GRET - SKY Health Insurance Project Cambodia

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GRET - SKY Health Insurance Project Cambodia

GRET - SKY Health Insurance Project Cambodia

Briefing Note March 2007

Acronyms used in this document :

    GRET = Groupe de Recherche et d'Echanges Technologiques

    HIS = Health Insurance Scheme

    SKY = acronym for “Insurance for our Families” in khmer

    MoH = Ministry of Health

    OD and PHD = Operational Health District and Provincial Health Department

1. Context

    GRET has been active in Cambodia since the late 1980s in several fields of economic

    development (agriculture, micro-finance, water sanitation, etc.). GRET launched in particular

    a micro-finance program in 1991 that progressively turned into a financially viable, legally

    recognized micro-finance institution called AMRET (formerly EMT). AMRET now covers

    over 150 000 clients in 12 provinces of rural Cambodia.

    In 1998, GRET found out that a health insurance product would be relevant to protect poor

    rural households against severe health expenses, as a complement to micro-credit. GRET

    therefore launched an experimental rural health insurance project covering two Cambodian

    provinces (Kandal and Takeo) the same year.

    Micro-insurance is an innovative approach, in Cambodia and worldwide; there are very few

    international references on health insurance for poor populations. For this reason GRET

    health insurance project in Cambodia received the "Pro-Poor Innovation Award" from CGAP1

    in 2000.

    The project is currently supported by AFD (French development Agency) and GTZ. SKY also

    receives strong institutional support from the Cambodian Ministry of Health via a formal

    NGO agreement.

2. Health Insurance Project rationale

    Several studies have confirmed that health risks are a crucial factor in the impoverishment

    of households in Cambodia:

    - Cambodia is one of the countries of the world where health conditions are among the

    worst and where families invest the most in care (health care expenditures represent a

    high percentage of household income in Cambodia; and a caesarian section costs close

    to 100 USD while the annual income of a poor farming family does not exceed 400


- Health problems pull households into situations of heavy indebtedness or

    decapitalisation, in the face of which micro-credit is no longer adapted as a solution;

1 Consultative Group to Assist the Poorest (donor consortium specializing in micro-finance, founded in 1995)

    GRET SKY Briefing Note 1

Developing health insurance to reduce the impact of health problems on households is

    therefore a considerable stake in poverty prevention. 3. Key objectives of GRET Health Insurance Scheme

    The project‟s objectives can be summarized as follows:

? Secure the incomes of Cambodian households by limiting the economic consequences of

    large health expenditures (illness, accidents);

    ? Facilitate and encourage these households' access to appropriate quality health care.

    4. These objectives are in line with the general Strategic Plan of the Ministry of

    Health for 2003-2007

    Cambodian Ministry of Health has set a strong pro-poor approach in all the working areas of

    its strategic plan for 2003-2007. The objective is to limit the impoverishing effect of health

    care expenditures for catastrophic risks while ensuring poorest people's access to quality

    health care.

    Considering this strategy and priority action, GRET believes that private/ community based/

    voluntary health insurance scheme is part of the alternative health financial schemes that can

    be piloted at an appropriate scale, in line with the Strategic plan 's goal, given that the scheme

    intends be:

    (i) A local "safety net" to prevent households falling into deeper poverty when facing

    health expenses

    (ii) A tool to channel households from inappropriate and expensive care delivered by

    private practitioners to public health facilities (iii) An external/independent body between users and public providers, that can enhance

    quality in partnering public health facilities by "voicing" users, but at the same time

    promote existing public health services in rural areas and encourage households to

    change their way of assessing quality of care

    (iv) A complementary mechanism to reinforce public health providers' utilization and

    secure a part of their financial resources through capitation mechanism. Piloting health insurance scheme fits into 4 of the 6 priority working areas that have been set

    in the Cambodian MoH‟s strategic plan. It should locally contribute to achieve the general

    expected outcomes in the following working areas:

    - Health service access and delivery

    - Health care quality improvement

    - Behavioral change and communication

    - Health financing

    Besides, through planning and sharing health expenditures, GRET health insurance services

    are expected to limit the impoverishing effect of health expenditures but will be harmless to

    improve access to care for households who are already into the poverty trap: It is obvious that

    the poorest of the poor will not access insurance services that require to pay a premium even if


    Since MoH plans to implement pilot Equity Funds to improve access to care for the poorest,

    GRET is working on building efficient complementarities between Equity Funds and the

    community based Health Insurance Scheme when active in the same area. In specific


conditions, the Equity Fund could purchase the insurance premium for the pre-identified

    poorest instead of covering the whole cost of care, which would considerably enhance its


In order to ensure a regular dialogue with major stakeholders in the health and social health

    insurance sectors, GRET has therefore initiated together with MoH a Social Health

    Insurance Consultative Group (HICG). This Group aims to be a platform for discussions on

    health insurance in Cambodia, contributing to reflections on health financing in the country,

    and favoring experience sharing from GRET Health Insurance Project and other on-going


    GRET also strongly contributed to the redaction of the Community Base Health Insurance

    guidelines, published by ministry of Health at the end of 2006. GRET is part of the

    stakeholders involved in discussions regarding the preparation of a sub-decree defining the

    conditions for microinsurance operations.

