Background
Health insurance, often known as medical insurance, assists policyholders in safeguarding their families and themselves from costly or unforeseen medical costs. Health insurance is intended to supplement medical costs associated with care and to estimate the overall risk of such spending [1]. A broad category of insurance policies known as "health insurance" offer benefits in case of illness or accident that results in a temporary or permanent loss of income, as well as hospitalization, medical and surgical expenses, child care, rehabilitation, and other related costs [2]. Having health insurance is essential for managing financial risk. It is particularly recognized as an essential component of the safety net for society and an incentive of strengthening public health and health care, in contrast to other insurances. Evaluating the advantages of better health outcomes against the expenses of increasing coverage is the primary policy concern [3]. Currently, 137 low- and middle-income countries (LMICs) face inadequate treatment and high mortality rates due to various conditions, with 15.6 million excess deaths in 2016 attributed to substandard medical care across various diseases. Universal healthcare coverage (UHC) could significantly improve health in LMICs, contingent on high-quality medical care. Implementing capital investments in high-quality healthcare facilities, alongside expanded service coverage, could potentially prevent 8.6 million deaths annually in these countries [4]. UHC entails a system in which every citizen of a certain country or geographic region have health insurance [5]. Bangladesh is still on the road to find a mechanism for financing health care to achieve UHC.
Importance of Health Insurance
Health care is fundamental to a nation's health, and the majority of high-income nations offer UHC. 99% of people have health insurance, and in certain nations, it is free at the point of service. An important aspect of coverage is cost-sharing, which deters unnecessary medical care. Nonetheless, the amount of money that must be paid out-of-pocket for medical care is usually limited [6].
For example, the Netherlands has a 385 Euro annual deductible, which is far less than the $1763 that the average employer-sponsored single coverage plan in the United States has as of 2022 [6].
Canada's healthcare system operates under the Canada Health Act (CHA), with publicly funded provisions. To receive full federal contributions, provincial and territorial health plans must adhere to the CHA's five pillars, which mandate universal coverage, public administration, comprehensive and portable services across regions, and accessibility without user fees. The system is primarily funded by the 13 provinces and territories, reflecting a collaborative effort to meet these CHA principles [7]. According to initial estimates, the average expenditure of public health care insurance in 2023 might vary based on what type of family and range from $5373 to $17,039 for six typical Canadian family types [8].
The US health insurance system is divided into private and public types. Private insurance includes plans from employers, unions, and TRICARE. Medicare serves over 65 and chronically disabled individuals, while Medicaid provides financial assistance to children. CHAMPVA/VA (Civilian Health and Medical Program of the Department of Veterans Affairs) covers veterans. Coverage rates and types may vary annually due to economic shifts, demographic changes, and policy adjustments, including the COVID-19 pandemic [9].
In neighboring India, a lower-middle-income country, has implemented multiple Government-Funded Health Insurance schemes (GFHIS) to provide affordable health care, including two national schemes, Rashtriya Swasthya Bima Yojana and Pradhan Mantri Jan Arogya Yojana [10]. India's health insurance plans classification includes hospitalization plans that cover medical expenses during hospital stays, family floater plans for entire households, and pre-existing disease cover plans for conditions existing before policy purchase. Senior citizen health insurance is designed for older individuals, while maternity health insurance addresses expenses related to pregnancy. Hospital daily cash benefit plans offer a specified sum for each day of hospitalization. Critical illness plans provide lump-sum payouts for specific severe conditions, and disease-specific special plans, such as Dengue Care and Corona Kavach policies, target particular health issues [11].
