Mutual health insurance in Rwanda: Evidence on access to care and financial risk protection

Abstract

Objective

Rwanda has expanded mutual health insurance considerably in recent years, which has a great potential for making health services more accessible. In this paper, we examine the effect of mutual health insurance (MHI) on utilization of health services and financial risk protection.

Methods

We used data from a nationally representative survey from 2005–2006. We analysed this data through summary statistics as well as regression models.

Findings

Our statistical modelling shows that MHI coverage is associated with significantly increased utilization of health services. Indeed, individuals in households that had MHI coverage used health services twice as much when they were ill as those in households that had no insurance coverage. Additionally, MHI is also associated with a higher degree of financial risk protection and the incidence of catastrophic health expenditure was almost four times less than in households with no coverage. Nonetheless, the limitations of the MHI coverage also become apparent.

Conclusion

These promising results indicate that MHI has had a strong positive impact on access to health care and can continue to improve health of Rwandans even more if its limitations are addressed further.

Introduction

Contemporary thinking stresses the role of health systems in governing access to health care services. Indeed, there is increased recognition of the pivotal need for health systems development as a building block for improving population health [1]. Health financing is a core component of health systems, and as such, many countries have implemented major reforms to health systems financing in the past decade or so, with a view of making health care more accessible and equitable to their populations [2], [3], [4], [5].

The essence of equitable and accessible health systems is enshrined in the notion of ‘universal coverage’ as confirmed by health leaders in a resolution at the World Health Assembly in 2005 [6]. Health spending through out-of-pocket payments (OOP) is not always easy to cope with. Households may encounter financial hardship and poverty as a result. In fact, over 150 million people face catastrophic health expenditure every year and 100 million fall into poverty worldwide after paying for health care [7]. Many other households simply forgo care because it is deemed too expensive. Thus, benefiting from health care remains difficult or impossible for many households because of financial barriers. We therefore posit that universal coverage and access to health insurance, with an important degree of prepayment, is an important policy objective that could improve financial protection for many.

There are different strategies for increasing prepayment and reaching universal coverage [8]. Tax-based systems, social health insurance systems or mixed systems commonly exist in most developed countries that have reached universal coverage. However, for developing countries, transition strategies are usually needed. These strategies include different prepayment mechanisms to reduce OOP and improve access to care, such as mutual health insurance (MHI). MHI or community-based health insurance exists in many African countries. However only a few programs have been scaled up considerably [9]. The sustainability and financial risk pooling capacities of these schemes are considered limited when compared to nationwide schemes. Nonetheless, they may be a first step towards universal coverage [8], [10], [11]. Rwanda has been successful in terms of expanding population coverage over relatively short periods of time. As a result, there is wide interest in examining the Rwandan model as a strategy for fast-tracking achievement of universal coverage.

Over the last years, Rwanda has seen an important increase in its expenditure on health with total health expenditure (THE) per capita increasing from US$ 9 in 2000 to US$ 34 in 2006. Public sources, including external resources, accounted for the majority of THE. Households contributed for 26% of THE through OOP [12]. In its efforts to improve access, the country has developed a comprehensive health sector strategic plan. A major focus of this plan is the expansion of health insurance to the informal sector through MHI [13].

Building on the experience of earlier pilots, the government supported start-up initiatives and over 100 MHI schemes were creted between 2000 and 2003 [14], [15], [16], [17], [18]. Population coverage increased continuously during this period and was estimated to have reached 27% in 2004 [19]. MHI was further scaled up in 2005 with the support of external funding [20], [21]. The aim of this expansion was to rapidly increase membership of vulnerable groups through premium subsidies and strengthen administrative capacities and pooling mechanisms [19], [22]. By 2007, around 74% of the population had some form of health insurance cover [19]. Further, in 2008, a formal legal framework for MHI was created with the adoption of a law on mutual health insurance. This set a new milestone towards universal coverage by making health insurance compulsory. This law also introduced formal cross-subsidization between existing health insurance schemes, leading the way forward for a possible national pool.

Currently, MHI membership remains voluntary in practice, although the 2008 law stipulates the need for all Rwandans to be part of a health insurance scheme. For non-subsidized members, premiums are paid annually and were US$ 1.8 per person per year in 2006. Premiums are collected by community health workers and transferred to a district level MHI fund, which is also subsidized by other sources including the government, and pays for outpatient and inpatient services on a fee-for-service basis [19]. Membership fees are waived for certain groups such genocide survivors and people living with HIV/AIDS. Estimates from 2006 suggest that up to 45% of funds at MHI branches were from subsidies from various international and national agencies. Co-payments at the health centre level are a flat rate of US$ 0.4 per visit and 10% of costs at the hospital level. The benefit package includes a range of preventive and curative services including drugs benefits. Variations in the actual benefits offered by the schemes may exist and are primarily due to differences in the availability of services in the catchment area. However, a 2007 legislation on MHI included a specific list of benefits offered. Occupational diseases are excluded from the benefit package as they are covered by the a national social security scheme [23].

In addition to MHI, there are also two other large public health insurance schemes. The Rwandaise d’assurance maladie (RAMA) is a mandatory scheme for government employees and their dependants and covered 2.3% of the population in 2007. The Military Medical insurance is a mandatory scheme for defense personnel and their families and covered around 1% of the population in 2007. The benefit package of these schemes is generally considered to be superior to that of the MHI. Very few people have formal private health insurance but some employers provide limited health care related benefits [23].

MHI remains the most prominent and diversified scheme in terms of population coverage and as such further analysis of it is very useful. This paper contributes to the evidence on MHI by examining its relationship with utilization and financial risk protection at the national level by analysing survey data from Rwanda. Previous research on MHI in Rwanda has looked at topics such as the community participation issues, institutional arrangements, financial sustainability of facilities as well as contribution to the scheme [11], [14], [24], [25], [26]. Of particular relevance to this paper is a study of 3 pilot districts that was conducted in 2000 [15]. It found that uninsured households had a lower utilization rate and encountered more out-of-pocket payments as compared to households who were MHI members. Our analysis is novel as the scheme has morphed significantly these since 3 pilot projects were examined. Using new nationally representative data, we are also able to look at the incidence of catastrophic health expenditure and degree of financial risk protection offered by MHI in addition to its effect on utilization. This research will guide policymakers and provide useful insights within the Rwandan context as well as for other countries that are considering moving towards universal coverage through similar models. The paper continues with Section 2, which describes the data and methodology in detail. Section 3 presents the results from the analysis and Section 4 discusses the findings and links them to the current policy dialogue in Rwanda.