Achieving universal health coverage through voluntary insurance: what can we learn from the experience of Lao PDR?

The Government of Lao Peoples' Democratic Republic (Lao PDR) has embarked on a path to achieve universal health coverage (UHC) through implementation of four risk-protection schemes. One of these schemes is community-based health insurance (CBHI) - a voluntary scheme that targets roughly half the population. However, after 12 years of implementation, coverage through CBHI remains very low. Increasing coverage of the scheme would require expansion to households in both villages where CBHI is currently operating, and new geographic areas. In this study we explore the prospects of both types of expansion by examining household and district level data.

Using a household survey based on a case-comparison design of 3000 households, we examine the determinants of enrolment at the household level in areas where the scheme is currently operating. We model the determinants of enrolment using a probit model and predicted probabilities. Findings from focus group discussions are used to explain the quantitative findings. To examine the prospects for geographic scale-up, we use secondary data to compare characteristics of districts with and without insurance, using a combination of univariate and multivariate analyses. The multivariate analysis is a probit model, which models the factors associated with roll-out of CBHI to the districts.

The household findings show that enrolment is concentrated among the better off and that adverse selection is present in the scheme. The district level findings show that to date, the scheme has been implemented in the most affluent areas, in closest proximity to the district hospitals, and in areas where quality of care is relatively good.

The household-level findings indicate that the scheme suffers from poor risk-pooling, which threatens financial sustainability. The district-level findings call into question whether or not the Government of Laos can successfully expand to more remote, less affluent districts, with lower population density. We discuss the policy implications of the findings and specifically address whether CBHI can serve as a foundation for a national scheme, while exploring alternative approaches to reaching the informal sector in Laos and other countries attempting to achieve UHC.