Child Medical Insurance: Sustainable Innovations through Public and Private Partnerships in Rural in Rural China

PROBLEM: 62% of rural households in China can not afford medical services. 22% of under-five mortality in rural China results from families lacking ability to pay. The Rural Collaborative Medical Security System (RCMSS) can not effectively help rural children because it focuses on adult chronic disease. OBJECTIVES: Plan China is a humanitarian, international NGO working in the Shaanxi Province of West China. Plan China sought a cost-effective model to ensure rural children's access to adequate health services by building a dynamic partnership between communities, local government health service providers and private insurance companies. Together a new medical insurance policy was created with low premiums to cover children's relevant diseases and injuries. RESULTS: 6,376 children were covered by the policy (which Plan subsidized in the first 2 years). In the first year of the policy, 79 children became successfully made claims (worth USD 9000). All groups were satisfied with the results. Villagers learned to trust the insurance company and quickly and simply received medical care they would not otherwise have received. The Insurance company made a loss; but expects to break even in the following years once the premium is increased (which is possible, since they now have the trust of the villages and proof of a successful program); the healthcare provider did not make a loss and benefited from the brand awareness of participating in this pilot. INNOVATIONS. 1. The insurance company, much better trained and informed than individual families, monitors and approves the treatment provided by hospitals, eliminating information asymmetry. 2. The policy is specifically designed to cater for children's health and financial needs. 3. This project establishes a direct billing/monitoring system between the rural hospitals and insurance agents, keeping rural children and their families out of the administrative process. 4. The project creates sustained incentives for insurance agents to invest in IEC. 5. Transparent bidding process to select healthcare providers and insurance company to minimize cost and maximize benefits. CONCLUSIONS: The pilot has been an overwhelming success. It is proving to be financially sustainable, allowing Plan China to scale-up the pilot in other program areas; and use this experience to influence the government and the RCMSS.