiums in public CBHI schemes are not determined on the basis of actuarial calculations (except for Saubhagya scheme), but rather set by the CBHI management on the basis of experience. The Ministry of Health and Population provides annual block grants to public CBHI schemes to subsidise premiums for people from disadvantaged groups and to cover part of their running costs. The study found that there is no consistency in the proportion of members subsidised in the six public CBHI schemes. The mechanism for providing a lump-sum subsidy in public CBHI schemes does not provide any incentive to increase the number of poor families enrolled beyond the target of 30 per cent. To the contrary, with each additionally enrolled family the subsidy per family is reduced. Private schemes do not have provisions for subsidising premiums based on socioeconomic conditions. Some discounts are granted at the time of renewal of membership for clients who wish to re-enrol, but not for socioeconomic reasons. Utilisation of health services: The survey found that the overall utilisation rate for health services among members of a CBHI scheme is higher than among non-members, regardless of whether it is a public or private scheme. Th ese findings indicate that CBHI schemes do in fact offer financial protection to their members, which enables them to use health services more often than non-members. How much this higher utilisation constitutes an ‘over-utilisation’ requires further investigation. Quality of health care: The survey found that the quality of health care provided to CBHI members, mainly in the public health facilities, is in line with the capacity and infrastructure of the health facility. There is no positive discrimination in facilities towards CBHI members. The same services are available to both insured and non-insured patients. The chances of improving the quality of health care through the negotiation power of health care purchasers is virtually nil as there is no purchaser-provider split in public CBHI schemes. In private schemes, the coverage of CBHI members among the population in the catchment area and their weight in terms of the total number of clients of the facility is low. Therefore, the influence of private CBHI schemes on health care providers is very limited. Technical efficiency: Accounts and record keeping systems are manual in all public CBHI schemes. Public schemes do not have any financial or administrative guidelines for properly implementing CBHI activities. Only two schemes (Mangalabare and Tikapur) had their accounts audited in the last fiscal year (2010/11). None of the public schemes have supervision and monitoring mechanisms in place, but CBHI management committees were found to be actively involved in CBHI activities. Public CBHI schemes have not sought any legal identity because they were initiated by the Government of Nepal. CBHI management committees have been formed in four out of the six public CBHI schemes. In Tikapur and Chandranigahapur, facility management committees look after the CBHI scheme. CBHI staff and committee management members have not undergone any specific health insurance or management training, and their capacity is variable and usually limited. In the best case, the CBHI staff had been exposed to other CBHI schemes during field visits. None of the CBHI schemes have a human development plan. Human resources available in public CBHI schemes are limited, and most CBHI activities are undertaken by health facility staff. In cooperative-initiated schemes, the executive board of the cooperative is responsible for insurance activity; there is no separate insurance management committee. In other private CBHI schemes, the health facility operation and management committee (HFOMC) is in charge of health insurance management. Both cooperative schemes present the same situation: no specific staff has been appointed to look after the CBHI scheme. The information system is managed in an ad-hoc way. There have not been any annual audits of CBHI activities for quite a long time. The analysis reveals weaknesses in the management systems of both private and public schemes. All schemes would benefit from rigorous technical support to develop into technically viable organisations.