ASSESSMENT OF ECONOMIC BENEFITS OBTAINED BY
HOUSEHOLDS FROM PURCHASING HEALTH INSURANCE:
A CASE STUDY OF DAR ES SALAAM IN KINONDONI
DISTRICT
By
Fares M. Mshujaa
A Dissertation Submitted to Dares-Salaam Campus College in Partial
Fulfillment of the Requirements for Award of Master of Science in Applied
Economics and Business Degree of Mzumbe University.
June ,2021
1
CERTIFICATION
We, the undersigned, certify that we have read and hereby recommend for
acceptance by the Mzumbe University, a dissertation entitled “Assessment of
Economic benefits obtained by households from purchasing health insurance: a case
study of Dar es salaam in Kinondoni district”, in partial fulfilment of the
requirements for awards of the degree of Masters of Science Applied Economics and
Business (MSc. AEB) of Mzumbe University.
______________
Major. Supervisor
_______________
Internal. Examiner
_______________
External. Examiner
Accepted for the Board of MUDCC
__________________________________________________________
PRINCIPAL / DAR-ES-SALAAM CAMPUS COLLEGE BOARD
i
DECLARATION
AND
COPYRIGHT
I, Fares M. Mshujaa, declare that this dissertation is my own original work and that
will not be presented to any other University in a similar or any other degree award.
Signature ……………………………………………….
Date …………………………………………………….
@ 2021
This dissertation is a copyright material protected under Berne Convection, the
Copyright Act 1999 and other international and national enactments in that behalf on
intellectual property. It may not be reproduced by any means in full or part, except
for short extract in fair dealings, for research or private study, critical scholarly
review or discourse with an acknowledgement, without the written permission of
Mzumbe University on behalf of the author.
ii
ACKNOWLEDGEMENT
First and foremost, I would like to express my sincere gratitude to almighty God for
His love, good health, wisdom and the challenges that I encountered during this
study through those challenges I become strong.
Then, I would like to appreciate the vital role played by Dr. Coretha Komba as my
supervisor for her guidance, from the very beginning to the end of this study.
Addition to this, I would like to thank all other lecturers at Mzumbe University- Dar
es salaam Campus for skills and knowledge in many aspects and their tireless
assistance and time spent throughout the limited working period.
Special thanks to my family, for their endless support from the day I started my
academic journey till today. They have always been there for me supporting every
step with prayers, financials and materials.
Again, I would like to extend my Special thanks to Dr. Daniel Nkungu of
Mwananyamala Hospital and Dr. David Mwaipaya from Muhimbili Hospital for
their tolerance and guidance during data collection; they have paved the way to the
accomplishment of this study. I appreciate for their endless support from the
beginning to the end.
My special thanks are extended to my friends and the classmates of Master of
Science Applied Economics and Business of 2018-2020 for their cooperation and
assistance whenever in need. They have been inspiring and I have learnt a lot from
them.
Finally, I extend my gratitude to my inspirational Brothers and sisters Thobias shija,
Mr. Tumaini Nguto, Mr. George, Miss Sharifa Ally, Mr. Iman Mbwambo for their
sincere advices during the times I was despaired with my studies, for their positive
influence and being a source of inspiration to others.
iii
DEDICATION
To my late mother Mrs. Alice Mshujaa as she would wish to see me reaching this far
in my studies. May her Soul Rest in Peace.
To my Father Mughenyi, Mshujaa, my sister Gloria Mshujaa and my brother Baraka
Mshujaa for their encouragement and support they always gave to me. May God
Bless you!
iv
LIST OF ABBREVIATIONS AND ACRONYMS
CHF
Community health Fund
COVID-19
Corona Virus Disease of 2019
FYDP
Five-year Development Plan
GOT
Government of Tanzania
HMOS
Health Maintenance Organization
IFC
nternational Finance Corporation
LIC
Low Income Countries
MIC
Middle Income Countries
MOHSW
Ministry of Health and Social Welfare
NGOs
Non-Government Organization
NHIA
National health Insurance Authority
NHIF
National Health Insurance Fund
NHIS
National Health Insurance scheme
NSSF
National Social Security Fund
OOP
Out of Pocket
SNHI
Social National Health Insurance
TDV
Tanzania Development Vision
THE
Total Health Expenditure
UHC
Universal health coverage
WHO
World Health Organization
v
ABSTRACT
This study examined economic benefit obtained by household after enrolling in health
insurance schemes. The study was guided by three objectives including; to examine the
cost of health care services before and after purchasing health insurance. To assess the
factors determining decision to purchase the health insurance and identifying challenges
facing households in accessing health care services using health insurance. A crosssectional survey was employed for this research. A sample of 384 households were
included in this study. Both stratified and simple random sampling techniques were used
to obtain sample size used in the study. Quantitative and qualitative data were collected
through questionnaire. The study used Econometric model termed binary probit model
to analyze variables included in the study. Binary probit involved marginal effect which
was used to interpret the results.
The results showed that the decision to enroll or not to enroll in health insurance
schemes is influenced by several factors including; health care expenditure, income,
employment status, level of education, knowledge on health insurance and perception of
future health expenditure. Employees were spending between 10-20 percent of their
income for health expenditure per month before they were enrolled in health insurance
schemes, then after they were enrolled, they are spending less than 10 percent for health
care services. Health insurance reduces financial stress during illness by saving costs
that would otherwise be incurred in health care sustenance.
The study recommend that the Government should take deliberate strategies for
establishing campaigns which will provide awareness to all citizen on the importance of
having health insurance. The study argues for the government to households with
different livelihood. Health Insurance schemes should make sure their members have
access to better quality health services from their nearby health centers. Finally, the
researcher recommends that other studies should focus on assessing social benefit that
individual, or household can obtain by using health insurance as means of payment for
health care service
vi
TABLE OF CONTENT
CERTIFICATION ..................................................................................................... i
DECLARATION ....................................................................................................... ii
AND ............................................................................................................................ ii
COPYRIGHT ............................................................................................................ ii
ACKNOWLEDGEMENT ....................................................................................... iii
DEDICATION .......................................................................................................... iv
LIST OF ABBREVIATIONS AND ACRONYMS ................................................ v
ABSTRACT .............................................................................................................. vi
LIST OF TABLES ................................................................................................... xi
LIST OF FIGURES ................................................................................................ xii
CHAPTER ONE ....................................................................................................... 1
INTRODUCTION ..................................................................................................... 1
1.1
Background of the Study .................................................................................. 1
1.2
Statement of the Problem ................................................................................. 5
1.3
Objectives of the Study .................................................................................... 6
1.3.1 General Objectives of the Study....................................................................... 6
1.3.2 Specific Objectives of the Study ...................................................................... 6
1.4
Research question ............................................................................................. 7
1.5
Significance of the Study ................................................................................. 7
1.6
Scope of the study ............................................................................................ 8
1.7
Justification of the study .................................................................................. 8
1.8
Organization of the study ................................................................................. 8
CHAPTER TWO .................................................................................................... 10
LITERATURE REVIEW....................................................................................... 10
2.1
Introduction .................................................................................................... 10
2.2
Definition of Key terms and Concepts ........................................................... 10
2.2.1 Household....................................................................................................... 10
vii
2.2.2 Health ............................................................................................................. 10
2.2.3 Health care...................................................................................................... 10
2.2.4 Health facilities .............................................................................................. 11
2.2.5 Insurance ........................................................................................................ 11
2.2.6 Health Insurance ............................................................................................. 11
2.2.7 Health Insurance schemes .............................................................................. 12
2.2.8 Out of Pocket .................................................................................................. 12
2.3
Theoretical Literature Review ........................................................................ 12
2.3.1 Grossman demand for health Model .............................................................. 12
2.3.2 Convectional Theory of Health Insurance ..................................................... 13
2.4
Empirical Literature Review .......................................................................... 14
2.5
Conceptual Frame work ................................................................................. 22
2.6
Research Gap.................................................................................................. 25
CHAPTER THREE ................................................................................................ 27
RESEARCH METHODOLOGY .......................................................................... 27
3.1
Introduction ................................................................................................... 27
3.2
Research Design ............................................................................................. 27
3.3
Study Area ...................................................................................................... 27
3.3.1 Dar es Salaam in brief and its Geographical Location ................................... 27
3.3.2 Study Population ............................................................................................ 28
3.3.3 Social Economic Activities ............................................................................ 30
3.4
Simple Size and Sampling Techniques .......................................................... 30
3.5
Data collection Methods................................................................................. 31
3.6
Data Processing and Analysis ........................................................................ 31
3.6.1 Data processing .............................................................................................. 31
3.6.2 Data Analysis ................................................................................................. 32
3.6.3 Econometric Analysis .................................................................................... 32
3.6.4 Variables and their measurements.................................................................. 35
3.7
Validity and Reliability .................................................................................. 36
3.8
Ethical Consideration ..................................................................................... 36
viii
CHAPTER FOUR ................................................................................................... 37
ANALYSIS AND PRESENTATION OF RESULTS .......................................... 37
4. 1
Introduction .................................................................................................... 37
4.2
Descriptive analysis........................................................................................ 37
4.2.1 Decision to Purchase health Insurance ........................................................... 38
4.2.2 Health Insurance Scheme usage distribution ................................................. 39
4.3
Econometric Analysis .................................................................................... 40
4.3.1 Probit Model ................................................................................................... 41
4.3.2 Marginal Effect .............................................................................................. 43
4.4
Challenges faced by patients while using health insurance to access health
services ........................................................................................................... 45
CHAPTER FIVE..................................................................................................... 47
DISCUSSION OF FINDINGS ............................................................................... 47
5.1
Introduction .................................................................................................... 47
5.2
Comparison between cost of health care services before and After the
purchase of health insurance. ......................................................................... 47
5.3
Factors affecting the Purchase of health insurance ........................................ 48
5.4
Challenges in accessing health care services while using health insurance ... 51
CHAPTER SIX ....................................................................................................... 54
SUMMARY CONCLUSION AND RECOMMENDATION .............................. 54
6.1
Introduction .................................................................................................... 54
6.2
Summary of the Study .................................................................................... 54
6.3
Conclusions .................................................................................................... 55
6.4
Recommendation of the study ........................................................................ 56
6.4.1 To Health Insurance Schemes ........................................................................ 56
6.4.2 To health facilities .......................................................................................... 57
6.4.3 To the government ......................................................................................... 58
6.5
Limitation of the study ................................................................................... 59
6.6
Recommendation for area for further studies ................................................. 59
ix
APPENDICES ......................................................................................................... 66
APPENDIX I : Questionnaire .................................................................................... 66
x
LIST OF TABLES
Table 3.0: Variables and their measurements ........................................................... 35
Table 4.0: Descriptive Statistics................................................................................ 37
Table 4.1 : Probit Model ........................................................................................... 41
xi
LIST OF FIGURES
Figure 2.0 : Conceptual Frame work ........................................................................ 23
Figure 3.1: Map of Kinondoni District .................................................................... 29
Figure 4.0: Distribution of health insurance scheme usage ...................................... 40
Figure 4.1: Challenges faced by Patient while using health insurance to access health
services ...................................................................................................................... 45
xii
CHAPTER ONE
INTRODUCTION
1.1
Background of the Study
Access to quality health services has enabled people to be active in social and
economic activity, since health is the is the first capital that human being can possess
in order to perform other activities (Kumburu, 2015).Health systems are playing an
increasingly important role in promoting equitable and sustainable growth through
responsible employment strategies and the procurement of goods and services. In
many conventional policies and procedures, this social value of health services isn't
well known or even recognized.
