Low cost health insurance
Low cost health insurance
Business Model Description
Invest privately in the expansion and / or creation of new low-cost prepaid medicine insurance with individual and family plans for first and second level medical care for low and middle income people.
Expected Impact
Increase access to health services and reduce inequality in rural and female population.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Paraguay: Amambay
- Paraguay: El Chaco
- Paraguay: Misiones
- Paraguay: Alto Paraná
- Paraguay: Canindeyú
Sector Classification
Health Care
Development need
Difficulties of access to health care persist for the rural population, especially the rural poor. Additionally, there is a shortage of human resources, since in preventive health the gap amounts to 3,800 health professionals. Only 25.9% of the population has health insurance (I).
Policy priority
The Institutional Strategic Plan of the Ministry of Public Health and Social Welfare has been carried out for 2023. Among the objectives are: The protection and guarantee of universal access and coverage, strengthen the quality of health care, guarantee the care of the prevalent diseases and promote the rational use of medicines and other health technologies (II).
Gender inequalities and marginalization issues
Women often lack regarding fertility, contraceptive and reproductive health measures and rural areas have lower access to health (III).
Investment opportunities introduction
In 2015, 78% of the population depended exclusively on public health services, that is, people for their medical care mostly went to the health posts and centers of their community or the District Hospitals, inclusive to the Hospital de Clínicas (I).
Key bottlenecks introduction
Inadequate infrastructure, such as insufficient healthcare facilitie directly impacts the ability to deliver effective health services, especially in remote or underserved areas. Additionally, a lack of trained healthcare professionals exacerbates these challenges (IV).
Health Care Retail
Development need
Difficulties of access to health care persist for the rural population, especially the rural poor. Additionally, there is a shortage of human resources, since in preventive health the gap amounts to 3,800 health professionals. Only 25.9% of the population has health insurance (I).
Policy priority
The Institutional Strategic Plan of the Ministry of Public Health and Social Welfare has been carried out for 2023. Among the objectives are: The protection and guarantee of universal access and coverage, strengthen the quality of health care, guarantee the care of the prevalent diseases and promote the rational use of medicines and other health technologies (II).
Gender inequalities and marginalization issues
Women often lack regarding fertility, contraceptive and reproductive health measures and rural areas have lower access to health (III).
Investment opportunities introduction
In 2015, 78% of the population depended exclusively on public health services, that is, people for their medical care mostly went to the health posts and centers of their community or the District Hospitals, inclusive to the Hospital de Clínicas (I).
Key bottlenecks introduction
Inadequate infrastructure, such as insufficient healthcare facilitie directly impacts the ability to deliver effective health services, especially in remote or underserved areas. Additionally, a lack of trained healthcare professionals exacerbates these challenges (IV).
Pipeline Opportunity
Low cost health insurance
Invest privately in the expansion and / or creation of new low-cost prepaid medicine insurance with individual and family plans for first and second level medical care for low and middle income people.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
(5,082,768 inhabitants) do not have any type of medical insurance (1).
> In 2019, only 8.3% (586,745 inhabitants) of the population have medical insurance (individual, labor, family, military, police and other insurance), 19.7% (1,392,636 inhabitants) have IPS insurance and 71.9% (5,082,768 inhabitants) do not have any type of medical insurance (1).
> The percentage of people with insurance has been increasing: 7.4% in 2017; 7.7% in 2018 and 8.3% in 2019 (1).
Indicative Return
5% - 10%
The estimated rate of return for an investor is 10.5%. The rate provided is a benchmark calculated as a cost of capital with the country risk premium that translates into an average return required by active investors in the subsector (2).
Investment Timeframe
Short Term (0–5 years)
> A feasibility study prior to the implementation of a private health insurance with extended coverage, in Guayaquil, Ecuador, presented in 2019, presented the total expenses that can be covered in a period of 1 to 5 years from the date of date of implementation (3).
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Capital - CapEx Intensive
Market - Highly Regulated
Impact Case
Sustainable Development Need
In 2019, 71.9% of the country's population did not have any health insurance (5).
