Affordable Health Insurance Scheme for Ready Made Garments worker in Bangladesh
SNV Netherlands Development Organization piloted an Inclusive Business project in Ready Made Garments (RMG) Industries in Bangladesh with the funding support of The Embassy of the Kingdom of Netherlands (EKN). The aim of the project is to test viable business solutions to improve workers health while Sexual and reproductive health rights (SRHR) are the priority. SNV invited interested private sector and NGOs to offer innovative business model which would ensure affordable, accessible and available health services to the worker. SNV also built the capacity of local providers in market analysis, design business model development, partnership building with RMG factories and business planning support to profitable business solutions. Through the process one of the private companies offered an affordable health scheme for workers which was totally missed.
Market Opportunity:
According to BGMEA around 4.2 million workers are working in the RMG sector in Bangladesh, 80% of whom are female. The price of the female workers health insurance is BDT 500 and thus the total market size would be yearly BDT 2 billion. Since they are the pioneer coming up with workers health insurance deserved to hold 50% of the market share and thus the expected market share for this product is around BDT 1 billion.
Business Opportunity:
The business model was focused on low income people working in RMG sector in Bangladesh. Their income is almost uniform and average income per day is below USD 3. The age gradation of the people ranges from 18-34 which indicates they are in the peak of reproductive age. The female workers are susceptible to sexual and reproductive diseases due to long lasting working hours, unhygienic menstrual management, malnutrition and poor working conditions. Most of the factories have their own medical centres with doctors but non- functional and thus workers health problems are unsolved, which also affects factory productivity and higher operational cost. Many of the factory owners and buyers are seeking amicable solutions but many are still far away, as most of the product and service providers have a lack of interest to serve LIP.
Initiation:
The business model was designed when SNV Bangladesh invited inclusive Business model to solve RMG workers Sexual and Reproductive Health and Rights (SRHR) which is funded by EKN. SNV Bangladesh facilitated through inclusive business training and workshop to understand the business model.
Pilot Approach
Market Study:
In 2014, Health Economics and Financing Research Group, icddrb, in collaboration with Bangladesh Diabetic Somity (BADAS) Funded by The Swiss Tropical and Public Health Institute, Switzerland conducted a base line study to assess the impact of health insurance on access and utilization of health care and to estimate out of pocket expenditure of workers without health insurance and also the health seeking behaviour. The findings showed that around 43% of RMG workers become sick and loose around 4 days salary due to sickness absenteeism. The study also shows that around 87% of workers seek health care services whose 40% cannot afford the health services due to high cost. Around 75% workers are willing to pay for health insurance.
Piloting the model:
The model started with the health insurance scheme in three selected factories to cover SRHR services along with health education. The aim of the model was to engage the factory owner to institutionalized workers health services at the same time ensure available quality health services. The total services are monitored through a database which preserve workers health history. The health services is maintained both factory and outside the factory.
Service provision inside the factory premises:
- Availability of qualified Doctors during working hours,
- Health education to aware workers health issues,
- Management sensitization for gender sensitive Health services
Outside factory premises:
Availability of qualified doctors and nurses with diagnostic and hospitalization facilities 24/7. Health Insurance card provided for privilege health services.
Unique feature of the Insurance:
- Zero cash transaction:
The supply chain of the services is maintained with a web base solution where all the payment is made with cashless transaction. All the stakeholders have the provision to monitor their respective factory workers total service delivered and frequency of patient.
- Dedicated service provider:
The health will be provided qualified service provider. The capacity of the provider was assessed and technical assistance was given for gender sensitive service delivery.
- Factory involvement:
Factory management interest built through quantifying the business benefits with the business model which evidence is created from the earlier stage of the implementation.
Initial challenges:
- Lack of willingness of the RMG factory owners to implement the project as there is cost associated with the initiative and there were no proven business case in the country.
- SRHR taboos and obligated by religious norms
- Insurance company were limited interest since higher risk associated with the coverage.
- Workers and management has negative impression about the insurance scheme.
With the health insurance scheme the workers have increased access to affordable health services and RMG factory owners pain also reduced to ensure better health facility for their workers. The average health seeking behaviour of the worker increased and the return of the investment of the health is seen to be positive impact and contributing improved working condition and productivity.
We are in the process of scaling up the initiative to other factories at the end of the year 2016.