Economic Analysis of Social Health Insurance in Developing Nations

This report examines the impact of the Social Health Insurance (SHI) model on middle-income countries, emphasizing its role in healthcare financing and economic stability. The author highlights that SHI, often legislated by governments, receives funding from various sources including enterprises, households, and government, thereby covering a significant portion of the financial responsibility for healthcare. While SHI typically covers basic healthcare, it may exclude expenses like accommodation and specialized treatments. The report notes that SHI contributes to population and service coverage, offering financial risk protection, but also acknowledges the existence of inequalities in this protection. It discusses the importance of cash benefits in this model and emphasizes the long-term stability benefits, such as efficient resource utilization. The report references key literature to support its analysis, including the works of Mills (2014) and Hsu and Liao (2015), to provide a comprehensive understanding of the SHI model's strengths and weaknesses in these economies.

Running head:SOCIAL HEALTH INSURANCE
SOCIAL HEALTH INSURANCE
Name of the student
Name of the university
Author note

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SOCIAL HEALTH INSURANCE
Health economist finds the health care sector as an interesting contributor to the
economy and aims to improve health. According to Mills (2014) the ability to provide basic
health service by middle-income countries is not enough to increase economic development,
so designing a health financing system is one of the ongoing topics. The paper has correctly
focused on the impact of social health insurance model in middle-income countries.
SHI is legislated by government and the health system receives money from
enterprises, households, government and other organizations. The fact of covering the
financial responsibility of households is true. The basic health care is covered by SHI but it
does not include expenses of accommodation, surgery, treatment by professional and with
extra facility. SHI cannot be considered as public or private domain. SHI covers the informal
sector. However, SHI fails to cover the individuals engaged in the formal sector. In tax-based
system half of the public expenditure is financed through revenues other than payroll taxes
such as social health insurance. It is correctly said that social insurance model contribute
highly towards the growth and stability of the country’s economy. SHI provides population
coverage and service coverage. The universal coverage guarantees financial risk protection
however, existence of inequalities in financial protection in SHI is another drawback of the
system. Cash benefits play a key role in this model. Despite of the challenges in SHI model,
this model does not come with waiting time and non-urgent situation like ageing population
demographics and overutilization of health resource works efficiently for long-term stability
(Hsu and Liao 2015).

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Reference
Hsu, M. and Liao, P.J., 2015. Financing National Health Insurance: The Challenge of Fast
Population Aging. Jing Ji Lun Wen Cong Kan, 43(2), p.145.
Mills, A., 2014. Health care systems in low-and middle-income countries. New England
Journal of Medicine, 370(6), pp.552-557.