Only 19.7% had insurance from the Social Security Institute (IPS) and 8.3% had another type of private insurance. In other words, of a total population of 7,069,218 inhabitants that existed in Paraguay, 5,085,000 people did not have access to medical insurance (5).
High informality levels imply low access to social security (6).
Gender & Marginalisation
Data from Latin America and the Caribbean indicate that women contribute between 71% and 86% of total unpaid work thus lack benefits and social protection systems such as retirement and health insurance (6).
Expected Development Outcome
> Improve the provision and access to health services.
> Reduce pressure on the public health system.
> Reduce the mortality rate, due to access to health medical care.
Gender & Marginalisation
> Reduce the inequality gap in obtaining health, improving access to health for rural areas.
Primary SDGs addressed
1.3.1 Proportion of population covered by social protection floors/systems, by sex, distinguishing children, unemployed persons, older persons, persons with disabilities, pregnant women, newborns, work-injury victims and the poor and the vulnerable
3.8.1 Coverage of essential health services
3.8.2 Proportion of population with large household expenditures on health as a share of total household expenditure or income
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Gender inequality and/or marginalization
Indirectly impacted stakeholders
Public sector
Corporates
Outcome Risks
> Many insurance programs do not reach the poorest sectors, so there could be even more pronounced gaps (7).
Impact Risks
Execution risks: > Difficulty of scalability, especially in rural areas, because there is not much infrastructure.
Stakeholders: > Formal workers from the middle and lower classes are required by law to be served by IPS, so they may have no intention of paying for additional health insurance.
Drop off: > Distrust of the population towards the real coverage of medical insurance and its convenience for them.
External risks: > The existence of competences in the market both from other entities such as telemedicine.
Unexpected risks: > Unexpected regulations regarding prices, services, etc. that could affect cost competitiveness.
Impact Classification
What
The outcome is likely to be positive, important, and anticipated because a broader healthcare offering could benefit underserved low- and middle-income populations
Who
Low-income patients resources, uninsured middle class or IPS are underserved due to lack of health coverage
Risk
households with incomes too low to pay even for these insurances or those formal workers who must pay IPS, could limit the extent of the impact
Impact Thesis
Increase access to health services and reduce inequality in rural and female population.
Enabling Environment
Policy Environment
The National Development Plan 2030 - One of the transversal lines of axis I (Poverty reduction and social development) is to obtain quality social services: Combining poverty reduction with living a healthy life throughout the life cycle (8).
The Institutional Strategic Plan of the Ministry of Public Health and Social Welfare 2019 - increase access and coverage of the first, strengthen the quality of health care, and guarantee care for prevalent diseases at the first level (9).
Reforms for better health in Paraguay 2019 to formulate action plans that define the steps necessary for the implementation of priority reforms.
Financial Environment
Law 60-90 (Law of investments) protects investments of national and / or foreign origin (13).
Law 60-90 establishes the total exoneration of fiscal and municipal taxes levied on the constitution, registration and registration of companies and companies (13).
Law 5,542 / 15 On guarantees for investments and promotion of job creation and economic and social development, grants the invariability of the income tax rate in force at the signing of the contract for up to ten years (14).
Regulatory Environment
Law No. 836 of the Health Code - This Code regulates the functions of the State in relation to comprehensive health care for the people and the rights and obligations of people in this matter (10).
Law No. 827 establishes that for the purposes of this Law, the Superintendency of Insurance will be understood as the control authority; and the Superintendent of Insurance as superintendent (11).
Law No. 1032/96 that creates the National System of health (12).
Marketplace Participants
Private Sector
Mediget (Paraguay), Dr. Click (Paraguay) (family medicine, trauma and orthopedics or psychology), E-Medicus (Paraguay) (primary care and diagnostics).
Government
Ministry of Public Health and Social Welfare (Diagnostic studies include tomography, ultrasound, electrocardiography and electroencephalography)
Multilaterals
IDB, EU, World Health Organization, Taiwan Technical Cooperation, among others.
Non-Profit
Paraguayan Association of Medicine and Palliative Care, IFMSA Paraguay, among others.
