Risk Pooling Arrangements Research Articles

Occupational and geographical differentials in financial protection against healthcare out-of-pocket payments in Nepal: Evidence for universal health coverage.

The low-and middle-income countries, including Nepal, aim to address the financial hardship against healthcare out-of-pocket (OOP) payments through various health financing reforms, for example, risk-pooling arrangements that cover different occupations. World Health Organization (WHO) has recommended member states to establish pooling arrangements so that the financial risks owing to health uncertainty can be spread across population. This study aims to analyse the situation of financial protection across occupations and geography using nationally representative annual household survey (AHS) in Nepal. We measured catastrophic health expenditure (CHE) due to OOP using two popular approaches-budget share and capacity-to-pay, and impoverishment impact at absolute and relative poverty lines. This study is the first of its kind from south-east Asia to analyse disaggregated estimates of financial protection across occupations and geography. The inequality in financial risk protection was measured using concentration index. Data were extracted from AHS 2014-15 -a cross-sectional survey that used standard consumption measurement tool (COICOP) and International Standard Classification of Occupations (ISCO). We found a CHE of 10.7% at 10% threshold and 5.2% at 40% threshold among households belonging to agricultural workers. The corresponding figures were 10% and 4.8% among 'plant operators and craft workers'. Impoverishment impact was also higher among these households at all poverty lines. In addition, CHE was higher among unemployed households. A negative concentration index was observed for CHE and impoverishment impact among agricultural workers and 'plant operators and craft workers'. In rural areas, we found a CHE of 11.5% at 10% threshold and a high impoverishment impact. Across provinces, CHE was 12% in Madhesh and 14.3% in Lumbini at 10% threshold, and impoverishment impact was 1.9% in Madhesh, Karnali and Sudurpachim at US $1.90 a day poverty line. Households belonging to informal occupations were more prone to CHE and impoverishment impact due to healthcare OOP payments. Impoverishment impact was disproportionately higher among elementary occupations, agricultural workers, and 'plant operators and craft workers'. Similarly, the study found a wide urban/rural and provincial gap in financial protection. The results can be useful to policymakers engaged in designing health-financing reforms to make progress toward UHC.

The Impacts of Microcredit on Informal Risk Sharing: Experimental Evidence from China

This study examines the impacts of a large-scale government-led microcredit program on informal risk sharing among poor households in rural China based on a randomized controlled trial. The results show that financial inclusion, on average, reduced households’ borrowing from informal financial networks, and informal borrowing decreased substantially among households that were program members, regardless of whether they had borrowed from the program. Further analyses suggest that the program alleviated the dependence on informal financial networks to afford consumption shocks for program members who did not obtain program loans, and the crowding-out effect on informal borrowing existed even during the announcement period of the program for these households. These results are consistent with limited commitment models, which predict that access to microcredit raises the expected value of autarky utility relative to the utility derived from risk-pooling arrangements, and thus reduces the scope of implementable risk-sharing contracts.

Achieving Universal Health Coverage through Health Financing Reform: Ethiopian Showcase

Objective: This article aim to analyze the Ethiopian health care financing reform, by aggregating the system into its constituent part, and examine isolated relationships, in which, the policy interventions and results can be more readily measured and evaluated, and propose any further recommendation. Besides, the study examines how members of health insurance scheme access, utilize, and meeting their benefits package without financial hardship, which later might guide the decision-makers in managing the trade-off that will inevitably arises as the financing system evolves. Methods: Desk reviews of government policy documents, proclamations, and health system financing strategy were scrutinized. Moreover, scholarly, peer-reviewed journals, and scientific literatures search were conducted through various approaches focusing mainly on the health system financing and the path to universal health coverage direction that has currently encountered around the world today. The articles reviewed for this study includes from electronic databases on the Internet, specific article searches, and published articles. The following databases namely the World Bank, the World Health Organization, the EconBase (Elsevier), Walden University Library, and Abt Associates Inc. were thoroughly navigated. Results: Membership to a health insurance scheme is crucial to improve the health status as well as foster productivity by the provision of health care services and reducing out-of-pocket payment at the time of illness. The Ethiopian showcase embraces two risk pooling arrangements, namely Social Health Insurance (SHI) and Community Based Health Insurance (CBHI) schemes, which gives financial protection and access to health care services at the time of demand. Accordingly, the CBHI scheme’s members are able to access health care benefits without financial hardship when they actually seek care. Conclusion: The existing health insurance schemes are a profound health care financing program, attributable for inclusiveness, diversity, and further researching, which in turn lends to positive social change through multitude comings paving a way to universal health coverage achievement, sustained economic and social development, and improvement in health outcomes. Furthermore, it may contribute to strengthen home-grown approaches, bestowing recommendations to the implementers, organizations or any other researchers by disclosing the successes, failures, as well as setbacks.

