Extending SHI to the Informal Sector in the Philippines:

the conceptual frameworkCHF Best Practice Workhop

1st February 2007Dar es Salaam, Tanzania

Arsenia B. Torres OIC, Office of the Vice President for Membership & Marketing

Philippine Health Insurance Corporation

in collaboration with

Matthew Jowett (PhD)GTZ Advisor to PhilHealth

The problem

The response – KaSAPI

Potential reach

Progress and challenges

Contents

PhilHealth covers approximately 74% of the population as of 2005

Govt. 1,678,880Private 5,616,220Sponsored 2,492,356IPP 2,839,455OFW 545,429NPM 196,650Total 13,368,990

OFW4%

Sponsored

19%

Prvt.42%

IPP

21%

NPM1.5%

Govt.

12.5%

15.5 Million workers or 49% of Labor Force are in the Informal Sector

Source: DOLE News dated May 8, 2005

De facto voluntary decision for household. As a result, low coverage levels – approx 14% of the target group enrolled.

Premium $24 per annum for family; generally acceptable but people want to pay weekly/monthly given uncertain income. Many remote communities, with little health infra.

Irregular contributions / coverage: only one-third of members registered in PhilHealth’s

voluntary ‘individual paying programme’ pay regularly

Adverse selection creates financial instability:

Problems on demand-side

Large public sector bureaucracy has limitations in:

Marketing and selling health insurance

Developing flexible payment systems which meet demands of target group

PhilHealth ideally wants annual premium payments (to stabilise irregular payments), but target population want the opposite

Chasing individual households administratively expensive and highly inefficient

Problems on supply-side

EXPANDING PHILHEALTH PARTNERSHIPS WITH ORGANIZED GROUPS

OBJECTIVES

• Increase enrollment and sustain membership

• Implement an alternative premium payment scheme

• Provide Informal Sector access to quality health care

• Identify and develop innovative approaches of marketing SHI

• Strengthen collaboration with OGs

• Minimize adverse selection

• Strengthen solidarity and risk sharing

Target clientele

Microfinance groups Cooperatives NGOs People’s Organizations CBHCOs

• Recruitment/enrollment

• Conduct of IEC/Advocacy

• Collection & remittance of members’ contribution

• Submission of reports

Premium payment

ORGANIZED GROUPS

PhilHealth

Members of Organized Groups

• Capability building (IEC)

• ID Generation

• Benefit Payment

• Group Premium

Organized Groups and PhilHealth

Partners in implementing NHIP(Conceptual framework)

Hosp. & regular outpatient

MOA Signing

KaSAPI Training

Letter of Intent & Application for Membership

Pre-Selection of Organized Groups

Attendance in NHIP Orientation

Organization’s Board Resolution

PhilHealth Evaluation and Decision

Enrollment of Members

Collection and Remittance

Policy Agreement

Monitoring

GENERAL STEPS FOR KaSAPI IMPLEMENTATION

Benefit Availment

1. Pre-selection of OG

Criteria:

No. of members Size of assets/capital

Clientele

Track Record Accredited health facilities

Area of coverage

ACCREDITATION OF OG

Organizational Stability

• Compliance with legal requirements

• Strength of leadership, operational and management systems in place

Financial Performance

• Efficiency

• Liquidity

• Profitability

• Return on Investment

Assessment/Evaluation

Rather than targeting individual households directly, target groups, and mirror employer-employee relationship (admin efficiency gains, limit adverse selection).

Piggy-back on collection systems of microfinance / cooperative organisations who collect very regularly from clients (greater flexibility for client).

This partnership allows PhilHealth to respond to household’s demand to pay small amounts regularly, whilst the organisation remits annual/semi-annual/quarterly payments to PhilHealth. Up to each partner how to organise internally.

Response to unstable coverage / contributions

Promote mandatory enrolment within microfinance organisation (efficient risk-sharing). Strong demand for health insurance by MFI/Coop management for their members.

Set minimum group size. Currently set at 70% (counter adverse selection).

How to enforce? Offer discounted premium. Similar approach to private health insurance approaching companies.

Should also help to limit coverage instability – partner loses income (through discounted premium) if enrolment drops below 70%.

Response to adverse selection

KaSAPI - triple win

Fulfil social mission; additional

membership; reduced delinquency / bad

debts

PhilHealth

Partner organisation

Informal economy workers

Increased, sustained coverage; improved financial stability of Individual Paying Prog

Payment flexibility; lower premium; more benefits; time & hassle savings

More than a

nice idea

Current KaSAPI partners

PS OO BRLI &

AAE MOA KT EM CR PA BA M K IPP Drop

ISta. Cruz Savings & Development Cooperative

MOA signed October 27, 2006

Nueva Segovia Consortium of Cooperatives

MOA signed October 27, 2006

IIIAlay Sa Kaunlaran, Inc. (ASKI) 812 Total collection = P911,876.00 (annual)Sta. Martin de Tours MPC

IVACenter for Agriculture and Rural 745 44 Drop: shift to employed.Development - Mutual Benefit Assn. 203 M1bs submitted to PhilHealth for validation

VIIITulay Sa Kauswagan, Inc. (TSKI) 808 Total collection = P231,896 (quarterly)Aguyog St. Francis Xavier MPC 26 > 70% of GS. Members enrolled under SP by LGUPerpetual Help MPCGreen Bank 292 Did not meet 70% of GS

XOro Integrated Cooperative (OIC)Oro Savings and Sharing Cooperative (OSSC)

1,422 potential PhilHealth members

XIMindanao Environmental Development Foundation (MED Found)

Under negotiations

Bansalan Cooperative Society MOA signed December 13, 2006CARAGA

Green Bank 168 Did not meet 70% of GSBaug CARP Beneficiaries MPC MOA signed November 9, 2006

TOTAL 1,620 1,231 44

PRO/OGStages of Implementation

REMARKSEnrollment

Consolidated Status of Implementationas of November 2006

Internal PhilHealth systems require further strengthening and development.

Policy design needs continually improvement, needs further simplification – but avoid too many policy changes.

Need to manage impact of indigent programme.

Continue to make group enrolment more attractive than individual enrolment e.g. benefits, waiting period. Potential for introduction of technology e.g. electronic ID card, payment through cell phone.

Challenges / issues

Generate broader movement; involve range of stakeholders in implementation e.g. federation of co-operative organisations.

Limitation: drawn towards areas with better health facility infrastructure (exacerbate equity in access?).

Partners potentially have consumer advocacy role for quality health services; link between government and civil society.

The answer to universal coverage? No, but can make significant impact.

Challenges / issues

HAVE A NICE DAY!