Besides the role of health systems to protect and improve public health, they have
many economic and social impacts that have to date been largely ignored. The
health systems would benefit from a stronger role in local and national growth plans
and planning policies by making their social and economic impacts clear. It would
also lead significantly to moving the discourse from the view that health services are
only cost-representing, to be understood as systems that strengthen the economy and
as essential partners in achieving social and economic well-being (Brown and Boyce
, 2019).
Good health is a basic right of man and a cornerstone of economic prosperity, and it
is inaccessible to so many people around the world. While significant progress has
been made, such as the increase in life expectancy, though geographically the
progress has been unfairly. Today, we're at a turning point – those within reach have
recognized the advantages of emerging health care and technology, and the global
community is struggling to serve the most disadvantaged among us. For example,
access to sexual, reproductive and child health services is increasing and maternal
mortality has decreased by 37% since 2000, nevertheless, the maternal mortality
ratio.
1
In developing regions, the proportion of mothers who do not survive childbirth is
already 14 times higher than in developed regions relative to those who do. There is
also lower coverage for health care services for women living in poverty and rural
areas (Damian, Tibelerwa, John, Philemon, , 2020).
However, for a community to have access to quality health services depends on
effectiveness and efficiency of health care financing system of the organization or
health care insurance scheme (Kumburu, 2015). The major issue of health care
financing is how to allocate limited resources so that health care services can be
delivered to the population. In low developing countries, health care system provides
a limited financial risk protection.
This results to the catastrophic payment for health care services among household
which could lead to improvement when subjected to sickness or injury. Out of
pocket (OOP) payment is a major obstacle to health care services. This leads to
inequality in seeking for health care services as those who are better off can afford
payment of quality medical health care services while the poor cannot afford
payment of health care services and even give up the utilization of health care
services at a point of sickness or injury (Kwon, 2016). World bank report in 2016
shows that, In Tanzania, out of pocket financing on health comprised 32% of the
Total Health Expenditure (THE) and 52% of the total private expenditure in
2009/2010, 33.2% of the THE in 2011/2012, and 43.3% in total private expenditure
in 2013/2014. This increases the risk of financial burden expenditure considering the
fact that 28.2 percent of the rural areas’ households are poor (World Bank Group ,
2015) This limits the household in accessing modern health care services and also
confines the efforts of the government in building efficient and sustainable health
care systems.
Catastrophic health expenditure occurs when health spending exceeds any
proportion of household consumption (total or non-subsistence) income. OOP health
care premiums are wasting significant amounts of household wealth in many low2
income Asian countries (Kimani and Maina,, 2015). Health Insurance is one of the
popular and useful way in making medical and surgical payment incurred by
insured. Health insurance has a financing system where by members of a particular
insurer (Health Insurance Scheme) as supposed to contribute a certain amount every
month as a membership fees and for that fee allows a member to obtain health
services from health facility through insurance card. Health insurance is included in
employee’s non-financial benefits packages as an employer enters into contract with
health insurance scheme which can be private or public insurance scheme
(Kumburu, 2015).
Unfortunately, there are many consequences for individuals who are not insured
with health insurance. Those who are uninsured face major health effects as a result
of not getting benefits. Uninsured health coverage has been associated with reduced
quality of health care, lower medical care levels, and increased likelihood of death.
Uninsured people are more than 25% more likely to die early than people with
health insurance. The Institute of Medicine reports that, in the year 2000, the
absence of health care resulted in the deaths of 18,000 Americans, making it the
sixth most common cause of death that year for individuals aged 18 to 64 (National
immigration law centre, 2015). Economically, Medical debt is a significant problem
with both covered and uninsured households. Medical debt may lead to financial
instability, elevated credit card debt, and greater likelihood of unemployment for the
uninsured and those with rising insurance costs. Uninsured people also face
disproportionately burdensome health care expenses. Those with Medicaid benefit
from the cheaper premiums offered with providers as well as the cost-effectiveness
of treatment. In many jurisdictions, hospitals bill patients without health benefits
without reimbursement rates, which are often more than 2.5 to 3 times the costs
charged with Medicare and providers (National immigration law centre, 2015).
Governments have a strong role to play in health policy and ensure programs are
available to everyone. Without public insurance, there will be those who will not be
able to afford the treatment they need, and they will be forced to choose sickness –
3
or even death – and financial failure as a crippling option that drives 150 thousand
people into poverty each year. For low-income countries (LIC) and middle-income
countries (MIC), public funding can be used to achieve universal coverage through a
package of extremely cost-effective ('best buys') initiatives. For this package, the
out-of-pocket payments should be zero or very low, defined at the point as fees for
service. Health without insurance coverage (out-of-pocket costs lack tax or
insurance premium prepayment). Mobilization of domestic capital should be
combined with policies to increase investment efficiency (Yamey G, Beyeler N,
Wadge H, Jamison D., 2016).
However, there are various reforms have been made in both developed and
developing countries for instance in Tanzania Ministry of health, Community
Development, Gender, Elderly and Children has national policy of 2007 which had
more emphasize on special groups including infants, children under five, pre and
school children, youths, people with disability, women of reproductive age and
elderly people to access health services. National policy of 2007 had several
objectives to achieve, these included reductions of mortality rate, morbidity and
increase life expectancy to all Tanzanians by providing quality services with wide
coverage (Ministry of health and social welfare, 2017). Also, the policy aimed at
strengthening their relationship with international health organization so as to
cooperate with them in order to achieve the objectives.
The foundation for new health national policy of 2017 is committed to achieve the
objectives of National five years development plan 2016/2017 – 2020/2021(FYDP
II) which aimed to ensure quality health service that will enable people to participate
in different social economic activities. The main focus of this policy are children and
mother and much attention are given to Malaria and HIV/AIDs which are major
killing disease in Tanzania (Ministry of health and social welfare, 2017). However
there a several reforms and improvements that have been made on health insurance
schemes.
4
1.2
Statement of the Problem
Health systems have the primary purpose of delivering high quality and affordable
health care. Around the same time, health systems play a significant role in the
status and development of national and regional economies, through their
expenditures and investments. Health systems play an increasingly important role in
driving inclusive and sustainable development through responsible practices in the
areas of employment and the purchasing of goods and services (Brown and Boyce ,
2019).
In developing countries access to health care services depends on some’s income
and accessibility. For this case people who are employed in formal sector and those
who are living in urban areas tend access quality health services compared to those
who are not employed or employed in informal sector and those who are living in
rural areas
(Kumburu, 2015). This is due to poor financing system and
unimplemented policies and plans.
Health insurance plays a vital role in controlling financial risks for people and
families. Families with only one uninsured member face stigma, fear, and financial
catastrophe potential. Uninsured households are more likely to have high out of
pocket (OPP) health care costs than insured ones, even though they spend less
overall on insurance (excluding premiums), though there have been arguments and
paradox concerning health insurance that though a consumer pays for premium but
not everyone become sick during the contract period and a consumer benefit from
the premium only if they become sick.
Therefore, health insurance schemes require a consumer to think for the future what
might happen if he or she get sick, this is to say that health insurance is there to
cover the cost for its customers in case of anything happens regarding health issues
(Culyer, 2016). Also, sickness vary with regard to the cost of treatment some
sickness treatment payments are affordable while others are very expensive.
Furthermore, consumers who have paid for the same premium some are rich, some
5
are poor and some are middle income earners therefore they can never have the
same pinch for payment.
Likewise, in most cases we assume that diseases we are suffering from are caused
by exogenous factors (Factors that are out of our control). But in actual sense we
have control over some diseases, by preventing them to occur. For instance, lung
cancer associate with smoking, diabetes with sugar foods, diseases associated with
overweight due to cholesterol-laden foods can be prevented by taking very small
amount of cholesterol foods and fats also through exercises. Insurance contracts do
not distinguish between sickness or diseases that are brought on by the behaviors of
consumers and those that are caused by factors beyond our control (Culyer, 2016).
Therefore, all the three paradox makes households to be uncertain whether to
purchasing health insurance or not. The main question that troubles most of
households is that can health insurance reduce health care expenses? Which will
enable them to save more money for other development activities, and at the same
time accessing quality health services with regard to different situation concerning
health problems? Therefore, those are questioning this study intended to answer.
1.3
Objectives of the Study
1.3.1 General Objectives of the Study
This study aimed at assessing economic benefit obtained by household from using
health care insurance.
1.3.2 Specific Objectives of the Study
This study aimed at analyzing the following issues
i.
To examine the cost of health care services before and after purchasing
health insurance.
ii.
To assess the factors determining decision to purchase the health insurance
iii.
To identify challenges facing households in accessing health care services
using health insurance.
6
1.4
i.
Research question
What is the cost of health care service before and after purchasing health
insurance?
ii.
What are the factors determining decision to purchase the health insurance?
iii.
What challenges households
face in accessing health care services using
health insurance?
1.5
Significance of the Study
The results of the study would also provide policy makers insights on ways to
improve health insurance policies and plans for the future which will be beneficial
for the current and future generation. Also, this study will Provide more insight to
insurance providers and the government motive towards designing good health
financing systems and initiatives that will strengthen and satisfy the majority of
Tanzanian candidates irrespective of age, gender, employment status in the health
care system.
However, this study will bring awareness to households on advantage of being
insured over not being insured. This study provides benefits that an individual and
households can obtain from purchasing health insurance which includes financial
protection during illness which reduces stress during financial crises and less panic.
Hence the study will provide insight into how health insurance affects household
spending and how it provides financial security by financial support for households.
Also, the study analyzed main challenges faced by households in accessing health
care services while using health insurance. Though there are other studies have done
the same, but this study has gone deep and specific towards analyzing challenges
faced by households living in Kinondoni districts in Dar es salaam region. Hence
this will be first step towards solving those challenges.
The study will encourage other researchers to conduct more research on the similar
issue in different regions. Hence this will provide the actual picture of health
insurance system and health services provision under health insurance schemes in
Tanzania.
7
Lastly the study is significant to the researcher as a partial fulfillment for an award
of a Master’s of Science Applied Economics and Business.
1.6
Scope of the study
This study was confined at analyzing only economic benefit obtained by households
from health insurance. This study was conducted at Dar es Salaam region in
Tanzania. This is due to limit of time and Fund unless it would have been good if it
could be done across the country.
1.7
Justification of the study
According to the National Bureau of Statistics (NBS), more than 60% of people in
Dar es Salaam, the country's economic pivot, live in unplanned areas. Residents face
economic and environmental challenges in these areas, which have informal
settlements characteristics. Given Tanzania's "vision of increasing health insurance
coverage to 50% of all Tanzanians by 2020," and the fact that only about 30% of the
population has health insurance, with the rest relying on out-of-pocket payments, the
study felt it was critical to gather data in the Dar es Salaam region on how much
coverage has expanded and the impact.
1.8
Organization of the study
This study is divided into six chapters, the first chapter provide an introduction of
the study. The first section of chapter one gives the background of the study in
general overview, followed by statement of the problem of the study. General and
specific objectives were also important sections in chapter one in relation to the
research questions. Also, chapter one provides significance of this study and the last
section is the scope of the study.
The second chapter of this study provides a literature review of the study, starting
with main terms used in this study, followed by theoretical literature review,
empirical literature review of the study. The conceptual frame work in relation to the
study objectives and theories was another important section in chapter two. Research
8
gap marks the end of chapter two. The third chapter provides research methodology
used in this study showing the research design used in this study, describing the
study area basing on its population, social and economic activities. Sample size and
Sampling techniques was one of important sections in chapter three showing the
procedures used to obtain the samples and simple size.
Other important sections in chapter three are data processing and analysis, data
measurement, validity and reliability and ethical consideration respectively.
Chapter four shows analysis and presentation of results, showing descriptive and
economic analysis of data obtained from the field. Chapter five presents discussion
of findings in relation to the specific objectives of the study and other studies done
by other researchers. Lastly is chapter six which mark the end of this study which
shows the summary of the study in brief, conclusion of the study, recommendation
of the study, limitation of the study and area of recommendation for further studies.
9
CHAPTER TWO
LITERATURE REVIEW
2.1
Introduction
This chapter presents several sections starting with Definition of key terms and
concepts of the study theoretical literature review, followed by empirical literature
review, conceptual framework and research gap.
2.2
Definition of Key terms and Concepts
2.2.1 Household
The household is where a person or a group of people live together at a common
address and share a living room. Individuals living together and sharing university
housing should be called a household rather than a family unit. Individuals must
share a shared room within the home in order to communicate with each other
(Mather, 2019).
2.2.2 Health
Health is a condition of being fully physical, mental and social- wellbeing and not
just absence of dieses. A means for daily life, not a purpose of life. Health is a
positive concept that emphasizes social and personal resources, as well as physical
capacity (Felman, 2020). The 'Constitution of the World Health Organization' which
came into effect in 1948 further acknowledges health as a basic human right and
states that 'enjoying the highest attainable quality of health is one of the basic rights
of every human being, irrespective of race, ethnicity, political ideology, economic or
social status.
2.2.3 Health care
Healthcare is the preservation or enhancement of health by the prevention, diagnosis
and treatment of diseases, disorders, accidents and other physical and mental
disablement in human beings. On other words healthcare is an act to undertaking
maintenance or restore physical, mental or emotional well-being, in particular by
10
trained and licensed professionals usually hyphenated when used attributively
(Felman, 2020).
2.2.4 Health facilities
These are places with resources that can meet the needs of different patients. Health
facilities include clinics, hospitals, psychiatric centers, laboratories, etc. Health
facilities are equipped with the equipment needed to diagnose and treat disease.
Such facilities may be general or specialized. Health facilities oversee a broad
variety of quality of health care environments, such as hospitals, nursing homes,
assisted living communities, outpatient treatment centers, home health care, day
treatment medicine and others. They also provide information to consumers in the
form of report cards and other performance information (Deepshikha, Paramdeep
and Singh, 2015).
2.2.5 Insurance
Insurance is a way of handling your own risk. When buying insurance, you purchase
cover against unforeseen financial losses. The insurance provider pays if anything
bad happens to you, or anyone you want (Winter, 2019)There are different kinds of
insurance including health insurance, life insurance, auto insurance mentioned but
few.
2.2.6 Health Insurance
Health insurance is a form of insurance plan that usually covers for the insured's
medical, psychiatric, prescription medication and occasionally dental expenses.
Health insurance can compensate the insured for costs incurred as a result of illness
or injury or pay them directly to the health care provider. It is also included in
workplace compensation packages as a way of recruiting new workers, with
premiums partly paid by the employer but also often withheld from employee
paychecks (Rapaport, 2015) In explaining the health insurance there are other two
important concepts these are insurer and insured. Insurer is company that provide
contract and offer insurance policy to customer (Insured customer). On the other
11
hand, an insured customer is a person that is being covered by the health policy by
obtaining benefit when he or she get sick.
2.2.7 Health Insurance schemes
Is a system that allows a patient to receive health care from a hospital / service
provider by making payments to an insurance firm that then pays directly to the
service provider (Winter, 2019).
2.2.8 Out of Pocket
Refers to direct payment from individual’s cash reserve for things like business trips,
medical care and other goods and services. The term out of pocket is commonly
used to describe the business and work-related expenditures of an employee which
the employer would eventually repay. This also defines the proportion of health care
expenses to the policyholder, including money spent on deductibles, copay and
coinsurance (OECD, 2015).
2.3
Theoretical Literature Review
Below are theories and models which are relevant and useful in this study, further
more these theories will be used guiding tool in data analysis and interpretation.
2.3.1 Grossman demand for health Model
Demand for health model was introduced by Grossman in 1972, the main concept is
health being a durable capital good which can be inherited but depreciates as time
goes, the model give emphasize on investment in health as an activity where medical
care is combined with other inputs in order to produce genuine health, in sense that
individual partly determine the length of their life expectancy (Muurinen, 1982).
Gross investment in Health capital are produced by household production function
whose inputs include consumer’s time and goods such as medical services, balance
diet, exercise, recreation and housing. Also, Grossman argues that the level of
individual’s health is not exogenous but depend on resources allocated to its
12
production. As health stock increases the time spent on health activities reduces thus
money value for this reduction is an index of the return on health investment
(Grossman, 1972).
The Grossman model integrated social, economic and environmental variables as
inputs to the process of output. In the model, wellbeing is neither good for pure
investment nor good for pure consumption. The model is criticized for considering
health as a dichotomous concept is intuitively wrong in that health is simultaneously
both and health provides both alternatives simultaneously. Muurinen, (1982) Argue
that Grossman's concept of health care demand overlooks these facts by ignoring the
distinction between curative and other types of healthcare. At least for curative
medical care, a relevant concept of a person's health status is considered how ill the
person is or the intensity of the person's illness. Notwithstanding the Grossman
model, has a great contribution in development of health economics.
Furthermore, this theory posits demand for health care depends on three factor
which are level of education, wage or employment status and rate of depreciation
(depreciation of health as capital) which is positively correlated with age (Jager,
2017). Therefore, the study used those three factors that are level of education, wage
and rate of depreciation in data analysis and interpretation while evaluating
awareness of economic benefit obtained by households when using health insurance.
2.3.2 Convectional Theory of Health Insurance
The conventional health insurance theory has preserved the fact that being covered
serves as a decline in health care costs, just as if the price decrease had happened
exogenously on the market. Thus, according to this theory, the process by which
insurance is provided can be overlooked, because the effect of premiums on medical
care demand an impact on income is empirically negligible. Nevertheless, the roots
of the insurance contract as a mechanism for shifting income to the ill were ignored
in treating insurance as a price impact.
13
Health insurance contract is a voluntary quid pro quo exchange where many
consumers pay a premium in exchange for a claim on the pooled premiums, on
condition that they become ill. The lower the likelihood of illness, the lower the
premium that each insurance purchaser must pay for any given payoff if ill. The
difference between the payoff and the premium is a transfer of income from those
who stay healthy to the person who gets ill. Health insurance is purchased to get this
transfer of income when ill (Woodward, 2013).
Those who become ill buy more health care (and other goods and services) than they
would without insurance because of this income transfer. For instance, they can buy
an extra day at the hospital to recover, or they can buy a costly lifesaving procedure
that would otherwise be inexpensive. This supplementary health care is the
insurance income transfer benefit. Yet due to problems with verifying sickness,
fraud, and the difficulty of drafting contingent-claim contracts, the payoffs in real
private health insurance plans arise through a reduction in the cost of health care.
Consequently, a portion of the additional health care purchased, that is, of the moral
hazard, is an opportunistic response to the reduced price, but a portion remains the
original intended response to the income transfers (Woodward, 2013).
Therefore, conventional theory of health insurance has been useful in analysis on
decision making on whether to purchase health insurance and in analyzing changes
on income when someone purchases insurance and when he or she does not.
Likewise, this theory explains insurance as subsidy since when someone purchases
health insurance health services and medical cost becomes cheap. Therefore, this
study aimed at evaluating on economic benefit that households get when they
purchase health insurance.
2.4
Empirical Literature Review
Our health is affected by the decisions we make whether we smoke, drink alcohol,
be immunized, follow a balanced diet, or indulge in daily physical exercise.
Prevention and encouragement of wellbeing and prompt and appropriate diagnosis
14
and services are both essential contributors to good health. The effect of larger social
influences on health is less well-recognized. Evidence of the strong association
between living and working environments and health effects has led to a renewed
understanding of how important human wellbeing is to the social climate. Factors
such as wages, schooling, working opportunities, influence and social care serve to
improve or weaken the wellbeing of individuals and populations (McKenzie, Dell
and Fornssler, 2016).
Access to health care services and means of payment tend to have a lot of effects to
individuals’ incomes, level of spending. But using health insurance scheme
membership card as means of payment tend to provide relief to individual health
care spending, since it reduces health and non-health debts, it enables individual to
spend more on development activities (National immigration law centre, 2015).
More than 50 percent of Americans receive health care from their own or a family
member 's work. While citizens practice social isolation and the economic
consequences of COVID-19 are starting to be felt throughout the world. Any
families who are already covered can lose their work-based health care for weeks or
months to come if they quit their jobs or have their hours cut. But this could be
terrifying moment to become uninsured. The good news is that most of the people
who lose insurance have the option of having free, comprehensive coverage, and
coverage is still minimal, this system can be better than people’s expectations (Wu,
2020) .
In most of African countries more than half of all health care expenses are covered
through out-of- pocket payment. This is due to economic constraints, lack of good
governance and institutional weaknesses have been major obstacles in accessing
health care services through health insurances which results to inequalities in
accessing health care services (Kapologwe, Kagaruki, Kalolo and Ally, 2017)
(Msuya, John , Jütting, Johannes, 2015). However, the beneficiaries of health
insurance who had experienced poor quality services have not been able to provide
15
feedback on time to the insurers. This due to lack of clear communication channel
between beneficiaries and insurers, as a result of multiple middlemen in pattern of
communication between beneficiaries and health insurance schemes (Munge,
Mulupi, Barasa Chuma, 2019).
Kumburu (2015) argue that a documentary was taken and it shows that billions of
people especially those who are living in low- and middle-income countries have
little awareness on effective and affordable health care services and this is due to
improper financing system in health insurance schemes and low efficiency in
delivering health care services. Kenya National health Insurance scheme is the most
efficient and oldest government scheme in Africa, as it is committed to provide
quality and affordable health care to all citizens. Kenyan NHIF membership is
compulsory to all formal employed citizens but to self-employed workers and other
informal sector being a member of NHIF is voluntary and it is available at a fixed
payment that is 160 Kenyan shillings per month. ( Barasa, Mwaura,Rogo,
Andrawes, 2017).
However, (Ssempala, 2018) argue that demand for health insurance is determined by
age where by as an individual gets older, he or she demand health insurance as
health depreciate with time so an individual will make sure he or she is covered by
health insurance. Another factor is wealth the researcher found that people who are
wealthy tend to demand health insurance compared to those who are not wealthy,
hence decrease in wealthy lead to decrease in demand for health insurance.
Those who are living in urban areas tend to demand more health insurance compared
to those whose residence is in rural areas. It was found that 77.7 percent of female
who were living in urban areas while 22.3 percent of females who are insured were
living in rural areas. This was similar to males who were insured where by 71.5
percent were living in urban areas while 28.5 percent were living in rural areas. Also
demands for health insurance depends on the level of education were by as a person
acquires higher education the more, he or she becomes aware of health insurance.
16
Therefore, the people with higher education tend to demand more health insurance
compared to people with low level of education. Last but not limited was gender
where by females tend to have higher demand compared to male since males are risk
takers and normally like to spend out of pocket.
