Determinants of the financial stability of mutual health organizations: a study in the Thies region of Senegal.

Abstract

The financial sustainability of community-based health insurance schemes has been debated in the literature given concerns that small risk pools voluntary membership and weak financial systems might jeopardize the schemes. The research reported here investigates the main factors influencing the financial stability of mutual health organizations (MHOs) in the Thies region of Senegal. The study covered the four-year period 2000-03 and comprised a household survey component a MHO survey component and a provider survey component encompassing all 27 schemes in the Thies region that have been fully functional for at least two years. Despite growth in the number of MHO members and beneficiaries during the four years scheme financial performance overall was poor. The primary factors explaining this poor performance were: problems of adverse selection low dues recovery unrecovered loans (particularly for expenditures at the hospital level) frequent changes to benefit packages without concurrent changes to premiums and limited use of financial tools. In order to promote MHO sustainability greater support is needed for the design of schemes and particularly for their management. Reinsurance which helps protect against random risk may have a role to play in the future but the immediate focus should be on stronger financial management. (authors)