SKY Impacts

David LevineRachel Polimeni

Ian Ramage

Sky Evaluation Dissemination Meeting4-5 October, 2011

Phnom Penh, Cambodia

Micro-health insurance

Can health insurance improve health and reduce vulnerability of the poor?

(If so, what policies are required for a a financially viable insurance market?)

SKY evaluation

Afd asked us to evaluate SKY expansion

Roll-out to 250 villages in 2008 Targeting a population of over

250,000

Evaluation challenge

Cannot just compare outcomes of the

insured vs. uninsured

Self-selection of low cost

In the United States health insurance often comes with employment, so the insured are healthier than the uninsured

If those who are rich, care about health care, and so forth, buy insurance, insurance can correlate with good health but not cause it

Self-selection of high cost

Above-average interest in insurance may be due to above-average expected health care costs

If those who anticipate needing health care more often buy insurance, insurance can correlate with bad health but not cause it

Need a randomized trial

Sky already randomized!

SKY held village meetings to market the program• “Lucky Draw” Coupon lottery at village

meetings • 20% won a coupon for 5 of first 6

months, others get standard offer of 1 month free

Door-to-door insurance agents followed-up to sign up new members

SKY Membership

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Months since Village Meeting

Per

ce

nt

En

roll

ed

Steep Discount

Regular Price

Data Collection

Baseline survey 2-9 months after village meetings• 2500 winners of the deep discount• Equal # of those offered regular price

Follow-up survey one year later

Methods

Instrument is having a deep discount (not regular price)

We estimate the effect of health insurance among those induced to buy by the deep discount • “local average treatment effect”

SKY Membership

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Months since Village Meeting

Per

ce

nt

En

roll

ed

Steep Discount

Regular Price

Theory

Overlapping stories of how health insurance can help: • Seek more and higher quality

health care When serious problems arise Preventative & other care

• => better health outcomes

• Lower health care costs => less debt and asset sales

Caution: Out study is too small for some important outcomes

Theory

Overlapping stories of how health insurance can help: • Seek more and higher quality

health care When serious problems arise Preventative & other care

• => better health outcomes

• Lower health care costs => less debt and asset sales

Caution: Out study is too small for some important outcomes

Theory: Health care when seriously injured or ill

Insurance reduces: • Forego care due to no money• Delay seeking care• Visit ineffective informal providers

=> Higher rate of using qualified providers & Promptly use qualified providers

=>Over time, health improves • But we have very low power for health impacts

Results on health care after serious incident

Sample = serious incident, which we define as led to• death or • disability of a week or more

No longer purely experimental variation

Similar rates of regular vs. discounted price offers

Hypotheses on care for serious

Insurance reduces: • Forego care • Delay seeking care• Visit ineffective informal providers

=> Higher rate of using qualified providers & Promptly use qualified providers

=>Over time, health improves

Forego care

After serious shock (> 6 days disabled or death)

Did not seek treatment or stopped treating due to costs • Controls 5.2%• SKY members 3.2 percentage points

lower (but n.s.)

Hypotheses on care for serious

Insurance reduces: • Forego all care • Delay seeking care• Using informal providers

=> Higher rate of using qualified providers & Promptly use qualified providers

=>Over time, health improves

Delay seeking care

%Treated 1st day = 60% of controls• 14 p.p.* lower among SKY• Longer delay for insured shows up all

along the distribution Largely due to less use of drug-sellers %“hospital” (including private clinics

with a bed) 1st day = • 51% of controls • -0.7 p.p. (n.s.) SKY

Hypotheses on care for serious

Insurance reduces: • Forego all care • Delay seeking care• Using informal providers

=> Higher rate of using qualified providers & Promptly use qualified providers

=>Over time, health improves

Choose formal, not informal, care (table 4)

First treatment was Health center: 14% among controls

& +18 p.p.** SKY Drug seller = 14% among controls

• & 8 p.p. ** lower among SKY (Still almost half treat first at private

“doctor”)

Theory of SKY insurance

• Seek more and higher quality health careWhen serious problems arisePreventative & other care

• => better health outcomes

• Lower health care costs

Birth-related outcomes (table 5)

At least one antenatal care • 92% of controls, +4 p.p. (n.s.) SKY

At least one tetanus shot = .93 + .14 SKY (P < .10) Birth attended by public facility = .59 + .21 SKY (n.s.)

