Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

A Critical Review of Health Insurance Financing Mechanisms and Provider Payment Reform Strategies for Balancing Coverage Expansion and Financial Protection in Emerging Markets

Lucky Ilodigwe, Abimbola Caleb Adesemoye

Abstract

Emerging markets face a double task in health financing: extending coverage to populations that have long paid for care at the point of service, and shielding households from the impoverishing cost of illness. This review examines the two policy levers that determine whether that task is met, namely the mechanisms used to raise and pool funds for health insurance, and the methods used to pay the providers who deliver care. On the financing side, the analysis contrasts general taxation, social health insurance, community-based schemes, private voluntary insurance, and residual out-of-pocket payment, giving particular attention to the persistent problem of covering large informal-sector populations whose earnings are hard to tax or to enrol on a contributory basis. On the purchasing side, the review compares line-item budgets, salary, fee-for-service, capitation, case-based payment, global budgets, and performance-based financing, tracing the behavioural incentive that each transmits to providers and the way that incentive shapes cost, access, and quality. The central argument is that coverage expansion and financial protection are not automatically aligned: schemes can enrol millions on paper while leaving deep gaps in benefits or high co-payments that reproduce financial hardship, and payment methods that succeed in enrolling providers can also inflate costs or ration care. Progress depends less on choosing a single archetype than on aligning revenue, pooling, and strategic purchasing so that the money follows agreed services to defined populations. The review draws lessons from reform experience across Africa, Asia, and Latin America, sets out the recurring trade-offs, and proposes a research agenda focused on mixed payment design, informal-sector inclusion, and the measurement of financial protection.

Keywords

health financing; universal health coverage; social health insurance; provider payment; strategic purchasing; financial protection; emerging markets

