Nudging low-income people towards inclusive health insurance

Wednesday, October 30, 2019

Nudging or incentivising people towards adopting healthier lifestyles is part and parcel of innovative comprehensive health insurance. The recent Expert Forum on using inclusive health insurance to drive health outcomes - moderated by Greg Scully - brought together Adelaide Odhiambo, CEO of Bluewave Insurance, Benoit Renard, CEO of Triggerise and Lisa Morgan from the ILO's Impact Insurance Facility.

As the new Landscape Study of Africa shows, health insurance penetration is less than three percent in some developing countries, and experts are looking to nudge theory and behavioural economics to reinforce positive behaviour through rewards and other incentives. Lisa Morgan suggested there are several ways that health insurance can help drive better health outcomes - firstly and most obviously it pays for treatment, but it also helps create peace of mind which is good for mental health. Agricultural insurance can help ease food insecurity, which in turn leads to better health.

Morgan said that faced with an increase in non-communicable diseases (NCDs) such as diabetes and heart disease, preventative action is vital. “We all know that prevention is better than cure,” she said. “We need an holistic approach which bundles together the full package of health interventions for comprehensive cover.”

Reward schemes based on nudge theory which influence people’s decision making without them realising it have been proven to work - for example, Discovery Health and Vitality rewards its 10 million members worldwide to live healthier. But these schemes are unaffordable to the vast majority of low-income people who are most in need of cover. In most countries, she said, health systems are focused on sick care rather than health care - the inclusive insurance sector can help change that narrative by focusing on both health and wellness. There are opportunities for inclusive insurance providers to tap into the ‘wellness economy’ by offering value added services.

Benoit Renard said that while Triggerise is not an insurer, it uses a lot of the tools and mechanisms which are core to the insurance industry to create health impacts at the bottom of the pyramid in Sub-Saharan Africa and India. Triggerise is a non-profit tech organisation which aggregates both demand and supply of health insurance.

Nudging also plays a big part: “By using rewards and non-financial nudges we trigger and measure behaviour uptake and continuation, while adjusting and optimising financial incentives,” said Renard. A typical user journey involves her (it usually is a her) meeting one of the scheme’s community health workers. She is told about membership and how to join, she enrols either by paying a subscription or, if she is eligible, for free, and she learns  how to navigate the different offers, where to go and what to access. If she has a simple phone she can get an SMS with a list of the nearest clinics and pharmacies in the scheme, or a map on a smartphone. She can then go to one of the clinics or pharmacies and access free or discounted services.

“Along the way she is nudged towards certain behaviours, she can commit to certain behaviours, she can be rewarded for that through loyalty points, she can get reminders and associated offers along the way,” said Renard. “Nudges could include reminders not to forget an appointment, or asking her to rate services. We carry out a systematic review of the power of each nudge.”

“It’s no good waiting a couple of weeks to reward users. The most successful nudges have been those which provide micro rewards immediately after a behaviour is witnessed. My favourite nudges involve the idea of commitment, when users pledge certain behaviour and get rewarded if they see it through.”

Bluewave also use nudges to incentivise behaviour. “Lower income segments have more exposure to health risks from poor nutrition and poor sanitation, so we build in incentives and nudges to encourage them,” said Adelaide Odhiambo. But, she said, they are focused on overcoming the main barriers to health insurance uptake: cost, trust, understanding and efficiency.

Bluewave’s basic text message service allows access to insurance for around three dollars a month, and they also have an app for comprehensive cover for those with smartphones. “We needed to step up to get the health care model much closer to those who need it other than through conventional distribution channels. Our capitation scheme enables us to get affordable health care to different communities such as church groups without them having to go directly to the insurer.”

“We are still on a journey to see how we can get accessible affordable comprehensive health care for everyone who needs it,” said Odhiambo. “There is a huge demand for it but it is still largely untapped, because insurance companies are shying away from the microinsurance sector. We are still figuring out how we can get health cover into the hands of every single African.”

Lisa Morgan called for more innovation from insurers. “Health insurance is a difficult product to orchestrate but it is really important. It would be great if people start thinking more laterally, using behavioural economics and asking how we can expand upon business as usual. For example, hospital cash has been around for some time, it would be nice to see more innovation.”

“We need to remind ourselves that innovations are better when they are driven by user needs,” concluded Benoit Renard. “We had a lot of beautiful powerpoint presentations, but when we were confronted with the reality we had to be humble and open to new ideas. We should focus on users and the evolution of their needs.”