Affordable health insurance scheme for RMG workers in Bangladesh

SNV Netherlands Development Organisation piloted an inclusive business project in the readymade garment (RMG) industries of Bangladesh with funding support from 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) remain the priority. SNV invited interested private sector companies and NGOs to offer innovative business models which would ensure affordable, accessible and available health services to the RMG workers.
SNV also helped the capacity building of local providers in market analysis, design of business models, partnership building with RMG factories and business planning support for profitable business solutions. Through the process, one of the private companies offered an affordable health scheme for the workers.
Market opportunity: According to the BGMEA, around 4.2 million workers are working for the RMG sector in Bangladesh, 80 per cent of them are female. The premium for a female worker's health insurance is BDT 500 and thus the total market size would be BDT 2.0 per annum. Pragati Life Insurance Limited, being one of the leading health insurance providers in the country, came up with a thought to serve the RMG workers. They are expected to get to at least 50 per cent of the market share and thus the projected market share of this product is around BDT 1.0 billion.
Business opportunity: The business model is focused on the low income people (LIP) working in the RMG sector of Bangladesh. Their income is almost uniform and average income per day is below USD 3.0 and thus they are below the poverty line as per the definition of sustainable development goals (SDGs). The age gradation of these people ranges from 18-34, which indicates they are in the peak of their reproductive age. The female workers are susceptible to sexual and reproductive diseases due to long working hours, unhygienic menstrual management, malnutrition and poor working conditions.
Many of the factories have their own medical centres with doctors, but they are non-functional, and thus workers' health problems are unsolved, which also affects factory productivity and leads to higher operational cost. Many of the factory owners and buyers are seeking effective solutions, but still remain far away as most of the product and service providers have a lack of interest to serve the LIP.
Initiation: SNV Bangladesh invited inclusive business model to solve RMG workers' SRHRs after the value chain analysis of the sector. SNV engaged all stakeholders following a systematic approach and adopted numbers of capacity building activities to design and develop the business model. All of the relevant stakeholders are brought on the same table for sharing their thoughts on identifying opportunities through joint initiatives.
Pilot approach market study: In 2014, the Health Economics and Financing Research Group, ICDDRB, in collaboration with the Bangladesh Diabetic Samity (BADAS), funded by The Swiss Tropical and Public Health Institute, Switzerland, conducted a baseline study to assess the impact of health insurance on access and utilisation of healthcare and to estimate the workers' out of pocket expenditure without health insurance and also their health-seeking behaviour. The findings showed that around 43 per cent of the RMG workers become sick and lose around 04 days' salary due to sickness absenteeism. The study also showed that around 87 per cent of the workers seek healthcare services, 40 per cent of whom cannot afford the health services due to high cost. Around 75 per cent workers were, however, found to be 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 owners with institutionalised health services for workers while ensuring available quality health services at the same time. The total services are monitored through a database that preserves workers' health history. The health services are maintained both inside and outside the factory.
Service provision inside the factory premises:
* Availability of qualified physicians during the working hours,
* Health education to make workers aware of the health issues,
* Management sensitisation for gender-sensitive health services
Outside the factory premises:
* Round the clock (24/7) availability of qualified doctors and nurses with diagnosis and hospitalisation facilities.
* Health insurance card provides privileged health services.
Unique features of the insurance:
1. Zero cash transaction: The supply chain of the services is maintained with a web-based solution wherein all the payments are done through cashless transaction. All the stakeholders have the provision to monitor their respective factory workers' total service receipts, disease profile, frequency of sickness and patient flow.
2. Dedicated service provider: The workers will be attached to a qualified service provider. The capacity of the provider was assessed and technical assistance was given for gender-sensitive quality service delivery.
3. Factory involvement: Factory management interests generate through quantifying the business benefits with the business model which is created from the earlier stage of the implementation.
Initial challenges:
1. 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.
2. SRHR taboos and restrictions by religious norms
3. Insurance companies had limited interest due to the higher risk associated with the coverage.
4. Negative impression of workers and management about the insurance scheme.
With the health insurance scheme in place, workers have increased access to affordable health services while enabling the RMG factory owners to reduce their pain and to ensure better health facility for their workers. The average health-seeking behaviour of the workers increased and the return on the investment in workers' health is seen to have positive impact and it's contributing to improved working condition and productivity.
The success: This is the only health insurance project in the country's RMG sector where workers and factory owners have started to share the premium jointly. Numbers of factories and international buyers showed interest to join the initiative. Already two international buyers have agreed to share premium for 30,000 workers of their supplier factory here. We believe that more workers would be covered under health insurance scheme that would enable a business-friendly and congenial environment in Bangladesh's booming RMG industry.
Jamal Uddin is a Development Worker.
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