Mathur (2015) argue that among factors that influence demand for health insurance
age had more influence on demand for health insurance services. The study found
that in India as age of a person increases demand for health insurance decreases,
since age is one of the criteria checked before joining in health insurance scheme.
People with 45 years and above were supposed to go for medical test, so as to check
whether they have any chronical diseases that would be expensive to pay for the
treatments. Also, people who are 65 years and above were not allowed to join in any
health insurance scheme since it would be very costly to treat them as old people
always prone to frequent diseases.
Likewise, according to Kotoh, Aryeetey and Van der Geest (2018) survey was
conducted among 6790 household the study found that national health insurance has
a good system that can cover everyone and enable them to have access to health
services. Notwithstanding there a wide gap between demand for health insurance by
poor people and the rich people. Also demand for health differs between healthy
individuals and those who frequently get sick. Therefore, findings showed that rich
people and those who are prone to disease their rate of demand for health insurance
was higher compared to those who are healthy and those who are poor.
A study conducted in India Kansar and Gill (2017) on the role of perception in
health insurance buying behavior of labors employed in informal sector. There were
12 opinions (Perceptions) but after regression only 8 factors were related to health
enrollment. Those factors were lack of awareness about the importance to enroll in
health insurance coverage, income, future incident and social responsibilities, lack of
information, availability of government healthcare subsidies, linkage with
government hospitals and preference for government schemes.
17
However, results show that those who had no awareness were more willing to enroll
into health insurance contrasting other studies where by enrollment or demand for
health insurance and awareness of health insurance and its benefits are positively
related. Furthermore, the study recommended that innovative strategies should
formed by the government and insurance providers to make sure the price for health
insurance is low and affordable so as to favor poor community especially labor
working in informal sector.
A related study by Chengula (2019) which aimed at examining factors influencing
informal sector personnel to join health insurance schemes in Mabali district in
Tanzania. The study employed cross-sectional survey which involved 144 informal
sector personnel. The study included both purposive and simple random sampling to
obtain participants. Findings showed that factors influencing informal sector
personnel to demand for health insurance services were type of insurance, number of
family members and nature of chronic illness. Results showed that 69.4 percent of
participants admitted that joining into health insurance scheme is very important as
it reduces challenges in accessing health services when needed. Also, 68.8 percent of
labors working in informal sector were willing to join and pay for health insurance
scheme, while 31.2 percent were not willing to join and to pay. However, the study
showed that families with low income while the charges for health insurance scheme
are high discourage to join in health insurance scheme.
Notwithstanding health insurance have a lot of benefits to household according to
(Mzee, 2016) the study argues that only 2 million people are covered by national
social security fund (NSSF) out of 44.9 million people. The study provided the
general overview of impact of health insurance services on customer satisfaction in
Tanzania. The study employed the case study approach. It was found that customers
were satisfied with social health insurance system while they were dissatisfied with
accredited medical providers. However, the study suggested that public awareness
should be increased and hence the system and procedures of delivering services will
be improved resulting to quality health service to insured person.
18
In a study done by ( Navarrete, Ghislandi, Stuckler and Tediosi, 2019) in Ghana as it
become the first sub- Saharan African country to introduce National health insurance
scheme (NHIS) with appropriate structured premium charges. The study tested the
impact of being insured especially in medical utilization and financial risk protection
compared with the uninsured. comparing with previous studies with consistency,
findings showed that participating in health insurance results to increase in chance
for meeting medical needs by 15 percent.
Hence there was a large reduction heavy burden of health expenditure. However,
household enjoyed the improvement in medical utilization and decrease of out-ofpocket spending. Unfortunately, some groups did not benefit from National health
insurance scheme (NHIS), these groups were vulnerable people, low educated
people, and self- employed households living far from hospitals who did not lower
the burden of out of pocket spending compared to individual living nearby hospitals.
A related study National immigration law centre ( 2015) which acknowledged the on
the benefit obtained by everyone due to increase in access to health insurance. The
study argues that access to health insurance reduces both health and non-health
related debts, also it enables consumers to save more and spend more on other
productive activities. Also, insurance act as an incentive in working places whereby
workers become motivated since they are insured in case of anything happens
related to their health. Likewise, the study argues that individuals who are not
insured are easy affected by increases of medical expenses (health service expenses)
and this led to reduction of balance owned on both health and non- health related
debts.
Likewise, the study shows that workers who have access to health insurance are
more productive compared to those who are not ensured. Workers without insurance
are often in poor health condition due to rare checkup. Poor health leads lowers
productivity. Elders who have poor health miss days of working because of health
19
issues. The study found that workers who were uninsured missed more than five
days of work each year compared to those who had insurance.
Unequal access to health care services in South Africa remains a huge challenge,
this is due to private health plans while National Health Insurance which is
recommended by the government and popular covers only 16% of the population
(Economics, 2016). These statistics have shown that National Health Insurance
cover small percent of their population this is due to little awareness on National
health insurance scheme and some are aware but face several challenges to became a
member and hence the are unable to access health care services like other members
(Kapologwe, Kagaruki, Kalolo and Ally, 2017).
According to (Shree and Dutta, 2017) having a single health insurance scheme may
lead to the end of fragmentation of insurance coverage and result to increase in
efficiency in health care services. Hence this increase efficiency in health spending
and providing equal health benefit. In developing countries like Tanzania and Kenya
health care is available depend on individual’s income, furthermore those who are
living in urban areas have more access to better health care than those in rural areas
(Kumburu, 2015).
However, the general contribution of the population to national health insurance is
poor according to the statistics. In 2016 one of the actuarial studies describes the rate
of contribution in to three population segments, from formal sector their contribution
is 6% of the salary (3% employee/ 3% employer), from informal sector or selfemployed their contribution is 180,000 Tshs per house hold in urban area in average
while in rural areas their contribution per house hold is 60,000Tshs in average and
from poor is 60,000 Tshs per house hold paid by the government (Shree and Dutta,
2017).
Unfortunately, enrolment of an individual to national health insurance scheme
depends on willingness to pay for the insurance. Majority of public servants in Juba
20
city are willing to pay 5% or less of their monthly total salary to national health
insurance scheme. This applies to all income groups as they prefer to pay for
medical checkup, consultation services and medications, while neglecting other
perceived benefit like cost sharing, development of health infrastructures, risk
management and poverty alleviation among households. On other hand there are
reasons not being willing to pay for health insurance including quality services
obtained from other insurance schemes, low income, corruption, inefficient systems
and inadequate information about the health insurance scheme (Basaza, Alier,
Kirabira and Ogubi , 2017).
Private voluntary health insurance in Sub-Saharan Africa barely protects more than
2 % of the population. Health insurance plans are mostly aimed at private workplace
employees and are usually offered as job incentives. One exception is Nigeria,
where the government funds private Health maintenance organizations (HMOs)
under the national health insurance scheme. Many people infected with HIV receive
care from overstretched health services.
More than 7% of overall health spending on HIV and AIDS is handled by private
businesses or private insurance providers (Shops, 2016). In the future private
insurance, which is for profit making will no longer be considerable in health care
system of African countries. Since most of private health insurance schemes are
locally initiated by Non- government organizations (NGOs), health care providers
like hospital, or local association which are mostly limited some regions or
communities. Thus, the schemes reach only a small number of beneficiaries. In
addition, insurance packages are not comprehensive, but generally offer additional
coverage for certain medical treatments (Pettigrew and Mathauer, 2016).
Despite the fact that National Health Insurance Fund (NHIF) scheme being in
operation in all region in Tanzania, but still it covers a small population. Report
shows that it is estimated only 6.6% of the population are covered by (NHIF)
scheme (Kumburu, 2015).
21
However, there is no standard mechanism for quality service so that a member of
National Health Insurance in Ghana (NHIA) can report about quality or payment
problem or any problem encountered by a member ( Wang, Otoo, and Dsane-Selby,
2017). But here come the issues that many developing countries have private health
insurance which serves their middle-income earners and very small portion the poor
(seivernding, Onyango and Suchman, 2018).
This is due to the fact that private insurance provide opportunity to employee and for
those who can afford the cost for their health services. Policy maker in developing
countries are indecisive of whether they will consider the contribution of private
health insurance also the study ague that if private health insurance already exist can
they provide better services at an affordable price and manage their market
(seivernding, Onyango and Suchman, 2018).
Though this is not the real question to the majority, the real question is what are
economic benefit can an individual gain from being a member of health insurance
scheme whether is it private or national health insurance scheme, and what do we
mean by saying economic benefit this means that services can be affordable also
using insurance cards should be less cost than paying from out-of-pocket. National
Health insurance system (NHIS) was really pro-poor in Ghana. When insured, the
poorest 40% of families reported slightly greater increases in care utilization and
considerably higher declines in cats-strophic out of pocket health spending relative
to members of the wealthiest group. Nevertheless, health benefits would not
necessarily protect vulnerable people from financial harm (Navarrete , Ghislandi,
Stuckler and Tediosi, 2019).
2.5
Conceptual Frame work
The most important thing to understand about your conceptual framework is that it is
essentially a conception or model of what's out there that you want to investigate,
and what's going on with these issues and why a preliminary hypothesis of the
phenomenon that you are investigating (Adom and Hussein , 2018). According to
22
Grossman demand for heath model health insurance in considered as an investment,
therefore there are factor that investment but to be specific let factor affecting
demand for health insurance like health expenditure, income, knowledge about
insurance, age and coverage of illness, perception regarding future health care
expenditure and number of family members be independent variables and demand
for health Insurance (Public, community and Private insurance) be dependent
variable.
Figure 2.0 : Conceptual Frame work
Decision on purchasing health
Insurance
Independent variables
Dependent variable
Source: Researcher’s own compilation
23
The relationship between variable is that dependent variable depends on the changes
in independent variables this means increases in health expenditure it will influence
an individual or household to purchase health insurance but low health expenditure
(affordable) makes households to spend out of their pockets. Holding other factors
constant increase in income lowers the demand for health insurance since there is
enough money in the pocket to cover health expenditure but decrease in income
increases demand for health insurance so as to have low risk during period of illness
and be able to cover medical cost.
It is obvious that people tend to invest on things that they have knowledge about
same applied on purchasing health insurance. If an individual has knowledge on a
certain health insurance it is easier to purchase. But if an individual is not certain
about the health insurance it is hard to purchase it. Looking at the nature of
employer most of government workers and civil servant purchase health insurance
as the system force them which means it is compulsory while in Private sector it is
not compulsory.
Also, people tend to demand health insurance if they think in the future health
expenditure will rise this means their perception regarding future health expenditure
influence them whether to purchase health insurance or not to purchase. Number of
family member is another factor that can influence to purchase health insurance
holding other factors constant, having a small family it is easier to cover medical or
health service cost out of pocket but having a large family it’s not easier to cover
health service cost therefore such families tend to have health insurance either a
package for the whole family or each member having his or her own health
insurance.
Last but not least is age and coverage of illness, as a person grows old, he or she
realizes that health expenditure increases year by year. Likewise, people who are
suffering from chronic diseases like diabetes, blood pressure, cancer and other tend
24
to purchase health insurance since their health is always in risk and tend to go to
hospital for checkup frequently.
2.6
Research Gap
(Shree and Dutta, 2017) the study done in Tanzania which evaluated on different
Health scheme and proposed on single health scheme. Another study evaluated on
the health insurance financing looking at ways health care insurance can be financed
and from this study Kenyan Insurance was found to be one of the best insurance due
to precise and systematic way of funding its National Health Insurance which covers
wide range for both those who are employed in formal and Non-Formal sector (selfemployed) (Deepshikha, Paramdeep and Singh, 2015).
