NCDs Threatening Health Insurance: Innovations, partnerships offer ways to mitigate the impact
Developing sustainable health microinsurance (insurance for low-income clients) in emerging markets is like threading a needle: It’s a lot more difficult than it looks. Insurance can help low-income households cope with health shocks, strengthen the sustainability of health care providers and help governments to achieve universal health coverage (UHC). Yet voluntary, unsubsidized microinsurance schemes usually don’t grow and mostly fail. In low- and middle-income countries (LMICs), an additional hurdle looms large: The crushing burden of infectious disease (malaria, HIV/AIDS, hepatitis and now Ebola) is being met by the inexorable rise of non-communicable diseases (NCDs), which include cardiovascular disease, cancer, chronic respiratory diseases, diabetes, mental health and neurological disorders.
In fact, NCDs have become the leading cause of death and disability worldwide:
• By 2030, NCDs are expected to kill 52 million per year worldwide, nearly five times more than communicable diseases.
• The cumulative global cost of illness and lost production during 2011-2030 associated with diabetes, cardiovascular disease, cancer, chronic respiratory disease and mental illness is projected to reach U.S. $47 trillion, equivalent to 5 percent of the world’s GDP in 2010.
• According to a New York Times article summarizing a task force report on NCDs, working-age people in LMICs face greater health risks than their counterparts in rich countries, are more likely to develop a chronic disease, and experience worse outcomes. About 80 percent of deaths and disabilities from NCDs in Africa and Asia afflict people younger than 60, more than double the share in many rich countries.
• The World Health Organization estimates that almost three-quarters of all NCD deaths in 2012 (28 million) occurred in LMICs. Approximately 90 percent of all deaths due to cervical cancer and due to chronic respiratory disease occur in LMICs.
The World Health Organization has documented the economic benefit that comes from investing in NCDs. Investment in LMICs to reduce premature deaths from cardiovascular disease by 10 percent was estimated to have economic benefits (due to a healthier workforce) of U.S. $25 billion per year from 2011-2025 ($377 billion total), a 3:1 payoff.
Aside from the massive societal cost of NCDs, the implications for insurance programs, public and private, are immense. Findings from a review of claims patterns of three South Asian health microinsurance programs underscore that while infectious diseases and accidents generate about 50 percent of claims for hospitalization, NCDs rank among the top four leading reasons for claims among these health insurance programs – indicative of an emerging “double disease burden,” where relatively high rates of communicable and non-communicable diseases prevail at the same time. Further, the average length of stay in the hospital was higher for NCDs than for acute conditions, suggesting higher associated costs.
(A resident of an urban slum area in Karachi called Macchar Colony (which means mosquito), located on a tidal flat near the shipyards, left.)
Thus, innovations in early diagnostics and the growing popularity of self-health monitoring tools and apps pose a major opportunity for public and private insurers to create and expand disease detection and management systems to mitigate the incidence and effect of NCDs. For example, in Honduras, a web-based health promotion and monitoring program for diabetes self-management using interactive voice response delivered via mobile phones was found to significantly improve a measure of blood glucose levels in diabetic patients after six weeks.
And insurance programs stand to gain from new investments being made to curtail NCDs. For example, in 2014 Medtronic Philanthropy, in partnership with Abt Associates and the Institute for Health Metrics and Evaluation, launched HealthRise, a five-year, $17 million program that supports community-based demonstration projects specifically designed to expand access to care and management of NCDs such as heart disease and diabetes.
Looking ahead, where will the services and the money to pay for care and prevention of NCDs come from? How can insurance help turn the tide of NCDs while continuing to seek viable ways to scale up? What business models will work, so that insurance can sustain broad risk pools which include increasing numbers of NCD patients?
Global experts who convened at the latest International Microinsurance Conference suggest that the future of health insurance for clients in LMICs where the disease burden from NCDs is rising fast will rely on:
• Expanding public-private partnerships which enable subsidies for comprehensive benefits that include preventive and primary care.
• Deploying a variety of technologies such as biometrics and mobile phone-supported functions that enable scale and efficiency in insurance (for enrollment and claims) and health services delivery (treatment protocols).
• Integrating financing and service delivery programs which can target NCD care and prevention: Think of telemedicine, health promotion and disease management bundled with insurance.
• Introducing large numbers of first-time clients to insurance with simple, good-value “starter” products which cover NCDs as well as acute illnesses and accidents, supported by mobile technology.
The challenge now for insurers is to embed cost-effective interventions that mitigate the impact of NCDs in insurance programs, thereby delivering value to clients and improving the financial viability of schemes. Over time, and as health insurance benefits expand, tackling NCDs will be imperative if the scale and sustainability we aim to achieve with health insurance – and more broadly UHC – is to be realized.
Note: The opinions expressed in this commentary are solely those of the author and do not reflect those of Abt Associates. Thierry van Bastelaer also contributed to this blog.
Jeanna Holtz is a principal associate, International Health Division, at Abt Associates.
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