Attitudes Toward Solidarity, Risk, and Insurance in the Rural Philippines

Abstract

A sustainable health reinsurance system can be fashioned for the informal sector by mobilizing social and economic forces operating within individual communities. The economic analysis in part 1 of this book draws conclusions from success stories in industrial countries and failures in low- and medium-income countries. This analysis leads to the premise that decentralized development of microinsurance units, operating in a market segment left out by for-profit health insurance firms and by national schemes, can be stabilized financially through their affiliation with a reinsurance facility-Social Re' (part 1, this volume; Dror and Duru 2000, pp. 30-40; Dror 2001).

Dror, Preker, and Jakab, in chapter 2 of this book, explain how the sociological dimension would theoretically affect the performance of a microinsurer. Findings of the Institute of Medicine reaffirm the active interplay of biology, psychology, behavior, and society in determining people's health attitudes. The institute further reports that, although people's attitudes and actions can readily be altered, these changes need support and reinforcement over time to guarantee better health. Attitudinal and behavioral changes are best prolonged through interventions at multiple levels, from the individual to society at large (Institute of Medicine 2001, pp. 1-1-1-8).

Efforts are required to address the psychosocial factors that influence health status, including, for example, proposing measures such as microinsurance to persuade individuals to accept a healthy way of life and permanently modify their health behavior. Microinsurance schemes provide individuals, households, and communities mechanisms for financing their health through group risk-pooling mechanisms, leading to a sustained improvement in their access to health services.

Higher up on the social scale, well-evaluated interventions at the organizational level should be encouraged, giving credit to organizations' vital role in influencing individual behavioL Still farther up the scale, community involvement in health-promotion strategies should not be overlooked, because some disease-related factors that are beyond an individual's capacity to modify can be significantly minimized through community efforts. Community empowerment, social support, and other values that protect members from stress are strengthened through community-level interventions. Finally, interventions at the societal level recognize the role of collective organizations influencing individuals' everyday existence (Institute of Medicine 2001, pp. 1-1-1-8).

Underlying assumptions are that members' affiliation with microinsurers is voluntary (individuals can join, stay enrolled, or withdraw at will) and that microinsurers will voluntarily join Social Re. A clue is therefore needed about the considerations that shape individual and collective choices. According to one opinion, The underlying economic motivation for joining a microinsurance unit is assumed to be a desire to seek reciprocity in sustaining risk-sharing arrangements among essentially self-interested individuals (Dror and jacquier 1999, p. 79). This assumption implies that joining a microinsurance unit (and Social Re) is a predictable, rational economic choice by self-interested individuals to maximize total utility (optimal choice theory), and an act of reciprocity, in which giving and getting are somehow linked. According to the utility motive, people will join if they can benefit from joining. However, considering that many people will pay a health insurance premium without getting any cash benefits (if they stay healthy), is it really clear what each individual would consider as his or her exact utility from being insured? As Herrnstein points out, because utility cannot be directly observed, it must be inferred from behavior, from the choices individuals make. Thus, utility is synonymous with the modem concept of reinforcement in behavioral psychology (Herrnstein 1997, p. 226). Dror and Jacquier mention a second motive for joining a microinsurance unit: people's desire to improve their health by controlling their living and working conditions. This control is linked to a deep-rooted human need to seek voluntary and repeated interaction with others in daily life (Dror and Jacquier 1999, p. 80). These interactions may provide material reciprocity or they may reflect altruistic, nonmaterial interactions. The three authors mentioned above suggest that, to understand how microinsurers can attract and retain their clients, they have to know what shapes their clients' behavior in their specific operating context. The same reasoning applies to a microinsurer's decision to affiliate with Social Re.

Since Social Re will be piloted in the Philippines, this examination will be done with reference to that country and culture. The rest of this chapter will provide an overview of the social and institutional structure of Philippine rural and informal society and the attitudes toward solidarity, risk, and insurance that influence choices and help shape the role of microinsurance. This role is quite different from what could be conjured from classical economic theory on utility, as will be shown. This analysis leads to the conclusion that in the rural Philippines, the introduction of insurance and reinsurance hinges as much, perhaps more, on the structure of society than on the profile of risks and the existence of a market for insurance.

Keywords: micro health insurance, social insurance, insurance for the poor, community based health insurance, health financing