Publication: Role of Communities in Resource Mobilization and Risk Sharing : A Synthesis Report

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Preker, Alexander S.
Carrrin, Guy
Dror, David M.
Jakab, Melitta
Hsiao, William
Arhin, Dyna
Most community finance schemes have evolved in the context of severe economic constraints, political instability, and lack of good governance. Usually government taxation capacity is weak, formal mechanisms of social protection for vulnerable populations absent, and government oversight of the informal health sector lacking. In this context of extreme public sector failure, community involvement in financing health care provides a critical though insufficient first step in the long march toward improved access to health care by the poor and social protection against the cost of illness. It should be regarded as a complement to-not as a substitute for-strong government involvement in health care financing and risk management related to the cost of illness. Based on an extensive survey of the literature, the main strengths of community financing schemes are the extent of outreach penetration achieved through community participation, their contribution to financial protection against illness, and increase in access to health care by low-income rural and informal sector workers. Their main weaknesses are the low volume of revenues that can be mobilized from poor communities, the frequent exclusion of the very poorest from participation in such schemes without some form of subsidy, the small size of the risk pool, the limited management capacity that exists in rural and low-income contexts, and their isolation from the more comprehensive benefits that are often available through more formal health financing mechanisms and provider networks. The authors conclude by proposing concrete public policy measures that governments can introduce to strengthen and improve the effectiveness of community involvement in health care financing. This includes: (a) increased and well-targeted subsidies to pay for the premiums of low-income populations; (b) use of insurance to protect against expenditure fluctuations and use of reinsurance to enlarge the effective size of small risk pools; (c) use of effective prevention and case management techniques to limit expenditure fluctuations; (d) technical support to strengthen the management capacity of local schemes; and (e) establishment and strengthening of links with the formal financing and provider networks.
Preker, Alexander S.; Carrrin, Guy; Dror, David M.; Jakab, Melitta; Hsiao, William; Arhin, Dyna. 2001. Role of Communities in Resource Mobilization and Risk Sharing : A Synthesis Report. HNP discussion paper series;. © World Bank, Washington, Dc. License: CC BY 3.0 IGO.
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