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Example 3

How to define a benefit package and set a premium in a data-poor & resources-poor setting? To put it bluntly (and, on purpose, exaggerating a little), not much is known about the target group, except that they are poor and have many healthcare needs…

For instance, in Western Kenya, a healthcare plan was developed at the request of a local organization. Together with a team of medical doctors, the marketing department, and the medical infrastructure specialists a package has been defined in terms of medical and non-medical services, infrastructure, administrative systems, and pricing and financial risk management.

Note that there are also conflicting interests between the stakeholders, e.g. the individual, the community, the healthcare provider, the insurer, the third party administrator, the government, the donor, etc. For instance, the individual wishes good health (i.e. access to healthcare) against the lowest premium, while the healthcare providers may wish to at least recover their costs or even make a profit…

While there are many unknowns, by combining actuarial and mathematical modeling and data from academic sources, local governments and institutes such as the WHO, the costs of the different services / benefits of the health insurance package can be estimated. Note that there is not much room for safety margins – something dear to actuaries – as the target population is poor and sometimes even cannot afford the most basic health insurance package. Subsidies from governments and / or donors may then present an outcome.

PharmAccess (www.pharmaccess.org) is an innovative non-governmental organization that has for mission to improve the access to basic qualitative healthcare for the people in Africa. Hiddo has been involved in defining and reviewing healthcare packages, including estimating premiums, for health insurance plans in Kenya, Tanzania, Nigeria and Mozambique.

ARC – Business Intelligence at work


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