Managed Health Solutions

By 2020, the emerging world’s first “microHMO for the Marginalized” will have catalyzed a more socioeconomically just system in which low-income Pakistanis and Indians are socially and financially protected through health microinsurance.

Learn more about Naya Jeevan at: www.njfk.org and http://www.youtube.com/watch?v=YJYFFuLFrbY&feature=feedlik

About the project

Naya Jeevan is a catalytic intermediary that risk-pools clusters of low-income individuals from both formal and informal sectors under a single, socially protective consortium. It negotiates commercial group health insurance from established and highly reputable insurers like Allianz, AsiaCare, IGI and Pak-Qatar Takaful at preferential, below-market rates on behalf of its members. The members not only benefit from the bulk-purchasing discount but also from Naya Jeevan’s package of Value-Added Services (VAS) that wraps around the core microinsurance product. These VAS create tangible value for beneficiaries, promoting retention and client/beneficiary satisfaction. Through the insurers’ preferred provider network of panel hospitals, beneficiaries are provided affordable access to high quality, private health care throughout Pakistan.

Deficiencies of the public health care system include frequent shortages of drugs, diagnostic material and supplies; this adds unpredictable (and often unaffordable) cost to travel expenses and loss of income/productivity due to the prolonged waiting times required to access public health. Therefore private health care is generally preferred even by the working poor in Pakistan. For health care expenses that are not conventionally insured – such as outpatient consultations and medicines – Naya Jeevan has arranged wholesale discounts that are passed on to its members, providing further relief in healthcare financing.

Naya Jeevan’s paramount innovation is that, unlike other health MI ventures, it does not try to shrink insurance premiums to meet the ability to pay of its target population. Instead, it systematically seeks well-resourced sponsors who have a defined relationship with the beneficiary (e.g. employer/employee, contractor, supply chain partner, etc) and therefore have a reason and ability to pay an appropriate premium for a low-income beneficiary. Given the negotiated discount on commercial – not specifically micro – insurance policies, the premium for the insurance Naya Jeevan provides is somewhere between conventional and microinsurance (~US$2/person/month); and so are the benefits (~US$1800/person/year; benchmarked to cover heart bypass surgery in our nationwide network across Pakistan).

This ‘strategic cross-subsidy’ allows for Naya Jeevan’s second main innovation. Since higher premium affords higher administrative margins and higher claims payments, a core component of Naya Jeevan’s value proposition is highly dedicated, personalized attention to every insured, delivered through a 24/7 ‘family doctor’ Telehealthline, targeted preventive health education interventions, and most importantly an initial health risk assessment of every insured beneficiary, which often detects existing, undiagnosed ailments that can be treated before expensive complications arise. Pre-existing conditions are commonly insured, so upon a diagnosis of a cataract the insurance immediately takes care of the problem and restores the person’s eyesight, productivity and general health and wellbeing. This approach provides two tangible experiences to the insured: a relatively lower-impact experience in that everyone meets a doctor (often for the first time in their life), and a relatively higher-impact experience when someone makes use of the insurance shortly after inception. When the insured belongs to a densely clustered group, e.g. workers at the same factory, such stories of insurance utilization spread faster than in more fragmented groups, e.g. borrowers of a microfinance institution, and thus have a stronger positive reinforcement of Naya Jeevan’s responsiveness and credibility and the trust it subsequently raises in insurance in general. To richen that positive experience, Naya Jeevan maintains a ‘Health Rescue Fund’ deposit with its insurers to cover uninsurable or legitimately rejected claims. On the other hand, the individual screening of every insured’s health status (along with some socioeconomic indicators) provides a baseline to measure social and health impact. It also serves to guide the primary health education interventions, targeting issues related to substance abuse, nutrition, hygiene and workplace safety. These workshops are provided both by Naya Jeevan and by strategic NGO and corporate partners.

Naya Jeevan receives revenue in the form of insurance contributions from employers, financial sponsors, employees and beneficiaries. These contributions are usually received as annual payments in advance. The main cost to Naya Jeevan is health insurance premium payments that are paid to the insurers, and operating expenses. Once the necessary scale is reached the operating expenses are expected to be covered from the 25 per cent to 40 per cent differential between premium received from sponsors and premium paid to insurers.  Naya Jeevan aims to achieve sustainability (that is, positive cash-flow) at approximately 75,000 enrolled lives, projected for 2013.

Naya Jeevan leverages corporate distribution networks, supply chains and human resources to distribute, market and co-finance health insurance to low-income beneficiaries.  This serves the strategic interests of these corporations not only as part of their corporate social responsibility but also by rewarding and incentivizing loyalty among their low income staff and value chains (e.g. supply chain distributors, retailers, etc). It also leads to the development and empowerment of their future customers and markets. 

Naya Jeevan has initially focused on three target populations:

1. Informal domestic workers(cooks, drivers, gardeners, etc. who are numerous in upper and middle class households in Pakistan). These workers are approached through the heads of the households they work in, who in turn are approached via their employers, preferably large (multinational) companies such as Unilever which cascade Naya Jeevan’s health plan to their managers/executives and encourage them to subsidize the healthcare of their informal workers.

Buying the insurance for their domestic workers is a voluntary decision of the household head (the corporate manager/executive), and insurance is expected to be automatic for the domestic workers, that is: mandatory but mostly paid for.

2. Low-income (mostly blue collar) contracted/part-time staff, e.g. previously uninsured corporate workers, factory workers and staff of SMEs (e.g.  restaurants, small retail outlets, etc.)

Buying the insurance is a voluntary decision of each employer and the insurance is automatic for each eligible employee, i.e. provided on a mandatory basis but free of cost. Eligibility rules are determined by the employer, for example to reward loyalty for long term employees.

3. Reaching suppliers and retailers through the consumer goods companies they are affiliated with.

The consumer goods company can reward successful SME retailers by sponsoring automatic health insurance for them/their low-income employees, or convince suppliers/contractors to co-finance health insurance for their workers.

Naya Jeevan’s unique value proposition lies at the intersection of health care financing and institutionalized philanthropy (insurance premium for low income people paid by high income people). This has also led them to explore other innovations. One such innovation is the provision of self-insured managed care for children at NGO schools with insurers playing the role of a Third Party Administrator and providing their network/infrastructure. The cost effectiveness and utility of this approach is being systematically compared to conventional risk transfer provided by Naya Jeevan to comparable control groups of NGO school children.

Another innovation is an initiative to help children with disabilities enroll in Naya Jeevan’s managed care health plan via a sustainable solution in a project branded “Artpreneurs for Change”. This is a collaborative effort with the Network of Organizations Working With People With Disabilities in Pakistan (NOW-PDP), Fulbright alumni and art therapists. Seed funding was given by the US State Department as a part of the first ever Alumni Engagement Innovation Fund. The project aims at running art therapy classes in three schools for children with disabilities and to use auction proceeds from the resulting artwork to raise awareness and funds for the healthcare of these children.

To reinforce the concept of community engagement and giving back, insured children from NGO schools participated on a voluntary basis in an after-school activity to make bracelets to help raise money for children with disabilities, generating PKR 17,000 in 15 days.

More can be read here

Date created: February 2012