    5. Project Stages & Outputs

    5.1 The experimentation process (1997-2001) went through the following stages:

    1997: studies, reflection on the model, market research;

    1998-1999: first intervention zone (Kandal): evolution of the insurance product from a simple

    service limited to a few major risks (death, amputation, surgery in the trunk) towards

    proximity primary health care (provider model; recruiting a doctor to the team);

    2000-2001: opening of a second zone (Takeo), using a different, 'insurance only' models (no

    longer including the primary health care offer) and seeking to establish partnerships with pilot

    health care structures (hospital).

    Until the end of 2001, implementation was therefore limited to a reduced and progressive

    scale to ensure validation of the lessons learnt before expanding the system.

    At the end of 2001, the health insurance system covered 389 insured in two communes in

    Kandal province (14% of the population) and 81 (9%) in the new zone in Takeo.

    5.2 In the second phase (2002-2005), the project developed the following activities in

    order to consolidate the scheme and increase membership:

    - Developing partnerships with health care structures (2002-2004), to closely manage

    quality and payment of care for insured:

    - Kandal province : partnership signed in July 2002 with Roluos primary health care

    center (capitation payment mechanism). (See Annex: description of insurance

    services offered)

    - Takeo province:

    - Zone 2: partnership signed in July 2002 with Prey Sbat health care center and Ang

    Roka district hospital previously supported by AMDA and now by Swiss Red

    Cross (capitation payment mechanism);

    - Zone 3: Opening of a new insurance pilot scheme, with a partnership signed in

    March 2003 with Prey Rumdeng health care center and Kirivong hospital, both

    supported by Swiss red Cross (capitation payment mechanism);


    - Partnership with Takeo hospital (Fee-based - See Annex as well); third-party

    payment mechanism.

    - Implementing a more performing registration system (2004), allowing families to join

    the scheme more easily:

    - Registration is now opened throughout the year still for 6-month period while before

    people could only join twice a year for a six-month period.

    - Payment of premium on a monthly basis (versus 6 months), with premium based on

    family size: increase of permanent sales force on the field, and further development of

    Information System in Head Office needed to ensure good follow-up of activity.

    - New system implemented and experimented in Takeo Province‟s Zone 2 since January

    2004; rolled out in Zone 1 and 3 in March 2004

    5.3 Mid - 2005, the scheme starts its scaling up phase:

Extending into rural areas: Takeo province

    - April 2005: Extension to the whole Ang Roka district (coverage of the nine Health centers)

    - June 2006: reorganization of SKY field management. A regional coordinator is appointed for

    Ang Roka district. Three insurance agents are assigned to health care centers (3 centers per

    agent), one part-time representative per center is hired for facilitating relationships between

    care providers and members, collecting premiums and promoting SKY. Village chiefs also

    receive financial incentives when they help register new families.

Since the beginning of the rollout in Takeo in June 2005, SKY has gone from 1 417 insured to

    6 110 insured in April 2007. Growth has been particularly strong since the methodological

    modifications of June 2006, thus validating the current model.

Starting with the urban scheme

    SKY began to operate in Phnom Phen at the end of 2005, in partnership with the Municipal

    Hospital of Phnom Penh. After one year of activity, the pilot is currently being revised and

    adjusted to enable roll out in 2007. A new partnership is about to be signed with Prey

    Kossamak Hospital to extend SKY offer.

5.4 Results as of December 2006

     31/12/05 31/12/06 Growth rate

    Insured people 4392 8926 103%

    Insured households 917 1780 94%

    Average family size 4,75 5,01 5%

    Average premium/year/capita $3,1 $4,57 47%

At the end of December 2006, the health insurance system covered 8 926 insured, 1 780

    households, i.e. a growth rate of more than 103% since last year.


6. First lessons learnt

    (a) Developing Adequate Insurance Services Cambodian households are usually not familiar with insurance services. To develop

    appropriate insurance products, GRET believes that specific communication methods must be

    developed to explain basic insurance principles and define insurance products with members.

