Wednesday, April 1, 2009

Micro Health Insurance the Grameen Way

Did you know that in America, the leading cause of bankruptcy is medical bills? Indeed, even with a pretty cushy health care plan in my household, medical bills certainly get our attention. For many families, this is the last straw. For the very poorest in the world, medical care can be financially out of reach entirely.

Grameen Bank hopes to fill that gap and has formed another division, “Grameen Health” which will be a provider of Micro-Health Insurance.

Grameen Bank is leveraging it’s reputation and infrastructure in rural and impoverished places in Africa. Grameen Health has been operating in India and Banlgadesh for some time, but with a $100 Million Euro investment from the Dutch government, Grameen is beginning a pilot program in four sub-Saharan African nations.

This will pose initially education and credibility challenges for Grameen—how to convince families to pay $1.75 per year for a family of six, up front before an illness, when alternatively the family could save up for an illness or may not be sick at all.

In nations where the average annual wage is less than $3,000 per USD, that $1.75 premium will not go unnoticed.

I read in a brief article from the knowledge bank at INSEAD that several organizations are branching in to micro health insurance including Africa’s largest HMO, AAR, but few are finding wild success.

All seem to agree that experimentation and developing a consistent supply of medical support is critical before micro insurance can be successful. “The one day that the medication isn’t available…they are never going to buy insurance again. Then you’ve lost them. That’s why it’s so different from micro finance” said Johanna Mair, a former doctoral student at INSEAD, who is now an associate professor of strategic management there.

I’ve mentioned before about my brief travels in Africa last fall, and I certainly saw the need for medical care there. (I had to be treated in a hospital there for a dog bite—that was an experience in and of itself!) I could see how families had to go out and buy their loved one’s wound dressings and surgery supplies and medications at the pharmacy. While it wasn’t wildly expensive by my standards, I don’t believe that many people would seek preventative care, based on how expensive it could be, and competing financial priorities.

The potential here is fascinating, should this catch on, that the poor worldwide might have access to preventative health care for themselves and their children. This would mean there are more people studying medical coding and billing to work for the expanding health care industries.

I’ve looked around for more articles on the subject but most seem to be theoretical and scholarly, if you see any articles about micro health insurance reaching the masses—please let us know.

No comments: