Assessing the

Sustainability of Community Based Health Insurance (CBHI) to Provide Universal Health Coverage

in Low and Middle Income Countries Setting




As stated in the WHO Constitution (1946) and the Universal Declaration of Human Rights (1948), everyone has the right to life, and is entitled to have access for healthcare. Several initiatives were rolled out since then, and the recent one was the adoption of Universal Health Coverage (UHC) in The 2030 Agenda for Sustainable Development (2015), aiming to provide essential health services and avoid impoverishment due to the catastrophic health spending. In regard to achieving UHC target, the countries need to implement adequate health financing programs. Several domestic funding options in country level are available as endeavours to healthcare financing, including Community Based Health Insurance (CBHI) that has been commonly implemented in several low- and middle-income countries (LMICs). The purpose of this essay is to argue whether CBHI is a sustainable health financing mechanism to support attaining the UHC, with focus of discussion in LMICs setting.


The UHC has intermediate objectives and goals that are influenced by several health financing functions (Mossialos et al, 2002; Carrin et al, 2005; McIntyre and Kutzin, 2016). Figure 1 below shows the link between health financing functions and UHC goals, in which will be used to discuss the possibility of CBHI to provide sustainable health financing in LMICs setting.

Figure 1.

Linkage between Health Financing Functions, UHC Objectives, and UHC Goals

Source: Mossialos et al, 2002; Carrin et al, 2005; McIntyre and Kutzin, 2016

In order to improve access and coverage as the goals of UHC, a well-performing health financing mechanism needs to be in place, with strong performance on mobilizing adequate resources and providing financial protection to the targeted community (Ekman, 2004). Several factors in revenue collection, pooling of resources, and purchasing mechanism need to be assessed to evaluate the possibility of CBHI to be a sustainable health financing mechanism in achieving UHC.



Revenue Collection

Revenue collection is a mechanism to raise sufficient financial resources to fund healthcare provision. A sustainable CBHI scheme should have progressive payment mechanism according to the ability to pay, allow redistribution from the lower risk to the higher risk, as well as provide coverage and access when it is needed, regardless the enrollee’s economic status (Mossialos et al, 2002). Therefore, it is necessary to ensure high enrollment as it will provide adequate revenue collection (Carrin et al, 2005).

The affordability of contribution, timing of collection, distance, quality of care, and trust influence the level of enrollment in most LMICs (Carrin et al, 2005). The CBHI premium contribution are varied from 5 – 10% of annual household income, which was found that still be unaffordable for low income members with irregular earning (Atim, 1998), and influence the enrollment and sustainability of CBHI (Fadlallah et al, 2018). In addition, timing of premium collection also matters for community in rural setting relying on farming, as some schemes require them to pay regularly, while at the same time they do not have the money until crop season comes. This results in low enrollment and high drop out in some Asia and Africa countries (Kiwara, 2007; Basaza et al, 2007; Ozawa et al, 2009). Living in rural setting with great distance to health facilities also discourages the enrollment, as they face poor transportation that consequently limit health service utilization (Hao, 2010). Quality of care, which commonly affected by the drug availability and staff performance becomes another main factor (Dong et al, 2009; Onwujekwe et al, 2009). A satisfied enrollee will tend to renew their membership in CBHI (Nsiah et al, 2013), whereas the poor satisfied enrollee will choose to drop out on the following year (Dong et al, 2009). Furthermore, familiarity and relationship with local group where the CBHI in place are associated with the decision to enroll or drop out from the scheme, showing that trust among members is crucial to maintain the high coverage of membership (Fadlallah et al, 2018). These factors contribute to low population coverage of only around 3.2 – 4.2% in many CBHI schemes in African countries (Pettigrew and Mathauer, 2016), which indicates that it will not be able to provide sufficient revenue for healthcare provision, particularly to the most vulnerable group in the community.


Pooling of Resources

Pooling of resources can be defined as the mechanism in which the insurance premiums are managed to pay health intervention for the enrollees, which is delivered by the healthcare providers, and consequently can distribute the payment risk among all enrollees, regardless their income level and existing health risk (Carrin et al, 2005). Aside of addressing the concern of equity, it should also be able to provide allocative and technical efficiency, as well as containing cost that might arise through several related health expenditures (Mossialos et al, 2002).

Pooling adequate resources in CBHI with voluntary enrollment faces challenges to attract enrollees from the healthier households, since they underestimate the quality of care that might be provided, due to the low premium the CBHI usually proposes. This low premium that is actually based on average healthcare cost of the targeted community may successfully attract the less healthy, which usually also the poorer ones. However, as it doesn’t attract the whole targeted population sufficiently, the premium will be adjusted to be higher which will lead to the discontinuation of enrollment from both groups altogether (Carrin et al, 2005). Aside of this issue, CBHI also faces lack capacity on administrative and financial management in grass root level, which will exaggerate the existing challenges. As the workers usually come from the local community with no formal training on insurance management, they face difficulty to implement the guidance from the central government for day-to-day management process. This condition becomes one reason the CBHI is being integrated to the National Health Insurance Fund (NHIF) in Ghana on 2011, which recently was proposed to be completely integrated under a Single National Health Insurance scheme (Prabhakaran and Dutta, 2017).

In regard to the efficiency and cost containment, a research conducted in Rwanda showed that CBHI schemes increased healthcare expenditure on outpatient visits, and less reduction in out-of-pocket spending among low income enrollees (Woldemichael et al, 2018). The similar condition also found in India, especially when the CBHI using reimbursement mechanism after the enrollee paying out of pocket. The low-income enrollees might have lower literacy for insurance claim mechanism, which results in no application for reimbursement after utilizing health care (Umeh and Feeley, 2017). These conditions are not aligned with the targeted UHC objectives to provide equity and efficiency for the covered population, another argument that CBHI is not a sustainable financing mechanism to provide universal health coverage.



Purchasing is a mechanism in which the pooled premium by the enrollees and other sources of funding are distributed to pay healthcare intervention delivered by the healthcare providers. Several elements should be considered for strategic purchasing are referrals, waiting period, and administrative cost (Carrin et al, 2005). Appropriate referral mechanism is crucial to prevent high cost in hospital utilization. However, according to a WHO study, it was found that 13 of 15 CBHIs ignored the costs of referral to hospital facilities, which will reduce efficiency gain (Schneider et al, 2001). In regard to waiting list, CBHI requires its enrollees to wait for certain period of time after their enrollment, before they can access the healthcare facility (Carrin et al, 2005), which might have negative impact particularly when they need to access the healthcare immediately. Given the small population coverage of CBHI, administrative cost unfortunately can be high and doesn’t balance with total revenue collected through the scheme (Atim, 1998), with an example in Tanzania exceeds 30% from the total revenue (Borghi et al, 2015). These findings showed that CBHIs might have limited capacity in strategic purchasing, which consequently will affect the equity and efficiency aspects, and fail to improve access and coverage to the targeted community.


According to several considerations in regard to three main health financing functions above, the CBHI scheme in general has limitation to collect sufficient resources, provide adequate risk pooling, and implement strategic purchasing to improve access and coverage for healthcare. Considering these factors, several LMIC(s) have been moving from this scheme into more sustainable mechanism of integrated National Health Insurance, with recent initiative from Ghana (Phrabhakarran and Dutta, 2017). The author suggests for other countries to start reforming their healthcare financing schemes towards more sustainable and progressive mechanism, by conducting evaluation of the existing CBHI and other health financing programs in their country, and developing roadmap for system reform.

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