Another study investigated on how National Health insurance can be used a tool to
improve coverage and accessibility of health care services. A study done in Ghana
looking at Inequality of public health insurance coverage in terms of financial
security from out-of-pocket costs and access to health services: cross-sectoral data
from Ghana ( Navarrete, Ghislandi, Stuckler and Tediosi, 2019). Centre (2015) took
a different angle by looking at the consequences of not being insured, focusing at
individual health consequences for both adults and children, economic consequences
and consequences for health system and insured (Kapologwe, Kagaruki, Kalolo and
Ally, 2017).
A study done in Kenya which focused on analyzing the national hospital insurance
fund reforms and their implications towards achieving universal health coverage
(UHC) while using secondary data sources both peer -reviewed publications and
grey literatures from 2010 onwards because it was a years that report of strategic
review of NHIF were produced by Kenyan ministry of health and International
Finance corporation (IFC) .However, the main objective of those reforms was to
increase range of coverage across the country with national health insurance fund
(NHIF) while providing quality health care services and offering security from
25
unpleasant effects of out of pocket payment ( Barasa , Rog , Mwaura and Chuma ,
2018).
A qualitative study was done in Ghana and Kenya focusing on private health care
provider experiences with social health insurance schemes. The study examined the
private providers’ conception and experience with participation of two different
social health insurance scheme in sub- Saharan Africa national health insurance
scheme (NHIS) in Ghana and national hospital insurance fund (NHIF) in Kenya. A
depth interview was conducted with providers working in 79 health facilities in three
regions in Ghana and in three regions in Kenya (seivernding, Onyango and
Suchman, 2018).
This study investigated on economic benefits that households may obtain from
purchasing health insurance looking at factors that influence demand of health
insurance.
26
CHAPTER THREE
RESEARCH METHODOLOGY
3.1
Introduction
This section presents research techniques used to collect data and analyze them. This
section starts by presenting research design followed by the study setting area, study
population, sampling techniques, data collection and analysis ending with reliability
and validity of the study.
3.2
Research Design
Research design is the concaved plan, structure and strategy and analysis to ensure
that questions and control variance are checked (Akhtar, 2016). Also, research
design is part of the research methods and techniques chosen by the researcher. The
design allows researchers to focus on research methods that are appropriate for the
subject and to set up their studies to be successful.
This study employed cross section research design which involve collection of data
from a population at a given time point. This research design is suitable for this
study since it is less time consuming as time and allocated fund for this study is
limited. The quantitative and qualitative data were collected for the purposes and
determining the relationship between variables under the study.
3.3
Study Area
3.3.1 Dar es Salaam in brief and its Geographical Location
Dar es Salaam is a town located in Tanzania, formerly known as Mzizima. This was
once the capital city until 1974, when Dodoma was recognized as a capital city.
Nevertheless, in terms of population, Dar es Salaam remains today the largest city in
Tanzania. Indeed, its population is the highest in East Africa as a whole. Dar es
Salaam's total population is over 4.3million (World Population review , 2021).
27
The City of Dar es Salaam lies between 6 ° 45' Latitude and 39 ° 18' Longitude, E
and 7.10' on the coastline of the West Indian Ocean, extending about 100 kilometers
north between the Mpiji River and south beyond the Mzinga River to the south,
about 1350 square kilometers of land with 8 offshore islands (Prospects, 2020).
3.3.2 Study Population
The study recruited participants who are households’ members between 18-49 years
of age both males and females from the community. Respondents provided vital
information on economic benefits obtained by households from purchasing health
insurance regardless of race, education and economic status.
The selected sample assisted in obtaining important information related to the study
so as to come up with the real picture on economic benefit they obtain from using
health insurance. In district wise this study was conducted at Kinondoni District
with a population of 1.775 million (Census, 2012) and with 13 well known hospitals
including Kinondoni hospital, Mama Ngoma hospital, St. Edward hospital,
Mikoroshini hospital, Sinza hospital , kairuki hospital, Sanitas hospital , Dr.
Agwarwal’s Eye hospital, Comprehensive Community Based Rehabilitation in
Tanzania (CCBRT) hospital, Mwananyamala hospital, Ekenywa specialized
hospital, Msasani Peninsula hospital and University of Dar es salaam(UDSM)
hospital
28
Figure 3.1: Map of Kinondoni District
Source (Suma, 2014)
29
3.3.3 Social Economic Activities
Dar es Salaam is occupied with people from different origins with different culture
and norms, though main natives of Dar es Salaam are zaramo. Most residents are
businessmen and women, government employees, private sector employees, NGOs
though other few groups are fishermen, farms, vendor (Mach ingas), street food
vendors without forgetting those who are jobless making the total population.
3.4
Simple Size and Sampling Techniques
Sample size is the number of individuals representing the whole population or
observations in any statistical setting, such as scientific experiments or public
opinion surveys. Although a relatively simple concept, the choice of sample size is a
critical determination for the project (Jon, 2018). While sampling is the process of
selecting or obtaining samples from the population where samples are drawn.
Kinondoni district has a population of 1.775million with 13 hospitals. The study
used stratified sampling by visiting all 13 hospitals and use simple random technique
to obtain household members with and without health insurance who provided
information on economic benefits obtained from purchasing health insurance.
The sample size was obtained through the following formula.
[ (
Sample size
[
[ (
)]
)]
]
Where;
Z is the Z score that is equivalent to 1.96 at 95 percent confidence level
P is the proportion of the population
e is the margin of error
N is the population that is 1775000
30
[
Sample size =
[
(
[
)]
(
(
)]
]
)
Sample = 384.43
According to Kothari (2004), however, any sample number may be selected as long
as it exceeds the initially determined sample, so this study selected 384 respondents
as the sample number for data collection.
3.5
Data collection Methods
Data collection instruments are tools that are used in gathering data from primary
sources in order to gain new insight about the situation and answering questions that
prompt the undertaking of the study. These data collection instruments are
questionnaires, interviews, observation, focus group discussion and survey. This
study used questionnaires as suitable method of collecting data since it provides
more freedom to respondents to provide information as he or she takes time and
privacy to answer. Therefore, questionnaires were constructed in English language
then translated into Swahili language which made easier for respondents to
understand since it is their mother tongue.
3.6
Data Processing and Analysis
3.6.1 Data processing
Data processing was conducted through editing which ensured completeness and
consistency of research information as similarly applied to discard unwanted and
irrelevant data, verify the same and check for consistency. Data coding was done
which involves grouping answers of a similar nature or meaning into one set of
answers and giving them a particular number called a code was then completed.
Data coding assisted in ensuring the study obtain the appropriate number of
responses for each question, also easing the tabulation of data using figures and
numbers obtained.
31
3.6.2 Data Analysis
The study used descriptive data since they are very useful for describing the area of
study in a quantifiable way. Quantitative data were generated and analyzed through
questionnaires. Descriptive statistics allowed the researcher to present data acquired
in a structured, accurate and summarized manner thus; data were analyzed through
the statistical software Package known as STATA.
3.6.3 Econometric Analysis
This study employed the probit model to estimate the effect on dependent variables
on decision to purchase or not to purchase health insurance. A probit model is a
popular specification for an ordinal or a binary response model, thus being in favor
of the study due to the nature of the dependent variable (execution) being binary. On
the other hand, the probit model is one of the binary classification models’ others
include the logistic regression model (logit) and linear probability model (LPM).
Therefore, this study used the probit model since the dependent variable is binary in
which it can take two values (1 for decision to purchase health insurance and 0 for
not purchasing).
Health insurance cover
Y= Decision to purchase health insurance
1 - Decision to purchase health insurance
1
- Not to purchase health insurance
a vector explanation variable determining household choice to purchase health
insurance
Note that there is a level of utility that is unobserved that can make households to
purchase or not to purchase health insurance and that level can be defined as latent
variable
, such that
32
= 1 that is the decision to purchase
= 0 that is the decision not to purchase
Suppose the decision by household is linearly depend on one or more explanatory
variable
=
If
+
+
follows standard normal probability distribution function
=∫
Let
( +
)dx
represent a probability that a household may purchase health insurance
Household will
Household will not purchase
purchase insurance
P(Y=1/X) =
) ;
( +
= ( +
P(Y=0/X) =1-
( +
)
)
Hence
=
Since
( +
)
=
( +
+…………+ )
Where
βi
=
estimated coefficients of the explanatory variables, which are Income,
knowledge on health insurance, nature of employer, perception on future health
expenditure and coverage of illness.
33
X1= Health expenditure (Tshs)
Income (Tshs)
Knowledge
= Nature of employer
= Perception on future health expenditure
Number of family members
= Age
=Coverage of illness)
34
3.6.4 Variables and their measurements
Table 3.0: Variables and their measurements
Type
of Variable
Variable
(Description)
How variables
measured
Independent
variable
Health expenditure
Respondent’s health average Continues
expenditure per month
Independent
variable
Income
Independent
variable
can
be Nature of data
Respondent’s
average
approximate income per
month
Knowledge
on Respondent’s awareness on
health Insurance
health insurance and what is
all about (Briefly)
Respondent’s
(Government,
Informal sectors)
Continues
Categorical
(1
aware;
0otherwise)
employer Categorical
Private, (1
Government;
0 otherwise)
Independent
variable
Nature of employer
Independent
variable
Perception regarding Knowing respondent’s past Continues
health
future health expenditure, current
expenditure
and what his/her perception
on the future
Independent
variable
Number of family Number of family members Continues
members
of respondent
Independent
variable
Independent
variable
Age
Range of respondent’s age
Coverage of illness
Dieses covered by health Categorical
Insurance (Chronical or (1 Chronical;
normal diseases or both)
0 otherwise)
Dependent
Variable
Decision to Purchase Knowing
whether Categorical
or Not to Purchase respondent has purchased (1 purchased;
health Insurance
health insurance or not
0 otherwise)
35
Continues
3.7
Validity and Reliability
Validity determines whether the research truly measures what it was intended to
measure or how truthful the research results are. Reliability is an assessment of the
consistency of the measurement instrument and thus determined by the accuracy of
the instrument used. The degree to which the instrument is accurate positively or
negatively affects the reliability of the study. First of all, the researcher involved
chief Physician of every hospital in Kinondoni districts. Therefore, Patients were
educated and more emphasize was put on the importance of this study. Hence this
made patients comfortable to provide relevant information required by the
researcher. Likewise, the study used same methodology and software to reproduce
the results and test them again so as to make sure data provided are reliable.
3.8
Ethical Consideration
Consideration of ethics and principles in research reflects the duty of the researcher
to consider, keep the public updated, and protect the dignity and health of human
subjects (Fouka & Mantzorou, 2011). Therefore, this study observed all research
rules and regulation, hence all information provided by respondent were handled
with confidentiality and not used for any other purpose apart from this study. The
ideas of other scholars were also recognized accordingly.
36
CHAPTER FOUR
ANALYSIS AND PRESENTATION OF RESULTS
4. 1
Introduction
This chapter provides a descriptive finding from the primary data study that was
conducted using a researcher's premeditated questionnaires. The chapter is split into
descriptive analysis and regression analysis of the suggested approach for
consideration of the results of the study. Findings are then arranged and presented in
coherent and important structures, which are textual, tabular and graphical
presentations.
