Effectiveness of Community Health Financing in Meeting the Cost of Illness

Bulletin of the World Health Organization, Vol. 80, No. 2, 2002

8 Pages Posted: 28 Sep 2007

See all articles by Alexander Preker

Alexander Preker

World Bank

Guy Carrin

World Health Organization

David M. Dror

Micro Insurance Academy (MIA)

Melitta Jakab

Harvard University - Faculty of Arts and Sciences

William Hsiao

Harvard University - T.H. Chan School of Public Health

Dyna Arhin

Harvard University - Center for International Development (CID)

Abstract

How to finance and provide health care for the more than 1.3 billion rural poor and informal sector workers in low- and middle-income countries is one of the greatest challenges facing the international development community. This article presents the main findings from an extensive survey of the literature of community financing arrangements, and selected experiences from the Asia and Africa regions. Most community financing schemes have evolved in the context of severe economic constraints, political instability, and lack of good governance. Micro-level household data analysis indicates that community financing improves access by rural and informal sector workers to needed heath care and provides them with some financial protection against the cost of illness. Macro-level cross-country analysis gives empirical support to the hypothesis that risk-sharing in health financing matters in terms of its impact on both the level and distribution of health, financial fairness and responsiveness indicators. The background research done for this article points to five key policies available to governments to improve the effectiveness and sustainability of existing community financing schemes. This includes: (a) increased and well-targeted subsidies to pay for the premiums of low-income populations; (b) insurance to protect against expenditure fluctuations and re-insurance to enlarge the effective size of small risk pools; (c) effective prevention and case management techniques to limit expenditure fluctuations; (d) technical support to strengthen the management capacity of local schemes; and (e) establishment and strengthening of links with the formal financing and provider networks.

Keywords: micro health insurance, social insurance, insurance for the poor, community based health insurance, health financing, cost of illness

Suggested Citation

Preker, Alexander and Carrin, Guy and Dror, David M. and Jakab, Melitta and Hsiao, William and Arhin, Dyna, Effectiveness of Community Health Financing in Meeting the Cost of Illness. Bulletin of the World Health Organization, Vol. 80, No. 2, 2002, Available at SSRN: https://ssrn.com/abstract=1017213

Alexander Preker (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Guy Carrin

World Health Organization ( email )

20 Avenue Appia
Geneva 27, CH-1211
Switzerland

David M. Dror

Micro Insurance Academy (MIA) ( email )

New Delhi, NCR
India
+41 78 790 6789 (Phone)

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Melitta Jakab

Harvard University - Faculty of Arts and Sciences ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

William Hsiao

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA MA 02115
United States

Dyna Arhin

Harvard University - Center for International Development (CID) ( email )

One Eliot Street Building
79 JFK Street
Cambridge, MA 02138
United States

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