Linkages between statutory social security schemes and community

Linkages between statutory social security schemes

and community-based social protection

mechanisms: A promising new approach

Alain Coheur

Alain Coheur Alain Coheur

Alain Coheur

Director of European and International Affairs

National Union of Socialist Mutual Benefit Societies

Vice-Chairperson

Technical Commission on Mutual Benefit Societies

Belgium

Christian Jacquier

Christian Jacquier Christian Jacquier

Christian Jacquier

Coordinator of the ILO/STEP programme

International Labour Office

Valérie Schmitt

Valérie SchmittValérie Schmitt

Valérie Schmitt-

-Diabaté

DiabatéDiabaté

Diabaté

Social Protection Expert

International Labour Office

and

Jens Schremm

Jens SchremmJens Schremm

Jens Schremmer

erer

Senior Programme Manager

International Social Security Association

Linkages between statutory social security schemes

and community-based social protection mechanisms:

A promising new approach

Alain Coheur

Director of European and International Affairs

National Union of Socialist Mutual Benefit Societies

Vice-Chairperson

Technical Commission on Mutual Benefit Societies

Belgium

Christian Jacquier

Coordinator of the ILO/STEP programme

International Labour Office

Valérie Schmitt-Diabaté

Social Protection Expert

International Labour Office

Jens Schremmer

Senior Programme Manager

International Social Security Association

Technical Commission on Medical Care and Sickness Insurance and

Technical Commission on Mutual Benefit Societies,

World Social Security Forum, Moscow, 10-15 September 2007

The International Social Security Association (ISSA) is the world's leading international organization bringing

together national social security administrations and agencies. The ISSA provides information, research, expert

advice and platforms for members to build and promote dynamic social security systems and policy worldwide.

An important part of ISSA's activities in promoting good practice are carried out by its Technical Commissions,

which comprise and are managed by committed member organizations with support from the ISSA Secretariat.

This document is available on http://www.issa.int/Resources. For terms and conditions, please consult the ISSA

website. The view and opinions expressed do not necessarily reflect those of the publisher.

First published 2007. © International Social Security Association, 2008

Alain Coheur, et al.

Summary

SummarySummary

Summary

Innovative integrated strategies to extend social health protection through linkages

between statutory social security schemes and informal sector or community-based

schemes will be discussed based on the results of a study of the International Social

Security Association (ISSA), the International Labour Organization (ILO) and the

International Association of Mutual Benefit Societies (AIM), undertaken within the

Global Alliance on the Extension of Coverage on the actual and potential impact of

financial, operational, governance, health service provision and policy linkages.

1. Extension of coverage: A matter of urgency

Access to adequate social security and health care protection are two fundamental human

rights. However, these rights are far from being achieved worldwide. For example, up to

80 per cent of the population in sub-Saharian Africa and some parts of Asia live without such

protection. This problem is exacerbated by uneven needs: the living and working conditions

of informal economy workers and rural populations are exposed the most to health and

accident risks, however, they are the groups most often excluded from social security.

Exclusion from social security has a devastating impact on the individual and his/her family.

The World Health Organization (WHO) estimates that every year 100 million persons enter

into a vicious circle of ill health and poverty due to health care costs. What is more, it also

reduces opportunities for economic growth and social development and makes countries

more vulnerable to the consequences of health shocks.

The extension of social health protection is therefore a matter of urgency to contribute to

economic growth and to social development, but above all, to protect hundreds of millions of

people around the world against poverty and unnecessary suffering.

2. Towards extending coverage - making the best of various

mechanisms

Various financing and institutional methods are at the disposal of policymakers intending to

work towards the extension of coverage. Social health insurance, tax-financed universal health

care systems, private health insurance, community-based and micro-insurance schemes

financed by contributions or taxes have each been implemented to protect people against the

risk of ill-health in various countries.

It is up to each country to choose the coverage extension strategy and tools most adapted to its

national circumstances. However, experience has shown that each of the methods above has

its specific advantages and disadvantages. Each is specifically adapted to cover certain

population groups but has weaknesses in covering others. Each has specific strengths and

weaknesses to provide coverage in a long-term and sustainable manner. None of them alone

Alain Coheur, et al.

has emerged as a panacea for the sustainable extension of health care coverage to the entire

population in the short term.