4.2
Descriptive analysis
Table 4.0: Descriptive Statistics
Variable
Observation
Mean
Minimum
.6684073
Standard
Deviation
.4714013
Decision
to
purchase
health insurance
Expenditure
Income
Knowledge
on
Health
Insurance
Employment Status
384
384
384
384
24930.92
526901
.6171875
26498.15
543736.9
.4867073
5000
0
0
189000
6,500,000
1
384
.8203125
.3844278
0
1
Perception
of
health
expenditure future trend
No of family members
384
.4114583
.4927399
0
1
250
3.248
2.450001
0
6
Age
384
36.30208
12.08704
18
77
Coverage
250
.464
.4997027
0
1
Education level
384
.8229167
.3822372
0
1
Gender
384
.4661458
.4995034
0
1
0
Maximum
1
Source: questionnaire-based survey data, from Dar es Salaam, May-July 2020
37
4.2.1 Decision to Purchase health Insurance
From table 1 it is shown that most of respondents have made their decision to
purchase health insurance since the mean is 0.66 which is closer to one where by 1 is
decision to purchase health insurance and 0 is the decision not to purchase health
insurance. However, decision to purchase health Insurance tend to affected by socioeconomic characteristics of the population. Based on gender females tend be good
users of health insurance compared to males. Findings shows that 53.5 percent of
respondents were female with health insurance while 46.5 percent of respondents
were with males with health insurance. From table 1 data shows that most of
respondents are female since the average of gender is 0.46 which below 0.5. who
always visit hospitals for their treatments and for their children’s?
However, education being one of the determinants of purchasing health insurance,
findings show that education level is higher for most of the respondents. higher
education Hence shown in Table 1 that average of education level is 0.82 which is
approaching to 1 as it represents high education while 0 represent low education
level. Based on education level 19.6 percent of respondents who have purchased
health insurance have primary level of education, 28.9 percent of respondents who
have health insurance have secondary level of education while 51.4 percent with
health insurance have college or university level of education.
This implies that people with high education level tend to purchase more health
insurance compared to people with low level of education. On other hand income is
one of the factors that determines the decision to purchase or not to purchase health
insurance depend on the expenditure on health services. Table one shows that an
average income is 52,6901(Tshs). Due to the average income of 52,6901 which is on
middle income category this means that health insurance can be affordable. Basing
on income which is categorized on three categories low income earners, middle
income earners and high-income earners. 48 percent of respondents who have health
insurance were low income earners, while 27.3 percent were of respondents with
38
health insurance were middle income earners and the least which were high income
earners which is 24.5 percent of respondents with health insurance.
This implies that people with low income tend to purchase more health insurance
compared to middle- and high-income earners. This is due to the fact that low
income earners are afraid sometimes they lack money to cover health expenses so
health insurance make them feel safe and enable them to get treatment and medical
care even when they don’t have money to cover their health care service expenses.
For middle- and high-income earners is different most of them make payment for
health services out of pocket and having or not having health insurance to cover
their health expenses is not a big deal to them.
Employment status is also one of the determinants on whether a person can decide to
purchase or not to purchase health insurance. From table 1 it shows that most of
respondents are employed or they are in workforce since looking at the average
which is 0.8 which is approaching to 1 which represents employed status. However,
when a person is employed a company may have some commitment to a certain
health insurance scheme. So, all of their employees can be subjected to that
insurance.
Also, even if there are no commitment having a monthly salary may act a security
so it is easy for a person to purchase health insurance and the fee for being a member
can be paid monthly deducted from the salary account. For those who are selfemployed can decide to purchase health insurance and pay per annual (Per year).
oppressively for those who are not employed merely purchase health insurance since
they are not secured with income.
4.2.2 Health Insurance Scheme usage distribution
There are several health Insurance schemes some are public including National
health insurance fund (NHIF) and Community health Fund (CHF). Based on Private
Insurance schemes AAR is very popular, National social security fund and Jubilee
39
insurance while other private health insurance schemes are company based. The
study looked upon people with health insurance and those who do not have health
insurance.
There were about 250 respondents with health insurance, majority of respondents
who were 215 about 56 percent of respondents with health insurance were members
of NHIF. While 16 respondents who are equal to 4.2 percent of respondents with
health insurance were members of CHF, same number of respondents that is 16 were
members of NSSF and the minority that is 0.8 percent of respondents with health
insurance who were 3 were insured with AAR. Seen in figure 4.1
Figure 4.0: Distribution of health insurance scheme usage
250
200
150
100
50
0
NSSF
NHIF
CHIF
AAR
Source: Own survey data, May – July 2020
4.3
Econometric Analysis
The study used econometric analysis to analyze it data. In econometric analysis
probit model was employed, hence probit regression was done. Also, Marginal
40
effect analysis was done so as to calculate the coefficient given the magnitude and
direction.
4.3.1 Probit Model
Table 4.1 : Probit Model
Variable
Coefficient
(P-value)
Health expenditure of households
0.0000148*
(0.000)
Household’s Income (Per month)
0.003720*
(0.018)
Knowledge about health insurance
.3273359*
(0.047)
Employment status of households
.6578247*
(0.047)
Perception on future health expenses
1.281759*
(0.000)
Age of households
.0075264*
(0.272)
Constant
Marginal effect
(P-value)
0.01254*
(0.000)
0.001261*
(0.018)
.1136077*
(0.050)
.2430514*
(0.005)
.4390164*
(0.000)
.0025673*
(0.272)
1.305863*
(0.000)
Source: questionnaire-based survey data, from Dar es Salaam, May-July 2020
In analysis of the regression model, independents variables influenced dependent
variable at different significant level. The variables involved were health expenses,
income, knowledge on health insurance, nature of employment or employment
status, perception on future health expenses, age. Looking at P-value all variables
were significant at 5% level of significant except age which is insignificant at 5%.
Therefore, all these variables were significant enough to influence dependent
variable.
41
The result of probit model in Table 4.2 show that regression of determinants for
decision to purchase health insurance among households living in Kinondoni
district. The fitness of the data was statistically significant at 5% significant level). It
is Interestingly, p-value is less than 5% so if we look at the independent variables.
Influence of independent variables on decision to purchase health insurance
Increase of health expenditure in one Tanzanian shilling (1Tsh) leads to increase in
0.00148 percent increase in purchase for health insurance. As cost for health care
increases people who are not members of any health insurance scheme are attracted
to purchase health insurance, since it is costly to pay out of pocket. As health
expenditure increases still households who are insurances still enjoy benefit of
health insurances, since there will be very small or no changes in their payments for
health services through health insurance schemes.
However, income has a lot of influence in decision to purchase or not to purchase
health insurance. An increase of income by one Tanzania shilling (1Tsh) leads to
increase of 0.37 percent on purchase of health insurance. Health being one of the
capitals in every activity as individual income increases, he or she will invest on his
or her health by purchasing health insurance to make sure he or she is secured in
terms of health so during illness the insurance will cover for health services. On
other hand when income decreases this means paying for health insurance every
month or every year will be like a burden for an individual hence this will
discourage an individual from purchasing health insurance.
An increase of employment by one unit leads to increase of purchase for health
insurance by 65 percent. Once a person is employed in either private or public sector
the possibility to purchase health insurance is very high compared to the other
person who is not employed. Public servants are forced by the system to purchase
health insurance that means it is compulsory for them. While in private sector
employer may inter into contact by either public or private health insurance schemes
42
so as to provide the service to the employees. However, in most cases it is not
compulsory for private sector employees to purchase health insurance.
Perception regarding future health expenditure influences the decision to purchase or
not to purchase health insurance. An individual opinion on regard to future health
expenditure by perceiving that health services will increase in the future leads to an
influence on purchase of health insurance by 28%. Many households are low- and
middle-income earners which means they are always sensitive to price of goods and
services. Therefore, they believe that in health expense will increase in the future
they will find a way to take precaution and the only way for taking precautions is to
purchase health insurance to make sure all members of the family are secured just in
case of any health issue.
4.3.2 Marginal Effect
The predicted improvement in the outcome variable following the change of the
independent variable is what we look at as the marginal effect, all covariates
remaining unchanged. Thus, provided both the magnitude and direction, the
marginal effect is determined to interpret the coefficients.
Decision to Purchase health Insurance
An increase in 1- Tsh of health expenditure leads to decrease of 5.06 unit in
purchase of health insurance. Hence marginal effect shows that there is a negative
relationship between purchase of health insurance and health expenditure. Therefore,
if the payment for health insurance increases due to increase in price for health
services and medical care people will be discouraged to purchase health services
hence purchase for health services will decrease.
While increase of individual income by 1-shilling lead to decrease in decision to
purchase health insurance by 39%. This is more likely to happen to high income
earners, as their income increases, they just cutoff the procedures when accessing
health services while using health insurance and decide to spend out of pocket.
43
On other hand of knowledge on health insurance if one person gain knowledge
concerning health insurance, he or she will influence others, hence leads to 11
percent probability of purchasing health insurance. Most of people buying behavior
is influence by age, peer groups, fashion, quality and information from a right
source. Therefore, increase of awareness concerning health insurances and its
benefits influence others to purchase health insurances so as to obtain the same
benefit obtained by other households.
Looking at the nature of employment, here it is categorized in to two group, who are
employed and unemployed. Therefore, increase in level of employment by one unit
leads to 24% percent increase of purchase of health insurance. Once an individual is
employed, he or she is secured with income which is salary that he or she is paid
every month. The scheme obliges public servants to buy health insurance, which
ensures that it is mandatory for them to do so. Once in the private sector, employers
can come into contact with either public or private health insurance schemes in order
to provide services to employees. Nevertheless, in most situations, it is not
mandatory for employees of the private sector to buy health insurance.
Perception regarding to the future expenditure the perception of one individual
always affects others. Findings show that if one person perceives that health
expenses will increase in a near future this leads to 43 percent probability of
purchasing health insurance. Many households like forecast on the basis of the
present trends and predicts the future. Therefore, if they predict that future health
expenses will increase due to rise of living standard or expectation of new born
which will increase number of family members. Hence purchasing health insurance
will be the first option on taking the precautions.
44
4.4
Challenges faced by patients while using health insurance to access
health services
Figure 4.1: Challenges faced by Patient while using health insurance to access
health services
120
100
80
60
40
20
0
Inadequate
medical care
Inefficiant
system leading
to bureacracy
Being
discriminanted
and less
prioritized
Few hospotals lack on effective
can accept
system to
public health
accommodate
Insurance
iformal sectors
Source: Own survey data, May – July 2020
Despite the fact that there are social and economic benefits obtained by insured
households but there are challenges faced by households while using health
insurance as a means of payment. Findings show that 112 respondents who are 40
percent of all respondents commented that not all medical care are available in the
hospitals so they have to buy somewhere else spending out of their pocket while
they have already paid for health insurance. Meanwhile 60 respondents same as 21.4
percent of respondents said there are few hospitals that can accept public health
insurance though they are tool by the insurers that can be accept in any hospitals and
which is what is supposed to be.
However inefficient system in many hospitals has led to a lot bureaucracy for those
patients who are insured. This was said by 20.7 percent of the respondents equal to
45
58 respondents saying there a lot useless procedure to be followed while accessing
health services through health insurance. Therefore, the system seems to very slow
but all patients whose are using health insurance have to follow them even if they
are in worse conditions. Also 33 respondents same as 11.8 percent of respondents
said the is no effective system to accommodate labors working in informal sector.
Looking at the fact that there is a good financing system for formal sector employee
for both private and public servants. This implies that if there could be a good
system to accommodate labors in informal sector many people would have join in
different health insurance schemes. While the minor group who are 17 respondents
same as 6.1 percent said those, who are insured are discriminate and not prioritized
as those who pay out of pocket.
