Demystifying health insurance package design by Choosing Healthplans All Together (CHAT)
We developed a simulation exercise called “CHAT” (“Choosing Healthplans All Together”) that allows variably educated populations who are inexperienced with health insurance to pick health benefits within a premium of INR 500 ($12) per household per year.
CHAT is a game like tool which enables the local community to jointly define the benefit package most relevant to their needs. In CHAT even illiterate and innumerate people can participate and decide on the composition and price of their health insurance. The process creates transparency and introduces democratic choices as an integral part of designing health insurance – breaking the monopoly of insurance companies on this crucial aspect of health financing.
A short (5 minute) video about CHAT is available for viewing on www.microinsuranceacademy.org
The primary beneficiaries of CHAT are communities at the “bottom of the pyramid”, who are able to participate in making decisions on their priorities in health insurance, and Choose their Healthplans All Together.
By involving communities in benefit package design, health insurance becomes much more acceptable and accessible to poor communities, and the complex concept of health insurance becomes clearer and less threatening. For instance, more than 95% of the groups which have participated in CHAT in Rajasthan, Maharashtra and Karnataka expressed interest in buying the insurance package they designed. In addition, as health insurance penetration is increased, out of pocket spending (the least efficient form of health financing) is reduced, shifting towards insurance and other more efficient prepayment and pooling mechanisms.
In India, the insurance industry functions on the assumption that “insurance is sold, not bought”. Our experience disrupts this top-down approach, and allows poor communities to make their own choices about benefit package design. To the best of our knowledge, CHAT is the first and only such process in developing countries.
About You
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Project Street Address
Project City
Project Province/State
Project Postal/Zip Code
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Your idea
Focus of activity
Service/process
Year the initiative began (yyyy)
2005
Positioning of your initiative on the mosaic diagram
Which of these barriers is the primary focus of your work?
Monopolies of knowledge
Which of the principles is the primary focus of your work?
Democratize access
If you believe some other barrier or principle should be included in the mosaic, please describe it and how it would affect the positioning of your initiative in the mosaic:
This field has not been completed
Name Your Project
Demystifying health insurance package design by Choosing Healthplans All Together (CHAT)
Describe Your Idea
We developed a simulation exercise called “CHAT” (“Choosing Healthplans All Together”) that allows variably educated populations who are inexperienced with health insurance to pick health benefits within a premium of INR 500 ($12) per household per year.
CHAT is a game like tool which enables the local community to jointly define the benefit package most relevant to their needs. In CHAT even illiterate and innumerate people can participate and decide on the composition and price of their health insurance. The process creates transparency and introduces democratic choices as an integral part of designing health insurance – breaking the monopoly of insurance companies on this crucial aspect of health financing.
A short (5 minute) video about CHAT is available for viewing on www.microinsuranceacademy.org
The primary beneficiaries of CHAT are communities at the “bottom of the pyramid”, who are able to participate in making decisions on their priorities in health insurance, and Choose their Healthplans All Together.
By involving communities in benefit package design, health insurance becomes much more acceptable and accessible to poor communities, and the complex concept of health insurance becomes clearer and less threatening. For instance, more than 95% of the groups which have participated in CHAT in Rajasthan, Maharashtra and Karnataka expressed interest in buying the insurance package they designed. In addition, as health insurance penetration is increased, out of pocket spending (the least efficient form of health financing) is reduced, shifting towards insurance and other more efficient prepayment and pooling mechanisms.
In India, the insurance industry functions on the assumption that “insurance is sold, not bought”. Our experience disrupts this top-down approach, and allows poor communities to make their own choices about benefit package design. To the best of our knowledge, CHAT is the first and only such process in developing countries.
Innovation
Define the innovation
We developed a simulation exercise called “CHAT” (“Choosing Healthplans All Together”) that allows variably educated populations who are inexperienced with health insurance to pick health benefits within a premium of INR 500 ($12) per household per year.