This leads to two crucial conclusions:

•

Urgent action to extend coverage should build on the respective advantages of various

methods depending on the target groups for extension and the existing infrastructure.

•

This should be done by exploiting the complementarities of different methods through

an integrative approach that avoids opposition, duplication or competition between

different schemes.

These conclusions at first sight increase the complexity of coverage extension strategies. But

they open a new potential for extending coverage through more targeted actions that build on

synergies and the respective advantages of different methods. The crucial condition for

realizing this potential is the establishment of coherence between the different methods used.

As a mechanism to achieve this coherence we propose the concept of linkages that are

necessary, both during the policy formulation and the implementation phase.

3. Linkages: A new tool to ensure sustainable extension of

coverage

This paper intends to both underline the high potential of coverage extension strategies that

build on linkages between various extension mechanisms and to respond to the existing gap of

both empirical and conceptual considerations on linkages.

It focuses on statutory social security (SSS) schemes and community-based social protection

(CBSP) mechanisms in order to develop a typology of potentially promising linkages between

these types of mechanisms. Both SSS schemes and CBSP mechanisms have each their specific

advantages and disadvantages in terms of their capacity to cover different types of population

groups in developing countries. Linking the two in order to compensate for their respective

weaknesses and to exploit their respective strengths therefore appears to have important

potential.

And indeed, this paper provides first innovative empirical examples on some of these types of

linkages based on a joint ILO/ISSA/AIM study covering a number of countries in three

regions. For each country covered in the study, a report was prepared based on a standard set

of guidelines.

These reports are accessible on the ISSA Extranet site and the ILO/GIMI

platform.

The countries included in the study were: Argentina, Burundi, China, Colombia, Ghana, India, Laos, Philippines,

Rwanda and Uruguay. The ILO, the ISSA and the AIM would like to thank the authors of the respective national reports: J.M.

Garriga and I. Olego (Argentina); J.M. Niyokindi (Burundi); A. Hu (China); A. C. Mercado Arias (Colombia); A. Grüb

(Ghana); M. Chakraborty (India); A. Ron (Laos); A. Asanza (Philippines); A. Fischer (Rwanda); J. Martinez (Uruguay).

http://www.issa-issanet.int and http://www.ilo.org/gimi

Alain Coheur, et al.

3.1. Statutory social security (SSS) schemes

SSS schemes are for the purpose of this paper defined as compulsory social health insurance

schemes financed by contributions. In view of their financing and administrative processes,

they require a certain degree of employment formality of their target population.

They have therefore in developing countries often been successful in covering civil servants

and formal sector workers. However, they have apparent limits in covering informal economy

workers. These are mainly related to the nature of informal employment without documented

employment contracts, irregular and varying income and high transaction costs to collect

contributions. The relatively high contribution rates of SSS schemes that finance generally

rather comprehensive benefit packages are also more in line with the contributory capacities

of formal economy workers, in particular because these workers benefit from a sharing of the

total contribution with their employer. Due to relatively high levels of standardization, SSS

schemes also have weaknesses in adapting their administrative processes and benefit packages

to varying needs and capacities of different population groups.

Once established, statutory social security schemes often achieve relatively high levels of

administrative sophistication and financial sustainability. Computerization and performance-

based management procedures allowing for efficiency, a usually large risk pool and a steady

contribution flow also contribute to this stability while at the same time ensuring a relatively

high contracting power with health service providers.

The success of social health insurance schemes very much depends on the political backing of

the compulsory nature of the scheme. This dependence on political commitment to ensure

enforcement and compliance exposes social health insurance schemes to a political risk that

can influence its sustainability. With political commitment, large scale coverage extension

through social health insurance can be achieved, but it takes considerable time. In many

countries, the short-term extension of coverage to the informal economy constitutes the main

challenge.

3.2. Community-based social protection (CBSP) mechanisms

This paper works with a wide definition of CBSP mechanisms that encompasses not only

micro-insurance or community-based schemes that directly manage an insurance mechanism

but also institutions established by civil society (e.g. cooperatives, NGOs, associations or

micro-finance institutions) that among other objectives facilitate the access of their members

to insurance mechanisms.

