Helping Communities Manage risks from the ground up.

Welcome - Editorial

Greetings from the Micro Insurance Academy!

With great pleasure we send you this update on the work of the MIA and its partners in our mission to help communities manage risks from the ground up.

[ Last MIA Group photo in front of our Panchsheel premises before we moved to East of Kailash (October 2008). ]

Our team was very busy during the last quarter of 2008 with new projects (looming in India and in Nepal), with training activities (such as the 2nd Reinsurance School for Microinsurance Schemes), with new research collaborations (such as the partnership with the Financial Access Initiative), with new publications, and much more. In this edition, our “voice from the field” is that of Dr. Meenakshi Gautham, our very accomplished post-doctoral fellow who has taken the lead in conducting focus group discussions and key informant interviews within the MIA field studies in Andhra Pradesh and Orissa.

All this increased activities was coupled with a need to move into new offices that better accommodate our staff as well as current and future space needs; this move occurred last October. Please update our address and telephone number in your records, if you haven’t done so already, as we wish to keep in touch with you!

We hope you enjoy this issue of “Voices”, and thank you for taking the time to keep updated about our activities.

Wishing you all the best for 2009,

Your friends at the Micro Insurance Academy

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Bringing Micro Health Insurance to Orissa: Madhyam Foundation, AWO International and MIA sign and seal a new partnership!

It is with great excitement that the MIA announces its partnership with Madhyam Foundation and AWO International to collaborate in providing responsive community-based micro health insurance to 100,000 people in three districts of Orissa.

Madhyam Foundation brings 12 NGOs that are already active in Kalahandi, Khurda and Malkangiri districts (Orissa). Working with the MIA and Madhyam, each of these NGOs will be given training in insurance domain-knowledge and other support, so they can mobilize self help groups and community organizations to launch and operate their own sustainable health insurance scheme, where nothing similar exists today.

[ Consortium members during a consultation workshop in Bhubaneswar (July 2008) ]

Following our successful sensitization workshop last July, the project started at the end of 2008 with a baseline study to capture and analyze high quality data about the communities we will engage. The baseline study is led by MIA, with full involvement of the NGOs and Madhyam Foundation in planning, logistics and rollout. In preparation for the new activity, representatives from this consortium participated in the MIA’s Reinsurance School last October to learn about reinsurance for their micro insurance schemes.

Madhyam Foundation is a state level development support organisation which promotes microfinance and livelihoods initiatives in Orissa. Madhyam works with different stakeholders such as NGOs, MFIs, Financial institutions, Donors and Government Departments. It specializes in working with small and second tier NGOs and MFIs in improving their governance, management practices and use of information systems, with the view to increasing their outreach and their portfolio.

AWO International is a development cooperation organization based in Germany. AWO believes in the values of solidarity, freedom, equality and tolerance. AWO’s international cooperation is focused on supporting civil society institutions and activities. AWO is committed to broadening this democratic base, which makes it possible to reduce inequalities between North, East, South and West in a sustainable manner. As a main part of its development cooperation, AWO builds up small projects with the help of local partners. AWO further engages in humanitarian help and international exchange of skilled employees.

The Micro Insurance Academy is a Delhi-based charitable trust dedicated to evidence-based studies, training and advisory services for microinsurance units serving the poor, and the only institution worldwide today providing technical assistance in insurance domain-knowledge to organizations that focus on grassroots communities. The MIA offers innovative, context-specific step-by-step stewardship (through initiation workshops, followed by training and technical assistance) first to understand the benefits of being insured, then to implement context-relevant micro insurance solutions, and to act as “barefoot insurers” of their collective risks.

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Nepal Microinsurance Coalition gets boost from Rockefeller Foundation and Erasmus University Rotterdam

The Rockefeller Foundation (USA) has recently decided to provide funding support to Erasmus University Rotterdam / Erasmus MC (EUR/MC) in partnership with MIA and other partners to introduce microinsurance to resource-poor communities in Nepal. This enlarged circle of partners has been based on a consortium created in July 2008 by MIA and Save the Children (USA) to introduce microinsurance to resource-poor communities in Nepal. In addition to the funding support received from the Rockefeller Foundation, another donor that requested to remain anonymous also contributed funds.

