Title
Is there any potential for community-based health insurance for generating new resources for
healthcare and securing healthcare of informal workers and their dependents in Bangladesh?
– An Enquiry towards Universal Health Coverage
Reported by
Dr. Jahangir A. M. Khan, PhD
Senior Lecturer in Health Economics, Liverpool School of Tropical Medicine, United
Kingdom AND Ex Head of Health Economics Unit, icddr,b, Bangladesh
Background and Rationale
Health insurance has been recommended as a sustainable and affordable healthcare financing
mechanism for achieving universal health coverage globally and in low- and middle-income
countries (LMICs) particularly (WHO, 2005). However, many LMICs have large informal
economic sector which is considered to be a strong barrier for including most of the people in
health insurance schemes. Like many other such countries, Bangladesh has 85.7 million
people or 56% of total population dependent on earnings from informal sector of the
economy, while formal sector constitutes only 12.5%, leaving rest 31.5% below the poverty
line (MoHFW, 2012).
Out-of-pocket (OOP) payments is the major healthcare financing mechanism in most LMICs.
In Bangladesh, sixty three percent of total health expenditure is borne by households as OOP
payments (MoHFW, 2012; MoHFW, 2015). Additionally, the public fund constitutes 23.09%
and voluntary healthcare payment schemes only 5.25% of total expenditure. This distribution
of healthcare financing mechanisms in Bangladesh justifies the fact that many households
(16%) face catastrophic health expenditure and many fall into poverty (3.5%) due to OOP
payments for healthcare (Khan et al. 2015). Further, estimation of unmet need of healthcare is
not readily available which presumably increases the consequence of dependency on OOP for
healthcare in terms of sufferings and deaths by manifolds.
Considering the consequence of reliance on OOP payment mechanism, the healthcare
financing strategy of Bangladesh, which targets achieving universal health coverage aims at
reducing out-of-pocket payments by half i.e., 64% to 32% in 2012-2032 (MoHFW, 2012). It
is further justified that inclusion of people who are dependent on informal sector of economy
into health insurance scheme is inevitable. The informal workers contributes largely to the
economic development in Bangladesh, but it is difficult to monitor or track their income and
bring them under direct tax system. Considering such a challenge, the Government of
Bangladesh considers community-based health insurance scheme is a potential way for
generating new resources for healthcare and simultaneously securing healthcare for informal
workers and their dependents (MoHFW, 2012). In the practical context, it is important to
assess the demand of health insurance and if possible, attempts should be taken for increasing
the demand among informal workers for applying CBHI schemes in Bangladesh.
Observations
For understanding the attitude and demand of informal sector workers towards health
insurance in Bangladesh, an attempt has been undertaken for assessing the willingness-to-pay
of informal workers of selected occupations, namely, rickshaw-pullers, shop-keepers and
restaurant workers. Even, an educational intervention on health insurance has been
implemented on these occupational groups. Finally, impact of the educational intervention
has been assessed using willingness-to-pay method.
The educational intervention aimed at increasing knowledge about health insurance, its utility
and how to organize community-based health insurance schemes using cooperatives as an
entity. Under the intervention, educational sessions took place once a week (3–4 hours)
during three subsequent weeks for each occupational group. The interventions used power
point presentation (mostly pictorial), group session and general discussion. In the first day, it
contains discussion about health condition, healthcare expenditure and current healthcare
facilities of workers. In the second day, health insurance mechanisms and utility of health
insurance have been discussed. Potential uses of occupational solidarity for developing health
insurance scheme have been discussed in the third day.
The descriptive statistics showed (table below) that the workers in control and treatment
groups were willing to pay 16.2 and 22.3 BDT per week for health insurance. Using a
difference-in-difference estimation, it was observed that the WTP increased by 4.1 BDT in all
workers as a response to educational intervention about health insurance. It was, however,
found that there were differences in WTP across occupational groups ranging between 12.5
BDT (Shop-keeper) and 23.0 BDT (Rickshaw-puller) per week.
Further, using regression model, it was estimated that WTP increased by 33.8% or 5.48 BDT
per week in response to educational intervention of informal workers on health insurance. As
an absolute amount, the mean WTP of a worker with educational intervention was estimated
to be 21.7 BDT (0.30 US$) per week per household or 86.8 BDT (1.16 US$) per month,
which was 16.2 BDT (0.22 US$) for workers in control group. In a one year period each
worker with education on health insurance was willing to pay 1,128 BDT (15.2 US$). There
are 41.5 million workers with informal employment (both urban and rural) in Bangladesh of
which 20 million are in urban areas. If all these workers can be brought into health insurance
by educating them and the estimated WTP (premium) can be applied, a total sum of 22,568
million BDT (305 million US$) would be accumulated for financing their healthcare. This
amount corresponds to 11.8% of total health expenditure in Bangladesh.
Conclusions and recommendations
It is not anticipated that all informal workers should be educated about health insurance
separately, rather a number of workers, who are community leaders, should be educated
before starting the schemes in different areas and occupational groups in Bangladesh. Such
education will make workers understand the health insurance mechanism, its utility,
organizational structures as well as relevant duties. This pioneering workers (volunteers) can
be a medium for transferring the knowledge to their fellow workers for encouraging them to
join such schemes.
While healthcare budget is subject to negotiation with other competitive interests, like
education, power supply, defence and so forth and extending tax-base is a time-consuming
process of the Government, community-based health insurance schemes can be established
with seed-funding and strong monitoring for bringing the informal workers and their
dependents under health insurance for securing healthcare through generating new resources.
Cooperatives of workers, registered under the Department of Cooperatives in the Ministry of
Local Government and Rural Development can be used as entities for CBHI schemes. In the
long-run, small CBHIs can be incorporated with social or national health insurance system in
the country for achieving universal health coverage.
References
Khan AMJ, Ahmed S. 2013. Impact of educational intervention on willingness-to-pay for
health insurance: A study of informal sector workers in urban Bangladesh, Health Econ
Rev 3:12.
Khan AMJ, Ahmed S, Evans TG. 2015. Catastrophic Healthcare Expenditure and Economic
Impoverishment Related to Out-of-Pocket Payments for Healthcare in Bangladesh - an
Analysis of Household Income and Expenditure Survey, 2010 (submitted for
publication).
MoHFW. 2012. Expanding Social Protection for Health towards Universal Health Coverage, Health
Care Financing Strategy 2012-2032. Health Economics Unit, Ministry of Health and Family
Welfare, Government of Bangladesh, Dhaka.
MoHFW. 2015. Bangladesh National Health Accounts, 1997-2010. Health Economics Unit, Ministry
of Health and Family Welfare, Government of Bangladesh, Dhaka.
WHO: Sustainable health financing, universal coverage and social health insurance. Geneva: World
Health Organization; 2005.