Providing insurance products to the poor using the co-operative structure

Appendix Four

Case study3: Mutual health organisations in Mali

Mutual health organisations (MHOs) and Community-based health insurance schemes (CBHI)) are community and employment-based groupings that have been growing progressively in West, Central, South and East Africa. Whilst these are small and medium sized organisations covering a small fraction of the population, they provide significant contribution to health care access to people in informal and rural sectors. MHOs in Africa usually grow out of mutual aid organisations set up initially to provide members with a range of social security benefits such as funeral grants, birth allowances and retirement benefits . Health care benefits are designed to improve members’ access to quality healthcare by spreading the costs and risks of members’ illness and provide acceptable facilities where ones do not exist. The growth of MHOs have been supported by governments and donor agencies who have recognised the potential for increasing access to health care services to otherwise under-served communities. The contributions MHOs levy on their members are not excessive in relation to average income . Most MHOs have standardised organisational structures that involve members in decision-making and require accounting and transparency from managers (Atim 1998).

In Africa MHOs lack training in administration and management areas including MHO-specific skills needed to deal with providers, check appropriateness of healthcare, ensure accurate costing, set premiums and benefits correctly and support preventive health measures and education. Whilst the provision of existing social security benefits are relatively easy as they require a simple savings scheme, health insurance benefits are more unpredictable and require a certain degree of actuarial expertise. Voluntary schemes in Africa have a penetration hardly rising above fifty percent, due to long waiting periods or no options in paying dues in kind. Provider owned MHOs lack effective independence to ensure that members are obtaining sufficient quality of care. There are other problems facing MHOs in Africa such as morale hazard, adverse selection, costs escalation and fraud. To tackle these issues the MHO relies on its strong solidarity culture to enforce a social control on any potential abuse . MHOs in larger villages operate a system of deductibles, co-payments, mandatory references and ceilings on coverage (Atim 1998, Musau 1999).

Mali is the first to create a nation-level MHO development and support agency, the Union Technique de la Mutalit Malienne (UTM), which is assisted funded by Fonds d’Aide la coopération (FAC) and assisted by FNMF(Mutualité Française). Mali is also the only country in Africa that has developed legislation specifically for mutual organisations (Atim 1998) . In the late 1980s, as with most countries, Mali abandoned the principles of free state welfare provision and introduced a system of user fees. Almost 80% of the country work in the informal and rural sector and do not have access or cannot afford user fees. A special program was put in place to develop mutuals for health with the assistance of Cooperation Francaise and its technical partner FNMF, in collaboration with the UTM and Mali government. There are many types of mutuals in existence in Mali covering different professions, some mutuals do offer funeral cover and a basic life insurance cover, but no insurance on health. The objective of the program is to use the existing solidarity of the mutuals, its member focus and not for profit basis as a cost effective and efficient way to distribute health insurance schemes to the poor.

The mutual for cotton farmers in Nongon was used to test the feasibility of providing health insurance products. In 1994 the mutual successfully created a community health care centre, and in 1998 a contribution of 5 CFA per Kg of cotton was asked as contribution to a health insurance scheme. The strong priority of health as a means to ensure continuos work and continuos income provided a high demand for the scheme amongst the cotton workers. Today the scheme is successfully providing benefits to women for maternity, child benefits up to the age of seven and benefits for men up to 50% of consultation and prescription.

The success of the scheme encouraged UTM with the assistance of FNMF to launch two health guarantee products in Bamako using the mutual networks in existence. The first product covered 60% of expenses relating to doctor’s visit and prescribed drugs, the second product covered 75% of hospitalisation costs. The health provider claims the insured portion of costs directly off the mutual releasing the policyholder from the burden of advance payments. Members are requested to provide identification cards when receiving treatment, there are a select number of healthcare providers that participate in the scheme and an agent is based in each hospital to verify and expedite the claims procedure. UTM negotiates and signs on behalf of all the mutuals to ensure that the best prices for medicines are obtained. This guideline prices list is distributed to each mutual, which is required to check each claim for appropriateness. Every month all health centres and all mutuals send in their data on fees and services to UTM, who then carry out a random sample check for each mutual to detect fraudulent behaviour. To be eligible for participation in the insurance scheme the policyholder must be part of the Association de santé communautaire (ASACO) through registration with a community based health centre. The scheme is reliant on the existing solidarity of the mutuals to gain sufficient numbers and avoid moral hazard, consequently the scheme is voluntary and does not exclude pre-existing conditions. The collection of the required premium is done over a year in small regular payments through a health savings plan, this makes it easier for the policyholder to pay the premium and enforces a minimum waiting period of one year. UTM provides resources to undertake educational workshops and marketing of the scheme to the members of the mutual, UTM is also responsible to ensure that sufficient reinsurance on the scheme is available. FNMF also has an important role to play in supporting the scheme: it provides necessary equipment to rural health care centres to ensure that adequate health care is available, it strengthens the link between the health centres and the mutuals, it undertakes actuarial studies and trains doctors and mutual personnel.

Whilst the scheme is still subsidised by Cooperation Francaise, there are promising signs that the sustainability of the scheme can be achieved and the scheme can be spread to other target areas. However, this is still a long term goal, there are still many difficulties to overcome, such as affordability, education, communication and infrastructure but in the short term the signs are encouraging in respect of the benefits the scheme is providing to the livelihoods of the poor (Samantar 2001).

Source: Kulmie Samantar, Head of International Development, FNMF