CHAT is a game like tool which enables the local community to jointly define the benefit package most relevant to their needs. In CHAT even illiterate and innumerate people can participate and decide on the composition and price of their health insurance. The process creates transparency and introduces democratic choices as an integral part of designing health insurance – breaking the monopoly of insurance companies on this crucial aspect of health financing.
A short (5 minute) video about CHAT is available for viewing on www.microinsuranceacademy.org
The primary beneficiaries of CHAT are communities at the “bottom of the pyramid”, who are able to participate in making decisions on their priorities in health insurance, and Choose their Healthplans All Together.
By involving communities in benefit package design, health insurance becomes much more acceptable and accessible to poor communities, and the complex concept of health insurance becomes clearer and less threatening. For instance, more than 95% of the groups which have participated in CHAT in Rajasthan, Maharashtra and Karnataka expressed interest in buying the insurance package they designed. In addition, as health insurance penetration is increased, out of pocket spending (the least efficient form of health financing) is reduced, shifting towards insurance and other more efficient prepayment and pooling mechanisms.
In India, the insurance industry functions on the assumption that “insurance is sold, not bought”. Our experience disrupts this top-down approach, and allows poor communities to make their own choices about benefit package design. To the best of our knowledge, CHAT is the first and only such process in developing countries.
Context for Disruption:
We brought to market a process that is simple to use and free-of-charge, enabling consumers to assert an interest in health insurance. This process disrupts the established approach to marketing health insurance (“take-it-or-leave-it”) by enabling low-income clients to exercise choice where they had none hitherto, and on a complex issue as designing their health insurance benefit package.
By opening the possibility for choice, clients can determine how they wish to ration their spending on health insurance to reflect their perceived benefits (linked to expected health-seeking). Secondly, the clients can relate to risk mitigation as a tangible and affordable exercise, when until now health insurance has been viewed as a quasi-incomprehensible transaction that only experts could understand, in which the emphasis was put on rare events, limitations and other constraints that promised too little compensation and thus have been irrelevant for poor people. The disruptive character of our intervention is exemplified notably by the high demand we get from grassroots communities to bring CHAT to them.
The overwhelmingly positive results lead us to believe that CHAT can have a real impact on the development of health insurance amongst hundreds of millions rural poor in India and other developing countries.
Delivery Model
Our innovation requires us to organize groups to “play CHAT”; the optimal group size is 15 persons, but we have organized groups as small as 12 and as large as 20. Each CHAT exercise lasts some two hours, and we bring along our copyrighted materials.
The local interlocutors provide the place where we conduct the CHAT exercise (e.g. a classroom, or simply under a tree – see photos) and help in organizing the people; the local group also provided one or several facilitator(s) who can speak English and the local language, and we communicated through the facilitators. Communication is verbal, but the process is guided by the facilitators’ manual to ensure that the process and the stages are followed in an identical manner in all locations and with all groups. This operative model has so far not allowed us to use distribution channels.
We now envisage developing a training module for facilitators so that the CHAT innovation can be spread more widely by people trained to do so. The training of facilitators will be done by the Micro Insurance Academy that has just started to function in New Delhi. Market penetration so far has been “experimental”: we tested the tool, the interactions, the usefulness of the data we obtain. Now we are ready to take the innovation to the next stage, train facilitators, disseminate the innovation and respond to the considerable demand we have been getting from grassroots organizations to include them as well.
Key Operational Partnerships
CHAT was originally developed by the National Institutes of Health (USA), and adapted to the Indian context of low cost community-based health insurance through the Social Re project. It was tested in 124 villages in close cooperation with “Karuna Trust” (Karnataka), BAIF & Uplift Health (Maharashtra) and “Aapni Yojna Project” (Rajasthan).
The funding for the adaptation and field testing of CHAT was provided primarily by an EU (ECCP) project “Strengthening micro health insurance units for the poor in India” (www.microhealthinsurance-india.org) with support from the NIH and Hivos (www.hivos.nl/English) and in-kind support from the grassroots organizations.
