The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian Development Bank Institute

(ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in
this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

Missing the missing middle

The case of Lao PDR
Azusa Sato
Health Specialist, South East Asia Department
Asian Development Bank
 1
Lao PDR background
2
Social protection: HEF, FMNCH and NHI
3
Remaining issues and way forward
 Lao PDR macroeconomic context
• 8th National Socio Economic 2017 indicators
Development Plan (NSEDP)
(2016–2020): graduation from GDP growth (%) 6.8
LDC status
GDP per capita ($) 2,579
• Equitable and inclusive growth
requires targeted policy Poverty rate (%) 20
interventions on basic social Fiscal deficit (% of 6.2
services for vulnerable groups GDP)
• Government spending on health
Public debt (% of GDP) 68
low, reliance on out of pocket
(OOP) expenditure (45.1% of
total health expenditure; target
30% by 2025)
 Health outcomes
• Good progress on many health targets Indicator 1995 2015/6 SDG
• But compared to neighbors, fares poorly and target
MNCH indicators remain challenging Life 56 68 -
• U5 mortality remains the highest in SEA expectancy
• IMR 48.9/1,000 (target 37) (yrs)
• child malnutrition (underweight below 5 years) Maternal 905 206 226
27% (target 20%)
mortality (per
• Equity gap 100,000)
• Children in the poorest quintile are 3.6 times more
likely to die before reaching 5 compared to those in
the wealthiest quintile U5 mortality 162 63.9 70
• Children born in Phongsaly province are five times (per 1000 live
more likely to die before reaching 5 than those births)
born in Vientiane City
 1
Lao PDR background
2
Social protection: HEF, FMNCH and NHI
3
Remaining issues and way forward
 Social protection schemes (2016)
Formal Sector
1. Defense - all police/military +
dependents
2. Civil servants - National Social Security
Fund (NSSF) - State Authority of Social
Security (SASS) - all civil servants and
dependents
3. SHI for private sector employees
(National Social Security Fund (NSSF) -
Social Security Organization (SSO) –
workers of state and private enterprises
+ dependents

1. Informal sector - Poor (HEF) - households

below the poverty line and in extreme poverty.
1. Informal sector - Non-Poor (NHI,
2. Priority population (Free MNCH) – services for
CBHI and partly SSO): self-
mothers and children <5
employed and informal sector
 The shift towards National Health Insurance
• Drastically increased population
coverage
• Enlarged risk pool
• Reduced fragmentation
between different schemes
• HIF and NHIB
• By June 2019, NHI will cover
80% of the population (5.65 m)

2015 2016 2017 2018/9

 NHI in practice
• NHI fund
• Empowered people with simplified rules
on accessing benefits and increased
predictability of health care financing
• NHI is for all – anyone can go to a facility,
pay the co-payment ($0.6 -$4) and be
covered for a range of inpatient and
outpatient services
• Poor, mothers and children U5 are exempted
from co-payment
• Patients present an ID or certificate of
residence, and family book
Geographic coverage, without needing to
seek out people individually and enroll them
one by one (as done by PHI and INO)
Doing this avoids the problem of the missing
middle
 1
Lao PDR background
2
Social protection: HEF, FMNCH and NHI
3
Remaining issues and way forward
 1
NHI: extensive benefits, low awareness, weak financial
management, regional context
2
Quality and underutilization
 NHI issues
• Extensive benefits
• All outpatient and inpatient services, including drugs
• In case of referral, transportation costs are included
• Few exclusions: VIP patient room, repair and cosmetic surgery,
artificial teeth, sterilization, glasses, contact lenses etc
• Awareness is still low
• Anecdotal evidence of overcharging, double-billing, under-the-table
payments, co-payments not consistently charged, benefits knowledge
• Need to develop communication strategies and feedback mechanisms
for the public
• Weak financial management
• Outdated payment rates, processing and payment delays
• Need to develop clear, implementable guidelines, continue adjusting
payment rates and introduce more active payment mechanisms
• Regional context
• Increasingly interconnected economies – how can NHI support
financing of migrants, both in and out?
 1
NHI: extensive benefits, low awareness, weak financial
management, regional context
2
Quality and underutilization
 Quality and under-utilization

?
0.6

Utilization x Quality = Health

Maternal mortality
Use of skilled birth attendant
Mortality of CVD, cancer
Coverage of treatment interventions
Under-5 mortality
Coverage of UHC tracer interventions
Neonatal mortality
Access to vaccines
Malaria cases
Health worker density/distribution
Hepatitis infections
TB incidence
 Coverage is not enough
% with skilled attendant at birth maternal mortality ratio
70 700

59.4 603.7
60 600
56.1

50 500

40 400

30 300
249.9

20 200

100
10

0
0
South and Southeast Asia Sub-Saharan Africa
South and Southeast Asia Sub-Saharan Africa

Note: data from 12 countries in Asia; 34 in Africa 15

Could poor quality limit utilization?
Low satisfaction remains unaddressed?
 Going forward – Lao’s plans
• Sustain free service delivery for the poor,
mothers, and children under 5 under NHI and
reduce OOP expenditures
• Expand NHI benefits to include more health
promotion, prevention and rehabilitative
interventions
• Focus on quality
• Performance-based incentives?
• Appropriate number and level of skilled
health workers who are motivated, trained
and incentivized
• Increase domestic health expenditures to 13%
of general government expenditure by 2025
 What can ADB do?
• NHI evaluation
• Project on quality of health care

Any suggestions?
 Summary
• Lao used to have the missing middle problem pre-NHI
• With NHI, missing middle issue is largely avoided: Lao covers
everyone according to geography in a sequenced manner, with
Vientiane last, thus targeting the most needy first
• However, some issues remain; NHI specific issues and quality
challenges
• ADB stands to support Lao PDR as NHI matures and progresses
towards UHC

THANK YOU