Table 1 Social Health Insurance Checklist
From: A checklist for designing health insurance programmes – a proposed guidelines for Nigerian states
Key design variables | Questions to be answered | Options | |||
|---|---|---|---|---|---|
Sources of finance | How would funds for the social health insurance (SHI) be generated/collected? | Premiums through social security contributions/payroll taxes/private contribution | Subsidies from taxes or other non-tax revenue | Others- donor funds/donations/co-payments | |
Is it pro-poor? | This option could potentially be pro-poor if contribution/participation is mandated and government pays subsidies for the poor | Whether this option is pro-poor is dependent on whether the taxes collected and used for SHI are progressive (pro-poor) or regressive (not pro-poor) | Donor funds have the potential to be directed towards the poor, but co-pays typically are not pro-poor unless there are mechanisms/waivers put specifically in place to protect the poor | ||
Is collection feasible? | Collection for this option might not be feasible if the informal sector is large because it is difficult to collect taxes or social security contributions from small business or independent workers in the informal sector | Collection might not be feasible in developing contexts with narrow tax base, tax evasion and weak collection mechanisms | Yes | ||
Will it be sufficient? | Funds generated from only this option are not likely to be sufficient if the informal sector is large because of the difficulty in collection of contributions; however, funds generated from a mix of all the available options might be sufficient but this depends on costed scenarios and benefit package offered | Funds generated from this option will likely not be sufficient if it is the major source of funds because of the difficulty of collection and competition from other sectors for government resources unless taxes/resources are earmarked specifically for SHI | No, if it is the major source of funds, especially in the long term | ||
Benefit package | What packages are offered | Comprehensive benefit package | Essential benefit package | ||
Will the system have enough projected revenue to pay all its costs? (to be informed by a fiscal space analysis and a costing exercise) | Not likely/not encouraged, especially in poorer contexts where the SHI is often insufficiently funded because of weak mechanisms for collection | Yes, provided that benefit packages are properly costed based on projected financial resources, population health needs, infrastructure and utilisation rates | |||
Provider payment mechanisms | How are/will providers be organised and compensated? | Fee-for-service: charging a fee for each service offered to SHI members | Capitation: a fixed payment to providers per member enrolled to provide a defined package of benefits | Diagnosis-related groups: a form of per-case per-day hospital payment most commonly used to pay hospitals for inpatient treatment to treat a patient with a given diagnosis | Pay-for-performance/performance-based financing: is a value-based purchasing model that offers financial incentives to providers for meeting performance targets |
Are they efficient in cost containment to ensure high quality care is provided at the lowest possible cost? | No – High administrative costs driven by the difficulty in forecasting monthly or annual expenditure and the need for an elaborate information system with checks and balances to curb fraud There is perverse incentive for providers to maximise their income by increasing the number of services provided (supplier induced demand) and/or reducing the quality (and therefore the cost) | Very likely if designed properly – Lower administrative and transaction costs because payments are can be predicted accurately and made on regular schedule If enrolees have the opportunity to select their providers, there is an incentive for providers to attract enrolees to themselves by developing healthcare delivery innovations that improves quality of care | Not likely, unless the SHI organisation implements an elaborate monitoring system to control provider claims because there are perverse incentives for providers to maximise their income by keeping patients for longer days than required and submitting multiple claims for patients with comorbid conditions | Likely, as payment is upon achieving set of verified results; however, this might drive the administrative cost high as verification is needed prior to making payments to service providers The verification exercise is a means to curb an adverse incentive on the supply side of service | |
Contributing population and level of compulsion | Will membership be compulsory or voluntary? | Voluntary – Participation might be encouraged but no level of compulsion exists in participation | Mandatory – Individuals are compelled by law to enrol | ||
Is it efficient for cross subsidisation? | No – Low compliance rates, which implies ‘low risk’ individuals may likely not join the scheme or only join when they fall ill; thus, leaving the risk pool composed mainly of high-risk individuals, placing financial strain on the SHI fund, leading to an unsustainable SHI | Yes – High compliance rate, which prevents exclusion of high-risk persons from membership, and protection against indirect risk selection | |||
Feasibility of collection: are appropriate structures in place? | Yes – Because elaborate structures are not required to collect voluntary contributions | No – If the informal sector is large because it is difficult to collect taxes or social security contributions from small business or independent workers in the informal sector. Also, low buy-in from the formal sector might lead to resistance in mandatory contributions Mandatory contributions can only be successful if there is a clear connection between the new mandatory payments and increased benefits for those in the formal sector and strengthening information and collection systems for those in the informal sector | |||
Pooling of funds | Are funds combined in a single or multiple pool? | Single | Multiple (this may include presence of other pools/health insurance schemes, e.g. community-based health insurance schemes) | ||
Is it efficient for risk equalisation/cross subsidisation? | Yes – Because cross-subsidisation/risk equalisation between high and low risk groups is easier in single/consolidated pools, which benefits from economies of scale | No – Because cross-subsidisation is difficult to achieve in fragmented or multiple risk pools Multiple risk pools could work in contexts where contributions are mandatory/compulsory to increase the size and mix of the pool | |||
Administration and management | Who will be responsible for oversight and monitoring the social health insurance system? | Private | Public | ||
Are appropriate structures available to monitor and address issues relating to quality, utilisation, cost, efficiency and provider payments? This may require and organisational capacity assessment | Private management bodies are more likely to have more experience in administering and managing insurance schemes, with stronger skills and capacity listed: 1) The ability and information technology expertise to identify, register and enrol members from both formal and informal employees (determining which informal sector workers are to be exempted from contributions) 2) The ability and information technology expertise to routinely process and manage claims and payments to providers used by beneficiaries 3) Actuarial skills to budget, monitor and ensure that revenues are matched with likely expenditures 4) The expertise to set prices and manage cost inflation with health providers (negotiations with health providers, accreditation and provider payments) 5) Skills to investigate fraud, to ensure transparency and accountability of the SHI 6) Skills to define and refine the criteria for assessing the quality of health service delivery at individual health facilities | Not likely, especially in developing contexts where public bodies have weak administrative and organisational structure and exposed to political pressure, which could limit their capacity to make purely rational decisions in the best interest of the SHI Public management bodies can be efficient if qualified administrative personnel are hired and/or trained in the required competencies | |||