46
CHAPTER FIVE
DISCUSSION OF FINDINGS
5.1
Introduction
This chapter makes a comprehensive discussion of both descriptive and empirical
findings. Findings a discussed with regard to the study specific objectives relative to
other literatures
5.2
Comparison between cost of health care services before and After the
purchase of health insurance.
Findings shows that out of 384 respondents 250 respondents had health insurance
and the rest 134 were not insured. During data collection some of respondents were
not sure about their health expenditure before they had health insurance though
some would tell in approximately for their health expenses as an individual and for
their family as whole. Findings showed that most of people spent a lot of expense on
health spending before they obtained health insurance where by 15 to 20 percent of
their incomes were used for health spending for themselves and their families.
Nevertheless, despite buying health insurance their health spending was less than
equal to 10 percent of their salaries. This means that making payment out of pocket
is always expensive especially for the ones with families as they have to pay for
everyone’s health care services. However, after purchased health insurance patients
started to get relief as small amount is always deducted from the salaries to cover
individual health expenses and those with families their dependents are also insured
with the same insurance.
Therefore health insurance provide security for individual and for the family, since
people become secured as they have insurance , so when it happens a person is sick
or accident there is no need to worry as health insurance cover all the health care
expenses no matter how the expensive the service or treatment when measured in
monetary value.
47
Families with one uninsured participant face shame, fear, and the risk for financial
disaster. Uninsured households are more likely to have high out-of-pocket spending
on health insurance than insured households, although they pay less overall on
treatment (Except premiums). Uninsured individuals who undergo a host of
hospitalization experience economic losses over the next four years, including
decreased credit availability and slightly increased risk of bankruptcy filing (Centre,
2017). The welfare effects of insurance are therefore optimistic and clear; a family
can prevent big shocks to its resources with insurance, which can significantly
reduce its financial insecurity (SSempala, 2018).
However, employees who are not ensured face numerous of compromises since the
reimbursement system in not considered in health insurance. Therefore, most of
them end up spending out of pocket which increases financial burden to them since
at the end their health spending is not reimbursed (Randall, 2020). Therefore, health
insurance plays vital role in ensuring financial protection to household during
illness. Though uninsured households tend to rely on informal coping systems for
smooth consumption. Nevertheless, these informal coping strategies can have
potentially harmful long-term consequences even though uninsured households are
able to smooth consumption in the short term (Adeyemi, 2019).
5.3
Factors affecting the Purchase of health insurance
There are several factors that determine demand for health insurance, unfortunate
health being one of social need many of the determinants are socio- economic
factors. This factor include gender, level of education, status or nature of
employment, income, coverage of illness, number of family members, perception on
future health expenditure.
Descriptive statistics shows that females are the one who purchase more health
insurance compared to males. Looking at the average of gender on purchasing health
insurance which is 0.4 which is approaching to 0 which was the code for terming
females while 1 was the code terming males. Therefore, most of health insurance
48
customers are females looking at the fact that women are more likely to be subjected
diseases due to the biological system. However, women are less risk taker so having
no health insurance is too risky for them regarding most of them having low income
compared to men.
Looking at level of education which was categorized into group low level of
education meaning primary education and High-level education which include
secondary and college or university level. Findings show that the average of
education level is 0.8 which means most of respondents have high level of education
since high level of education was termed as 1 and low level of education was termed
as 0. Hence during learning process people come across different things and they
gain exposure from different places and from different people who they come across
with. So, when a person has high level of education, he or she is likely to become
aware health insurance.
Furthermore, when a person reaches university level it means he or she is above 18
years old. Therefore, in most health insurance schemes an individual with 18 years is
counted as independent meaning he cannot depend on his or her parent health
insurance. However, NHIF has created a systematic health insurance fund system
allowing every university student to pay a small amount per year as a membership
fees which is 50400 Tanzania shillings which is reasonable and affordable for most
of university students. Therefore, by paying this fee a student can be treated in many
hospitals including both government and private health facilities.
Nature of employment was another factor that determine decision to purchase health
insurance it was also categorized into groups, employed and unemployed. Findings
shows that the average of nature of employment is 0.8 which means most of
respondents are employed since employed was coded as 1 and 0 for unemployed.
People who are employed or self-employed are secured with monthly income or
profit. Hence it is easier for them to become members of certain health insurance
scheme since, a certain percent is deducted from their salary every month.
49
Findings show that the average income of respondents is 526,901 Tanzanian
shillings. this implies that most of the patients from different hospitals in Kinondoni
district are middle income earners. One of the characteristics of middle-income
earners is that they try to earn more and save more. Therefore, paying health
expenses through health insurance is a big piece of cake as they struggle to save
more. According to Richard (2018) With the extra profits from a drop-in healthcare
costs customer may then buy more medical services and other products. As revenue
increases it motivates customers to purchase health insurance.
Despite the potential benefit gained from increased health coverage and other goods
exceeds the expected utility loss due to payment. Thus, customers attempt to
compare the total gain with the potential risk of extra protection in order to achieve
an acceptable purchasing policy. A study done in Malaysia it was found that for
employees factors that affect the decision to purchase health insurance are the level
of income, age, gender, race, religion, level of education , job sector and adverse
selection affected the decision to Purchase health insurance while for unemployed
ones factors affecting purchase of health insurance are race, ethnicity, educational,
marital status and how much an individual spend out-of-pocket (OOP) health costs
were factors that affected the decision to buy health insurance. The price effects on
the probability to purchase or not to purchase was found to be vital for salaried
individuals, but not for non-salaried individuals (Arpah, 2016).
Also, coverage of illness can determine the decision to purchase. It must be noted
that disease can be categorized into two groups normal diseases or diseases that can
easy be treated like malaria, typhoid, cholera and the like. The second group is
chronic diseases meaning they need special treatment some take a long time to be
cured and others its treatment has not yet been found, these diseases are like cancer
(Blood, Brain, breast, and Lung cancer), diabetes, Pressure, HIV/Aids and others.
Looking at the average on coverage of illness on purchasing health insurance which
is 0.4 which is approaching to 0 which was the code for terming chronic disease
50
while 1 was the code terming normal diseases. This means that most respondents’
health insurance includes treatment of chronic diseases and this attract many people
to purchase health insurance.
In the past, use of health and social capital was strongly correlated with actual takeup of insurance. Unlikely the purpose of health insurance uptake still depend on age
and household size seems to matter in explaining the actual uptake of health
insurance. In line with current research, older people are likely to be covered,
suggesting that households are negatively chosen to cover older members who may
be more likely to have chronic diseases and more likely to have health needs
(Adeyemi, 2019).
Likewise, all health insurance schemes have been able to accommodate up to 6
members of the family. Meaning one member of the family can purchase a health
insurance and it can be used by all his or her dependents. This happens mostly when
a parent purchase health insurance can also be shared by another parent and their
children who are below 18 years old. When a person reaches 18 years old health
insurance scheme count him or her as a self-dependent.
Last but not least is the perception on future health expenditure, due to the rise of
cost of living it can hardly be said that health expenditure in the future will decrease.
Therefore, cost can remain the same for some time or can rise due to rise of cost
living. Therefore, this study termed future health expenditure to remain constant as 0
and increase was termed as 1, looking at its average on descriptive analysis which is
0.4 approaching to zero which implies that most of respondent’s ague that future
health expenditure will remain the same for some time.
5.4
Challenges in accessing health care services while using health insurance
Notwithstanding many health insurance scheme members have benefited a lot from
health insurance, but there are also obstacles they encounter when accessing health
services.
51
Inadequate medical care is one of the challenges that most of patient’s, by 40 percent
of respondents commented that most of the recommended medicine and medical test
are not available. Therefore, they are told to go somewhere else and use their own
money (out of pocket) to buy those medicine. Likewise, there have been a tendency
that patients are told to wait for a specialist (Specialized doctors) since they are not
present at that time. This can take more than two weeks and even a month without
any positive answer.
The system for health insurance user is still inefficient and there have been a lot of
procedures to be followed before being treated. 20.7 percent of respondents
mentioned the issue concerning referral, one cannot be treated in regional or national
hospital unless you have a referral from the hospital that provided you a health
insurance. Furthermore, you must have a control number from the previous hospital.
However, there are few dispensaries that accept health insurance as medium of
payment. Both government and private sectors have done a lot of efforts to make
sure there is at least one dispensary in one ward. Unfortunately, many of the
dispensaries nearby people’s residence do not accept health insurance as way of
paying for their health services rather they accept cash only. This has been a
challenge to most people as they must look for other health facilities far from their
residence which can accept health insurance.
In Many hospital patients who are using health insurance to pay for health services
are discriminated this was said by 6.1 percent of respondents. since they are seen as
vulnerable group or people with low income and for that case those who are paying
out of pockets are given priority. One of the respondents was quoted “Other
countries have racism while in our country there is income discrimination.
Likewise, to the study done in Nigeria found that there are three major challenges
facing health sector in Africa. From the viewpoint of the six pillars of the WHO
healthcare system, the key challenges still lie in leadership and administration,
health personnel and the provision of health services and funding. While these
52
categories tend to overlap individual problems that make up these categories, it
makes it possible to prioritize the parts of the healthcare system most affected or
needing immediate attention.
Lack of human capital is the biggest problem facing the health sector in Africa. This
is both open and covert, reflecting the complexity of this challenge. It is open in the
sense of insufficient number of workers, mix and distribution resulting from
inadequate production from training institutions; brain drain to Europe, America and
Asia; and unfavorable government policies to minimize jobs in civil services.
Factors which are covered includes insufficient healthcare staff to provide services
resulting from worker strikes in the healthcare sector, participation in private
practice (rather than in public hospitals), internal migration to major cities and
insufficient attitude towards work. This is similar with WHO's findings, which
showed that sub-Saharan Africa (SSA) faces the greatest challenges in human
resource shortages for health. Each part of the health care system depends on the
people who administer the services and deliver them. Healthcare delivery, for
example, relies heavily on the individuals who supply the clients with the services.
Yet over the years, the health care workforce has not been given the attention it
deserves (Oleribe , 2019).
53
CHAPTER SIX
SUMMARY CONCLUSION AND RECOMMENDATION
6.1
Introduction
The chapter deals with the findings and implications of the study, also the researcher
tends to achieve areas of further research and research limitations.
6.2
Summary of the Study
The study acquired data from one district in Dar es Salaam that is Kinondoni district.
384 individuals participated in the study through questionnaire. Descriptive and
econometric analysis were employed to analyze the study objectives aimed at;
examining the cost of health care services before and after purchasing health
insurance, assessing the factors determining decision to purchase the health
insurance. Also, the study wanted to identify challenges facing households in
accessing health care services using health insurance.
Findings shows that most of people incurred a lot of cost on health expenditure
before they purchased health insurance where by 15 to 20 percent of their salaries
were used for health expenditure for themselves and their families. However, after
purchasing health insurance their health expenditure was less or equal to 10 percent
of their salaries.
The study also aimed at examining determinants for purchasing health insurance
whereby there were several factors that influence the decision to purchase or not to
purchase health insurance which were income, knowledge about insurance, age
coverage of illness meaning ( normal diseases or chronic disease), perception
regarding future health care expenditure and number of family members.