CBSP insurance mechanisms are usually small-scale and decentralized and often include a

close participation of insured persons in their management. Flexibility in administrative

processes and the targeted definition of benefits and contribution rates according to the

capacities and needs of specific population groups such as rural workers, certain occupational

groups or community members, allow them to effectively cover groups that are due to their

Alain Coheur, et al.

specific characteristics difficult to cover by, and often excluded from, statutory schemes.

Where existing civil society institutions (e.g. a cooperative or trade union) to which informal

economy workers have already adhered participate in extending social protection but not

directly manage a scheme, administrative process can be facilitated and transaction costs in

registering members and in collecting contributions can be significantly reduced.

Relatively low contribution rates affordable for informal economy workers require CBSP

insurance mechanisms to provide a limited benefit package. Furthermore, they face a number

of administrative and sustainability challenges once established. The level of administrative

and IT sophistication is often low and contribution flows are difficult to predict as the

voluntary nature of membership can lead to high drop-out rates. The often small risk pool

engenders an important sustainability risk where health shocks affect a large part of the

insured population. While CBSP mechanisms contract with health care providers and have an

important role in the development of quality health services at the local level, their contracting

capacity and power can be quite limited.

The decentralized and flexible nature of CBSP mechanisms provides them with a great

potential to extend coverage at the community level and they are quite independent from

national politics in a country. However, it is difficult to achieve the extension of coverage at a

large scale with these mechanisms and the extension of existing schemes beyond their current

borders constitutes an important challenge.

Alain Coheur, et al.

Table 1

Table 1Table 1

Table 1.

. .

Strengths and weaknesses of SSS schemes and CBSP mechanisms

3.3. Possible synergies

Recent experience and the short summaries of their main characteristics show that neither SSS

schemes nor CBSP mechanisms are in a position to achieve universal coverage in the short

term. However, they can both cover certain but different population groups and should

therefore both be used in coverage extension strategies.

Statutory social security

Statutory social securityStatutory social security

Statutory social security

Community

CommunityCommunity

Community-

-based social protection

based social protectionbased social protection

based social protection

Potential for population coverage

otential for population coverageotential for population coverage

otential for population coverage

Ability to cover Strongest potential for civil servants

and workers in employment

relationships of a certain level of

formality

Strongest potential for informal economy

workers clustering around certain common

characteristics (either regional or

occupational, e.g. agricultural workers)

Financial aspects and scope of benefits

inancial aspects and scope of benefitsinancial aspects and scope of benefits

inancial aspects and scope of benefits

Levels of

contribution

Relatively high and shared between

employers and employees - often

not affordable for informal

economy and self-employed

workers

Low levels usually affordable to all members

of the scheme

Scope of benefits Comprehensive and relatively

standardized benefit packages

Limited scope and levels of benefits but

well-adapted to needs of target population

Redistribution Contributions according to ability to

pay

Flat rate contributions (no redistribution)

Risk pool and

financial

consolidation

Big and geographically diversified

risk pools. Steady contribution

income flow

Small and varying (voluntary membership)

size of risk pool. Income difficult to predict

Operations / admini

perations / adminiperations / admini

perations / administration

strationstration

stration

Management Sophisticated computerization and

management processes. Trained

staff

Low level of management training and low

levels of computerization and management

system sophistication

Administrative

procedures

High standardization and statutory

contribution payments. Difficulties

to adapt to non-standard groups

Flexible according to needs and capacities

of target group. Low transaction costs and

strong capacity to reduce fraud and moral

hazard

overnance

vernancevernance

vernance

Participatory

nature

Representation of workers and

employers in centralized decision-

making

Direct participation of members in

decentralized decision-making

Health service provision

ealth service provisionealth service provision

ealth service provision

Contracting High market power and contracting

capacity - agreements at a national

/ regional scope

Contracting power and agreements at the

local level

Policy planning

olicy planningolicy planning

olicy planning

Advocacy Top-down policy approach Bottom-up with/without policy support

Alain Coheur, et al.

In addition, as Table 1 summarizes, they display quite distinctive strengths and weaknesses in

terms of coverage, financing, administration and benefit provision, which indicates that these

mechanisms should not only be developed in parallel but that linking the two provides more

than just the sum of the two. Well-designed linkages between these two instruments have a

high potential to accelerate the extension of social protection. However, there has been

insufficient study of the potential types of linkages as well as insufficient analysis and

comparison of existing experiences so far. The following section will make a first contribution

to addressing this lack of knowledge through providing a typology of potential linkages as well

as innovative empirical examples that could be observed in various countries.