As the innovation centers on community involvement and democratization of the process of designing health insurance benefit packages, partnerships are essential. The initial partnership between NIA and Social Re enabled the creation of the Indian CHAT materials, and resulted in several peer-reviewed publications. Funding from the EU enabled the initial field testing; a follow-up grant from Hivos enabled the launch of the world’s first Micro Insurance Academy that hubs the scaling of CHAT training and improvement. Finally, the grassroots organizations facilitate access to the end beneficiaries, who are at the heart of the process.
Impact
Financial Model
CHAT is the entry-point of our holistic approach to delivering low-cost community based micro health insurance. Within the overall scheme of health insurance operations, the costs related to running the CHAT exercises are absorbed in the insurance premiums. However, at the initiation point, CHAT is used as a tool to introduce communities to the value proposition of insurance, and therefore it is offered free-of-charge to communities.
CHAT is always tailored to local realities, which has proven as a very effective tool to make the insurance relevant for people with little or no prior knowledge of insurance to enlist to community-based health schemes. However, this customization requires upfront information about local needs, utilization and cost of care, which we have obtained up to now by carrying out baseline household surveys, which requires substantial investment of time and money (for data collection and analysis). To reduce the cost of CHAT further, we are currently working on modeling a modified and simplified intervention through assembling the information needed in a rapid access series of focus group discussions and key informant interviews.
The current interventions of CHAT, as well as the future modeling, are financed through several foundation and research grants, which recognize the great potential of the CHAT exercise in customizing the design of insurance solutions, enhancing the community-centered approach, and responding to context-specific needs of the poor based on local metrics, while reducing the cost of this process
What is your annual operating budget?
€500'000.00
What are your current sources of revenue? (please list any sources that are foundation grants)
CHAT is currently implemented in India through the Micro Insurance Academy. The budget given refers to the Academy; it was recently launched with partial funding from Hivos (a Dutch NGO inspired by humanist values). Other sources of funding include research grants from (several) European research bodies.
Finally, the Micro Insurance Academy and its affiliated staff and linked partners have a wealth of experience and expertise in micro insurance, as well as excellent access to grassroots organizations. We have the technical know-how, the analytical ability, and the data needed to conduct diverse studies on micro insurance.
As such, we are uniquely placed to consult on a wide range of issues and policies relating to micro insurance, and we engage in consulting activities (mostly to international organizations and development agencies); income generated is used to cross-subsidize the capacity-building activities among resource-poor persons and communities in the field, including CHAT.
Effectiveness
What has been the measurable impact of your project to date? How many people have benefited from your program in total? What policies, communities, or institutions have been influenced to make fundamental changes because of your work?
We evoke an assumption that when prospective clients become involved in selecting the services they will access through health insurance to reflect their perceived priorities, they will be more willing to join and pay for such insurance. Therefore, a method is needed to allow variably educated, poor populations who are inexperienced with health insurance to ascertain their priorities for insured benefits.
Never before has this been done in the context of health insurance in India/developing countries. We developed a modified version of the CHAT (Choosing Healthplans All Together) exercise tested previously among uninsured persons in the USA, and tailored the underlying metrics to the reality of several rural and semi-urban (slum) locations in India.
The ten benefit types that were included in the CHAT board reflect a synthesis of three sources of information: (i) published sources regarding health insurance in India (ii) utilization data from a household survey we conducted, and (iii) knowledge of the team regarding health services available locally.
At the end of the elicitation process, respondents were overwhelmingly positive about the experience, and upwards of 95% reported an interest to buy the insurance product they had just designed.
Which element of the program proved itself most effective?
The element of the programme that proved itself most effective was the receptiveness by the clients.
At the end of the elicitation process, respondents were asked about their satisfaction. Questions and responses were as follows:
“would you recommend CHAT to others?” 98% answered yes;
“would you be willing to accept the group’s choice of a plan?” 99% said yes;
“how much would you trust a group of consumers using CHAT to design a health insurance plan for you or your family”, 67% said “a great deal” and 28% said “somewhat”, while only 4% said “very little” or “not at all”.
This is corroborated in overwhelmingly positive answers to 12 other questions on fairness, clarity and relevance of the process.
Number of clients in the last year?
In the past year CHAT was implemented in upward of 142 villages (in Maharashtra, Karnataka and Rajasthan) sample size: 2234 persons, representing a total population of some 200,000 persons
What is the potential demand?
Potential demand is as broad as the potential demand for health insurance among rural and poor persons in India (counted in at least 200 million persons), plus demand in other countries.
The completed CHAT exercises strongly suggest that this is the kind of entry-point activity that would be replicated in every place where health insurance is offered to groups (as distinct from individual marketing and sales).
As most poor persons live in tightly knit communities, the potential of CHAT to serve as the vehicle to give people choice in health insurance, and thus attract them to exercise sensible rationing of resources, based on local conditions and group experience, is universal.
Funding permitting, we will explore the demand also in Africa, where the notion of community and group-affiliation is also very strong, and where the potential demand for CHAT is also very promising.
Scaling up Strategy
Our scaling-up strategy is based on three thrusts: (i) improve the instrument; (ii) expand activities in India; (iii) expand in other countries.
The potential of CHAT to serve both as a source of information about clients’ choices and as an advocacy tool to improve awareness among clients can be maximized when the metrics used to design the simulation exercise offer a faithful representation of the local reality. We have evidence of significant differences across locations in health needs, costs and supply, and as people are well placed to discern which benefits give them good value for their money based on local cost-experiences, the benefit package options must also reflect services available locally and costs charged locally. The CHAT board used for field-testing in India reflected the analysis of a HH survey we conducted. However, the time and cost of conducting a survey and analyzing data impedes scaling. We plan to overcome this difficulty by devising a cheaper alternative: we will a) define more accurately the minimal information needed to customize the CHAT board to reflect location-specific conditions; b) elaborate an efficient and cost-effective methodology to obtain this information; and c) define a generally applicable actuarial model for rapid adjustment of the CHAT exercise to clients’ priorities everywhere.
The other scaling strategy is to perform the CHAT exercise routinely as the first stage of introducing health insurance among rural and poor persons. The initial field experiments have already created much more demand for the exercise than we could satisfy, in part because of the very enjoyable character of this group activity. We have established excellent links with networks of grassroots organizations and federations of NGOs, and through these links we can be introduced in many places across India. An additional phase planned for implementation within the next 3 years would be to bring the CHAT tool to other low-income countries.
Stage of the initiative:
0
Expansion plan:
See answer under "Scaling up Strategy"
Origin of the Initiative
Repeated interactions with villagers and slum-dwellers in India, South Africa, and elsewhere gave us strong feeling that we were ineffective in communicating what health insurance is all about, and why it is good for poor people.
By chance, we fell upon a scientific article reporting on an experiment in the USA that used a game to elicit the choices of uninsured people regarding health insurance benefit packages. David contacted the Marion Danis (in NIH), explained what we wish to do in a completely different setting and a different target population… and our US contacts became our partners. Many conference calls later, we had a “new CHAT. And after more than a year of field experimentation, the greatest pleasure is to observe the great fun people have playing CHAT…
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Sustainability
What are your two main challenges to finance the growth of your initiative
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The Story
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Comments
Hi! First of all let me congratulate all those at the Micro Insurance Academy for this idea which could hopefully become an important first step towards providing tailored healthplans for those who, until know, have been and for the most part continue to be, considered incapable of understanding healthplans and thus deciding what is "best for them". Empowering communties that are trapped at the bottom of the pyramid and having them decide together what health plan best suits the community's needs is a truely innovative approach and succeeds in breaking several preconceptions we have today which are in my opinion very dangerous (e.g. when you are illiterate you simply do not have the possibility of being a decision-maker of your own life, that healthinsurance is a complicated thing and is only interesting to the "better-off" etc.)
Watching the video, and the way the CHAT groups are carried out, I do have a question however on how these groups are actually created. More specifically I noticed that groups were composed either entirely by women or entirely by men... I can imagine that the health needs of males are diferent from those of females but how do you get these groups to decide which family healthplan best suit the community as a whole? What structure would a CHAT group have for that kind of a family plan? Do you think females by themselves are better suited to discuss on plans that concern their children? Or should males also take part in it? Maybe my question is irrelevant as the video just showed that a female/male division was the best strategy for the community being filmed and that it all depends on the cultural context in which you are in ....in any case, I would love to have your comments on this. Thanks!
Hi Virrose.
You are right that in the CHAT video one can see groups composed of males and of females, but rarely photos of mixed groups. We also have film footage of other groups, from other villages where all groups were mixed male-female. Essentially, just as the exercise emphasizes "people's choice", the first choice the respondents make is whether they would like to participate or not. We do not pay participants, we simply invite those who wish to join. Some groups met at times of day when a mixed composition was more difficult, and in other cases the composition was a deliberate choice, which we respected.
The more interesting part is that we have not found a significant correlation between gender and the benefots chosen, except that (as you mention and as could be expected) females chose maternity more often than males. Actually, I must qualify even this choice, because we saw that in the first round of the game more women chose maternity; but in the second round of the CHAT exercise, when the entire group selected the benefiot package that would apply to the entire group/village, mateernity was selected almost in all cases by both males and females. More generally, we noticed that when the group engaged in collective choice, it included benefits that were useful mainly to the more vulnerable segments of the group, such as pregnant women, children, people with handicaps (groups chose to include medical equipment that was necessary for some but not all people) etc. We think that when the group makes a choice for the group, intra-group solidarity is more visible compared to the situation when each person makes a choice for him/herself alone. So CHAT gives people a unique opportunity to act as groups and convert the mutual help that is part of vilage life into a format insurance package.
Hope that this answers the question, and thank you very much for raising an excelent point.
Incidentally, those who have not yet seen the video and would like to, the URL is www.microinsuranceacademy.org and then clic on CHAT at the right side of the screen. Enjoy, and thanks for posting more comments/questions/suggestions.
David
This innitative sounds really ingenious! To empower poor communities and individuals through a "game" is really inventive and I also think - effective... as everybody, whether poor or rich, whether literate or illiterate is ready to have some fun, but also to try to get control over his/her own situation (in the game or in reality).
And trying to empower people to take decisions for their own health - not only, but also for the health of the community - that is something really indespensable in areas like that... many other countries will need that as well!
So, I congratulate the Microinsurance Academy for this undertaking and would like to pose a question, regarding the practical use of it. I am not sure whether I understood well, but is this only "in theory" aiming at empowerment and creating skills for desicion-making and consensus or these benefits are really received somehow by the community?! Or might be received at some other stage?
Dear Mariana: thanks for your comment and for your question. I am sure many readers are wondering, like you, what happens once the CHAT exercise is finished. The answer is that the interaction between the participants in CHAT and the organizers ends when the exercise ends; however, the information collected during the game in many groups is then analyzed, and provides a unique evidence-base for design of not only of insurance benefit-packages, but also health policy and decisions by policy-makers on what to fund and what to subsidize. So, the follow up includes (i) in some cases the launch of an insurance plan based on the benefit package, and (ii) quality information for policy makers, NGOs and anyone interested in health financing on what the clients want, what matters, and what poor people can pay.
Readers who would like to get references to published analysis of the results are invited to post a query, and I shall be pleased to direct you. Incidentally, readers from India can expect to read more about CHAT analysis in the Economic & Political Weekly that will appear on 11 August (next week).
Thanks again for your interest, and keep sendign your comments and questions.
David
Thanks for this great project. The team at MIA has really done a fantastic job in adapting this product to bring it to market for a population that needs to be consulted at every step of the insurance process. What I find the most interesting is the opportunity to scale this product. I hope that insurance companies on a wider scale (in the development, IO, NGO) context will see this initiative as valuable and can also adopt it. I'm wondering what the cost implications are for these companies? I think in due time they will see the value in having the input of the broader community and the traditional method of designing insurance solutions based on biased information will be let go.
