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# _Zaire's Bwamanda Health Zone_<sup>_6_</sup>

The focus of this case study is only on one small region of Zaire, not a national system of hospital financing as was the case in the other examples. In many ways, it is not comparable with the other programs discussed in this paper because it is focused around one district reference hospital rather than an array of providers that includes sophisticated tertiary hospitals. Nevertheless, several important lessons can be drawn from the health plan in this region.

In 1975, Zaire developed a plan to organize its health services around a large number of health zones, each serving approximately 100,UOO people with a reference hospital and satellite health centers. The health zones were given a considerable degree of autonomy, including responsibility to develop cost recovery programs to meet their operating and maintenance costs (Bitran _et al.,_ 1987). The management of one zone, Bwamanda, created an insurance program as a means of generating revenue for its reference hospital aiid organizing the delivery of services in the zone. The insurance plan is managed by the health zone and is thus a direct insurance program rather than a third party arrangement, and it is administered as a prepaid capitation health care organization. Enrollment in the plan is voluntary, but in an attempt to limit adverse selection, all members of a family are required to join if one member joins. For residents of the zone who are not enrolled in the plan, case-based fees are charged, with 16 case payment rates related to the diagnostic characteristics of the patient. Insured persons who have been referred from a health center pay a copayment equal to 20 percent of the case price charged to uninsured residents of the zone. In addition, the hospital charges non-residents twice the resident rate and salaried employees persons (whose employers are required by Zairian law to pay the full cost of their medical care) 250 percent of this rate. In a sense, there are two insurance plans in the zone; one for the voluntary enrollees (60 percent of the zone's population in 1989) and employer-paid coverage (4.6 percent). Unlike the other insurance programs discussed above, the Bwamanda insurance plan only covers hospital services (plus chronic care treatment in health centers). However, hospitalization benefits are only available to members who can document that they were referred from a satellite health center.

The Bwamanda Health Plan and the requirement for employers to pay the health care costs of salaried employees generate distinct financial incentives to providers and consumers for each of three population groups: the insured, the uninsured, and the employer-paid group. The insured group has paid its premium and thus wishes to maximize its utilization, though this is limited by its 20 percent cost sharing and the requirement to pay for care at health centers. The hospital and the insurance plan (the same organization) wish to minimize the use of services by this group, as it does not want claims payments to exceed premium income (the prepaid capitation incentive). The uninsured try to avoid use of the hospital because they face high prices if they are admitted. The hospital wants this group to use the hospital, but hopes to minimize the level of inputs provided to any person admitted so that treatment costs do not exceed the case payment rate (the retrospective case-based incentive). The employer-paid group does not face any charges, so they will maximize their use of the hospital. The hospital also has incentives to admit employees (but to still minimize resource inputs during their stay), as employers pay at a much higher rate than that paid by other patients.

Cost escalation. The impact of the Bwamanda Health Plan on cost escalation cannot be discussed in the same context as the impacts of the national insurance programs previously described.

**6** Information on the Bwamanda health zone in Zaire is derived from Shepard _et al.,_ 1990.