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How private, voluntary health insurance can work in developing countries
Mark V Pauly1, Frederic E Blavin, Sudha Meghan
1Department of Health Care Management at Wharton School, University of Pennsylvania, in Philadelphia, USA. pauly@wharton.upenn.edu
Health Affairs (Project Hope)
|November 6, 2009
Summary
Voluntary health insurance is feasible for hospital and total medical spending in developing nations. However, markets for physician services and medicines are likely unviable due to cost variations across income levels.
Area of Science:
- Health economics
- International health policy
Background:
- Developing countries often lack robust health insurance mechanisms.
- Understanding medical spending variations is crucial for insurance market feasibility.
Purpose of the Study:
- To assess the potential for voluntary health insurance markets in developing countries.
- To estimate risk premiums and administrative costs for insurance coverage.
Main Methods:
- Utilized World Health Survey data from eleven countries.
- Analyzed variations in total medical, hospital, physician, and outpatient drug spending across income levels.
Main Results:
- Insurance for hospital or total medical spending appears feasible for large population segments.
- Insurance for physician services or medicines is likely not feasible.
- Medical spending significantly varies by income level.
Conclusions:
- Health insurance markets in developing countries should be segmented by income.
- Feasibility differs significantly between types of medical services covered.
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