Financing Medical Care through Insurance: Policy Lessons from Household‐ and Community‐Level Analysis in Kenya

Abstract

Medical insurance is an important feature of a health care system in which patients pay user charges to get medical treatment. Without insurance, many people would not afford acceptable care in a fee-for-service system. Since health is a merit good, making insurance broadly available in communities is a major policy issue in countries where user fees finance medical treatments. The paper analyses data from facility and household surveys in Kenya and shows that policies which popularize medical insurance can be inefficient because there exist community and household level factors that inhibit its use. The results further reveal substantial variations in the way the variables that influence the use of insurance affect different population sub-groups. In this regard, it is important to ensure that vulnerable groups in communities are not excluded from insurance schemes in which they invest. The policy value of the paper is to call attention to factors such as place of residence, gender, income, education, community institutions, transaction costs and facility quality -that hinder or facilitate use of medical insurance so that these factors can be considered when institutionalizing insurance in communities. We note that using the community as a unit of analysis in field surveys may strengthen policy conclusions usually obtained from such surveys.Résumé: L'assurance médicale constitue un élément important de tout système de soins de santé dans lequel les patients paient pour obtenir des soins médicaux. Sans assurance, de nombreuses personnes seraient dans l'incapacité de faire face aux coûts d'un système de paiement à l'acte. La

The Demand for Public Health Care and the Progressivity of Health Care Services in Ghana

“…The size of the household generally decreases the probability of seeking health care, which is stronger for private than public care. Enrolling in a health insurance programme significantly increases the probability of seeking health care, both across options and across samples, except in the child model where though positive, it is insignificant (see Mwabu et al, 2002). The probability of seeking health care is also positively correlated with the number of days ill. We also control for regional and religious differences as well as the relationship with head of household.…”

“…Studies have also considered health financing and its implications on health outcomes. Whereas Mwabu et al (2002) analyzed the use of insurance as a means of financing medical care, Anyanwu (2007) used macro-level analyses to investigate the effects of government expenditure on health outcomes and finds a significantly positive effect on health outcomes (under 5 mortality and infant mortality). This paper uses micro-level data, multinomial logit and a simulation approach to investigate the demand for health care and the progressivity of these expenditures in Ghana.…”

An Empirical Analysis of Health Shocks and Informal Risk Sharing Networks

“…To sum up, the findings highlight that rural households are largely exposed to the risks of healthcare shocks and assistance from informal risk sharing networks are rarely available to cushion households from the financial, health, and welfare impacts of health shocks. Introducing health insurance systems or other third‐party healthcare financing mechanisms would increase welfare significantly (Mwabu et al, ). Recently, Ethiopia started to pilot innovative community‐based (mutual) health insurance schemes in selected rural villages and these are expected to be gradually rolled out to all rural villages.…”

An Empirical Analysis of Health Shocks and Informal Risk Sharing Networks

“…To sum up, the findings highlight that rural households are largely exposed to the risks of healthcare shocks and assistance from informal risk sharing networks are rarely available to cushion households from the financial, health, and welfare impacts of health shocks. Introducing health insurance systems or other third-party healthcare financing mechanisms would increase welfare significantly (Mwabu et al, 2002). Recently, Ethiopia started to pilot innovative community-based (mutual) health insurance schemes in selected rural villages and these are expected to be gradually rolled out to all rural villages.…”