Notwithstanding that health insurance enable most of low- and middle-income
earners to afford various health care services that they could not afford constantly
54
out of their pockets. But also encountered some challenges while using health
insurance. A lot of bureaucracy before access to different health services this was
prominent to government hospitals including having referral from regional hospital
before accessing health services from other hospitals. Some medical checkups and
medicines are not available so a patient must incur another cost to purchase them
somewhere else. However, it is very rare to find a specialized doctor available when
needed.
6.3
Conclusions
Findings indicate that individual with health insurance are more secured than those
who do not have since they can access health care services even when they do not
have money. Also having health insurance saves a lot of money during accessing
health services since an individual can pay less than he or she would pay from out of
pocket (OOP). Hence health insurance schemes have been beneficial to low- and
middle-income earners as most of high-income earners spend out of pocket.
More efforts should be placed on improving public health insurance schemes
towards accessing health services in difference health centers, since it is mainly used
by many citizens. However, the health financing system is not balanced between
sectors since findings shows that there is lack of effective system to accommodate
labors working in informal sector. Therefore, labors employed in informal sector are
not attracted to join in health insurance schemes as members.
However, findings revel that most of people who are insured have registered
themselves as members of National Health Insurance scheme (NHIF), followed by
National social security fund (NSSF) and Community health Fund (CHF) and very
few are members of AAR insurance. This means that NHIF is affordable hence
many can access its insurance. Furthermore, NHIF has different packages for
individuals, family (TIMIZA) and university students’ package which is a renewable
contract every year. Hence this is the most preferred health insurance scheme in
Tanzania. Therefore, since it is a public health insurance if there are any
55
improvement to be done in health insurance sector then they should base on the one
which is used by many citizens which in National health insurance fund (NHIF) so
as to benefit the majority
6.4
Recommendation of the study
Thus, as according to the study, in order to improve health insurance coverage, the
following recommendations should be taken into consideration.
6.4.1 To Health Insurance Schemes
Health Insurance schemes should make sure their members have access to better
quality health services from their nearby health centers. Making a follow up in
health centers and make a specially departments for those who are paying for health
services through health insurance. Having a separate section and special departments
for providing health services for those who are using health insurance, will reduce
bureaucracy and complications. Hence this will save time since there will be skilled
personnel especially in administration department who are well trained and skillful
in processing health insurances. Therefore, processing health insurance card will
take few weeks and this will enable patients to obtain health care services through
health insurance without much paper work and frequent follow up.
Health insurance schemes should improve their systems and make sure their workers
are skillful enough to deliver quality services to customers using shortest period of
time. Patients have been complaining that it takes time to process health insurance
especially for public health insurance schemes. It can take at least one month and it
is very long time for patients who have serious illness. Therefore, health insurance
should make sure processing customer’s insurance card takes short time as much as
possible so as to save somebody’s life.
Public health insurance schemes like NHIF and CHF should improve their service
by making their insurance being accepted in private hospital. This has been one of
the major challenges facing public health insurance users. Since some private
56
hospitals do not accept public health insurance and this has cost many patients since
some of government hospital are far from their residence. Further public health
insurance scheme should inter into contract with private health facilities like private
hospital, health centers, private clinics and private dispensaries. The contract
between private health facilities and public health insurance should be transparent to
all citizen and all the agreement should be disclosed to make sure all members of
public health insurance schemes have freedom to access health services from private
health facilities.
6.4.2 To health facilities
Health facilities including hospital, health centers and dispensaries should reduce
bureaucracy during provision of health services while using health insurance.
Bureaucracy discourage patients from using health insurance and sometimes delay
of treatments worsens patient’s illness. Public health care providers should improve
efficiency of
their system of delivering health care services through health
insurance. Since delay of treatment to patients led to delay of other development
activities in our society, due to the fact that health is the first human capital. In order
for an individual to perform well in social and economic activities he or she must be
well mentally, emotional stable, and physically fit. Therefore, the faster the recovery
of an individual from a certain illness the sooner he or she becomes productive and
gets back to perform different developmental activities in the society.
Likewise, patients should be treated equally regardless of their means of payment
whether they are using health insurance or out of pocket. In many hospitals patients
who spend out of pocket are given priority while other who are using health
insurance are ignored. It should be kept on mind that all patients are equal but they
just use different means of payment, others use out of pocket while others use health
insurance. Therefore, paying out of pocket should not be considered as a form of
corruption in health facilities neither should payment through health insurance be
considered as a means of payment for low income earners or vulnerable group.
57
Regarding the fact that Tanzania is one of the middle-income countries, therefore
Tanzanians expect quality social services including better education and improved
health services. Health capital being a mother of all other forms of capital including
social, material, financial, intellectual capital and living capital but not limited.
Health facilities should encourage the government to invest more in health sector by
providing all required health infrastructures like skilled health workforce, effective
administrative health system, transport system, communication networks, sewage,
water and electric system. However, health facilities should make sure all required
health tests and medical care are available, even if it required request for additional
fund from the government to purchase them.
6.4.3 To the government
The government should improve health financing system which can incorporate
those who are employed in formal sector, informal sector, self-employed and those
who are not employed. According to human right very citizen has right to obtain
highest standard of physical and mental health. Therefore, the government should
make sure that all health insurance schemes have a well-established financial system
which can accommodate people with different streams of income and different
levels of income. Note that every citizen has a right to obtain a standard quality
health services at a reasonable amount of money. Hence government is there for its
people and should stand for them to make sure there are no barriers for any citizen
who wants to be a member of a certain health insurance scheme regardless of their,
gender, income , level of education or any factor that can be discriminate other
people as it is always done by unfaithful public servants.
The Government should establish campaigns which will provide education to all
citizen on importance of having health insurance. This should be done across the
country so as to enable those who are not aware of health insurance to be aware of it
and its benefits. However, there should be full disclosure of all information about
every health insurance scheme including health insurance packages and how they
differ from one another. It should be kept in mind there are many citizens especially
58
in rural areas who need to be educated on health insurance. Therefore, Ministry of
Health, Community Development, Gender, Elderly and Children should not only
focus on providing health services to people in rural areas but also should provide
education on health insurance, what is it all about, its financing system, its
accessibility, and its social and economic benefit.
The government should plan on strategies to reduce the level of poverty. Most of
labor force in informal sector is characterized by low income. 27 percent of
respondents who did not have health insurance, most of them have employed
themselves in informal sector. Therefore, they fail to purchase health insurance since
they usually receive daily low wages or little profit that cannot satisfy their basic
needs. Hence when plans for poverty reduction are implemented, individuals
working in informal sector will be given priority as they are subjected to low
income. Consequently, people working in informal sector will save more and being
able to invest in different economic activities, purchasing bonds, securities and
insurance such as health insurance.
6.5
Limitation of the study
Due to limited time and Funds, the study was conducted in Dar es Salaam region at
Kinondoni district; hence the results cannot be generalized for the whole region or
even for the whole country. The study used questionnaire only as it was the best way
to collect data from patients during the Pandemic of Corona virus (COVID-19)
otherwise the combination of interview and questionnaire would have been the best
option for this study. Moreover, there were a lot of procedures to be followed before
being allowed to collect data from hospitals and these made a researcher to take one
month and 12 days to collect data which was a lot of time than expected.
6.6
i.
Recommendation for area for further studies
The researcher recommends that other studies should focus on awareness of
health insurance across other regions. Looking at the way health insurance
schemes use to bring awareness whether are advertisements, sensitization
59
program since most individual especially in rural areas are not aware of health
insurance scheme and their benefit.
ii.
Also, the researcher suggest that other studies should focus on assessing social
benefit that individual, or household can obtain by using health insurance as
means of payment for health care services.
iii.
Another interesting area for further studies is examining the quality of services
delivered by different health insurance schemes across the country while
focusing on perceived quality of services, time for delivery, and the
infrastructures of each health insurance scheme.
iv.
Researcher recommends that other studies should examine social-economic
factors affecting informal sectors in up taking health insurance.
60
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APPENDICES
APPENDIX I : Questionnaire
Dear respondent,
Am Fares Mshujaa a student from Mzumbe University Dar es Salaam Campus
Pursuing masters of Science Applied Economics and Business. Currently am
conducting a research on Economic benefit obtained by households from
purchasing Health Insurance. I kindly ask for your cooperation by answering the
following questions in order to simplify my research
Questionnaire no…………………………………………………………
Name of the respondent ………………………………………………….
Please put a tick (√) for a correct option and put some explanation where is needed
PERSONAL INFORMATION
1. Gender
a) Male
b) Female
[ ]
[ ]
2. Age ---------- years
3. Marital status
a) Married
b) Not married
c) widow/widower
[ ]
[ ]
[ ]
4. What is your level of education?
a) Primary education
b) Secondary education
c) College /University education
[ ]
[ ]
[ ]
HEALTH INSURANCE INFORMATION
5.What are you doing for living
a) Employed in government sector
b) Employed in Private sector
c) Self Employed
d) Student
[
[
[
[
66
]
]
]
]
6. What is your average income per month? …………. Tshs
7. what is your average health expenditure per month ………………………. Tshs
8. Do you have any knowledge on health Insurance?
a) Yes
b) No
[
[
]
]
9. If the above answer is yes, please briefly explain below
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
………………………………………………………………
10. In your working place are there health benefits including health insurance
a) Yes
[
]
b) No
[
]
11. If the above answer is yes which insurance scheme are you registered as a
member
a)
NHIF
[
]
b)
CHIF
[
c)
AAR
[
d)
Other private Insurance, please specify ………………………
12. Does your health Insurance scheme offer different packages
a) Yes
67
]
]
[
]
[
]
b) No
[
]
13. If the above answer is yes what are the criteria used to categorize those packages
kindly
Explain below in brief
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
14. Have you purchased any health insurance?
a) Yes
b) No
[
]
[
]
15. Which health insurance package did you purchase and what are the reason for
purchasing
Such package
 Name of the Package ………………………………………………….
Reasons
i.
ii.
iii.
iv.
……………………………………………………………………………
……………………………………………………………….
……………………………………………………………………………
………………………………………………………………….
……………………………………………………………………………
………………………………………………………………….
……………………………………………………………………………
……………………………………………………………………
16. For how long have you been insured by health insurance …………………Years
17. In approximation what was your average spending in health care expenses per
year(Tshs)
Before
you
purchased
health
insurance
……………………………………………. Tshs
68
18. After you had health insurance in approximation what was your average
spending in health
Care expenses per year in ……………………………………………………Tshs
19. Looking at the trend on health expenditure what is your perception on your
future health expenditure………………………………………………….
20. Does the health Insurance you purchased include your family members
a) Yes
[ ]
b) No
[
]
21. If the above answer is yes, how many family members can the health insurance
scheme allow to be insured ………………………………members
22. Which types of illness does the health insurance you are registered in cover?
a) Chronical diseases
b) Normal/ other diseases
23. what do you think are the advantages of being insured by health insurance over
spending Out of pocket on health care expenses
i.
………………………………………………………………………
…………
ii.
………………………………………………………………………
…………
iii.
………………………………………………………………………
…………
iv.
……………………………………………………………………..
………
24. what are the challenges you have been facing when accessing health care
services by using by using health Insurance
a) ………………………………………………………………………………
…………………………………………………………………………….
b) ………………………………………………………………………………
…………………………………………………………………………..
c) ………………………………………………………………………………
……………………………………………………………………………
69
d) ………………………………………………………………………………
…………………………………………………………………………
25. What should be done to overcome such challenges, feel free to make your
suggestions below
1. …………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
2. …………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
3. …………………………………………………………………………………
…………………………………………………………………………………
*** THANK YOU FOR YOUR COOPERATION***
70