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Health Insurance and Bangladesh (Part 05)
shofiq uddin khan
I complete my BBA from PSTU. 
By shofiq uddin khan
Published on 15 January 2010
Health Insurance and Bangladesh. Health Insurance Schemes in Bangladesh and Their Function. Experience of Three Organizations - Pacific Prime Insurance, The Ganasasthya Kendra (GK) Health care system in Savar and The Grameen Health Program

Health Insurance and Bangladesh. Health Insurance Schemes in Bangladesh
Many developing countries, including Bangladesh, are affected by a “Double Burden” of disease and scare of resources (WHO 95). Unprecedented population growth and the emergence of new and chronic diseases have placed extra demands on health services. Despite massive efforts to combats such problems in Bangladesh, recent studies maintain that the resource base is sufficient studies to meet neither future needs nor planned services. In Bangladesh about 64% of the health expenditure come from the “out of pocket of the house hold” 33% is provided by the government sector and the remaining comes from the NGOs services. In a resource poor country, like Bangladesh, to ensure the compulsory health facilities for all, the government cannot bear such huge amount of money to provide the health services to the people. In rural Bangladesh, many agricultural co-operatives were established by the government a decade or more ago as ‘merchant’ association for the collective purchase of fertilizers and others inputs in agriculture and the marketing of crops. Few of them still exist. Recently more successful micro-credit co-operatives in the poorer households have been initiated by Non Government Organizations to stimulate small-scale entrepreneurship. There are about 16000 NGOs who are working in different areas for the well-being of the rural poor’s in various manners since the inception of the country. Only a few of them deliver health care services and receive subsidies from national trust and international donor agencies. However, in recent years, since the late 80s, a number of health insurance schemes were initiated by these NGOs on a pilot basis. Though the functions and the performances of all of these NGOs have not been evaluated till to date through any national survey but very few of them have become successful to provide proper health care services to the poor needs.

Health Insurance is a risk sharing mechanism employed to harness private funds for health care and to reduce the financial barrier faced by individuals when seeking health care. The social health insurance has two prime functions that merits separate considerations, although they are intrinsically linked. The first is a financial function which is to provide a pool of funds to cover all or part, of the cost of health care for those who contribute to pool and to encourage providers and consumers to use health services in a very cost effective manner. The second prime function of the social health insurance scheme is social, including social equity. Health insurance is to remove the financial barriers to obtaining health care at the time of illness for the vulnerable groups in the society i.e. the very young, the elderly and chronically ill.

Social health insurance aims at protection from low probability and catastrophic loss like illness or injury. By pooling financial contributions from a large number of populations and pooling individual risk on a large scale (risk sharing), health insurance plans can cover the health expenditure, such as hospitalization, outpatients, medical care, drugs and sometimes also compensate the loss of revenues. The term health insurance is used to denote health promotion, prevention and health care. Large segment of the world’s rural population and many people in the urban informal sector has no access to health services and remain vulnerable to the full financial cost of illness. This happens mostly in low and middle income countries. Most of the countries have some forms of public provision of health services but less and less countries can provide a full range of health services, based on the needs of the populations.

Many developing countries are currently considering the possibility of introducing compulsory healthy insurance schemes. One reason is to attract more resources to the health sector. A second reason is dissatisfaction with existing services in which staff motivation is poor, resources are not used to advantage and patients are not treated with sufficient courtesy and respect.

Health Insurance Schemes in Bangladesh and Their Function: Experience of Three Organizations

The standard of living in Bangladesh is extremely low, Bangladesh may not be able to provide foreign nationals in the country with the services that they need. In regards to healthcare, the treatment standards are typically very poor, and many medical facilities will not be able to offer patients anything other than immediate emergency care.

Feeling comfortable in the knowledge that if something was to happen to a family member their medical costs will be taken care of, is important to us all. Our expert consultants can advise on the most suitable level of coverage for families, individuals, groups, travelers, and teachers expatriate health insurance.

Pacific Prime Insurance

Pacific Prime (PP) is an expatriate insurance broker specializing in providing overseas medical insurance for Bangladesh nationals living, working or holidaying abroad. If you are a non Bangladesh national and moving to Bangladesh we can also provide plans that meet your specific requirements. The policies that PP can provide are guaranteed renewable for life and globally portable, so even if you should relocate away from the country your plan will continue to cover you. With a number of extra benefits including maternity coverage, emergency evacuation and repatriation, dental treatment, out-patient consultations, alternative medicines, complimentary therapies, and specialist consultations, customer  can be assured that an international health insurance Iran plan will give you the coverage that you need. For more information about the products and services that we can offer, or to receive a free quote, please contact us today.

