WOTRO Funded Research Project

WOTRO-Funded Research Project on Development of a New Cost- & Time Effective Methodology to Upscale Demand for Health Insurance among the Poor in India

The Micro Insurance Academy (MIA) has been involved since April 2008 in collaborative research funded by WOTRO (a division of the Netherlands Organisation for Scientific Research which supports scientific research on development issues). The overall goal of this four year research project is to upscale demand for health insurance (HI) among grassroots groups in India by developing a cost- & time effective methodology to design better HI products. The assumption underlying this research proposal is that the key to elaborating attractive HI packages lies in identifying an optimum match between clients’ needs for healthcare, available supply of healthcare and demand for HI. Our evidence-based studies in the last years led to the conclusion that there is no “typical micro insurance client”. Since there are significant differences across locations in medical needs, solvent demand and supply of healthcare, it is critical to identify this optimum match based on local information. The feasibility of such an approach hinges on our ability to develop a cost effective, fast and simple method to close the information gap. Our immediate goal in this project is thus to develop a protocol for data collection and analysis of locally relevant data obtained from multiple sources, in conjunction with a series of key informant interviews (KII) with community leaders and health care providers, and focus group discussions (FGD) with community members. This methodology is being developed and validated in an iterative process of comparing modelled data with traditional sources of data such as household surveys.

Why is all this necessary? Because India is undergoing a rapid change in demography, in economical status, in priorities, in social structure and in health-seeking behaviour (to mention just a few aspects), and this rate of change varies across locations. Success in achieving our goal is contingent on our ability to capture the pulse of a silently transforming rural and low-income India as it occurs. This understanding of the dynamics of socioeconomic change offers the key to structuring meaningful insurance products that suit the conditions prevailing in the microinsurance space at this time. Our insistent focus on enabling prospective clients to compose benefit packages by trading-off benefit types within a limited budget can be achieved through the use of the simulation tool called “Choosing Healthplans All Together” (CHAT) which we developed and field-tested with success previously.


The first wave of the field work started in April 2008 in collaboration with Cooperative Development Federation (CDF), with membership of over 500,000 persons and activities in upward of 250 villages through 500+ groups in Warangal and Karimnagar districts of Andhra Pradesh State, India. CDF now rolls out its Sahavikasa Cooperative Based Health Insurance Scheme (SCOBHIS), and invited MIA to facilitate technical preparations and consensus-building within the CDF constituency around adopting the principles of the community based mutual micro health insurance model, including en-bloc affiliation (considered the best option to minimize insurance failures such as adverse selection and moral hazard). A household survey was conducted in the two districts in May-June 2008 (data yield was 1810 responses). During the same period, 36 KIIs (mainly with healthcare providers) and 19 FGDs (mainly with CDF members) were completed. The survey data is now compared to information harvested from several official statistical publications. Through this step, we derive the essential information for adaptation of the CHAT tool to local healthcare needs and costs (based on the socio-economic status of the target community, their medical needs, health seeking behavior, the cost of health services, the availability of health services and local availability of other HI products). Under the guidance of MIA, local personnel were trained to carry out FGD at CDF (which will be carried out regularly once the insurance is implemented).


In November 2008, MIA facilitators will carry out a series of CHAT simulation exercises in Warangal & Karimnagar, through which the clients of SCOBHIS will choose the benefits that will be included in their HI package from 1 January 2009. The WOTRO research project includes three such waves, (in 2008, 2009 and 2010). At the completion of the project we expect to have elaborated a replicable step-by-step protocol that will guide the process of introducing viable community-based micro mutual HI that entails empowering and active participation of the target community, with minimum expenses. In line with the objectives and practices of MIA, the results of this research project will be disseminated through publications and conferences.