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Medical Treatment Loan – An Inter-Sectoral Approach for Improving Access to Healthcare for the Poor as An Innovative Financing Mechanism in Bangladesh.

An Inter-Sectoral Approach for Improving Access to
Healthcare for the Poor as An Innovative Financing
Mechanism in Bangladesh.
Hossain Ishrath Adib: Programme Head, Healthcare Financing, Health Nutrition and
Population Programme, BRAC, Dhaka, Bangladesh. Email:
Wahid Abdallah: Assistant Professor, Economics and Social Sciences, BRAC University,
Dhaka Bangladesh, Email:
Moonmoon Shehrin: Project Lead, Medical Treatment Loan, Micronance Programme,
BRAC, Dhaka, Bangladesh. Email:
Shahadath Hossain, Graduate student, Department of Economics, United International
University (UIU), Dhaka, Bangladesh. Email:
Key terms: Healthcare nancing, access to healthcare services, catastrophic health
expenditure, loans for health, Bangladesh, BRAC
Forty years since independence, Bangladesh is now in a
position to make a credible claim that it has experienced
a health revolution. Such achievements have been termed
as “The Bangladesh Paradox” due to its exceptional health
achievements, particularly in health related targets set
through Millennium Development Goal despite poverty
(Lancet, 2013). However, despite remarkable achievements
in a number of primary health indicators, equitable access
to comprehensive health services from reliable providers
remains to be a critical public health challenge for Bangladesh.
At the same time, rising proportion of aging population and
growing burden of chronic, non-communicable diseases and
injuries is creating more pressure on the limited budgetary
allocation for health.About two-third of total health
expenditure in Bangladesh isprivately nanced through out-
of-pocket payments and around 15% of total householdsface
catastrophic health expenditure without effective coping
mechanisms against health related shocks (MOHFW, 2012).
High cost of treatment for emerging non-communicable
diseases and health emergencies often induce low-income
households to liquidate family and business assets. With
a fast growing expenditure in health, and a large informal
economy the traditional tax-based nancing or social health
insurance for universal health coverage (UHC) are not realistic
in the near future. Community based approaches like micro-
health insurance are yet to show any credible evidence as
an effective alternative solution with adequate depth of
coverage, scalability and sustainability.
In the absence of adequately functioning health facilities with
comprehensive access to care, especially at the periphery,
the patients have to travel to bigger cities and often all the
way to tertiary facilities. The associated cost of non-medical
expenditure and inconvenience of traveling as well as
dependency on attendants create additional barriers to timely
access to medical treatment from appropriate providers. As
a result, informal providers turn out to be the initial and often
the only point of care for the low-income households. Such
phenomenon presents inequity and discrimination in access
to quality health services in Bangladesh.
introducing Medical treatMent loan (Mtl)
Historical contexts in Bangladesh suggest that while state-
led healthcare nancing policy and delivery mechanisms
retains its due importance, there are signicant potentials
for alternative health nancing through multi-sectoral
engagement. In view of such circumstances, BRAC, a leading
non-state development organization in Bangladesh took the
initiative ofdevelopinginnovative approaches and policy
options. It was designed to diminish catastrophic payments,
to improve access and quality of careand to create a set of
interventions with a scope for integration into a universal
coverage strategy.At the same time, as a pioneer of
micronance and one of the largest micronance institutions
in Bangladesh, BRAC assessed that healthshocksare often
the cause of micro-credit default. Income shock resulting
from medical emergencies is one of the primary reasons
for families to fall deeper into poverty. Such realization led
to a collaborative effort between Micronance Programme
and Health Nutrition and Population Programme of BRAC
in designing and launching“Medical Treatment Loan” (MTL)
scheme. This facility is primarily available for micronance
clients and their family members in 3 districts of Bangladesh
with thefollowing objectives:
i. Improve timely access to reliable healthcare services for
low-income households.
ii. Reduce nancial constraints for seeking healthcare for
low-income households.
iii. Minimize incidents of asset depletion and adverse
indebtedness on account of catastrophic health events
This innovative low-interest loans approach aims to protect
the poor from the vulnerability associated with catastrophic
health expenditures and to assist them with effective
referral and navigation support at the facilities. MTL offers
opportunities for individuals/households affected by such
payments to cushion or buffer the impact of catastrophic
expenditures. Moreover, by securing institutional credit to
pay back the expenditures over a reasonable period of time.