    To ensure the participation of the members in the definition of the insurance system, the

    project has developed the following methods:

    - It uses surveys (Exit Patients, Wealth Ranking, Drop out questionnaire, …) and other

    participatory methods (user groups) to assess the situation of members, understand their

    needs, and improve the services proposed;

    - Insurance relies on trust between the scheme and its members; full-time insurance agents

    are living in the rural villages covered by the system. They ensure a daily presence at local

    health centers; insurance must be a service close to the people;

    - „ICC‟ (Insurance Consultative Committees) are set-up in villages. Such committees allow

    insured people to be informed on the project, provide feedback on insurance products and

    contribute to improving the overall system. Those ICC meetings will be adapted for urban

    context in Phnom Penh.

(b) An Innovative Model for a Viable and Reproducible Insurance System

    The early stages of the experiment made it possible to verify the existence of a strong

    demand among households for primary health care coverage beyond hospital care alone.

    Indeed, primary care is a daily preoccupation for households; with very limited resources;

    occurrences are higher, it is also a way for households to understand how insurance works.

    Given the population‟s limited ability to contribute, insurance systems in theory target rare

    care (hospital risks) first and not primary care (a high frequency risk) in order to be financially

    viable. It is therefore necessary to reconcile the demand with the insurance system‟s financial viability. This project shows that it is possible is to build a two-tiered system:

    - linked to primary health care providers (using a „capitation‟ provider payment mechanism

    to ensure costs containment and enhance appropriate quality of care); here, the insurance

    favours use of the partner provider;

    - partnership with hospitals for more serious and more expensive risks that the insurance

    system can manage; here, the idea is to lift financial obstacles for users.

    - with the necessity of a clear and functioning referral system between the primary and

    secondary health facilities.

(c) The Need for Strong Partnerships with Public Health Care Structures

    Quality of care and more generally the quality of service (proximity, welcoming of staff,…)

    are essential. To guarantee this quality as well as transparent user fees, it is necessary to sign

    clear agreements with local health structures. GRET decision has been to work with public health care providers.

    - The Government made the policy choice of creating health operational districts

    throughout the country, with subsidized local health centers and a pricing system that

    is clear and consequently limited.

    - Some public facilities also receive support from medical NGOs, thus guaranteeing the

    minimum quality necessary for insurance to be launched

    - The challenge for the public sector is balancing access to care for the largest number at

    accessible rates while paying health staff attractive salaries. Developing an insurance


    system can contribute to financing health care structures. Regular ‘Monitoring

    Meetings with current health care partners, aim to discuss impacts of HIS on health

    care structures and to contribute to improving overall health care quality through the

    feedback of insured members (cf. Exit Patients Survey).

(d) The major design features of the pilot health insurance scheme under test in the four

    geographic zones are as follows.

The health insurance scheme:

    - follows a community based and voluntary membership's approach;

    - covers the whole members of the family (family membership required);

    - has a clear social mission / must be affordable for all rural households including large and

    poor families;

    - follows a pragmatic membership‟s approach, taking into account rural households

    situation and enabling them to join the scheme easily;

    - incites to stable / long term memberships (waiting periods, dropouts penalties, …) in order

    to limit anti-selection and enhance outreach of coverage for households;

    - is designed in consultation with the direct beneficiaries in the villages;

    - covers both primary health care and hospital care with mandatory referral mechanism;

    - works in partnership with public health facilities through capitation payment mechanism

    and close monitoring (to enhance quality assurance and costs containment);

    - is transparent / health insurance scheme's financial statements are shown in villages Health

    Insurance Consultative Committee (including elected insured representatives);

    - works in partnership with Health authorities (MoH central and provincial level) to fit into

    national health policy and guidelines;


- is private and independent from health authorities or health providers / aims to be

    managed by Cambodian managers with local insurance agents based in the village;

    - is non-profit but must reach financial sustainability in the long run after a subsidized

    period by external donors' funding.

    7. Next steps

    The challenge for the coming years is to continue the extension of the scheme and reach

    financial viability.

- Geographical extension: in 2007, SKY started to operate in Kampong Thom province, and

    in 2008, to the whole Takeo Province (70 health centers). Kampot and Sieam Reap are

    also future potential SKY zone.

    - Targeted population diversification: New target group will be approached ( garment

    workers, students ….) and specific marketing tools have to be designed.

