Implementing community-based health insurance schemes : lessons from the case of Rwanda
Community-Based Health Insurance Schemes (CBHIs) have flourished all over the developing world. CBHI is a not-for-profit type of health insurance that has been used by poor people to protect themselves against the high costs of seeking medical care and treatment for illness. In principle, CBHI schemes are designed for people who live and work in rural areas, or in the informal sector. Most often, these people are unable to access adequate public, private, or employer-sponsored health insurance. Significantly, by reaching those who would otherwise have no financial protection against the cost of illness, CBHIs also contribute to equity in the health sector. However, many schemes do not perform well due to a number of problems related to their implementation. This study examines then the problems related to the implementation of CBHIs in the developing world. In addition, the study presents possible strategies to overcome those problems. It also draws lessons from the case of Rwanda, generally considered a success story in the implementation of CBHIs. Methodologically, extensive literature review and informal interviews are two methods used to tackle the research questions. The review found that the main challenges of CBHI are related to insurance risks that include adverse selection and moral hazard. There are also challenges related to the context in which CBHIs are launched such as the absence of formal insurance culture and poverty, which lead to low levels of revenues that can be mobilized from poor communities. Furthermore, the study discusses problems related to design features that hinder the performance of CBHI. Those problems include, among others, the small size of the risk pool, under pricing and the limited management capacity that exists in rural and low-income contexts. To remedy to those problems, the literature proposes different strategies: increased and well targeted subsidies to pay for the premiums of low income populations; educational and awareness-raising programs for behavior change; mandatory enrollment to fight against adverse selection; regular training to enhance management skills; and community participation Finally, the study draws lessons from success stories of implementation in Rwanda.