PP offer additional customer services that include claims advice, emergency contact numbers and medical advice lines. They also maintain a comprehensive list of Bangladesh hospitals/doctors. Most of our clients are expatriates we maintain a Bangladesh. As a leading broker of medical insurance in Bangladesh PP keep up on the latest insurance trends and News. Pacific Prime Insurance can offer expatriates in Iran dedicated international health insurance plans that will provide comprehensive coverage in the East and around the world. Plans that we can offer will usually have a number of benefits that a policyholder is able to tailor to suit their specific requirements. With coverage options including out-patient, dental, maternity, and emergency evacuation, you will be assured of receiving the highest levels of quality treatment anywhere in the world.

The Ganasasthya Kendra (GK) Health care system in Savar

The Ganasasthya Kendra (GK) health care system in Savar has since gradually been expanded and currently covers about 165000 inhabitants in rapidly industrializing area situated 40km away from Dhaka, the capital of Bangladesh. The health care system consists of two tiers. Each of the four static sub-centers (covering each 25000 to 30000 in habitants) is managed by a team of 8 to 10 paramedics headed by a senior paramedic, who also perform door-to-door visits (600 to 700 families or 3000 to 3500 inhabitants each paramedic) where preventive and simple curative care and health education are delivered. At the sub-centre, curative care is provided to the patients referred during the door-to-door visits. A doctor visit the sub-center twice a week to see the patients referred by the paramedics. A 70 beds referral hospital receives the patients referred by the sub-centers. The outpatients department of the hospital operates as a sub-center for the surrounding inhabitants. In 1975, GK established a health insurance scheme aimed at increasing access for the poor to the health care system and recovering the majority of the recurrent cost of the health care delivery. Initially started with a flat rate as premium and no co-payments. Fee structure was changed after a few years into a sliding scale of premium and co-payments to better protect the poor and to control over-utilization of services. GK has also vocational training programs for women and handicapped and provides small loans to over 2000 poor families mainly through the women gathered in co-operative groups of 5 to 10 women.

The Grameen Health Program

The Grameen Bank provides group-based loans to the rural poor, mainly women, gathered in local centers consisting of 8 groups of 5 credit receivers. The Grameen Bank has 2 million members covered almost half if the villages of the country through 1050 branches. GB borrower’s income increases on average by 60% over 3 years and after 8 loans about half of all borrowers graduate totally out of the poverty cycle. The Grameen Bank involved in health care in early 1990s as a result of some critical findings in the credit programme relating to health and health care use. The findings suggested that illness was the single largest cause of loan default (44%) in GB’s credit program. Field observation further revealed that improved income levels in GB’s borrower families resulted in increased expenditure on poor quality of health care. Therefore, the Grameen Bank requested the Grameen trust to develop a Health Program to deliver quality curative, preventive and promotional health services. From its inception, the Grameen Health Program included a pre-paid health plan. The Grameen Health Program functioning through three community- based levels in one operational area. Five to six health workers perform door-to-door services at village level (one worker for 500 to 700 household), supervised by a paramedic per two health workers. The paramedic is also in charge of a sub-centre. There are three sub-centres in one operational area. These are overseen by one Health Centre, located Grameen Bank area branch office, staffed with one doctor, one paramedic, one laboratory technician and one office manager. The health workers provide preventive care and health education, while the paramedics provide community-based curative care at the sub-centers. The health center provides out-patients curative services. The patients requiring hospitalization are referred to the nearest Government Health Complex. Over a period of two and a half years, the Grameen Health Program developed its activities in 6 operational areas near Dhaka and established another 5 operational areas during 1996.

Both GK Health Insurance Scheme and Grameen Health Plan are essentially provider-driven. Enrolment in the GK scheme is voluntary, per household and based on the signing of a contract between GK and the household, after scrutiny of the socio-economic data on an enrolment form. Coverage starts immediately for clinic attendance but only after one week for hospitalization. Before its implementation, the Grameen pre-paid Health Plan was discussed with the members of the GB credit program in the 6 GB operational areas where it was to be established. The decision to affiliate to the Grameen Health Plan was made in each local centre, where the forty or so women had to reach a consensus on the issue after consultation in each of eight small groups. At the end of the negotiation process all the local centers within the 6 areas agreed to subscribe.

Both GK and Grameen are providing preventive services, family planning and health education which are free for all irrespective of family subscription to health insurance scheme. Regarding curative services, in both the scheme, community-based care is covered. In both schemes for the dive new operational areas, costs of referral cases are also covered. These additional coverage’s in the new. Grameen Health Plan was introduced because their non-inclusion in the coverage package of the current plan was an important reason for non-renewal of subscription. The Grameen Plans manager further hopes that this supplementary coverage’s will attract more subscription from the non-GB families. Hospital coverage, however, was not added in the plan of the existing six areas.