Target Locations
Paraguay: Amambay
Paraguay: El Chaco
Paraguay: Misiones
Paraguay: Alto Paraná
Paraguay: Canindeyú
References
- (I) Florencia Attademo-Hirt et al. 2019. Estrategia del grupo BID con el país 2019-2023. https://www.idbinvest.org/sites/default/files/2020-04/ESTRATEGIA%20DEL%20GRUPO%20BID%20CON%20PARAGUAY%20%282019-2023%29.pdf (II) Ministerio de Salud Pública y Bienestar Social. 2019. Plan Estratégico Institucional. https://www.mspbs.gov.py/dependencias/portal/adjunto/c5fbf6-PlanEstratgicoInstitucionalPEI20192023.pdf (III) Rural Health Information Hub. 2021. Barriers to Improving Rural Maternal Health. https://www.ruralhealthinfo.org/toolkits/maternal-health/1/barriers (IV) Ministerio de Salud Pública y Bienestar Social. 2014. Salud Pública apunta a desarrollo de servicios, pero espera recursos. https://www.mspbs.gov.py/portal/990/salud-publica-apunta-a-desarrollo-de-servicios-pero-espera-recursos.html
- (1) Organización Panamericana de Salud. s.f. Paraguay. https://hia.paho.org/en/countries-22/paraguay-country-profile
- (2) Aswath Damodaran. 2021. Current Data. https://pages.stern.nyu.edu/~adamodar/
- (3) Julio René Pérez. 2019. Estudio de factibilidad previo a la implementación de un seguro de salud privado con una cobertura extendida. https://dialnet.unirioja.es/servlet/articulo?codigo=9089221
- (4) OCDE. 2019. Estrategia de Competencias de la OCDE 2019. https://www.oecd.org/skills/OECD-skills-strategy-2019-ES.pdf
- (5) Dirección General de Estadística, Encuestas y Censos. 2016. Población juvenil de 15 a 29 años de edad por año de la encuesta, según sexo y tipo de seguro médico (%), 2016-2021. Serie comparable. https://www.ine.gov.py/resultado/index.php
- (6) Organización Panamericana de Salud. 2017. "Acceso de las mujeres a la protección social en salud", en un mundo laboral en transformación. https://www.paho.org/es/noticias/8-3-2017-acceso-mujeres-proteccion-social-salud-mundo-laboral-transformacion
- (7) Hugh Waddington. 2009. Health insurance for the poor: Myth or reality? https://www.3ieimpact.org/sites/default/files/2019-02/Health_insurance_for_the_poor_1.pdf
- (8) Gobierno del Paraguay. 2014. Plan Nacional de Desarrollo Paraguay 2030. https://www.stp.gov.py/pnd/wp-content/uploads/2014/12/pnd2030.pdf
- (9) Ministerio de Salud Pública y Bienestar Social. 2019. Plan Estratégico Institucional. https://www.mspbs.gov.py/dependencias/portal/adjunto/c5fbf6-PlanEstratgicoInstitucionalPEI20192023.pdf
- (10) Congreso de la nación paraguaya. 1980. Ley No. 836. https://www.bacn.gov.py/leyes-paraguayas/2399/ley-n-836-codigo-sanitario
- (11) Congreso de la nación paraguaya. 1996. Ley No. 827 https://www.bacn.gov.py/leyes-paraguayas/703/ley-n-827-de-seguros
- (12) Congreso de la nación paraguaya. 1996. Ley No. 1032. https://www.mspbs.gov.py/dependencias/dnvs/adjunto/975a86-LEYN10321996QUECREAELSISTEMANACIONALDESALUD.pdf
- (13) Congreso de la Nación Paraguaya. 1991. LEY Nº: 60/90. https://www.mic.gov.py/mic/w/industria/ddi/pdf/Ley60-90.pdf
- (14) Congreso de la Nación Paraguaya. 2015. LEY Nº 5542. https://www.bacn.gov.py/leyes-paraguayas/4523/garantias-para-las-inversiones-y-fomento-a-la-generacion-de-empleo-y-el-desarrollo-economico-y-social