4. Towards a typology of linkages

Five types of linkages can be identified, namely to improve financial sustainability, to improve

operations and administration, linkages in governance structures, synergies in health service

provision and at the level of policy planning. An overview of this typology is provided in

Table 2.

Table 2

Table 2Table 2

Table 2.

Typology of potential linkages

Financial linkages

Financial linkagesFinancial linkages

Financial linkages

• Tax subsidies

• Redistribution between statutory and community-based

schemes

• Financial consolidation (risk transfers, re-insurance,

guarantee fund)

• Joint pooling to broaden risk pool

Operational/administrative linkages

Operational/administrative linkagesOperational/administrative linkages

Operational/administrative linkages

• Technical advice

• Exchange of information/good practice

• Sharing of management functions:

- Marketing/registration

- Contribution collection

- Claims processing/procedures

- Fraud prevention and control

• Information system linkages

• Regulation and/or control

Governance linkages

Governance linkagesGovernance linkages

Governance linkages

Representation on boards or other institutional decision-making

bodies

Linkages in health service provision

Linkages in health service provisionLinkages in health service provision

Linkages in health service provision

• Contracting linkages:

- Definition of benefit package

- Prevention and health education / promotion

- Provider payment mechanisms (type of mechanism and

prices)

- Co-contracting with providers

- Improvement and assurance of the quality of care

• Access to health services delivery networks / providers

Policy planning linkages

Policy planning linkagesPolicy planning linkages

Policy planning linkages

• Joint participation in the design and implementation of

national social protection strategies

• Similarity in core policy design principles

• Policy coherence to avoid unintended by-effects through

imbalanced incentive structures

Alain Coheur, et al.

4.1. Financial linkages

CBSP mechanisms face challenges regarding their financial sustainability and are often in

need of financial support in view of the low ability to pay of the population to be insured.

Equitable access to health care schemes therefore requires some external resources to ensure

sufficient financing and sustainability.

These resources can consist of cash transfers from governments to schemes taken from

general revenue but could also be based on a redistribution of funds between statutory and

community-based schemes. Temporary sustainability challenges due to small risk pools and

fluctuating contribution incomes can be compensated through financial consolidation

mechanisms (e.g. through re-insurance or a guarantee fund) that can, once again, be backed

by the government but also by the statutory scheme(s).

A close linkage between SSS schemes and CBSP mechanisms to improve the financial

sustainability of the latter can be envisaged through joint pooling of funds with a view to

broadening risk pools. In this case, CBSP mechanisms are relieved of one of the most

important challenges they are facing.

Examples for financial linkages can be found in a number of countries. Colombia’s subsidized

health insurance scheme, for example, combines tax subsidies and the transfer of

contributions from statutory schemes to stabilize the financing of health care for the poor and

for vulnerable groups (Box 1).

Box 1

Box 1Box 1

Box 1

As a part of the reform of the health care system in Colombia in 1993, a special subsidized scheme

was introduced to finance health care for the poor and vulnerable groups (including their families)

who are unable to pay contributions to the general insurance scheme. The funds for this special

scheme are raised through taxes (national and regional transfers - 69 per cent of the funding) and a

solidarity contribution collected under the contributory social insurance scheme (24 per cent of the

funding). These funds are then channelled to several institutions, including 7 mutual benefit

associations federated in a national organization Gestarsalud, which now covers 60 per cent of the

market, compensation funds (

cajas de compensación

- 20 per cent of the market), and several

private commercial insurance companies that also cover 20 per cent of the market. Today this

successful subsidized scheme covers 19.5 million people.

Alain Coheur, et al.

National solidarity between the formal sector and the informal economy is also fostered in

Ghana where the National Health Insurance Fund that provides subsidies of premiums for the

poorest members is partly financed by social security contributions from formal sector

employees. Since redistribution at the national level may not be sufficient in countries with

low income, it is also useful to consider international redistribution such as in Ghana where

under a Global Social Trust pilot project funds are transferred from Luxembourg to provide a

cash benefit supporting health check-ups for indigent pregnant women and mothers with

children under the age of five.

