Starting in Pakistan, Asher Hasan is providing quality, private health insurance to low-income workers in the emerging economies through an approach that distributes cost and social responsibility among several stakeholders affiliated with low-income beneficiaries.
The New Idea
In South Asia, where quality health insurance is available only to the wealthy, Asher is leveraging corporate, academic, large citizen organizations (COs), and small medium enterprise resources to finance low-cost, private health insurance for the working poor. His flagship plan, one of several he is currently testing, reaches domestic staff and shares costs across three payers: The well-to-do employer of the corporation, the well-to-do corporate executive and the informal domestic worker of the corporate executive who is the end beneficiary of the health plan—a maid, driver, cook, or guard. At present, the low-income beneficiaries are predominantly located in the large metropolises of Karachi, Lahore, and Islamabad but there are now almost 4,000 children from a rural, interior part of Sindh Province that are also covered. Asher’s Karachi-based team negotiates exclusive pooled-risk agreements with insurance underwriters and leverages the underwriters’ existing nationwide networks of quality, inpatient/ER-trauma healthcare delivery systems. With over 10,000 people now enrolled, he aims to extend affordable access to quality catastrophic healthcare to at least 320,000 people in India and Pakistan by 2015, achieving at least a 70 percent retention rate among plan participants as the effort advances.
Medical catastrophes often precipitate generational poverty among millions of vulnerable people across much of the developing world. Despite South Asia’s rapidly growing economies, public expenditure on healthcare remains an abysmal 2 to 3 percent of total GDP spending. Direct access to quality healthcare is too expensive for low-income people, and there is not an expectation, culture or familiarity among this group to be insured. Low-income families in urban centers are particularly at-risk of being trapped in poverty and indebtedness at the behest of healthcare expenses or catastrophic medical events as the cost of living and urban pollution/sanitation problems are much greater. If the primary breadwinner experiences medical trauma or loss of life, the whole family is left with no income, often leading to the children leaving school in order to work.
The health insurance industry is experiencing a period of double-digit growth, but currently health insurance products are commercially designed for more affluent corporate beneficiaries. No private health insurance company is catering to the low-income segment, which represents 96 percent of the insurable market.
In Pakistan, Naya Javeen’s first market, private healthcare is exclusively available to the corporate elite and employees of large multinationals—approximately 700,000 people have affordable access by being employed by these institutions. However, at least one-third of the country’s 170 million people earn less than $3/day and have little or no access to quality healthcare. Moreover, more than 99 percent of health expenses for the working poor are incurred out of pocket, and poor families spend anywhere from 20 to 40 percent of their total income on healthcare. Healthcare expenditures drive many to borrow from predatory loan sharks who charge exorbitant interest, and some low-income families ultimately fall into a vicious cycle of indebtedness.
Informal domestic workers are often confronted with significant complications—linked to culture, power, class—around asking employers for financial help when crisis strikes. Nevertheless, domestic workers will often ask their employers for a loan when faced with a financial emergency, and employers of domestic workers often ultimately bear the financial burden of their employee’s health crises. It makes more sense, Asher believes, for an employer to restructure this ad hoc unpredictable expenditure into a streamlined, pre-defined investment into their employee’s health. Low-income workers cannot rely on the public health system which is free in principle, but in reality is accessible only through bribes and is dilapidated, corrupt, under-resourced, and overwhelmed.
To extend quality care to low-income clients, Asher is scaling demand for private healthcare services through several approaches that share costs across a few payers affiliated with the low-income plan beneficiary. While he is testing out several approaches, his model focuses on domestic workers affiliated with the only segment of the population that is currently insured: Employees of corporations and large multinational agencies. These domestic employees number about 14 million in Pakistan and represent a promising initial market for Asher’s micro-health insurance model and approach. Because they are closely affiliated with the country’s wealthy and powerful, Asher also sees opportunities to guide a larger system change by shifting the mindset of the wealthy who also formulate policy change in the country.
