Wharton Journal

Issue date: 4/7/08 Section: Perspectives

In the time one takes to read this article, approximately 200 children will die of preventable causes. Thankfully, many organizations are working toward lowering the childhood mortality rate and recent advances have been made. One innovative concept currently in development by the nonprofit Foundation for International Medical Relief of Children (FIMRC, www.fimrc.org) is that of micro-health insurance. While several for-profit organizations are exploring ways to develop business models around micro-health insurance in countries such as Namibia, FIMRC is focusing its efforts in the communities where it currently operates children's health clinics.

The FIMRC model assumes a willingness by the community members to improve their own health if given the appropriate resources. Furthermore, given that FIMRC works in communities where the average daily wage is often below $1-$2, the model was designed such that community members could earn the health insurance instead of purchasing it. Specifically, FIMRC is in the process of developing a system whereby health credits can be earned by achieving certain health goals or attending health education workshops.

Take for instance FIMRC's project site in Bumwalukani, Uganda. Weekly health education sessions have become a popular means by which community health issues are addressed. The women's group often highlights needs in the community and the group leader facilitates a solution or makes a plan of action. The incorporation of a micro-health insurance model will now provide each attendee with a health credit simply for being present at the workshop. If all members of a pre-selected workgroup attend the workshop, an extra health credit is awarded thereby encouraging neighbors to support and monitor one another.

Another way to earn health credits is by the mother bringing her newborn child to the clinic for vaccinations and documentation of the child's birth (up to 80% of births in some areas of sub-Saharan Africa go undocumented). The mother then receives two health credits for bringing her child to the clinic. FIMRC asserts that by designing a system where health credits can be earned, community members will take an active interest in their health and will then be rewarded by the option to "purchase" health insurance using their accumulated health credits. The health insurance will then cover secondary or tertiary health care needs such as eyeglasses or even surgery.

The question facing many small nonprofit organizations is how to distribute very scarce resources in a community where everyone is in need. Using a microhealth insurance model based on awarding health credits for positive health behaviors, FIMRC hopes to demonstrate an efficient allocation of scarce resources to those who are most in need and to those who take an active interest in their own health.

The micro-health insurance model encompasses a great deal more than the basics presented here. FIMRC is optimistic about its strategy and hopes that other nonprofit organizations will find such a system helpful. While FIMRC has operations in seven developing countries, it plans to do a pilot launch of its micro-health insurance program this summer in El Salvador and Uganda. As a team member involved with the micro-health insurance model, I am excited by the potential of the program. There are immense opportunities for involvement and I encourage you to email info@fimrc.orgif you are interested in getting involved with any aspect of FIMRC or the microhealth insurance program in particular.

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