Financial linkages contributing to financial sustainability can for example be found in Rwanda

where joint pooling has been adopted for secondary and tertiary care. In Ghana, one of the

functions of the National Health Insurance Fund is to reinsure district mutual health

insurance schemes against random fluctuations of costs. In Laos, joint pooling between the

SSS scheme and CBSP mechanisms is now under consideration.

4.2. Operational/administrative linkages

While the SSS scheme can bring valuable advice and support to the community-based

mechanism on all technical and operational questions related to the administrative processes

of insurance schemes (e.g. identification, registration, claims processing, IT systems, etc.),

CBSP mechanisms such as organized groups or community-based organizations can also

make an important contribution to facilitating some of the core administrative processes of

statutory schemes. This support is particularly valuable for statutory schemes intending to

expand their coverage to informal economy and agricultural workers, and consists of reducing

the often high transaction costs involved in the identification and registration as well as in the

collection of contributions from these workers.

Organized groups or community-based organizations are social institutions where informal

economy workers have access to support services that are necessary for improving household

productivity and income. Through these types of organizations, informal economy workers

have access to various services, including marketing of products, purchasing of inputs, credit,

savings and insurance, etc.

Assuranc

AssurancAssuranc

Assuranc

Contributive

scheme

Subsidized

scheme

Employers

& workers

15,000,000 insured persons

Contributions

= 12% salary

Transfer o

f 1/12

of contributions =

24% of financing

State (taxes)

69% of

funding

19,500,000 insured persons

Coverage rate: 28% in 1992,

80% in 2007, goal of 100% in 2009

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Extending social health insurance through organized groups can be more efficient than

individually targeting informal economy workers, for these groups can easily reach the target

population and facilitate a series of administrative procedures (such as marketing,

registration, contribution collection, information, claims processing, monitoring and control)

at relatively low administrative costs. Important linkages with regard to these management

functions have for example been implemented in the Philippines where community-based

organizations market voluntary membership in the statutory scheme, register workers and

collect contributions on behalf of the statutory scheme (Box 2).

Box 2

Box 2Box 2

Box 2

In 2003, Philhealth, which is administering social health insurance for the private-sector in the

Philippines, begun to work with CBSP mechanisms in order to extend its voluntary scheme to more

informal economy workers under a project called POGI. Around 15 per cent of the target population

newly joined the Philhealth scheme under this project. Building on some of the lessons learnt during this

project, it was replaced by a new scheme under the name of KaSAPI that targeted community-based

organizations with at least 1,000 members in 2005/2006. Under this new programme, these

organizations market the Philhealth scheme, register workers and collect contributions on behalf of

Philhealth. The programme offers a discounted premium when a group of a minimum level is enrolled

under a contract with PhilHealth. An organized group qualifies for the group premium rate if at least 70

per cent of the group size is enrolled in Philhealth and an even more preferential rate applies if at least

85 per cent become members. At the same time Philhealth tried to adopt its systems and processes to

the realities of the informal economy, e.g. it relaxed its documentary requirements to ease registration

and made its payment schedule more flexible.

A potentially even more effective procedure to ensure affiliation of informal economy and

agricultural workers can be automatic affiliation of all members of an organized group (trade

union, cooperative, etc.) to a scheme. The contributions can be deducted from the production

sales or the taxes paid by workers instead of being deducted from individualized payrolls.

These procedures have many advantages: automatic affiliation facilitates the coverage of a

large percentage of the target population; it also leads to little adverse selection problems and

low drop out levels; expensive marketing campaigns can also be avoided. Automatic

deduction of the premium avoids having to collect premiums among the members. Moreover,

since contributions are linked to sales figures or turnover, some redistribution is introduced

into the scheme.

While such procedures of affiliation and payment of contributions are already used in several

schemes in India (e.g. dairy cooperatives) and Latin America (e.g. coffee cooperatives), or are

planned to be used in schemes that are being implemented in Mali, Burkina Faso (e.g. cotton

cooperatives) and Senegal (e.g. transportation workers for which the premium will be charged

at each trip, i.e. when the truck or car leaves the station), these are until now mostly used to

ensure membership of schemes managed by the organized group or community and not on

behalf of statutory schemes.

Alain Coheur, et al.

