> Posted by Hillary Miller-Wise, CEO, Africa Region, Grameen Foundation
Veteran journalist Walter Cronkite once said of America’s health care system that “it is neither healthy, caring, nor a system.” Imagine what he would have thought about some of the public health care systems in the developing world.
Consider Kenya, which is now a middle-income country, due to recent rebasing of the economic calculations. Public expenditure on health care is about 6 percent of GDP, compared to 9.3 percent in OECD countries. About 33 million Kenyans – or nearly 75 percent of the population – are uninsured, of whom 70 percent live on less than $2 per day. And there is no Obamacare on the horizon.
What does this mean? Well, as in the U.S., it means that low-income people rarely seek care because they can’t afford it. It’s not too surprising then that life expectancy in Kenya is 61 years old and healthy life expectancy is 53 – which means that the average Kenyan can expect to be sick for about 8 years of life. Maternal mortality in the country is about double the global average. And a child younger than five years old has about twice the chance of dying in Kenya than if she were born in Cambodia, Iraq, or Guatemala.
Grameen Foundation thinks it might be able to make a dent in those statistics, and not just in Kenya. We have partnered with MicroEnsure, a global leader in the provision of microinsurance, to help low-income Kenyans manage their health risks and ultimately lead healthier lives. We’ll do this by coupling a health insurance product with health information delivered over the mobile phone – an initiative we call “Uzima,” or “well-being” in Swahili. Our hypothesis is similar to that of other microfinance initiatives coupled with empowering information services: if low-income people have access to an insurance product that enables them to access quality care along with information on healthier preventative behavior, they will have fewer health shocks that drive them further into poverty. Moreover, by promoting healthier behavior through targeted communication, we expect that we can reduce the risk of the customers for the insurer. Let’s take a closer look at the business case.
There are a lot of reasons most insurers aren’t interested in serving the mass market in a place like Kenya. Some of the major considerations are the lack of reliable data for accurate pricing and product development, high customer acquisition costs relative to small premiums, costly and complex administration, sales and education, and poor service quality by health providers, among other reasons.
If we can attract people to an mHealth service through gamification and other techniques (to be determined through Grameen Foundation’s human-centered design approach), we not only have a pre-established channel to encourage healthier behavior, but we also have an opportunity to raise awareness and educate the potential customer about the insurance product. In effect, it’s an opportunity for “below-the-line” marketing or advertising through non-traditional channels. Finally, by using mobile technology, MicroEnsure can reduce the costs of administration like claims processing.
To address the issue of poor service quality, we have also partnered with Penda Health, which provides high quality affordable primary care through a chain of health clinics in Kenya. The insurance product will enable low-income Kenyans to access high quality comprehensive primary care as well as women’s health and family planning services through Penda Health. In addition, the Penda Health clinics will serve as a channel for educating clients about the insurance product and registering them for the mHealth information service.
But it’s not just about marketing or cost control, this is also about closing the loop for low-income Kenyans on their health – providing information that enables them to make better health choices together with a financial instrument that allows them to access quality care. Will it work? We think so. The service is expected to join the ranks of other successful mobile microinsurance offerings, and Kenya benefits from very high mobile penetration rates. But we are also open to the possibility that the solutions we end up with will not look exactly like the ones we imagined at the start. That’s how innovation happens, after all.
Have you read?
The Formula for Mobile Microinsurance Success in Senegal and Pakistan
Mobile Microinsurance Products and Financial Capability
Agriculture Microinsurance in Africa: To Subsidize or Not to Subsidize?