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Adverse selection in a community-based health insurance scheme in rural Africa: Implications for introducing targeted subsidies

BACKGROUND: Although most community-based health insurance (CBHI) schemes are voluntary, problem of adverse selection is hardly studied. Evidence on the impact of targeted subsidies on adverse selection is completely missing. This paper investigates adverse selection in a CBHI scheme in Burkina Faso...

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Autores principales: Parmar, Divya, Souares, Aurélia, de Allegri, Manuela, Savadogo, Germain, Sauerborn, Rainer
Formato: Online Artículo Texto
Lenguaje:English
Publicado: BioMed Central 2012
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3457900/
https://www.ncbi.nlm.nih.gov/pubmed/22741549
http://dx.doi.org/10.1186/1472-6963-12-181
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author Parmar, Divya
Souares, Aurélia
de Allegri, Manuela
Savadogo, Germain
Sauerborn, Rainer
author_facet Parmar, Divya
Souares, Aurélia
de Allegri, Manuela
Savadogo, Germain
Sauerborn, Rainer
author_sort Parmar, Divya
collection PubMed
description BACKGROUND: Although most community-based health insurance (CBHI) schemes are voluntary, problem of adverse selection is hardly studied. Evidence on the impact of targeted subsidies on adverse selection is completely missing. This paper investigates adverse selection in a CBHI scheme in Burkina Faso. First, we studied the change in adverse selection over a period of 4 years. Second, we studied the effect of targeted subsidies on adverse selection. METHODS: The study area, covering 41 villages and 1 town, was divided into 33 clusters and CBHI was randomly offered to these clusters during 2004–06. In 2007, premium subsidies were offered to the poor households. The data was collected by a household panel survey 2004–2007 from randomly selected households in these 33 clusters (n = 6795). We applied fixed effect models. RESULTS: We found weak evidence of adverse selection before the implementation of subsidies. Adverse selection significantly increased the next year and targeted subsidies largely explained this increase. CONCLUSIONS: Adverse selection is an important concern for any voluntary health insurance scheme. Targeted subsidies are often used as a tool to pursue the vision of universal coverage. At the same time targeted subsidies are also associated with increased adverse selection as found in this study. Therefore, it’s essential that targeted subsidies for poor (or other high-risk groups) must be accompanied with a sound plan to bridge the financial gap due to adverse selection so that these schemes can continue to serve these populations.
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spelling pubmed-34579002012-09-26 Adverse selection in a community-based health insurance scheme in rural Africa: Implications for introducing targeted subsidies Parmar, Divya Souares, Aurélia de Allegri, Manuela Savadogo, Germain Sauerborn, Rainer BMC Health Serv Res Research Article BACKGROUND: Although most community-based health insurance (CBHI) schemes are voluntary, problem of adverse selection is hardly studied. Evidence on the impact of targeted subsidies on adverse selection is completely missing. This paper investigates adverse selection in a CBHI scheme in Burkina Faso. First, we studied the change in adverse selection over a period of 4 years. Second, we studied the effect of targeted subsidies on adverse selection. METHODS: The study area, covering 41 villages and 1 town, was divided into 33 clusters and CBHI was randomly offered to these clusters during 2004–06. In 2007, premium subsidies were offered to the poor households. The data was collected by a household panel survey 2004–2007 from randomly selected households in these 33 clusters (n = 6795). We applied fixed effect models. RESULTS: We found weak evidence of adverse selection before the implementation of subsidies. Adverse selection significantly increased the next year and targeted subsidies largely explained this increase. CONCLUSIONS: Adverse selection is an important concern for any voluntary health insurance scheme. Targeted subsidies are often used as a tool to pursue the vision of universal coverage. At the same time targeted subsidies are also associated with increased adverse selection as found in this study. Therefore, it’s essential that targeted subsidies for poor (or other high-risk groups) must be accompanied with a sound plan to bridge the financial gap due to adverse selection so that these schemes can continue to serve these populations. BioMed Central 2012-06-28 /pmc/articles/PMC3457900/ /pubmed/22741549 http://dx.doi.org/10.1186/1472-6963-12-181 Text en Copyright ©2012 Parmar et al; licensee BioMed Central Ltd. http://creativecommons.org/licenses/by/2.0 This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
spellingShingle Research Article
Parmar, Divya
Souares, Aurélia
de Allegri, Manuela
Savadogo, Germain
Sauerborn, Rainer
Adverse selection in a community-based health insurance scheme in rural Africa: Implications for introducing targeted subsidies
title Adverse selection in a community-based health insurance scheme in rural Africa: Implications for introducing targeted subsidies
title_full Adverse selection in a community-based health insurance scheme in rural Africa: Implications for introducing targeted subsidies
title_fullStr Adverse selection in a community-based health insurance scheme in rural Africa: Implications for introducing targeted subsidies
title_full_unstemmed Adverse selection in a community-based health insurance scheme in rural Africa: Implications for introducing targeted subsidies
title_short Adverse selection in a community-based health insurance scheme in rural Africa: Implications for introducing targeted subsidies
title_sort adverse selection in a community-based health insurance scheme in rural africa: implications for introducing targeted subsidies
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3457900/
https://www.ncbi.nlm.nih.gov/pubmed/22741549
http://dx.doi.org/10.1186/1472-6963-12-181
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