The large percentage of uninsured patients exerts pressure on the healthcare system, leading to treatment delays and a greater need for urgent care facilities. As a result, limited resources wind up being used to treat or prevent problems that might have been handled more affordably elsewhere. Additionally, not having insurance has a major cost impact on healthcare system communities, and the people [12]. Health financing plays a crucial role in achieving UHC by improving service access and financial safety. High healthcare costs currently bar millions of people from accessing necessary services, and those paying out-of-pocket often face poor quality care. Implementing well-designed health financing policies can address these challenges, promoting coordinated, high-quality care and ensuring that providers have the necessary resources. The World Health Organization (WHO) outlines three key functions in health financing: generating revenue (via government budgets, insurance schemes, personal payments, and external funding), accumulating funds (gathering prepaid funds for a certain population), and allocating resources to healthcare providers. Moreover, national policies usually specify the healthcare services available to the public, with patients typically bearing the cost of services not covered [13].
Disease Management Scenario in Bangladesh
The Ministry of Health and Family Welfare's Health Economics Unit reports that 16.4% of patients annually avoid medical care due to rising out-of-pocket health spending. 68.50% of the entire cost of therapy must be covered out of pocket by Bangladeshis. The exorbitant cost of medical treatment in Bangladesh provides significant obstacles for healthcare seekers, with out-of-pocket expenses including medication, treatment fees, and diagnostic tests. According to the Health Economics Unit, patients spend 64% of their healthcare expenditure on medications, allocating 23% for hospital stays and 8% for diagnostics. Public hospitals receive government funding therefore treatment costs are frequently split with households. But private facilities often require households to cover all treatment costs. In government hospitals, just 3% of patients receive medicine, while 14.9% receive diagnostic services. The majority of patients visit private diagnostic facilities and get their medications from private pharmacies. Some patients struggle to afford specialized consultation fees. Since the consultation fees of at least Bangladeshi Taka (BDT) 500–700 each time they visited the specialized doctor. Particularly in private institutions, healthcare costs may be quite expensive for people. These costs include prescription drugs, diagnostic tests, hospital stays, and bed fees. These costs can result in disastrous medical bills, pushing consumers to use loans, reduce household spending, or look for other forms of financial support as coping methods [14, 15].
In Bangladesh, the idea of health insurance is novel. Small numbers of health insurance plans are provided by the insurance firms. Nevertheless, this only provides to a small percentage of the population and hardly makes up 1% of the funding. Low coverage resulting from high premium costs and the fact that this type of financing is sometimes only available to urban residents who work in the formal sector are some of the issues related to it. For adverse selection, the risk groups are frequently left out. The impoverished and low-income population cannot afford to subscribe to private insurance. Many community-centered initiatives are currently being run at the local level by NGOs and nearby hospitals. In a local region, the programs' effectiveness is uncertain, but generally, they make up only a small percentage of the nation's budget [16]. There are 35 life and 46 nonlife insurance firms in Bangladesh, and several of them provide group health insurance coverage to their employees. Unfortunately, just 0.4% of the population has insurance, thus individuals must rely on their savings to cover their medical costs. Out of the approximately 16 crore individuals living in the nation, over 90lakh have opened life insurance policies; however, just 10% have health coverage [17].
Bangladesh's health insurance system includes government-provided social health insurance, micro health insurance (MHI), private health insurance, voluntary community insurance, and medical savings accounts. Social health insurance is a risk-pooling plan for specific groups, while MHI focuses on preventative services for impoverished families and women. Private health insurance is offered by insurance firms, while voluntary community insurance involves community members contributing money at a fixed rate. Medical savings accounts allow consistent payments for personal medical expenses [18].
Discussion and Recommendation
Health insurance in Bangladesh serves as a vital shield against the exorbitant medical expenses incurred during emergencies or severe illnesses, safeguarding individuals and families from plunging into debt or exhausting their savings. It grants access to a broader network of hospitals and clinics, ensuring quality health care without financial constraints. This assurance of coverage instills peace of mind, particularly for those with pre-existing conditions, while also facilitating preventive care services that aid in early detection of health issues, ultimately reducing future medical costs. Moreover, health insurance contributes to a more resilient workforce, alleviating poverty, and fostering the growth of the healthcare sector through increased investment and improved facilities. Despite these benefits, challenges such as limited coverage options persist, necessitating continuous efforts to enhance the health insurance market.