[ Consortium members during a national consultation workshop in Kathmandu (July 2008) ]

The aim of the MIA-Save consortium is to provide financial protection to resource poor communities through the access to health, life, property, and other forms of insurance. The consortium unanimously agreed to support the project and began assigning tasks for moving forward. The first joint activity has been to jointly conduct a workshop with local NGOs on community based micro insurance (Kathmandu, July 14-16 2008). At the end of that workshop, a Declaration of Understanding was signed by all NGOs that participated, affirming their commitment to launch and scale up community-based microinsurance schemes following the mutual model. However, next steps had to wait until funds could be secured.

With the recently concluded support of EUR/MC and the Rockefeller Foundation, as well as the anonymous donor to Save the Children, our consortium will conduct the indispensable baseline study (including HH survey, key informant interviews, focus group discussions and analysis of the household survey information). The results will allow us to provide evidence-based information underlying the provision of micro health insurance (e.g. Incidence of illness, cost of treatment, premiums, insurance product design, etc). When this preparatory phase is completed, implementation of insurance could begin.

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New research on health insurance and the quality of healthcare:

Poor households need to overcome two fundamental challenges when faced with a health emergency. The first challenge is securing financial resources: Poor households have access to limited financial resources to pay for the necessary treatment due to low personal savings and poor access to risk mitigation mechanisms such as loans and health insurance. The second challenge is accessing information where they can obtain quality healthcare. While access to health care has improved in many low income countries, improvements in the quality of care are less remarkable.

[ An MIA field investigator at work. ]

Can micro health insurance overcome these two fundamental challenges? It is fairly clear how micro health insurance can protect a household’s financial exposure. What is less clear is how insurance can address informational asymmetries regarding the quality of care. We investigate this relationship through this study, which aims to examine questions such as:

• How can insurance, that addresses financing concerns, also affect the quality care available to poor households?
• Can micro health insurers leverage their institutional position and aggregate, otherwise limited, financial resources to fix quality deficiencies in the healthcare available to poor households?

Our approach will include qualitative analysis of existing schemes along with a review of scientific literature and institutional case studies. We will supplement our research with interviews and focus group discussions with practitioners, academics, donors, policy makers, and clients.

For more information, please read a short concept note on the study here.

About the partners:

The Financial Access Initiative (FAI) is a consortium of researchers at NYU, Yale, Harvard and Innovations for Poverty Action, housed at NYU’s Wagner Graduate School of Public Service. FAI is focused on analyzing how access to financial services, including credit, savings and insurance, can better meet the needs of poor households.

The Micro Insurance Academy (MIA) is a Delhi-based charitable trust dedicated to evidence-based research, training and advisory services for microinsurance units serving the poor. MIA works to empower communities to play an active role in insurance while lifting themselves out of poverty. MIA ensures sustainable operations of community-based micro health insurance schemes by creating an enabling environment that links microinsurance units to reinsurance.

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Simply Reinsurance: The MIA conducts an international workshop on how reinsurance can help protect micro insurance schemes:

Reinsurance is new to the world of micro insurance. Most managers of micro insurance schemes have never dealt with reinsurance, and consequently do not know from experience what reinsurance can do for their micro insurance schemes, and why/how this financial tool is essential for their sustainable operations.

[ Prof. Dr. David Dror, Chairman MIA, address participants of the 2nd Reinsurance School ]

Following the success of the 1st reinsurance school in 2007, the Micro MIA held the 2nd Reinsurance School for Micro Insurance Schemes at the India International Centre in New Delhi on Oct. 15-17, 2008. Nearly 50 delegates from around India and from abroad came to see presentations, participate in discussions and learn from international experts how reinsurance can protect micro insurance units.

Reinsurance gives micro insurance schemes a safety net and protection against insolvency. Presenters demystified reinsurance for participants beginning with the history of reinsurance, the different types available, analyzing reinsurance contracts, understanding evaluation grids, and reinsurance retention and pricing levels. The faculty included prominent figures in the field such as Jeff Blacker, an actuarial consultant from the United States, Liyaquat Khan from HSBC Global, Annette Houtekamer from Eureko Re, S. Balasubramaniam of the Dhan foundation, Devaprakash from Care India, Shreeraj Deshpande from Bajaj Alliance, Sandeep Asthana from RGA, Alok Kumar of Swiss Re (India), as well as resident MIA faculty such as David Dror, Dharmendra Kumar, Ralf Radermacher and Iddo Dror.