Asher’s organization, Naya Javeen, distributes responsibility and cost across three payers: The wealthy employer of domestic staff, the company that is the parent employer, and the domestic worker who is the plan beneficiary. Naya Javeen’s underwriters have developed a matrix which computes the cost based on three considerations: (i) group size (ii) risk classification/profile of members, and (iii) annual coverage limits/benefit design. They typically have a single market price (the price Naya Javeen charges its customers) with discounting in rare circumstances. To give one example: Unilever has 800 officers/managers in Pakistan, with 15,000 workers associated with these officers as maids, cooks, drivers, and the dependents of these informal workers. The plan is structured so that Unilever employees pay 80 percent of the insurance premium for coverage ($1.20/month ideally through auto-payroll deductions); Unilever pays 15 cents per month and also cascades the health plan to its officers/managers; and the domestic workers themselves pay 15 cents per month. By leveraging these centralized distribution systems, Asher has reduced marketing costs as well as minimized the cost of distribution/collection that has been a barrier to sustainability in the micro-insurance industry.
Asher is creating new business development opportunities for its partner underwriters not merely by introducing them to a new market of low-income insurance seekers but also by introducing them to a new market of middle- and high-income insurance seekers. For each client Naya Javeen’s underwriting partners target in the corporate, academic, CO and SME sector, a proportion of their workforce and management are middle- and high-income. This middle and high-income population buys insurance plans for themselves and their families at commercial rates. Consequently, Naya Javeen’s underwriting partners—Allianz-EFU, IGI Insurance, Pak-Qatar Takaful and AsiaCare—tap into a business opportunity by working with the model.
Currently 72 percent of the client pool, many of them recently enrolled, is in the citizen sector (low-income staff/families and CO-run school kids); 10 percent of the pool is small and medium enterprise clients, 13 percent is multinational corporations (MNC) and domestic corporations; and 5 percent is academic. Asher expects that over time this will equilibrate to the following: CO: 20 percent; corporate/MNC: 30 percent; SME: 30 percent; academic: 20 percent. At present they have an 80 percent renewal rate but this is still a relatively small sample size.
To date, Asher has used his national media partners in radio and TV only sparingly to raise awareness of micro-health insurance. However, he plans to pursue a national-scale media campaign that will help raise awareness of the need to provide low-income employees and their families with affordable access to quality healthcare. Asher wants to run this as a revenue-sharing arrangement with media partners that will require no financial investment from Naya Javeen.
Naya Javeen has expanded to twenty-four team members, tending to four main functional areas: Business development (enrolling beneficiaries), member services (that serve the needs of their low-income members—the MS team includes four full-time in-house doctors and one dentist), corporate development (media/PR/communications, organizational learning and development and community mobilization) and Business Solutions (IT, business analytics, logistics, and administration) The team has marshaled and sustained significant pro bono support in accounting/auditing (U.S. accountants are KPMG and PK auditors are E&Y) and legal (Weil, Gotshal & Manges).
In ten years, Asher wants to have established two to three additional markets: Potentially Mexico, South Africa and one other country in Africa, and additional markets in India, UAE, Philippines, and Indonesia. He also is looking at the inclusion of a dental and vision plan to augment the core health plan.
Asher was born and raised in England until the age of eleven. At that time, his father’s untimely death prompted his family to return to Pakistan. However, his mother suffered a nervous breakdown and had to be institutionalized in England for over three and a half years, an event that pushed the family over the brink into a significant financial crisis. His father’s former bank employer kept the children in school on scholarship, but as Asher notes, they were outsiders looking into a world of affluence and socioeconomic apartheid: They attended private school yet understood that the family’s means were limited and growing more so by the day. This experience, more than any other, equipped him with insights and empathy that continue to influence him to this day.
As an adult, Asher trained toward being a surgeon in the United States. After spending the first part of his surgical training helping a few patients deeply, he realized he wanted to address problems at the systemic level within a dysfunctional healthcare system that often worked against the interests and welfare of patients. He transitioned initially into industry, and worked with a French-owned pharmaceutical company interested in extending its reach to new developing markets and addressing global disparity through tiered pricing of life-saving drugs. Asher later joined a biotech company and led a medical team focused on developing tools for obesity prevention, an issue that resonated with him personally, as his mother was obese and suffered chronic illness as a result.
During his tenure in the pharma-biotech industry, he obtained an MBA from New York University’s Stern School of Business and began to pursue the idea that would become Naya Javeen in 2008.