DESIGN OF INCENTIVES IN COMMUNITY BASED HEALTH INSURANCE SCHEMES

Source – Vyasamoorthy, P

DESIGN OF INCENTIVES IN COMMUNITY BASED HEALTH INSURANCE SCHEMES

Contents
Foreword……………………………………………………………………………………………………………………….i
Abstract………………………………………………………………………………………………………………………..ii
1 Introduction……………………………………………………………………………………………………….1
2 The Need for Conceptual Clarity: Differences between Informal Insurance, Market Insurance and Community Based Insurance Schemes………………………………5
3 Addressing Important Incentive Problems in Community Based Insurance Schemes: Adverse Selection, Moral Hazard and Incentives for Managers……………..8
3.1 Incentives to Reduce Adverse Selection: Enrolling the Family as a Unit?……………………8
3.2 Incentives to reduce the Moral Hazard Problem: Establishing a Group Insurance Contract……………………………………………………………………………………………………………13
3.3 Incentives to Increase the Risk Pool: Managers Payment Contract……………………………23
4 The Role of Public Policy in Setting the Right Incentives…………………………………….27
5 Conclusions………………………………………………………………………………………………………29
References…………………………………………………………………………………………………………………..31
Table
Table 1: Important Differences in Alternate Insurance Arrangements……………………………………6
Figure
Figure 1: Claims Variation and Size of Risk Pool……………………………………………………………..25