Digital Financial Services Improve Health System Performance
By Emily Mangone, Abt Associates
Universal health coverage (UHC) is the ideal that all people have access to good quality health services without risk of financial hardship. It is an ideal many countries aspire to, but have yet to reach. Fortunately, the proliferation of mobile telephones and advances in digital financial technology have created opportunities for faster progress.
To better understand these opportunities, the USAID Local Health System Sustainability Project established an evidence base on emerging models of digital financial services (DFS) for health, and explored why, how, and under what circumstances these models contribute to UHC. The findings revealed the ways in which DFS are already improving health system performance in some countries.
Digitization of payments to health workers increases health system transparency, accountability, and efficiency, as well as provider satisfaction.
The digitization of payments to health workers during the Ebola outbreak in Sierra Leone shortened the average delivery time of payments from one month to one week. As a result, the frequency of health worker strikes dropped from an average of eight per month, to zero. Further, this digitization allowed the Sierra Leone government and development partners to identify and remove more than 3,000 duplicate provider records and 300 fraudulent payment recipients, which saved $10.7 million in 2015. The review found similar benefits from digitization of health workers’ payments in Bangladesh, Zanzibar, and Madagascar.
Digital financial services are financial transactions --including banking (savings and loans), insurance, and payment services (remittances, transfers, user fees, and bulk payments) -- that can be accessed via digital channels such as mobile phones, electronic cards (credit, debit, and prepaid), computers, and other electronic instruments.
DFS create transparency, and thus the potential to improve health care service quality, equity, and coverage.
M-TIBA is a successful DFS platform for health in Kenya. According to one study, M-TIBA digital claims data for payments to providers helped identify over-prescription of antibiotics for acute respiratory tract infections, which created an opportunity to improve health care service. M-TIBA also gave patients more decision-making power by providing updates in real-time about costs for specific medical procedures.
DFS expand health care coverage and equity.
In health insurance, new digital technologies, models, and partnerships add value and expand access and choice for customers. At the same time, they build value and improve operational efficiency, which can lead to extended coverage for the underserved.
- Digitization of health insurance enrollment and renewal. In Ghana, the National Health Insurance Authority digitized the insurance renewal process with a dedicated unstructured supplementary service data (USSD) application that allows members to use mobile money to pay premiums and renew their membership. During the four months after digitization, 1.4 million mobile renewals were completed and the number of new member registrations increased by 200,000. Increased renewals and new registrations were attributed to reduced wait times, transport costs, and opportunity costs.
- Pairing insurance and free telemedicine. In Bangladesh, Digital Healthcare Solutions offered a pilot that bundled insurance with telemedicine for customers of a micro-lender. Within the first week, 40 percent of subscribers were using the telemedicine service and the artificial intelligence chatbot function was getting 250,000 contacts per day. The service reportedly increased the amount of time that beneficiaries spent with providers and for many was the only access they had to health service providers.
- Integrating insurance with loan repayment. In Nigeria, insurer AXA partnered with financial technology provider Carbon to bundle health insurance with digital loan repayment terms. Carbon customers who took digital loans were offered a “VIP” hospital cash product as an incentive to repay on time. As individuals paid back loans, they simultaneously purchased insurance coverage that helped them if they fell sick and were unable to make payments.
There is strong evidence that digitizing financial services across the health system improves performance and advances UHC. National governments, ministries of health, and other stakeholders can spur these improvements in several ways:
Digitize the processing of claims for national health insurance programs, which will incentivize digitization at the facility level. Health facilities often experience long wait times for payments on claims; digitizing processes on both ends would speed things up.
Mandate or incentivize the digitization of parallel and upstream information systems in health facilities, such as electronic medical records or health management information systems. These systems facilitate the adoption of DFS that can easily be integrated for improved management of the facility.
Clarify and strengthen regulatory environments for mobile money operators and financial technology companies to encourage growth, healthy competition, and digital payment ecosystems.
Dedicate resources to train the health workforce to process and accept digital payments, and ensure that there is appropriate oversight and management at local, state, and national levels.
For findings on the impact of DFS on beneficiaries, see Digital Financial Services Can Support Health Care Use and Financial Protection
Read the full report: Digital Financial Services for Health: A Global Evidence Review
Emily Mangone is the LHSS Project Senior Technical Advisor for Digital Transformation.