Even though the majority of Bangladeshi citizens lack access to health insurance, some private insurance companies do provide health insurance to the nation's higher income groups. However, just like most other essential services, health insurance is out of reach for the majority of Bangladesh's low-income and impoverished citizen groups [19].
Health specialists are concerned that as the budget for the health sector rises, more individuals will have to pay for their own health care, making it more challenging for them to obtain treatment, and a large number of them may end up in poverty as a result of high medical costs. According to government budget of the Institute of Health Economics, 68.5% of all health expenditures in Bangladesh are covered by the people and significant change is required in the industry, especially in the way funds are allocated. Bangladesh allots less than 1% of GDP to the health sector, while the WHO recommends 5%. However, the majority of the money is used to pay for the salaries of health professionals and other expenses [20].
Whereas, more than 100 billion euros was allocated on Netherlands' health care in 2020 that was almost 14% of its GDP. With a population of more than 17 million, this amount corresponds to around 6660 euros in health care costs per person in the Netherlands. There is no single-payer healthcare system in the Netherlands. Instead, a government-regulated and sponsored universal healthcare system is implemented through mandatory basic private insurance. Taxes on income, wages, general revenue, individual insurance premium payments, and copayments are used to finance public health care. Prescription drugs and general practitioner visits, high quality health care with wide accessibility is among the services provided [21]. Additionally, subsidized medications and medical services are often financed in significant quantities by the Australian government [22]. Medicare, which pays for hospital visits and 85% of specialist expenditures, provides public health care in Australia. This single-payer, universal healthcare scheme, which might be free or inexpensive, is available to all Australian citizens and permanent residents. In Australia, taxes pay a portion of healthcare expenditures. Residents contribute to the Medicare Levy, which finances the public system, with 2% of their income. Prescription drugs are also subsidized to make them more affordable. The percentage of GDP spent on health is around 10%. That implies that in Australia, 10% of investments were directed towards health [23].
Globally, healthcare delivery takes four main forms. In the "Out-of-Pocket" model, patients pay directly. In National Health Insurance or single-payer system, like Canada, Taiwan, and South Korea's system, uses private facilities but government-funded bills. The Bismarck Model, seen in France, the Netherlands Germany and Japan, mandates private insurance with government subsidies and The Beveridge Model, seen in the United Kingdom's National Health Service (NHS), involves government-owned and operated, often associated with providing "free health care." New Zealand, Cuba, Hong Kong, and Spain are among the countries that adopt the Beveridge Model for their healthcare systems [24].
According to the Health Ministry, a government-funded healthcare initiative has been taken aiming to provide free medical treatment and medication. For example, the government is introducing a cervical cancer vaccination campaign, initially for girls aged 10–15, to reduce the incidence and death rate of cervical cancer, which accounts for the majority of cancer-related deaths among female patients. The minister highlighted initiatives to enhance healthcare quality across the country, including district, upazila, and union-level hospitals, and announced plans to provide 24-h health services at 500 centers. Every household would receive a healthcare card, the minister announced. Through the UHC package under the “Shyastha Surokkha Karmasuchi” (in Bengali), everyone with this card will receive free medical treatment, medication, and travel expenses [25].
The analysis of the aforementioned healthcare system scenarios highlights that Bangladesh is in alarming situation in terms of providing high quality healthcare facilities without any financial hardship. Also, the health insurance policy system in this country is not convenient especially for lower middle class and low-income citizens. Therefore, it has become necessary to introduce common health insurance system in Bangladesh. Citizens of all income will be able to get health care through this common health insurance system. This insurance system can be established by collaborating with Bangladesh government has already initiated a new policy that is “Shyastha Surokkha Karmasuchi” (SSK) in which a healthcare card will be provided to every individual. Upon admission, the patient will be recognized by the medical staff as a member of SSK. The health care card keeps track of information about medical services obtained to speed up the payment procedure. Patient data (diagnostics) may be stored on it. This health card can be used as a common health insurance card. Also, some primary frameworks such as national health insurance, bismarck model or beveridge model like other countries can be utilized in the common health insurance system to encourage all people to have an insurance [25].
