The contribution of micro-health insurance to equity and sustainability in Rwanda

Many countries are looking to health insurance to improve access to medical care for low- income groups and to raise additional revenues for a depleted health sector. In Rwanda, concerns about a sharp drop in demand for medical services after the re-introduction of user fees in 1996, motivated the government to design and pilot-test micro-health insurance (MHI) in three districts. This thesis compares the performance of the current Rwandan MHI with the user fee system and against principles of egalitarian equity and sustainability. It draws from the economic and social literature related to health insurance, equity and sustainability; and uses cross-sectional routine and survey data collected on insured and uninsured population groups from health centres, MHI, households, patients and focus groups during the Rwandan pilot phase (7/1998-6/2000). It aims to contribute to the research on equity and sustainability in health financing and utilisation by evaluating and comparing the implications of MHI and of user fees for households and on the health sector. The analysis comprises three main components. First, it examines the demand for health insurance in a binary choice model. Second, following egalitarian equity principles and the minimum standard approach, it evaluates the impact of utilisation and financing of health care on the financial situation of insured and uninsured households. Third, it uses an econometric cost function that allows identification of payer-specific outputs to analyse and compare the cost and efficiency implications of MHI with capitation payment versus user fees in health centres, in order to test the hypothesis that providers adjust the treatment intensity to the expected payment mechanisms. Based on findings, a MHI insurance design is derived to scale up risk-pooling and improve equity and sustainability in the district health system.