“The reinsurance school reiterated my conviction in the ability and wisdom of common people. The school is well poised to add significant value in creating a cadre of insurance advisors in locations where they are needed most” commented one participant.

The workshop had broad participation from Indian and International NGO’s and insurance companies, including Save the Children Nepal, Cooperative Insurance Company Kenya, Iffco Tokio General Insurance, Cooperative Development Foundation, CECOEDECON, and Madhyam Foundation, among many others. It highlighted that reinsurance can increase the insurers’ capacity, improve financing, curtail the amount of annual fluctuations in losses, and remain solvent when faced with losses of a catastrophic magnitude.

The 3rd Reinsurance School will be held in New Delhi in October 2009. For updates, please check http://www.microinsuranceacademy.org/School from July 2009 onwards.

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“May we Introduce…” Dr. Meenakshi Gautham, WOTRO/MIA Post-doctoral Fellow.

In this Issue of Voices we have the privilege and pleasure of bringing you insights from Dr. Gautham, who speaks of the Baseline Survey methodology of WOTRO/MIA, the differences in field locations, local heroes of health, capacity building of local researchers and more..

[ Dr. Meenakshi Gautham conducting a Key Informant Interview in Malkangiri, Orissa ]

1. Micro Insurance Academy (MIA): The comprehensiveness of the baseline study is a key feature that sets MIA apart from other NGOs working in community based micro insurance, what do you think are the characteristics that make it so different?

Also, for those that are not familiar, HOW does MIA conduct a baseline survey, perhaps you could share a short summary of the work you do?

MG: First let me provide the rationale for the baseline study: MIA has set out on the ambitious and challenging task of developing suitable microinsurance programmes for large communities across different states in India. Microinsurance implies low and affordable premiums, low coverage and rests on the principle of en-bloc affiliation. There is also the principle of choice making by communities- people collectively select their benefits and the premiums they can pay. These benefits and premium levels can vary enormously from one part of the country to another as they are based on local incomes, local disease burdens, local availability of health services and the corresponding costs that people incur on health care. There is no one-size-fits-all formula that can be applied to all of India. MIA recognizes India’s diversity and therefore follows a comprehensive evidence based approach to developing appropriate health MIUs in different states.

In my view it is this commitment to using good quality, substantial evidence in programme development that sets MIA apart from other NGOs. The team here has a coherent understanding of research, a commitment to pursue scientific research designs and field research methods and the ability to systematically derive benefit types and premium levels from the field data. In some of my work with other NGOs I have found a fear of good quality research which is often equated with “academic research” as opposed to programmatic research. In my view, there is only good research and bad research, and good research can also be made meaningful, timely and comprehensive. I am glad to see that MIA is going with good research and has put in a lot of hard work to generate the needed resources as well.

The research that we do is exploratory in nature and consists of both qualitative and quantitative methods. We begin with the qualitative phase that consists of Focus Group Discussions (with the prospective insured) and Key Informant Interviews (with providers of healthcare mainly) and some secondary data harvesting. The FGDs are held with adult men and women (separate groups) from different income groups with different types of asset ownership. We ensure that we get the perspective of the poorest of the poor who in villages are generally the landless and casual wage labourers. Based on the health seeking information that we elicit in the FGDs we identify and interview a wide variety of health providers and facilities in the region. These include village level grassroots providers – both private providers such as Rural Medical Practitioners (RMPs) and village midwives, as well as the govt grassroots workers like the ASHAs, ANMs and AWWs. We visit government and private health facilities at the 2nd level – the solo GPs, Primary and Community Health centers, small hospitals and nursing homes. We also visit the secondary and tertiary level hospitals such as the district hospital in the district headquarter or a multi specialty private hospital in the state capital.

The qualitative phase takes about 10-15 days and is followed by a quantitative cross-sectional household survey that uses a structured, integrated questionnaire and is carried out over a large sample size. The HH survey gives us the numbers to base our calculations on, and also to compare to the information obtained through the qualitative phase. Over the next 2 years MIA is looking at the possibility of gradually replacing the more resource intensive HH survey with data obtained through the FGDs and KIIs as well as data harvested from official sources like the National Sample Survey.

2. You have worked on baseline studies in Andhra Pradesh and now Orissa -- can you tell us about your experience with each, and shed light on the major differences between the two?

