A Discrete Choice Experiment to Elicit the Willingness to Pay for Health Insurance by the Informal Sector Workers in Sierra Leone

Joseph Kamara

doi:10.11648/j.hep.20180301.11

Abstract

The current health care financing system in Sierra Leone is unsustainable and poses challenges ranging from increased in out of pocket health care expenditure to accessibility problems, particularly in rural areas where living standards are low and health care facilities are scarce. This paper investigates whether privately financed health Insurance can improve the accessibility to formal health care in Sierra Leone and mitigate the effects of OOPs on poor households. To do so, we estimate the Willingness To Pay (WTP) for health insurance among informal sector workers in Sierra Leone using a Discrete Choice Experiment approach. Eight informal sector activities were selected namely – petty trading, subsistence farming, commercial bike riding, cattle rearing, fishing, tailoring, mining and quarrying. A random effect logit model is used to estimate households’ WTP for an improvement in coverage, choice of health care provider and a reduction in waiting time. Our study reveals that households were WTP more to have better attributes (better coverage, less waiting time) and to go to a faith - based provider. Our findings also suggest that location – rural versus urban – matters in determining the WTP since urban households were WTP more for health insurance than their rural counterparts, (SLL 54,348 or $7.34) and (SLL 37,250.5 or $5.03), respectively.

Highlights

Over 2 billion people living in developing countries are faced with health systems characterized by inefficiencies, poor quality services, inequitable access; inadequate funding; and high out of pocket (OOP) health care expenditures [10]
The first part of the analysis looks at the regression results for the entire sample and sub-samples - by type of location and informal sector activity
This paper studies household’s Willingness To Pay (WTP) for health insurance among informal sector workers using the Discrete Choice Experiments (DCE)

Summary

Introduction

Over 2 billion people living in developing countries are faced with health systems characterized by inefficiencies, poor quality services, inequitable access; inadequate funding; and high out of pocket (OOP) health care expenditures [10]. The International Labour Office (ILO) in 1993 (during the fifteenth international conference of labour statisticians) defined informal sector as composed of entities engaged in the production of goods or services with the main objective of generating employment and income [32]. These entities operate at two levels of organizations - with little or no division between labour and capital, and on a small scale [32]. The labour regulations in these settings are based on casual employment, relatives, kinship, no contractual arrangements with formal guarantees etc

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Conclusion