Promoting sustainability for micro health insurance: a risk-adjusted subsidy approach for maternal healthcare service
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Promoting sustainability for micro health insurance: a risk‑adjusted subsidy approach for maternal healthcare service Yi Yao1 · Joan Schmit2 · Julie Shi1
Received: 30 October 2017 / Accepted: 21 August 2018 © The Geneva Association 2018
Abstract Micro health insurance is an important way to finance health expenditure for low-income people, and maternity care is a key component of relevant coverage. We propose a risk-adjusted subsidy provided by the government to microinsurers as a method to enhance micro health insurance for maternity benefits. Using a large data set from a micro health insurance programme in Pakistan, we apply various econometric models to predict maternity-related expenses and to calculate an appropriate risk-adjusted subsidy from the government to microinsurer. This allows us to further simulate the microinsurers’ financial results. We find that the risk-adjusted subsidy could significantly improve the loss ratio by almost 40%, and the Ordinary Least Squares model is preferred among the four model forms we test. We contribute to the literature by demonstrating that this method is feasible, and further, by illustrating the potential effect of such a subsidy on micro health insurer outcomes. If successful, such a payment model could improve efficiency and extend affordable maternity care to low-income women in developing regions. Keywords Micro health insurance · Risk adjustment · Maternity healthcare
* Julie Shi [email protected] Yi Yao [email protected] Joan Schmit [email protected] 1
School of Economics, Peking University, Beijing, China
2
School of Business, University of Wisconsin at Madison, Madison, USA
Vol.:(0123456789)
Y. Yao et al.
Introduction Improving maternal health and reducing child mortality are two important targets in the United Nations Millennium Development Goals (MDGs). From 2000 to 2015, progress was made to improve the access to and quality of maternal care, yet the maternal mortality rate (MMR) still remains high in developing countries. In 2015 alone, roughly 303,000 women are estimated to have died during and soon after pregnancy and childbirth. Almost all of these deaths occurred in low-resource settings, and most could have been prevented.1 The MMR in developing countries in 2015 was 239 per 100,000 live births versus 12 in developed countries, almost 20 times the difference.2 Among the various underlying conditions contributing to high MMR, lack of adequate maternal healthcare is a leading factor (Liu et al. 2010; Dumont et al. 2013). According to a statement by the World Health Organization (WHO), poverty and lack of access to qualified maternal healthcare are still the main obstacles to achieving the Sustainable Development Goals on child and maternal mortality before 2030.3 In developed countries, maternity care is commonly included in government or employer-provided health insurance plans, with comprehensive prenatal and postpartum care included in the coverage. In comparison, for low-income residents living in many developing countries, social
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