Preventive and other care (A3)

No effect on • Any visit to public doctor in last 3

months (A surprising result)

• Immunizations (low precision) (Already free)

• Use of modern contraceptives

Theory of SKY insurance

• Seek more and higher quality health careWhen serious problems arisePreventative & other care

• => better health outcomes• Lower health care costs

No detectable change in health

Same death rate, 0.7% Almost identical rate of disabled a

week or more No detectable improvement in

children’s growth• Height for age z-score = -1.47** controls

& +.31 SKY (n.s.)

Theory of SKY insurance

• Seek more and higher quality health careWhen serious problems arisePreventative & other care

• => better health outcomes• Lower health care costs

Theory: Lower health care costs

Insurance reduces costly private care & and pays public-sector co-pays Þ Lower out-of-pocket costs after serious

health problemsÞ Health care does not require new debt or

selling assets such as landÞ Accumulate physical and human capital

• But low power for capital accumulation after only one year

Hypotheses: Health care costs

Insurance reduces costly private care

& and pays public-sector co-pays Þ Lower out-of-pocket costs after serious

health problemsÞ Health care does not require new debt or

selling assets such as landÞ Lower precautionary savings

Þ freeing up resources for consumption & productive investment

Þ Accumulate physical and human capital

Reduces costly private care

Household spent $5 or more for private care for at least one incident = 61% of controls

-12 p.p. for SKY

Hypotheses: Health care costs

Insurance reduces costly private care & and pays public-sector copays Þ Lower out-of-pocket costs after serious

health problemsÞ Health care does not require new debt or

selling assets such as landÞ Lower precautionary savings

Þ freeing up resources for consumption & productive investment

Þ Accumulate physical and human capital

Hypotheses: Health care costs

Insurance reduces costly private care & and pays public-sector copays =>Lower out-of-pocket costs after

serious health problemsÞ Health care does not require new debt or

selling assets such as landÞ Lower precautionary savings Þ Accumulate physical and human capital

Incident costs

Costs per serious incident (compressed, including transport)

= US$104 for controls - $46* SKY Sample = serious incidents

Health care cost per HH

We cumulate cost of care for incidents leading to:• death • disabled a week or more • cost >$100

Captures most lumpy costs important for insurance

SKY provides financial protection

For households Pr(cost of care for all serious or costly

incidents totals > $100) = 39% of controls • -10.9 p.p. of SKY (P = .06)

Hypotheses: Health care costs

Insurance reduces costly private care & and pays public-sector copays Þ Lower out-of-pocket costs after

serious health problemsÞ Health care does not require new

debt or selling assets such as landÞ Lower precautionary savings Þ Accumulate physical and human

capital

Borrowing

Amount borrowed (top-coded): All HH: $195 for controls – $68* SKY• Reduction only among HH with a

serious incident Loans for health = $29 - $22** SKY Several other measures support

Hypotheses: Health care costs

Insurance reduces costly private care & and pays public-sector copays Þ Lower out-of-pocket costs after

serious health problemsÞ Health care does not require new

debt or selling assets such as land

Þ Lower precautionary savings Þ Accumulate physical and human

capital

Reduces selling land

Sell asset = 22% of controls

8 p.p. fewer (P < .10) SKY

Land sales due to health care costs = .011

-.016 (P = .06) SKY

Hypotheses: Health care costs

Insurance reduces costly private care & and pays public-sector co-pays Þ Lower out-of-pocket costs after serious

health problemsÞ Health care does not require new debt or

selling assets such as landÞ Over time, accumulate physical

and human capital

No detectable change in physical capital (low precision)