The joint development and sharing of trained technical management teams or the outsourcing

of administrative functions can contribute to increase the efficiency of CSPB schemes and

compensate for its administrative weaknesses. Empirically, no direct support from statutory

schemes to administrative functions of CBSP schemes could be identified. Administrative

functions are largely outsourced to professional organizations. In Senegal, for example, a

professional centralized Insurance Management Unit to which the planned or existing health

insurance schemes will outsource some of their technical management functions is being

designed. In India, this role is mainly played by for-profit-companies (third party

administrator - TPA) that assume most of the administration of an insurance scheme in

exchange for a commission of 5 per cent fixed by law.

Where statutory and community-based mechanisms both operate their own health insurance

schemes, the exchange of information on insured persons, contributions paid and claims can

be greatly facilitated by a compatibility and connection between the IT systems of different

schemes. Most often, but not always, this will be ensured through a transfer of system

knowledge from the statutory scheme to the community-based scheme in order to ensure

coordination and coherence as well as service provision planning. In Laos PDR, for example

the compulsory Social Security Organization (SSO) and the community based health

insurance schemes have important similarities in their major design characteristics and

administrative systems. The basic information systems on membership identification and

utilization of health care benefits of the two schemes are similar, with more computerization

in the SSO and increasing computerization in community-based health insurance schemes.

The systems allow, for example, the comparison of utilization and use of capitation funds by

the provider between the two schemes. These similarities will increase the chances of eventual

mergers, and allow the creation of broader risk pools and possible redistribution between

different income and risk groups.

Monitoring and evaluation of the community-based scheme through the statutory scheme can

also be envisaged as an effective means to ensure administrative coherence. Regular reporting

as part of supervision and control can ensure that the statutory scheme is in a position to

include information on the coverage and financial development of community-based schemes

in its decision-making and business development. In Uruguay, the Ministry of Public Health

has a controlling function for collective health organizations. However, it must be ensured

that the reporting not only goes one way.

4.3. Governance linkages

CBSP mechanisms, given their democratic and participatory nature, have an important

knowledge of the specific needs and priorities of specific population groups and are well

integrated at the local level. They are potentially strong representatives of informal economy

population groups providing the information and knowledge necessary for extending

coverage to them at a larger scale. Such knowledge covers local constraints and group

characteristics as well as experiences with the implementation of certain measures such as

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health education or the identification of the poor potentially eligible for subsidies etc. SSS

schemes often fall short of such knowledge, which hampers the design and implementation of

measures to extend coverage to the informal economy. As trusted representatives, CBSP

mechanisms can also improve the confidence into schemes at the local level and work towards

reducing fraud, adverse selection and over-consumption of health services on behalf of the

SSS scheme.

The representation of CBSP mechanisms and informal economy workers on the decision-

making of SSS schemes and in the coverage extension policy-making process is therefore

crucial. But also the representation of the formal sector in CBSP schemes can be of value to

better understand their functioning and to explore potential mutual assistance.

Despite their potential, such linkages at the governance levels can only rarely be found in

practice. In the Philippines, for example, a representative of the Basic Sector of the National

anti-poverty commission sits in as a member of the board of Philhealth, the statutory health

insurance scheme. The Basic Sector represents and works for informal economy workers. In

India, the Yeshasvini Co-operative Farmers Health Insurance Trust (a scheme with 2 million

farmers affiliated in 2007) allows representatives of both the government and the cooperative

sector to attend its board meetings.

4.4. Linkages in health service provision

The objective of social protection in health is to provide access to at least an essential package

of health services with the aim to improve the health status of a given population. The

provision of this package involves several challenges for any scheme: the definition of the

package based on various criteria of needs, priorities, cost-effectiveness etc., the pricing of the

various services through contracting processes with health care providers and ideally also

quality assurance as to the services provided to insured persons.

Linkages between CBSP mechanisms and SSS schemes can contribute to improving the

sustainable access to health services for the populations covered by the respective schemes.

CBSP mechanisms, due to their small-scale nature, often lack market power in contracting

with providers. SSS schemes, however, usually have such market power and co-contracting

may therefore be an important way forward.

Information is key in the definition of the right basket of services and in contracting

processes. This involves knowledge on what is essential for the various parts of the population,

on the cost-effectiveness of different procedures in different settings, the expected utilization

rates and costs of services. Due to their centralized nature, SSS schemes sometimes lack

information on the concrete needs and priorities of the population in terms of health services

while CBSP mechanisms lack information on cost-effectiveness and other sophisticated items.

