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Social Protection Do’s and Don’ts. Paul Gertler UC Berkeley and INSP. Dimensions of Social Protection. Health Outcomes Prevent ill health Return an ill person to health Financial Prevent major illness from throwing family into poverty

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social protection do s and don ts

Social Protection Do’s and Don’ts

Paul Gertler

UC Berkeley and INSP

dimensions of social protection
Dimensions of Social Protection
  • Health Outcomes
    • Prevent ill health
    • Return an ill person to health
  • Financial
    • Prevent major illness from throwing family into poverty
    • Protect living standards against ill health
  • I will focus more on financial protection
examine empirical evidence on social protection design
Examine Empirical Evidence on Social Protection Design
  • In Government needed?
    • Can families self-insure living standards against illness?
  • Tradeoff in benefit design
    • First Peso coverage versus catastrophic
  • How should medical providers be paid?
  • Social Protection other than insurance
do families need help to protect living standards against ill health
Do families need help to protect living standards against ill health?
  • Can families protect living standards against financial loss from illness by themselves?
  • Cost of illness
    • medical care
    • lost income from not being able to work
  • Informal insurance mechanisms
    • Savings
    • Credit
    • Help from friends & family (Social Capital)
are families able to pay the cost of illness
Are Families Able to Paythe Cost of Illness?
  • Definition:

“Able to pay if can finance cost of illness without reducing standard of living”

  • Use consumption as measure of living standards
  • Examine whether

Δin consumption in HHs w/ an illness is lower than in HHs that are healthy

  • Reduction in consumption means must finance illness by lowering living standards
evidence from indonesia gertler and gruber 2002
Evidence From Indonesia(Gertler and Gruber, 2002)
  • Panel survey of 6,000 households
  • Illness measures
    • Days ill in last month (minor illness)
    • Ability to perform physical activities
      • Rigorous activities (medium illness)
      • Simple activities (serious illness)
  • Examine how change in illness measures affects change in consumption
families not able to self insure serious illness
Families not able to self-insure serious illness
  • Need for government to help families protect living standards against illness
  • But, can insure minor illnesses
    • User fees, copays are OK
    • Little value of first Peso coverage
    • Large value to catastrophic coverage
  • Social Protection with first Peso coverage, but capped benefits minimize insurance benefit
  • Important: budget constraint means tradeoff between # who benefit and ability to cover catastrophic events
social versus financial capital gertler levine moretti 2004
Social Versus Financial Capital(Gertler, Levine & Moretti, 2004)
  • Savings
    • Micro-finance/savings program like Bank Sefi, Grameen Bank, BRI
      • Reduce cost of savings & borrowing
    • Poverty Alleviation programs like OPORTUNIDADES
  • Social capital
    • Able to call on friends, family and community
in times of illness its better to have money than friends
In Times of Illness Its Better to Have Money Than Friends
  • No effect of social capital on ability to insure
  • Building savings does help
  • Programs that help families save
    • Micro-finance/savings
    • Cash Transfer programs
    • OPORTUNIDADES conditional cash transfer program increased land holding & animal ownership in Mexico
medical providers can capture social protection insurance benefit
Medical Providers Can Capture Social Protection Insurance Benefit
  • Social Medical Insurance Plans
    • pay medical care providers fee for service
    • Allow providers to balance bill
    • Allow Providers to price discriminate
  • Providers may raise price to patients with insurance without increasing services
  • If raise price equal to the insurance benefit, out-of-pocket costs same as before insurance
  • No insurance benefit to individual, just transfer to providers
social health insurance in the philippines gertler solon 2001
Social Health Insurance in The Philippines (Gertler & Solon, 2001)
  • Expanded social health insurance to wage sector in early 1990s
  • 1st Peso coverage with capped benefits
  • Paid fee-for-service, allowed balance billing & price discrimination
  • Examined 2000 inpatient prices
the relationship between social protection for health poverty
The Relationship between Social Protection For Health & Poverty
  • Financial protection prevents families from becoming poor due to catastrophic illness
  • Financial protection critical to making some poverty alleviation programs work
    • Micro-finance for farm & enterprise investment
    • Jobs & job training programs
    • If have to pay for illness, money & resources diverted
  • Programs that invest in health provide Financial Protection by keeping people healthy
oportunidades gertler rivera levy sepulveda 2003
OPORTUNIDADES(Gertler, Rivera, Levy & Sepulveda, 2003)
  • Conditional Cash Transfer Program focused on investments in human capital of children
    • Health, Nutrition, Education
  • Alleviate long-term poverty
    • helping next generation escape poverty
    • Start adulthood with capabilities (health & education) to take advantage of labor market opportunities
  • Cash conditional on prenatal care, child nutrition monitoring & supplements, other preventive care
rigorous evaluation
Rigorous Evaluation
  • Rolled out in rural areas 1997-00
    • 2 million families in 50,000 villages
    • Budget constraint meant phased implementation
  • Randomized 506 villages
    • Treatment villages got program 1st
    • Control villages got program 2 years later
  • Following 18,000 households
increased child height reduced anemia
Increased Child Height & Reduced Anemia

All controls include age, sex, education, family structure, parental characteristics & baseline economic status

social protection do s don ts
Social Protection Do’s & Don’ts
  • Families cannot self-insure living standards against illness – Need government help
  • Financial protection should focus on covering catastrophic illness & not minor illness expenses
    • Families are able to pay for minor illnesses
    • Use copays & user fees if needed
    • 1st Peso, capped benefit design least desirable
  • Don’t allow providers to price discriminate
financial protection key to poverty alleviation
Financial Protection Key to Poverty Alleviation
  • Prevents families from falling into poverty
  • Strengths poverty alleviation programs & should be part of them
  • Policies that encourage savings help
    • Micro-finance/savings like Bank Sefi & Granmeen
  • Programs that improve health outcomes provide financial protection by keeping people healthy