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Social health insurance reexamined

  • Wagstaff, Adam

Social health insurance (SHI) is enjoying something of a revival in parts of the developing world. Many countries that have in the past relied largely on tax finance (and out-of-pocket payments) have introduced SHI, or are thinking about doing so. And countries with SHI already in place are making vigorous efforts to extend coverage to the informal sector. Ironically, this revival is occurring at a time when the traditional SHI countries in Europe have either already reduced payroll financing in favor of general revenues, or are in the process of doing so. This paper examines how SHI fares in health care delivery, revenue collection, covering the formal sector, and its impacts on the labor market. It argues that SHI does not necessarily deliver good quality care at a low cost, partly because of poor regulation of SHI purchasers. It suggests that the costs of collecting revenues can be substantial, even in the formal sector where nonenrollment and evasion are commonplace, and that while SHI can cover the formal sector and the poor relatively easily, it fares badly in terms of covering the nonpoor informal sector workers until the economy has reached a high level of economic development. The paper also argues that SHI can have negative labor market effects.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4111.

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Date of creation: 01 Jan 2007
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Handle: RePEc:wbk:wbrwps:4111
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  16. Wagstaff, Adam & van Doorslaer, Eddy & van der Burg, Hattem & Calonge, Samuel & Christiansen, Terkel & Citoni, Guido & Gerdtham, Ulf-G & Gerfin, Mike & Gross, Lorna & Hakinnen, Unto, 1999. "Equity in the finance of health care: some further international comparisons1," Journal of Health Economics, Elsevier, vol. 18(3), pages 263-290, June.
  17. Obermann, Konrad & Jowett, Matthew R. & Alcantara, Maria Ofelia O. & Banzon, Eduardo P. & Bodart, Claude, 2006. "Social health insurance in a developing country: The case of the Philippines," Social Science & Medicine, Elsevier, vol. 62(12), pages 3177-3185, June.
  18. van Doorslaer, Eddy & Wagstaff, Adam & van der Burg, Hattem & Christiansen, Terkel & Citoni, Guido & Di Biase, Rita & Gerdtham, Ulf-G. & Gerfin, Mike & Gross, Lorna & Hakinnen, Unto, 1999. "The redistributive effect of health care finance in twelve OECD countries," Journal of Health Economics, Elsevier, vol. 18(3), pages 291-313, June.
  19. Alejandro Gaviria & Carlos Medina & Carolina Mejía, 2006. "Evaluating The Impact Of Health Care Reform In Colombia: From Theory To Practice," DOCUMENTOS CEDE 002647, UNIVERSIDAD DE LOS ANDES-CEDE.
  20. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
  21. O'Donnell, Owen & van Doorslaer, Eddy & Rannan-Eliya, Ravi P. & Somanathan, Aparnaa & Adhikari, Shiva Raj & Akkazieva, Baktygul & Harbianto, Deni & Garg, Charu C. & Hanvoravongchai, Piya & Herrin, Ale, 2008. "Who pays for health care in Asia?," Journal of Health Economics, Elsevier, vol. 27(2), pages 460-475, March.
  22. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-83, May.
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  24. Cristian C. Baeza & Truman G. Packard, 2006. "Beyond Survival : Protecting Households from Health Shocks in Latin America," World Bank Publications, The World Bank, number 7120.
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