An exchange of information and potentially a joint definition of the package of services can

therefore benefit both CBSP and SSS schemes and avoid waste and inefficiencies. In

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Colombia, for example, the health service package is defined on a statutory basis involving all

health insurance schemes and is evaluated and adjusted on an annual basis.

Clearly, contracting is a process that involves important transaction costs where each scheme

contracts separately with a certain number of providers. Some CBSP mechanisms such as in

India currently use external service providers to develop networks of accredited hospitals and

to handle the contractual relationships on their behalf. Developing a national policy of

contracting or making the contracts including price structures of SSS schemes available for the

use of CBSP mechanisms can reduce these transaction costs. Where this is not possible,

contracting guidelines including key features can also be of assistance for small schemes. In

Burkina Faso and in Senegal, ILO/STEP has initiated a process for the development of a

contractual approach between mutual health organizations and public health care providers.

This process begins with an inventory of contracting experiences. Working groups then draft

proposals that are discussed by all the stakeholders involved. The goal of the approach is to

harmonize contractual practices.

Opening existing health care providers run or contracted by SSS schemes to additional

contracts by CBSP mechanisms based on similar terms can also be of use. This is also a

valuable help to health care providers that do not need to adapt to diverse types of contracts

and can more easily comply with the procedures and standards. It is also important that the

provider payment is aligned where the same providers contract with different schemes, as the

provider otherwise has an incentive to favour the members of some schemes over those of

other schemes. Finally, quality assurance processes could either be combined or information

be exchanged. The SSS scheme usually develops quality assurance methods and tools that

could be adapted and transferred to the CBSP mechanisms.

4.5. Policy planning linkages

Whatever the type of scheme or the mix of schemes adopted in a country, integrated and

coherent planning at the policy level is important in order to avoid unintended consequences.

If coherent planning is lacking and core design features of various schemes operating in

parallel in one country are not coordinated, policy objectives may not be achieved. Linkages in

the policy planning of different schemes are therefore crucial.

For example, the extension of contributory schemes, in particular on a voluntary basis, may be

hindered by the parallel existence of subsidized or free access schemes. This has been shown

for example in the Philippines where the success of the first project to extend the reach of the

voluntary insurance scheme to the informal economy through working with cooperatives (see

Box 2) was limited due to, among other reasons, the presence of another programme that

meant to cover the poorest families through a new subsidy scheme from the national

government. Faced with a choice between free health care and a contributory scheme, most

families opted for the former.

Alain Coheur, et al.

The utilization of different provider payment mechanisms in different schemes may create

unintended financial incentives for providers to favour the members of one scheme over the

members of other schemes. Different regulations with regard to family coverage, benefit

packages, co-payments etc. between different schemes may distort the decision of workers and

may constitute considerable barriers to a potential merger of different schemes.

Actual differences in core design features between different schemes operating in the same

country frequently stem from the dispersion of responsibilities for the various schemes.

Whereas Ministries of Labour are often responsible for policy formulation for statutory

schemes, Ministries of Health usually supervise community-based schemes. Subsidized

schemes for indigents often depend on the Ministry of Interior. Under such circumstances,

government commitment not only means to push for the extension of coverage, but also to

ensure an integrated policy planning and coordination between different governmental actors.

A lack of such coordination may seriously endanger the achievement of policy objectives. Laos

provides a positive example for functioning policy planning linkages (Box 3):

Box 3

Box 3Box 3

Box 3

A high level of policy coherence as well as good practice exchange between schemes has been achieved in

the efforts to extend coverage in Laos. The statutory scheme and the voluntary community-based schemes

were not only introduced at roughly the same time in 2001, but the major components of both schemes

are similar: benefits and exclusions, provider payment as well as the basic information systems on

membership identification and utilization. In the short-term, the aim of these linkages is to create a

positive environment of coherence rather than competition, with each scheme learning from each other

and to avoid that providers favour insured persons in any of the schemes. In the long-term, the similarity

of design components is crucial to spread knowledge and experience about social security in both the

formal and the informal economies and increase the chances of a future merger. The merger between

statutory and community-based schemes has been formulated by the Ministry of Health as a long-term

objective.