References

Aminu-Ibrahim, A. Y., Ogbete, J. C., & Ambali, K. B. (2018). Developing sustainable diagnostic laboratory infrastructure models for emerging and resource constrained health systems. Iconic Research and Engineering Journals, 1(8), 118 to 132. Aminu-Ibrahim, A. Y., Ogbete, J. C., & Ambali, K. B. (2019). Capital project delivery models for high risk healthcare infrastructure in developing national health systems. Iconic Research and Engineering Journals, 2(10), 626 to 649. Barnum, H., Kutzin, J., & Saxenian, H. (1995). Incentives and provider payment methods. International Journal of Health Planning and Management, 10(1), 23 to 45. Carrin, G., & James, C. (2005). Social health insurance: Key factors affecting the transition towards universal coverage. International Social Security Review, 58(1), 45 to 64. Cotlear, D., Nagpal, S., Smith, O., Tandon, A., & Cortez, R. (2015). Going universal: How 24 developing countries are implementing universal health coverage from the bottom up. Washington, DC: World Bank. Dogbatsey, E. A., & Ebhojie, O. (2018). Budget compliance and statutory reporting in Sub- Saharan Africa: A systematic review of frameworks, gaps, and reform pathways. Zenodo. https://doi.org/10.5281/zenodo.20446859 Ekman, B. (2004). Community-based health insurance in low-income countries: A systematic review of the evidence. Health Policy and Planning, 19(5), 249 to 270. Fan, V. Y., & Savedoff, W. D. (2014). The health financing transition: A conceptual framework and empirical evidence. Social Science and Medicine, 105, 112 to 121. Knaul, F. M., Gonzalez-Pier, E., Gomez-Dantes, O., Garcia-Junco, D., Arreola-Ornelas, H., Barraza-Llorens, M., ... Frenk, J. (2012). The quest for universal health coverage: Achieving social protection for all in Mexico. The Lancet, 380(9849), 1259 to 1279. Kutzin, J. (2012). Anything goes on the path to universal health coverage? No. Bulletin of the World Health Organization, 90(11), 867 to 868. Kutzin, J. (2013). Health financing for universal coverage and health system performance: Concepts and implications for policy. Bulletin of the World Health Organization, 91(8), 602 to 611. Kutzin, J., Cashin, C., & Jakab, M. (Eds.). (2010). Implementing health financing reform: Lessons from countries in transition. Copenhagen: World Health Organization, on behalf of the European Observatory on Health Systems and Policies. Kutzin, J., Yip, W., & Cashin, C. (2016). Alternative financing strategies for universal health coverage. In R. M. Scheffler (Ed.), Handbook of global health economics and public policy (Vol. 1, pp. 267 to 309). Singapore: World Scientific. Lagomarsino, G., Garabrant, A., Adyas, A., Muga, R., & Otoo, N. (2012). Moving towards universal health coverage: Health insurance reforms in nine developing countries in Africa and Asia. The Lancet, 380(9845), 933 to 943. Langenbrunner, J. C., Cashin, C., & O'Dougherty, S. (Eds.). (2009). Designing and implementing health care provider payment systems: How-to manuals. Washington, DC: World Bank. Lu, C., Chin, B., Lewandowski, J. L., Basinga, P., Hirschhorn, L. R., Hill, K., ... Binagwaho, A. (2012). Towards universal health coverage: An evaluation of Rwanda Mutuelles in its first eight years. PLoS ONE, 7(6), e39282. McIntyre, D., & Ataguba, J. E. (2012). Modelling the affordability and distributional implications of future health care financing options in South Africa. Health Policy and Planning, 27(Suppl. 1), i101 to i112. www.iiardpub.org Meng, Q., Xu, L., Zhang, Y., Qian, J., Cai, M., Xin, Y., ... Barber, S. L. (2012). Trends in access to health services and financial protection in China between 2003 and 2011: A cross- sectional study. The Lancet, 379(9818), 805 to 814. Mills, A. (2014). Health care systems in low- and middle-income countries. New England Journal of Medicine, 370(6), 552 to 557. Moreno-Serra, R., & Smith, P. C. (2012). Does progress towards universal health coverage improve population health? The Lancet, 380(9845), 917 to 923. Obadha, M., Chuma, J., Kazungu, J., & Barasa, E. (2019). Health care purchasing in Kenya: Experiences of health care providers with capitation and fee-for-service provider payment mechanisms. International Journal of Health Planning and Management, 34(1), e917 to e933. Ogbete, J. C., Aminu-Ibrahim, A. Y., & Ambali, K. B. (2018). Optimizing laboratory spatial planning strategies to improve diagnostic accuracy, safety, and clinical throughput. Iconic Research and Engineering Journals, 2(1), 87 to 113. Preker, A. S., & Carrin, G. (Eds.). (2004). Health financing for poor people: Resource mobilization and risk sharing. Washington, DC: World Bank. Savedoff, W. D., de Ferranti, D., Smith, A. L., & Fan, V. (2012). Political and economic aspects of the transition to universal health coverage. The Lancet, 380(9845), 924 to 932. Sekhri, N., & Savedoff, W. (2005). Private health insurance: Implications for developing countries. Bulletin of the World Health Organization, 83(2), 127 to 134. Tangcharoensathien, V., Witthayapipopsakul, W., Panichkriangkrai, W., Patcharanarumol, W., & Mills, A. (2018). Health systems development in Thailand: A solid platform for successful implementation of universal health coverage. The Lancet, 391(10126), 1205 to 1223. Wagstaff, A., & Lindelow, M. (2008). Can insurance increase financial risk? The curious case of health insurance in China. Journal of Health Economics, 27(4), 990 to 1005. Wagstaff, A., Flores, G., Hsu, J., Smitz, M. F., Chepynoga, K., Buisman, L. R., ... Eozenou, P. (2018). Progress on catastrophic health spending in 133 countries: A retrospective observational study. The Lancet Global Health, 6(2), e169 to e179. World Health Organization. (2010). The world health report 2010: Health systems financing: The path to universal coverage. Geneva: World Health Organization. World Health Organization, & World Bank. (2017). Tracking universal health coverage: 2017 global monitoring report. Geneva: World Health Organization and World Bank. Xu, K., Evans, D. B., Kawabata, K., Zeramdini, R., Klavus, J., & Murray, C. J. L. (2003). Household catastrophic health expenditure: A multicountry analysis. The Lancet, 362(9378), 111 to 117. Yip, W. C.-M., Hsiao, W. C., Chen, W., Hu, S., Ma, J., & Maynard, A. (2012). Early appraisal of China's huge and complex health-care reforms. The Lancet, 379(9818), 833 to 842.