The fact that this process is a free product that can be used to engage many stakeholders is quite appealing. By bringing together groups of people to come to a common understanding of what their health insurance needs are, the product will be more readily accepted and hopefully more appealing for market - meaning the insurance companies will be more sustainable (profit making) in the long run.
Congrats again to MIA!!
Hi everybody, nice to see we have a space to talk about CHAT and about the micro health insurance. I had the chance to participate the last year's CHAT investigation in Rajasthan, and I'd like to say something about what I've seen and what I think about the project.
First of all, people can understand quite well the game, regardless their education, age and wealth background. They are absorbed by the game and play it seriously.
Secondly, CHAT is really a good tool to introduce the idea of micro insurance to the poor and illiterate people. After our session, people often stayed and continued to ask question and to discuss the choices.
Thirdly, we can always find a kind of consensus on the major interests and the diversification on the minor interests which means we do be able to draw some interesting points from the survey for the design of the insurance police.
However we felt sorry that we had only a small part of picture for the moment. We would love to see what happened in other regions with other parameters of background. And that’s why I’m very glad to see this project came into being. It makes our experience to be a beginning but not an end. It calls for more attention and more reflection on the question. It builds a bridge between the scientifically research and political practice. All my best wishes to this energic new “baby”.
As a facilitator of CHAT exercise in Maharashtra, I have seen how the players gradually gain understanding of health insurance as they get involved in playing the game. I found CHAT an excellent tool to make the illiterate poor understand the health insurance concept (which is an extremely difficult thing to do, let me tell you!). It is also an excellent tool which helps the facilitators/organizers know what the poor people’s priorities in health insurance are. Though at the time I was not much aware about what the exercise was going to culminate into, I am glad an institution like MIA will continue to use the innovative game for product design.
Cheers!
With the recent release of Michael Moore's latest film, Sicko, it is clearer now than ever before that individuals, rather than institutions, understand the health needs and desires of populations all over the world. CHAT offers a brilliant medium of bringing that understanding and reality to the decision makers and also brings an understanding of the ground realities to the consumers which has before now been difficult to communicate. I believe that with the creativity of organizations like the Micro Insurance Academy promoting innovative tools to create social change in one of the trickiest of development sectors, India will prove to be a model in providing an insurance that the people want to those very people who need it the most--the poor.
I am doing some work on creating an affordable health insurance product for the low income market in South Africa. We realised after reviewing available research, talking to people in the target market and visiting facilities that people use that we have no idea what the market wants and would be prepared to pay for - which obviously makes it fairly difficult to design a solution that we hope will be voluntarily purchased. Critically, research methodologies and surveys that simply ask people what they want and how much they are willing to pay are not particularly helpful as we are never sure to what extent people really understand the options and to what extent they are really willing to trade off benefits and price. I showed the CHAT video clip to our client who were really fascinated with the process and felt that it would generate insights they could use to design a solution with a greater degree of confidence.
MicroInsurance must surely be the next Blue Ocean in expanding health protection to the poor.
Nine of the top ten project proposals by number of comments at time of writing discussed care giver/provider innovations, this is the only project that seeks not so much to innovate a product area... but to innovate an entire and uncontested market space; a truely disruptive and innovative "Blue Ocean Strategy" (google this for details).
This said, while I can see where CHAT and an MicroInsurance Academy fit in, social enterprises would still seem to need entrepreneurs! How can these be identified? How can we get them trained in and back out in the community making their local insurance (health and other income protection) companies? How many are we talking about? CHAT and Micro Insurance Academy can provide intellectual capital but what about start up capital? How can we link the two?
To date we have only seen small iniatives, forays in the coastal waters (certainly compared to the vast billions spent on support direct service provision), I wish you luck in gathering together enough support to mount a serious expedition to travel this Blue Ocean. I admire your courage and share your belief that if we can conquor fear of the unknown; there is a new world of enourmous untapped potential out there...
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