A lack of policy planning linkages and coherence in a multi-scheme environment can also

have a negative impact on the necessary solidarity at the national level. This solidarity between

well-off and poorer groups of the population, between the old and the young, between the sick

and the healthy is important if universal coverage is to be achieved. But redistribution and

solidarity must be organized across all population groups in order to avoid negative

repercussions in terms of equity and efficiency. Therefore, the implementation of solidarity

mechanisms by the government across and within schemes in a coherent manner is required.

This is done in Colombia where the subsidized scheme integrates solidarity based on a

coherent national policy planning.

The “Unorganized Sector Workers Social Security draft Bill” under preparation in India is

also a good example of policy planning linkages intending to create a coherent and equitable

system of social protection at the national level for different population groups (Box 4).

Alain Coheur, et al.

Box 4

Box 4Box 4

Box 4

Over the last few years, the Indian central government as well as various State governments and

ministries have shown a stronger commitment to extend health protection benefits to informal economy

workers, with several initiatives: welfare funds, subsidized insurance products, social obligations for

private insurance companies, State governments health insurance initiatives, etc.

However it is estimated that some 90 per cent of the labour force still does not benefit from any kind of

social security. As regards health protection, this exclusion phenomenon still affects some 950 million

persons, making of the extension of health protection to all an unprecedented challenge.

An “Unorganized Sector Workers Social Security Draft Bill” is currently being finalized at the central

level. It will pave the way towards a nationwide social security system based on the national solidarity

principle (with contributions from employers as well as subsidies from central and State governments). It

aims to provide a minimum level of social protection benefits to most of the informal economy workers.

The proposal is designed as a global and coherent framework adaptable to both the existing social

security mechanisms already implemented in the various States and the financial capacity of the States to

contribute to it. As such, it is conceived as a flexible instrument adopting, in the light of its expected

wide coverage, a common minimal denominator applicable to all States. State governments remain free

to complement the various provisions and benefits.

5. Conclusions

Access to health services and social protection is an essential factor for economic and social

development and a key condition for reducing poverty. Given the widespread exclusion from

social protection in many countries, the extension of coverage is a matter of urgency.

There is, unfortunately, no quick and easy solution to the challenge of extending health care

coverage. In many countries, only very limited progress has been made during the past

decade. This is despite the fact that there are a number of mechanisms for extending health

care coverage. All these mechanisms, however, have their distinctive advantages and

disadvantages in terms of their capacity to cover populations in a sustainable manner. None of

them alone appears to be able to reach universal coverage in the short term.

While the exact mix between these different mechanisms should depend on each country’s

specific circumstances, it appears that a combination of them is most promising to extend

health care coverage. And indeed, a parallel development of different mechanisms can be

observed in many countries where social health insurance schemes are being implemented for

some parts of the population while community-based schemes are created for population

groups that cannot yet be covered by the statutory scheme. Often a tax-financed health service

also plays a role for some population groups.

This paper argues that the parallel development of these different mechanisms within the

same country in an unconnected manner not only misses out important opportunities to

better cover populations, but can also be detrimental to coverage where competition and

duplication between the different schemes develop. Inefficiencies while resources are scarce

and the demand vast should be avoided at all cost.

Alain Coheur, et al.

Taking SSS schemes and CBSP mechanisms as examples, this paper shows that a whole variety

of linkages between different schemes both at the policy level and the implementation level

can be envisaged. These linkages can function as important stimulus to the extension of

coverage. Coherency at the policy level combined with an effort to compensate for the

respective disadvantages of schemes through linkages can avoid competition and

inefficiencies and can strengthen the capacity of the existing social protection mechanisms to

cover a greater share of the population in a sustainable manner. However, while some

innovative measures could be identified in a joint empirical ILO/ISSA/AIM study, linkages

remain in general largely underdeveloped in practice.

The authors of this paper believe that this should change. This paper has therefore sought to

make a conceptual contribution to developing linkages and to providing a number of first

empirical examples from a variety of countries. Better connecting different schemes, building

coherency between different actions at the national level, developing innovative linkages

compensating for organisational, financial or structural weaknesses of various types of

schemes will remain an important challenge and will be a focus of the work of ILO/ISSA/AIM

also in the future.

Acronyms

AIM: Association Internationale de la Mutualité

CBSP: Community Based Social Protection

ILO: International Labour Organization

ISSA: International Social Security Association

SSS: Statutory Social Security

STEP: Strategies and Tools Against Social Exclusion and Poverty

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