La microfinance peut-elle répondre aux besoins de protection sociale des plus pauvres ?

Micro health plans for macro benefit

Democritus touted the goal of good health in the fifth century B.C., when he said that "without health, nothing is of any use, not money nor anything else" ("On Diet:). Descartes wrote in 1637 ("Discours de la Methode") that "the preservation of health is ... without doubt the first good and the foundation of all the other goods of this life."

And the positive effect of wealth on a nation's health, whether direct or indirect, has long been presumed. More recent evidence suggests good health is a major driver of economic development and a necessity for the poorest nations' ascension out of poverty.

That said, the newest excitement in fighting poverty is the spectacular success of innovative microcredit experiments championed by Nobel laureate Professor Muhammad Yunus, a Bangladeshi economist. Against the advice of banks and government, Mr. Yunus introduced microloans to the extremely poor without any collateral, any legal structure, any group guarantee or borrower liability. The numbers document a dramatic escape from poverty from these private sector, bottom-up bets on the individual as entrepreneur, as opposed to traditional top-down, bureaucratic government-run charity programs.

As of May 2006, private Grameen Bank loans had reached more than 6.61 million borrowers, 97 percent of them women. More than 33 million people in Bangladesh have benefited from the 2,200 branches of Grameen Bank in more than 71,000 villages throughout Bangladesh.

An astounding 98 percent of loans have been repaid, a far lower default rate than any other known lending program. Returns from Grameen Bank in 2000 from microfinance were a remarkable 4.3 percent. More than 50 percent of the people in the program have already moved out of poverty.

How is microfinance related to health and medical insurance? It turns out microcredit did not always succeed in bringing people out of poverty, the major reason being the burden of out-of-pocket health-care payments. In the absence of health insurance, family illness was consuming any money earned. The negative impact of health costs on the success of microloans was also noticed by Jamii Bora in Nairobi, Kenya, who started a 50-person microloan program there in 1999 that now serves some 120,000 clients. Partnering with a local hospital, Jamii Bora offered clients health insurance for $15 a year to cover the borrower and up to four children. Grameen in Bangladesh responded by creating a separate, inexpensive health insurance program. A Grameen family pays $3 per year for the entire family's health insurance coverage.

Other examples of small-payment, consumer-based health insurance include prepaid "health care subscriptions" with no links to health status or care usage, community-based risk pools, availability of micro health loans, and health education lessons at microloan payment meetings.

This is microinsurance at work: a personal microcash payment purchases private health insurance to reduce the risk of future sickness. Individuals are empowered with personal financial investment and access to information; financial devastation due to medical expenses is avoided, all without the deleterious effect of a third party footing the bill. Admittedly, medical insurance and health care in these countries are still in their nascent stages; additionally, creative hybrid partnerships with medical clinics, physicians and volunteers are part of the equation. (Early health insurance had similar beginnings in the United States.) So although this may only be a start, the preliminary results look compelling.

According to recent World Health Organization estimates, 25 million households every year (more than 100 million people) are forced into poverty due to illness and the struggle to pay for health care. The case for health insurance is overwhelming, yet the vast majority of citizens in many of the world's emerging nations have none. Why?

Although many reasons can be listed, no recipient is more worthy of blame than the misguided insistence of government-funded health insurance. Government insurance systems historically entail massive administrative costs due to bureaucratic forces, overregulation, lack of transparency, and long lists of politically motivated mandates. Privately run health insurance products can be rapidly employed in flexible and consumer-oriented ways and can even generate reasonable profit -- the results speak for themselves even in the poorest circumstances.

Societal health as an essential driver of national economic development is clear. (...)

Allowing that sort of creative collaboration between individuals and the private sector would be powerful. And such a collaboration isn't just for economic development and prosperity; people's lives depend on it.

Scott W. Atlas is a senior fellow at Stanford University's Hoover Institution and a professor at the Stanford School of Medicine.

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