Out-of-pocket expenditures for prevention and treatment of cardiovascular disease in general and specialised cardiac hospitals in Addis Ababa, Ethiopia: a cross-sectional cohort study

BackgroundCardiovascular disease poses a great financial risk on households in countries without universal health coverage like Ethiopia. This paper aims to estimate the magnitude and intensity of catastrophic health expenditure...

Risk Pooling, Risk Preferences, and Social Networks

Using data from an experiment conducted in 70 Colombian communities, we investigate who pools risk with whom when trust is crucial for enforcing risk pooling arrangements. We explore the roles played by risk attitudes and social networks. Both empirically and theoretically, we find that close friends and relatives group assortatively on risk attitudes and are more likely to join the same risk pooling group, while unfamiliar participants group less and rarely assort. These findings indicate that where there are advantages to grouping assortatively on risk attitudes those advantages may be inaccessible when trust is absent or low. (JEL C93, O12, O18, Z13)

Enterprise Liability, Risk Pooling, and Diagnostic Care

The safety of patients is an important responsibility of health care providers, and significant compensation costs may arise if providers are negligent. A widely debated option involves liability for such compensation being placed with the hospital rather than the individual clinician, a system known as liability. In the United States, partial adoption of enterprise liability and proposals for its universal introduction have accompanied high-profile malpractice insurance crises in the last two decades. Hospitals in England and Wales have been subject to this system since 1990, and risk-pooling arrangements have emerged subsequently allowing hospitals to transfer their liability risk to an agency known as the National Health Service Litigation Authority. We explore some of the mechanisms used by this agency to provide hospital management with financial incentives to take care. We estimate the influence of these arrangements on the use of diagnostic imaging tests within hospitals, using a panel data set covering the period 2000-04, during which period a policy shift took place leading to a form of natural experiment. Our results suggest that the use of diagnostic tests did not respond to the incentives created during this period. We speculate that certain types of patient care activity, including the use of diagnostic tests, may be less responsive to incentives placed at the level of the hospital by comparison with incentives placed at the level of the clinician. Our findings may have implications for jurisdictions contemplating a move to enterprise liability as well as wider implications for public-sector organizations faced with financial incentives to improve service quality. © The Author 2010. Published by Oxford University Press on behalf of the Journal of Public Administration Research and Theory, Inc. All rights reserved

Managing Interdependent Information Security Risks: A Study of Cyberinsurance, Managed Security Service and Risk Pooling

The interdependency of information security risks often induces firms to invest inefficiently in IT security management. Cyberinsurance has been proposed as a promising solution to help firms optimize security spending. However, cyberinsurance is ineffective in addressing the investment inefficiency caused by risk interdependency. In this paper, we examine two alternative risk management approaches: risk pooling arrangements (RPAs) and managed security services (MSSs). We show that firms can use an RPA as a complement to cyberinsurance to address the overinvestment issue caused by negative externalities of security investments; however, the adoption of an RPA is not incentive-compatible for firms when the security investments generate positive externalities. We then show that the MSS provider (MSSP) serving multiple firms can internalize the externalities of security investments and mitigate the security investment inefficiency. As a result of risk interdependency, collective outsourcing arises as an equilibrium only when the total number of firms is small.

Health Financing in Singapore: A Case for Systemic Reforms

This paper assesses Singapore's healthcare financing arrangements in terms of their efficiency, fairness, and adequacy. Singapore represents an interesting case study because it is perhaps the only high-income, rapidly ageing country to rely on mandatory savings to finance healthcare, thus eschewing extensive risk-pooling arrangements, generally regarded as efficient and equitable. The paper argues that parametric reforms, i.e. relatively minor changes in the parameters of current schemes which preserve the existing philosophy and system design, will not be sufficient to meet healthcare financing objectives. Systemic reforms, which will bring Singapore into the mainstream of health financing arrangements found in the OECD countries, are urgently needed. Their design and timing should be based on good quality, timely and relevant data, and an environment conducive to vigorous debate.

Moral Hazard in Risk Pooling Arrangements

The authors examine risk pooling arrangements with moral hazard. Because of the nature of the risk pooling arrangement, full nominal coverage is shown to be optimal, despite the presence of moral hazard, and positive loss-prevention effort levels are induced even at full nominal coverage. When marginal utility is convex and higher-order utility effects are sufficiently small, as the number of members in the pool increases, the effort levels of members decrease and, as the pool size approaches infinity, effort levels approach zero. The latter result suggests that moral hazard may define an optimal size for risk pooling arrangements.