Willingness to pay for private
voluntary health insurance in
southeast Nigeria
Obinna Onwujekwea and Edit V. Velényib
a Health policy Research Group/Department of Health
Administration and Management, University of Nigeria, EnuguCampus, Enugu
b The World Bank, Washington DC.
Rationale
• A real challenge of health care financing in
Nigeria is the paucity of insurance mechanisms
for financial risk protection.
• Public expenditures in Nigeria account for 20-30%
of total health expenditures whilst private
expenditures accounts for 70-80% and the
dominant private expenditure is out-of-pocket
spending (OOPS) (Soyibo, 2004)
• The dominant reliance on OOPS and the
considerable absence of risk sharing is largely
responsible for catastrophic health expenditures
Rationale CONTD
• The National Health Insurance Scheme (NHIS) was
launched in 2005 but its coverage is limited to federal
government civil servants.
• What happens to other people?
• The National Health Financing Policy provides for the
use of private voluntary health insurance (PVHI) as one
strategy for ensuring universal coverage with health
insurance in the country
• It is important to understand the willingness of
consumers to enroll and pay for PVHI for developing and
implementing viable PVHI schemes
Objectives
• To determine the willingness to enroll and
to pay for PVHI
• To understand the determinants of
willingness to enroll and WTP for PVHI
Research Methods
• The study was conducted in an urban area
and a rural area in Enugu State, located in
southeast Nigeria
• Pre-tested interviewer administered
questionnaire was used to collect data
from a random sample of 200 households
from the rural and 250 households from
the urban area
Research Methods II
• The Contingent valuation method (CVM) was
used to elicit willingness to pay (WTP) for PVHI
using the bidding game question format.
• Before eliciting WTP, a scenario was presented
to the respondents describing PVHI, its potential
benefits, benefit package and payment vehicle.
• All the respondents were read an introductory
explanation (in the local language) about PVHI
and the CVM scenario.
Data analysis
• The data was examined for links between
socio-economic status (SES), geographic
location and occupation with WTP and
willingness to enroll
• Ordinary least squares (OLS) multiple
regression analyses were undertaken to
tests for theoretical (construct) validity of
elicited WTP for PVHI
Results
Willingness to enroll and to pay for PVHI
• 380 (86.0%) respondents were willing to
personally enroll in PVHI and 377 (85.7%) were
willing to enroll other household members.
• 220 (52.1%) respondents were willing to pay a
monthly premium of 500 Naira ($4.2) for
themselves, whilst 98 (23.6%) were willing to
pay $4.2 for other household members.
• 226 (53.2%) were willing to contribute some
money so that the poorest people in their
communities would benefit from health
insurance.
Results II
• For the full sample of the respondents, the
median monthly WTP for personal premium was
500 Naira ($4.2), whilst it was 200 Naira ($1.7)
per person for other household members.
• The median monthly altruistic WTP amount was
33.3 Naira ($0.3).
• The mean WTP for respondents and for other
household members were $3.3 and $2.2
respectively for the full sample.
• For only the respondents that were willing to pay,
the mean WTP for respondents and for other
household members were ($5.2) and ($5.0)
respectively.
Results III
• Rural dwellers and worse-off socioeconomic status (SES) groups stated
smaller WTP than urbanites and better-off
SES groups.
Results III: Geographic differences in willingness to enroll
and to pay for PVHI
Mean (SD)
WTP self
Median
WTP self
Mean (SD)
WTP for other
householders
Median WTP
for other
householders
Urban
459.1 Naira 500 Naira
(342.8)
292.4 Naira
(265.3)
200 Naira
Rural
314.6 Naira 200 Naira
(221.6)
218.7 Naira
(215.7)
100 Naira
SES differences in willingness to enroll and pay for PVHI
Q1 Most
Q2 Very
Q3 poor
poor n = 109 poor n = 109 n = 109
Q4 Least
poor n = 109
Willing to
enroll (self):
n (%)
104(95.4%)
99(90.8%)
86(78.9%)
88(80.7%)
Willing to
pay (self):
n (%)
38 (34.9%)
53(48.6%)
58(53.2%)
70(64.2%)
Willing to
104(95.4%)
enroll other
householder
s: n (%)
97(89.0%)
84(77.1%)
89(81.7%)
WTP for
17 (15.6%)
other
householder
17(15.6%)
28(25.7%)
36(33.0%)
s: n (%)
SES differences CONTD
• As SES increases so does the level of
WTP to pay for PVHI (p<0.01).
• For only the positive WTP cases, the
mean WTP for the respondents was $4.4,
$5.1, $4.8 and $5.9 for Q1,Q2,Q3 and Q4
• For only the positive WTP cases, the
mean WTP for the other household
members was $4.6, $5.1, $4.8 and $5.3
for Q1,Q2,Q3 and Q4
Construct validity
• WTP was positively statistically
significantly related to acceptability of
health insurance and socio-economic
status of the households (p<0.05).
• The regression models were statistically
significant (p<0.01).
Conclusion I
• PVHI is a promising strategy for health
financing in southeast Nigeria
• Unsubsidized PVHI may never cover
everybody especially indigents, but if it
covers some of the people willing and able
to pay such as the better-off SES classes,
that is at least better than having them
face high OOPS
Acknowledgement:
• We are grateful to The World Bank,
Washington DC for funding the study.