The fee structure of the Gk health care system is characterized by sliding scales of premiums. Renewal fees and itemized co-payments for the insured households and for the uninsured households, by flat fee for services. The scales based upon the socio-economic groups, with near symbolic amounts for the lowest group.

In GK health insurance scheme, the affiliation is voluntary and open to all households in GK’s area of responsibility. However, the affiliation rate amongst the 2000 families engaged in the GK credit program. During the meetings of credit family groups, the advantages of subscription to the health insurance scheme and how to affiliate to it, are explained by the workers of the credit scheme and the health workers. Individual households are free to decide as to whether to affiliate or not through the group meetings may help to convince households or not, through the group meetings may help to convince household to do so. Receiving credit from GK does not label families as GK health insurance scheme. In contrast, families receiving GB credit are identified as GB member families and the affiliate to Grameen Health Plan through a GB centre-based decision process.

From the experiences of GK and GB several lessons can be learnt. First, cost recovery the rational use of resources in health care delivery is two sides of the same coin and both need to be addressed simultaneously. Secondly, as patient charges are similar to the expenses of community based services in the health care system, communities may be able to self-finance this level of services. From a systems perspective, this is also the level they may be able to self-manage. It implies that any community financing scheme and thus the insurance schemes discussed here, should be designed so as to collect the maximum extent possible, charges at the community service level, while ensuring access to the hospital for patients referred by the community based services. Thirdly, this strategy would clarify that subsidies are needed to cover expenses at hospital level and management of the health care system as a whole. In this respect, GB’s expectation to get the Grameen health program at break-even point and of Gk to cover the majority of recurrent costs of the total health care system through patient charges is unrealistic. Finally, the concentration of the scheme at community based service level, combined with a shift from an itemized co-payment to one based on an illness episode could dramatically simplify its management and substantially reduce its administrative cost. 


Health insurance is growing very fast today. The growth will be supported by stand alone health insurance companies and new players entering healthcare market with improved healthcare infrastructure across the world motivating a larger section of population for better healthcare services through various healthcare insurance policies. Currently State owned health insurance companies constitute about 70% of the market and the rest is occupied by private companies. However private companies are growing fast and aims to occupy a larger share in the health insurance market in near future.

Today, health insurance in this world is focused purely on collecting the premium; and paying the medical fees when the patient falls ill. Unfortunately, there is little being done to help customers remain well. Aboard, insurance companies realize the high cost they have to bear as a result of chronic diseases (such as diabetes, obesity and hypertension) which are primarily life-style disorders; and are taking proactive steps to ensure their customers remain healthy. Corporate are also investing in employee wellness programs, because this directly affects their bottom-line!

The functioning and the potential of health insurance schemes depend upon the politico-economic views on society of organizers of health insurance schemes, communities and health care provides. The key findings of this study include that (a) while subscribers are currently not actively participating in scheme management, nor in overall health care management, existing family involved in credit program of the two parent organizations could be used as entry-point to make this management more community-based. (b) the schemes potentials for community involvement could be further enhanced, if a number of technical indicators are improved and health systems elements are applied in interaction and with the co-operation of all involved. These issues are: avoidance of duplication in service delivery in GK Grameen areas; better protection of the poorer households by amending fee structures and socio-economic classification of the households; the inclusion of hospital care in the insurance coverage; the concentration of scheme management at community level, including collection of premiums and co-payments, as it simplifies scheme administration and thus makes the scheme more manageable by local communities and insertable in community management of basic services.

The concept of risk sharing through community-based solidarity appears to be better understood by the population in the GK area of responsibility than in Grameen one. This appears from the main reported reasons for non-renewal in GK area which were of a practical nature. In contrast, the main reason in the Grameen area was the non-use of Grameen health facilities in the past year.

There is no active involvement of the subscribers to both the schemes in decision-making about the organization and the functioning of the schemes. All relevant decisions premium and co-payment levels, or on how to increase subscription are taken by the schemes managers, based on routine data and on findings from specific surveys. Hospital coverage is included in the GK scheme. However, it is absent in the existing Grameen health plan. Summarizing, the available data on the current use pattern does not show that the poorer households are particularly protected through the GK health insurance scheme nor through the Grameen health plan.

As the cost of medical care goes up, medical insurance coverage is going to become increasingly important for Bangladesh huge middle class population. This challenge actually presents a significant opportunity for the health insurance industry which can change the face of the healthcare industry by making it more patient-centric ! Indian patients are becoming increasingly articulate, and they want more information about their medical problems. Unfortunately, their doctors do not have the time to provide them with this. Patient education has been a neglected area in India so far, and this lacuna represents a major opportunity for the insurance company which has the vision to realize the importance of owning this area . This is a significant value addition to your customers – and even ends up saving you money on their policies, as they are less likely to fall ill!