Government may make it mandatory for every citizen to purchase common health insurance, which is subsidized for individuals and heavily regulated. Moreover, it would also be prudent to establish the mandate of requiring all public, nongovernmental and private sector employees to be insured and accredited. This would improve the options available to patients for healthcare services within the national insurance program and issue strict official rules and regulations on common health insurance so that inefficient and inequitable healthcare service can be prevented.
Since the main motive is to provide universal health care with wide accessibility to top notch medical treatment, sufficient amount of resource must the pre-requisite for common health insurance. So that coordination is required for the implementation of purchase and payment features. Bangladesh is severely lacking in medical experts, especially in rural regions. Greater infrastructure and compensation are available in cities, which is why many medical professionals including nurses choose to work there. The government can guarantee a fair distribution of medical personnel throughout the nation by implementing a common health policy.
The sustainability and fair access of Bangladesh's present healthcare system are major obstacles. The current tax-based funding approach frequently leads to uneven benefit distribution and erratic income. Moving toward a social-insurance-based system is essential to addressing these issues and guaranteeing more equal health care for everyone. In addition to making finance management more predictable and sustainable, this change will enable people match their contributions to the services they get, which will promote equity in all spheres of society.
A social insurance-based strategy may provide long-term stability and equity in contrast to the current tax-based system, which frequently has problems including poor resource allocation and reliance on erratic government budgets. In a tax-based system, general taxes play a major role in raising money, which might not be enough to fully pay the healthcare industry as a whole. Moreover, discrepancies in access to healthcare result from advantages that are frequently not directly linked to an individual's contributions.
On the other hand, contributions may be more precisely matched to people's income levels under a social insurance system. By guaranteeing that the amount raised is commensurate with the population's capacity to contribute, this strategy may increase financial predictability. Countries like Germany, France, and Japan have successfully adopted social-insurance models, which provide complete coverage for healthcare services and have income-based premium. A fairer allocation of healthcare resources, especially for low-income and marginalized areas, might result from Bangladesh implementing a similar paradigm.
The sizable informal labor population in Bangladesh, which now does not use the official tax or insurance systems, is a major problem. We suggest a combination of strategies to guarantee that premiums are collected fairly from this group:
Progressive Premiums: The amount of premiums may vary according to income levels. Contributions from informal workers might be gathered via small company registration systems, community networks, or mobile payment platforms. This would guarantee that those who are not officially employed may nevertheless affordably engage with the system.
Subsidies for Low-Income Groups: To guarantee that no one is turned away from the system because of their financial circumstances, the government should pay premiums for low-income people. Rural residents and those working in the unorganized sector would particularly benefit from this.
Universal Participation: All people might be registered in the health insurance system under a default opt-in mechanism. With the opportunity to opt out only in certain circumstances, this would streamline the procedure and guarantee that no one is left out. To promote involvement and guarantee that premiums are affordable for unorganized laborers, such a system may be progressively put into place.
Encouraging Officialization: Unofficial employees may be encouraged to officially declare their job through the health insurance program. The government can encourage people and enterprises to enter the workplace by tying insurance system participation to official jobs.
Making sure that hospitals and pharmacies have enough money to offer high-quality services and drugs is a key issue in the shift to a social insurance-based healthcare system. We provide a number of tactics to deal with this:
Tiered Reimbursement System: It is recommended that a tiered reimbursement system be put in place, with greater monies going to high-demand areas like rural areas and healthcare providers receiving payment according to the services they offer. This guarantees that medical institutions are rewarded for providing high-quality treatment and are adequately compensated for their work.
