Willingness to Pay for Community-Based Health Insurance among Rural Households of Southwest Ethiopia

TL;DR

This study assesses rural households' willingness to pay for community-based health insurance in Southwest Ethiopia, finding most are willing to contribute around 8.9 US$ annually, which informs policy on implementing such schemes.

Contribution

It provides empirical data on willingness to pay for CBHI in Ethiopia using a robust contingent valuation method, which is novel in this context.

Findings

77.8% of households are willing to join CBHI

Average willingness to pay is 8.9 US$ annually

About half of households are willing to pay the proposed premium

Abstract

Use of healthcare services is inadequate in Ethiopia in spite of the high burden of diseases. User-fee charges are the most important factor for this deficiency in healthcare utilization. Hence, the country is introducing community based and social health insurances since 2010 to tackle such problems. This study was conducted cross-sectionally, in March 2013, to assess willingness of rural households to pay for community-based health insurance in Debub Bench district of Southwest Ethiopia. Two-stage sampling technique was used to select 845 households. Selected households were contacted using simple random sampling technique. Double bounded dichotomous choice method was used to illicit the willingness to pay. Data were analyzed with STATA 11. Krinsky and Rob method was used to calculate the mean/median with 95% CI willingness to pay after the predictors have been estimated using Seemingly Unrelated Bivariate Probit Regression. Eight hundred and eight (95.6%) of the sampled households were interviewed. Among them 629(77.8%) households were willing to join the proposed CBHI scheme. About 54% of the households in the district were willing to pay either the initial or second bids presented. On average, these households were willingness to pay was 162.61 Birr per household (8.9 US$) annually. If the community based health insurance is rolled out in the district, about half of households will contribute 163 Birr (8.9 US$) annually. If the premium exceeds the amount specified, majority of the households would not join the scheme. Key words: community based health insurance, willingness to pay, contingent valuation method, double bounded dichotomous choice, Krinsky and Robb, rural households, Ethiopia.