Ethiopia: Potential of Traditional Social Insurance for Supporting Health Care n many developing countries, the in- Organization and structure of eders adequacy of current health financing anmest i es Eder is a form of traditional social insti- _ _ ~~~~~~arrangements, typified by progres- sively declining budgetary allocations tution that is established by the mutual r and more cost sharing schemes have agreement of community members in led to the exploration of additional and order to collaborate with each other alternative approaches to improve the whenever any member or their family members face adverse situations. The financing situation. Among the alterna- tives suggested are risk-sharing mecha- primary function of the eder is taking nisms that include community-based care of the burial and consolatory ac- schemes that tap the potential of tradi- tivities when death occurs within mem- , 4t social arrangements. bers. However, eders also provide assis- In Ethiopia, eders are forms of tradi- tance to offset losses to a member (due . . ~~~to theft, etc), during the weddings of tional arrangements utilized mainly for teft, etc) during the eddns of assisting those bereaved and for ex- members, etc. Besides these; edersare ecuting funeral-related activities, of paramount importance in other de- ecuting~ ~ ~ ~ ~ ~eopena funeralrelats acthiniheies. These associations are also called upon velopmental activities within the sur- for various'.'self-help activities and rounding community. Eders raise funds sometimes act as health insurers, or coordinate the free labor of mem- though larglynbers in activities such as building though largely in a less formal manner. rod,shl,hethittuonad No. 48 They have an obvious potential for roads, Soos ealth institutions and September 2002 serving as social financing mechanisms. the like. Some eders contribute money Since these are already functioning IKNrt reportsperiodicallyon groups, the administrative costs for Indigenous Knowledge (IK) initiatives the extra health-related activity are in Sub-Saharan Africa and occasionally on such initiatives outside the Region. not as inhibiting as when forming .a It is published by the Africa Region's new insurance entity. In addition, the Knowledge and Learning Center as fact that eders are based on mutual ui1t part of an evolving IK partnership f h e b o t - between the World Bank, communi- derstanding amongst members reduces ties, NGOs, development institutions 4+ONAL N4A the possibility of adverse selection. and multilateral organizations. The views expressed in this article are those of the authors and should not be attributed to the World Bank Group or its partners in this initiative. A tC'/ON AN9' 9 webpage on IK is available at / wwvw.worldbank.org/afr/ik/ default.htm 2 to members who have lost their houses in a fire or to com- health care function is not very different from those that are pensate for the loss of farming oxen, while others also pro- not providing these services - obviously, there would be a vide assistance to members to cover their medical costs. clear emphasis in these on health issues. Essential here is a The organizational setup of most eders is very simple. All close link and on-going communication with health institu- eders have a chairman or a 'judge' and almost all will have a tions that give services to members. Secretary and a Treasurer. Eders are said to be the most The financial logic of the eder is not different from any in- democratic and egalitarian social organizations in Ethiopia surance system. In most situations members contribute a - membership is open to everyone regardless of socio-eco- fixed amount of money on a weekly or monthly basis. When- nomic status, religion, sex, and ethnic affiliation. Even ever a member has a problem, a fixed amount (depending on though very few respondents mentioned not being able to the by-laws of the particular eder) is taken out of the com- pay contributions as a reason for non-membership of eders, mon pool and given to that member. There are also a few almost all eders have provisions for members who face eco- eders which raise the fixed contribution whenever the prob- nomic problems and are unable to pay contributions after lem arises. In a community-based health insurance feasibility having been members for some time. These members are study conducted by the author and a representative of BA- considered as "pensioned" by the eder and are allowed to re- SICS* (Basic Support for Institutionalizing Child Survival, an ceive all the benefits that are due to other members. organization that helps to implement USAID-supported pro- grams ) in three towns, Adama, in the oromia Region and Yirgalem and Arbaminet in the Southern Region, eders were The potential of eders in financing health care found to provide financial assistance for members' medical The organizational structure of eders that currently have a problems. For instance, in one of the eders included in the study, a lump sum payment of up to US$15 was given to households where a family member needs hospitalization. This amount covers the advance payment required by the IK N o tes hospitals prior to admitting a patient. would be of interest to: A follow-up survey was also conducted by the author in 1999 in systematically selected rural villages of the country. Name The data for this part of the survey were collected through Institiltion household and health facility exit interview surveys. Accord- ing to the findinngs of this latter survey, about 87 percent of Adidress household survey respondents and 72 percent of the exit in- terview survey respondents were participating in eders with mean annual payments of US$7 (ranging froml.5 to 60 birr) and US$8 (ranging from 1.5 to 68 birr) for household and exit respondents respectively. More importantly, 21.5 per- cent of the household survey respondents and 16 percent of Letters, comments, and requests for publications the exit interview respondents claimed that their eders pro- should be addressed to: vide assistance during the time of medical need. The type of assistance provided ranges from loans to covering all medical Editor: iK Notes Knowledge and Learning Center costs of members. The respondents in both the exit and the Africa Region, World Bank household interviews were asked if they would be willing to 1818 H Street, N.W., Room J5-055 join a possible eder-based health insurance scheme. Eighty Washington, D.C. 20433 E-mail: pmohan@worldbank.org six percent in the household survey and 90 percent in the exit survey were willing to join such a scheme. The average 3 monthly contribution which the respondents reported as be- Selected References ing able to raise was birr 2.5 (US $0.3) wvith a range of birr 1 to 36 (US $0. 1.3 to $4.5) in the household survey and birr 3.4 Aredo, D The Iddir: A study of an indigenous informal fidllt (US$ 0.4) with a range of birr 1 to 48 (US $0.13 to $6) in the cial institution in Ethiopia. Savings a79d Develop.et. e.xit interviewv survey. Respondents in the exit survey (who 1993, XVIII (No. 1):77 -90. exitintrvi-w urvy. espndets n te eit urvy (vho Haile Mariam, D., & Brenzel,L. Feasibility of Community- had a recent experience of the financial cost of illness) sowed base Health Brancel,L Eth ibia. of Co a higher propensity to join possible eder-based health insur- blicath Insurlin Va. ance schemes with a slightly higher willingness to pay in Klitaard, R. In lingtun EA terms of monthly premiums. The benefits most valued by the Kiiotar, R. ancluist RCu respondents were emergency senrices followed by drugs. It is R. ang Rist, RC. obvious that people in rural areas where there are inad- 195 San Fanisco: equate facilities for emergency services (including obstetric 1995. San Francisco: services) would be willing to join schemes that would make Jossey Bass. these senrices available to them. A case in point is an eder in Pankhur. & 2shete E - 364h one of the sampled villages that gave a loan of about US$25 Observer. 1958; 2(11): 354 - 364. to a pregnant mother-to-be facing obstructed labor. The Seifu, A Eder in Addis Ababa: A Sociologic-al stud3 Ethiopia moneywas used to hire emergency transport service to take Observer. 1968; 12(1): 8 -33. the mother to a health center located about 40 kilometers from the village. The popularity of the eder amongst people from all walks Dr. Logan Brenzel (health care financing advisor for BASICS). of life has been growing. These non-profit-making institu- tions based on solidarity, friendship and mutual assistance among members may possess both the techniques of enforce- ment and the appropriate incentives for applying them - vital qualities that one looks for wvhen examining the role of indig- enous institutions in socio-economic development. Overall, it can be surmised that eder-based schemes would improve the efficiency of service delivery. This article was written by Professor Damen Haile Mariam., Assistant Professor and Head of the Department of Conmmu- nity I-leclth, Faculty of lMedicine, Addis Ababa University, Ethiopia. For more informnation, e-mail hcp.aau@telecom.net.et 4