Considerable upscale of the scheme, together with the consolidation of the scheme’s

    structure and organization, should finally allow for:

    - better identification of the conditions of viability,

    - proper design of the optimal financial model based on the most appropriate

    type and level of premium and capitation;

    - full validation of the hypothesis of risk. This last item remains crucial to

    establish an health insurance model in Cambodia

The expected result of current expansion phase is therefore the validation of a health insurance


    ? that is viable in the long term ;

    ? that contributes to poverty prevention in Cambodia, since insurance will secure the

    income of fragile households;

    ? that improve the overall health conditions of its members; ? and that favours the improvement of the Cambodian health care system by

    encouraging the population to make use of it in optimal conditions (quality of care, clear



    GRET Š SKY Health Insurance Schemes Š February 2007

    Takmau ODAng Roka DOKirivong DOK‰mpong Thom ODEntire city1999200120031/01/20072005 (starts in december)Specific groups targeted working in informal and formal Full OD, 9 health centers (starts in June 2005) 1 health Center, 16 villages (1224 households)1 Health Center10 villages (1648 households)3 Health Centers (7 700 households)sector (mototaxi, garnment workers, beer girls, market 23 250 householdsvendors)1 114 households (6 189 persons) - 6,2% of 78 households (410 persons) - 1,18% of 140 households (612 persons) - 11,4% of membership248 households (1 123 persons)509 households (2 059 persons) membershipmembership

    1 person family: 0,50$ / family / month 2-1 person family: 0,98$ / family / month 3 categories of prices adjusted to group revenues . 6 Months minimum, with automatic roll-over. Registration period opened throughout the year.4 persons family: 1,08$ / family / month 2-4 persons family: 1,83$ / family / month Approximatly 3% of the estimated revenue. For formal 5-7 persons family: 1,50$ / family / month 5-7 persons family: 2,32$ / family / month sector, minimum 50% co-payment from employer>8 persons family: 1,83$ / family / month >8 persons family: 2,68$ / family / month 1 person family: 0,78$ / family / month 2-4 persons family: 1,34$ / family / month 5-7 persons family: 1,82$ / family / month >8 persons family: 2,19$ / family / month 2 Months reserve fund collected at registration. Refundable at the end of the contract.Roluos Health Centre9 Health Centres of the ODPrey Rumdeng Health Centre3 Health Centres of the ODChey Chumneas - Takmau referral hospitalAng Roka HospitalKirivong HospitalK‰mpong Thom Provincial Hospital

    Municipal Hospital of Phnom Penh

    Takeo hospitalTakeo hospitalFree access to Prey Rumdeng Health Centre services Free access Roluos Health Centre services (MPA) Free access to all 9 Health Centre services (MPA) Free access to all 3 Health Centre services (MPA) Free access to SKY primary health care within Municipal (MPA) including prescribed drugs.including prescribed drugs.including prescribed drugs.including prescribed drugs.Hospital

    Free access to OPD and IPD services in Takmau Free access to OPD and IPD services in Ang Roka Free access to OPD and IPD services in Kirivong Free access to OPD and IPD services in Free access to OPD and IPD services in Municipal Chey Chumneas after referralhospitalK‰mpong Thom hospital after referralhospital

    Possible referral to other Phnom Penh national Free access to OPD and IPD care in Takeo Hospital after in case of complex pathologies

    Safe Motherhood program incuding a cash Safe Motherhood program incuding a cash benefit benefit (45$) for deliveries in health facilities.(45$) for deliveries at PPMRH.

    Grant for funerals (50,000 Riels) + transportation of the Grant for funerals (50,000 Riels) + transportation of Grant for funerals (50,000 Riels) + transportation Grant for funerals (60 USD) + transportation of the body Grant for funerals (50,000 Riels).body + mortuary band.the body. of the body. back home (in Phnom Penh). Emergency transportation grant 20,000 Riels.Emergency transportation grant 20,000 Riels.Emergency transportation grant 20,000 Riels.Family registration: to join the insurance scheme all family members must be insured. Monthly Payment of the premium. Advance payement strongly encouraged (free additional month of coverage for 6 month advance payment).

    Capitation contract with health centers and referral hospital. Third party payment with Takeo hospitalCapitation** contract with health centers and referral Capitation contract with health centers and Capitation payment with Municipal Hospitalhospital. referral hospital.

    Long term treatments of chronic diseases, glasses, basic dental care, prothesis. Waiting period of six month for non urgent surgery. Waiting period of 3 to 6 months for delivery matters.

    Local insurance agents living in villages of the health centreÕs catchment area. Part time "member's facilitators" working in health facilities, Insurance Consultative Committee in each commune to ensure community involvement and a good adaptation of the health insurance services to the needs of the families. It is composed of elected representatives of the insured members, one representative of the commune authorities, one representative of the pagoda, and the insurance agent as secretary of the committee. Local authorities (village chiefs, distrcit and commune gouvernor) 1 Full time Insurance Agent, 1 hostess at Municipal Hospital, partnering NGO for promotion and commercialisation.

    * Since health insurance is a new concept in rural area, in a first step the premium is subsidised to encourage rural households to test insurance servicesÕ impact.** Capitation mechanism: a fixed amount is paid in advance by the health insurance scheme to health providers per insured person for the defined set of health services over the defined period, regardless the actual utilization of any or all of the benefits.

GRET SKY Briefing Note 8

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