Public–Private Partnerships: Financial strain on public health services may be lessened by partnerships with private sector suppliers, particularly in the pharmaceutical and healthcare services industries. Especially in underprivileged areas, these collaborations might assist guarantee the supply of medications and critical healthcare services.
Efficient Fund Utilization: To motivate healthcare professionals to spend resources effectively, incentives have to be incorporated into the system. Providers may be compensated, for instance, if they use the money to invest in preventative health care, simplify operations, or upgrade infrastructure. These incentives may guarantee the sustainability of healthcare systems while enhancing the standard of treatment provided to the general public.
Monitoring and Auditing: To make sure that money is being used efficiently, healthcare institutions should undergo routine audits and performance evaluations. Transparent monitoring systems would guarantee that healthcare professionals are held responsible for providing high-quality services and assist reduce resource misuse.
Conclusion
It is not only vital but also feasible for Bangladesh to make the shift to a social insurance-based healthcare system. We can establish an accessible and sustainable healthcare model by establishing clear and fair procedures for collecting premiums from both formal and informal workers, making sure that healthcare institutions have enough funds, and implementing a tiered reimbursement structure. This change will promote equity and efficiency in the system while guaranteeing that everyone, irrespective of job status, has access to the health care they require. A healthier, more just Bangladesh would result from the adoption of such a system.
Author Contributions
Shreshtha Saha: conceptualization, writing–original draft. Sumaiya Binte Reza: conceptualization, writing–original draft. Md Abdul Mazid: writing–review and editing. Syed Masudur Rahman Dewan: conceptualization, writing–review and editing, supervision.
Ethics Statement
The authors have nothing to report.
Conflicts of Interest
The authors declare no conflicts of interest.
Data Availability Statement
The authors have nothing to report.
Transparency Statement
The lead author Syed Masudur Rahman Dewan affirms that this manuscript is an honest, accurate, and transparent account of the study being reported; that no important aspects of the study have been omitted; and that any discrepancies from the study as planned (and, if relevant, registered) have been explained.
R. Kumar, “Chapter 8—Mutual Funds, Insurance, and Pension Funds.” in Strategies of Banks and Other Financial Institutions, eds. R. Kumar. (Academic Press, 2014), 207–242, [DOI: https://dx.doi.org/10.1016/B978-0-12-416997-5.00008-7].
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Abstract
ABSTRACT
Background
Bangladesh, a densely populated South Asian country, faces numerous challenges in its healthcare system. Given the population of almost 160 million, there is an urgent need for a comprehensive health policy. Despite the government's recent advancements in improving healthcare services, there is still a significant amount of work that need to be accomplished.
Discussion
In Bangladesh, individuals are required to cover 68.50% of the total expenses for therapy directly from their own funds. Healthcare seekers in Bangladesh encounter numerous obstacles as a result of the exorbitant cost of medical services, including expenses for prescription medications, treatment charges, and diagnostic examinations. Health insurance is essential for mitigating financial risk and plays a pivotal role in societal safety nets, bolstering public health and health care. Insufficient health care in low and middle‐income nations results in a significant number of deaths. The World Health Organization (WHO) underscores the significance of health financing in attaining universal coverage, emphasizing the necessity of generating revenue, accumulating funds, and allocating resources to guarantee access and quality in healthcare services.
Conclusion
To summarize, the healthcare system in Bangladesh is confronted with significant issues that are worsened by the financial demands placed on its populace. Adopting universal health coverage might play a crucial role in promoting fair and equal access to health care, improving health results, and strengthening economic stability for the approximately 160 million individuals in the country.
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Details


1 Department of Pharmacy, School of Medicine, University of Asia Pacific, Dhaka, Bangladesh
2 Pharmacology Division, Center for Life Sciences Research Bangladesh, Dhaka, Bangladesh
3 Department of Pharmaceutical Chemistry, Faculty of Pharmacy, University of Dhaka, Dhaka, Bangladesh
4 Department of Pharmacy, School of Life Sciences, United International University, Dhaka, Bangladesh