Theory Liquid assets

• weaker precautionary motive reduces • lack of health care outflows and eventual higher

income from assets might increase Productive assets

• Lower precautionary savings + no health care shocks should increase

No detectable difference in assets Cash savings Gold Land

Summary

Health care when seriously injured or ill

Preventive health care Health care costs

Health care when seriously injured or ill

SKY insurance reduces: • Foregoing all care Probably • Delaying seeking care No• Visiting informal providers Yes

Higher rate of public providers Yes Promptly get health care from qualified

providers unclear=>Over time, health improves No evidence

(but low power)

Other health care

SKY increases• Use public facilities for minor No• Preventative care No evidence (but

low power)

Health care costs

SKY reduces costly private care maybe & increases SKY pays for copays Yes=>Lower out-of-pocket costs after serious

health problems yesÞ Health care does not require new debt YesÞ Health care does not lead to selling assets

such as land ProbablyÞ Over time, accumulate physical and

human capital No evidence

Cautions

Absence of evidence is not evidence of absence• So “not significant” (n.s.) results can still

be important

Supplements

Health care in rural Cambodia

Private caregivers good at handing out pills (“polypharmacy”)• Untrained drug sellers• Private “doctors”

Typically modest formal training• Some traditional healers

Public facilities

Three-tiered public sector• Local health centers • Referral hospitals (in English, closer to

“clinics”)• Provincial hospitals

Poor reputation Copays

• Financial and in-kind• Hospital stays have no incremental financial

copay after 6 days

SKY health insurance

Micro-health insurance program in Cambodia.

Run by the NGO GRET since 1998 Funded by the French (AFD) and

others Offers voluntary health insurance in

rural areas Covers 61,000 people (some urban)

SKY

Premium from $0.50 - $1.83 per hh per month, based on household size

Usually chose areas with above-average public health services• e.g., contracted out to Swiss Red Cross

Several means to improve quality • Feedback • Lump sum capitation payments

SKY Insurance Benefits

Free (no copay):• Public health centers

(not neoclassical insurance)• Public district and provincial hospital

with referral• Prescribed drugs (if on list)

Not cover • Chronic conditions • Pregnancy right after meeting

The Setting

Very disadvantaged• Mean education in our sample = 5 years• Infant mortality rate 55/1000 live births

Randomization (Table 2)

Randomization looks good on most measures• Literacy• Age mix• Assets • …

One exception: Enumerator was more likely to rank deep discounts as lowest wealth rank (11% deep discount, 14% full price)

First stage Sky membership (averaging 3 nearby

months) = 0.04** - .004** months since meeting+ 0.34** low price- 0.005** low price * months

R2 = .16

Slightly different 1st stagesOutcomes Endogenous XAnnual or stock measures such as debt

% of last year in SKY

Trust in SKY Ever in SKY

Recall of last 3 months health care

% of last 4 months in SKY

Cost of and care for serious health incidents

Pr(in SKY) for the month of the incident (or adjacent months)

Methods

Standard errors adjust for clustering by village

* and ** for P< .05 and <.01 We lack precision for some impacts

Other Hypotheses

SKY membership will increase• Trust in SKY• Favorable opinion of public facilities

Trust in SKY

SKY is unfamiliar, which reduces trust

If high coupon raises exposure to SKY => H: High coupon leads to a more

favorable view of SKY

Slightly better view of SKY

SKY is trustworthy, will pay, is honest (1-5 scale)

Trust in SKY (average) = 3.4 + 0.3** Ever a SKY member

View of public facilities

SKY selects good and works to improve health centers

If • higher quality most easily

observed when used and • Sky increases public usage

=> H: high coupon leads to more favorable view of public facilities

No improved view of gov. doctors

“Government doctors are extremely thorough and careful.

“You have complete trust in government doctors

“Government doctor's medical skills are not as good as they should be (reverse coded)

Other outcomes

• Trust in SKY Yes, but small• Use of public facilities for minor

concerns No evidence

No convincing difference in school enrollment (Table 7)

Sample = school-aged children Enrolled = 0.82 + 0.07* SKY BUT

• Effect is not found among those with a serious incident, so probably sampling error