MG: I will just talk about the main differences here. Andhra was more developed in terms of basic infrastructure, even in its rural interiors. The roads were better (minus bumps and ditches), villages were electrified and had good water supply, and the lowest reported household income in one village (between rupees 25,000-30,000 per year) was higher than the lowest that we came across in Orissa (Rs 3,000-5,000 per year).

[ Dr. Meenakshi Gautham with a future researcher? Orissa 2009. ]

In health, the greatest difference between the two states lay in the presence and utilization of the private vs. public health sectors. In Andhra we found an abundance of the private sector – beginning with mobile RMPs who went around villages, to qualified GPs (General Practitioners), specialists and nursing homes in the block level towns, and bigger multi specialty hospitals in the district headquarter town. Rural communities in Andhra consistently preferred private sector services at all levels of care. They even sought private facilities for maternity care and institutional births.

All this changed the moment we crossed the border into neighbouring Orissa. There was a meager presence of the private sector as one moved away from Bhubaneswar (state capital) into the districts. In districts Kalahandi and Malkangiri, the bulk of professional medical care was provided through the government Primary Health Centres (PHCs) and Community Health Centres (CHCs). However these were functioning with acute human resource shortages. Malkangiri district was functioning with just one- third of its required doctor strength. Some of the villages we visited were quite far from the nearest PHC: one was around 35 kms. In this village people said they sought first care from 2 visiting RMPs who lived in a nearby village or from a local traditional healer. As compared to Andhra, we found more traditional and magico-religious healers (called Kobiraj, Disari, and Guiniya) in Orissa. Although institutional births were on the increase, people said they still preferred home births as the health facilities were far and transport facilities were limited and costly.

People and doctors reported that most deliveries were normal, regardless whether the delivery occurred at home or in the nearest PHC. This was particularly relevant since caesareans could only be performed at the district hospitals where a surgeon and gynecologist were available (but not a single anesthetist in Malkangiri!). In Andhra the situation was reversed, with reports that more than 80% of the deliveries having been caesarean sections (as found in our HH survey). In Andhra (but not in Orissa), two of the foremost surgical conditions reported by small nursing homes in our KIIs were caesarean sections and hysterectomies.

The major health burden in all 3 districts of Orissa was malaria, TB and malnutrition. We saw large numbers of children in the villages we visited with visible signs of malnutrition. In fact Kalahandi district hospital is building a nutritional rehabilitation centre for children. In AP, people also spoke of vector borne diseases (malaria and chikungunya) and joint pains but they also spoke of asthma, blood pressure, and blood sugar – suggesting a transitional disease burden in Andhra.

Personally for me it was quite an experience traveling through some of the most impoverished parts of Orissa. The few young doctors I met in far flung PHCs in inaccessible areas are doing commendable work which is nothing short of heroic. At the Bhawanipatna district hospital I also met a recently recruited young hospital Manager, who decided to move away from the ‘suffocating’ commercial environment of a private hospital in New Delhi and do more satisfying work elsewhere. He took me for a tour of the hospital and showed me how he is trying to turn it around! It was all quite amazing and unexpected.

3. What are the greatest challenges you face when working on the baseline study? How do you overcome this?

MG: We are venturing into an unknown territory where nothing is predictable or certain. It is a challenge to ensure that our work goes on smoothly and within our timelines. The only way to ensure this is to plan and coordinate very well in advance, maintain very good communication with our local partners, and seek their advice and support at all times.

The other big challenge and by far the bigger one in my view is to keep alive the motivation, sincerity, and efficiency of the research team in the face of harsh field conditions and long working hours. We work with locally recruited young field investigators. They form the last mile that bridges us with the communities we want to understand. The quality of the data we obtain is entirely dependent on the competency, sensitivity and spirit of enquiry in our field investigators. We try to develop this through good training and mentoring and by taking good care of our field staff. It also helps that me and a few others are personally fully involved in the fieldwork and try to teach a lot by example.

4. How do you think the baseline study will change and improve with each new location MIA works in?

MG: So far we have worked in two very different locations and our tools have gone through a process of revision and improvement with each new location. In our second location we also decided to hire our own field staff who was involved not only in the field work but also in the data processing including FGD transcriptions and translations. This development will further ensure that our final research output is of good quality. We also expect that over the next 2-3 years, we will be able to use more and more of FGDs and KIIs, without the more labour intensive household survey, to derive most of our health insurance calculations.