This innovative post-payment mechanism is expected to
spread the nancial risk of health events over a long period
into the future, making the required payments affordable.
PerforMance of Mtl during
tHe Pilot PHase of year 1
BRAC micronance programme provides small loans to low
income households, with a special focus on womenwho
invest the money in their small businesses. MTL serves as
a top-up loan to meet the treatment and associated costs
incurred by the respective clients or their family members.
Within six months of launching in October 2013, MTL was
gradually made available for nearly 200,000 micronance
households located in 26 sub-districts under 3 districts of
Bangladesh. In an event of illness within the family, a current
micronance member can apply for this loan. To avail the loan,
borrowers are required to collect a referral slip from BRAC
ofce, which entitles the client with a special discount from
a list of empanelled local providers. Upon consultation, the
doctor writes a medical advice with an estimated treatment
cost. The micronance team at the respective branch ofce
then carries out a quick nancial appraisal to determine the
loan amount and duration before disbursing the loan. The
client repays the loan along with his/her other loans through
weekly/monthly installments (as applicable).The size of MTL
ranges from USD 38 to USD 640. The repayment period
varies between 6 to 24 months.
In a year, a total number of 1,467 clientsreceived MTLto nance
the treatment cost for themselves/their family members.
The primary purpose of the rst year of operation was to
set up the institutional structure, establishing the providers’
network and design navigation support for the clients
while seeking medical care. From the very beginning,one
of the key activitiesof the project is to undergocontinuous
evaluation to observe its performance in terms of achieving
the three major objectives stated above. Periodic results
from this continuous evaluation exercise will provide the
managements with critical feedback for ne-tuning of the
design and operational modalities of the scheme and its
expansion strategies.
During the rst phase of evaluation, the monitoring
team collected information from 168 randomly selected
households that received MTL. Data was collected on
medical conditions of households who borrowed from BRAC,
time required to get the loan, cost of treatment, sources of
nancing in case the loan was not adequate and utilization
of loan. Simultaneously, health events in the last 12 months
were also collected from the same household regarding, their
healthcare seeking behavior and means of nancing before
MTL was available. The following table shows a breakdown
of health conditions from the sample in broad categories for
which the treatments were nanced by MTL:
Following is some of the basic information that was collected
during the rst phase of evaluation:
It has been observed that the loans that are disbursed
on average, covers 52% of the treatment cost (including
transportation, drugs, diagnostics, medical consultation,
hospitalization if needed and costs incurred by the
attendants). The key reason for incomplete nancing
for health expenditure through MTL was to avoid over-
indebtedness through nancial appraisal and assessment
of the debt capacity of the borrower. Another nding was
that on average, MTL borrowers could mobilize necessary
resources three days earlier than the households without this
The following table gives a comparison between a subset of
MTL borrowers in terms of how long it took them to mobilize
nancing for treatment and other associated costs:
In the absence of MTL, during health shock, households
without minimum income or savings had to wait for more
than 3 days to mobilize resources for treatment. On the other
hand, with MTL, 60% of households mobilized resources
within 7 days to initiate treatment, thus avoiding critical
delay in seeking healthcare.
The following diagram shows a comparison in terms of
coping mechanisms during health events:
The above diagram shows a slight improvement in the trend
of asset retention and dependency on others for meeting
health related expenses in the presence of MTL.
is Mtl aBle to attain tHe key oBjectives?
In order to assess the performance of MTL with respect
to attaining its key objectives, there is a need for in depth
research and trend analysis. Based on some early observations
generated by monitoring and evaluation exercise, some
early indications can be derived about the scope for MTL
as an innovative and complementing health nancing
mechanism. As far as ‘access’ is concerned, BRAC has
taken the strategy of creating incentives and providing the
households with the choice of seeking treatment from a list
of qualied practitioners with discount. The loan component
has created a strong incentive for the households to receive
treatment from qualied practitioner without delay, as this is
a pre-condition for their proposal for MTL to be processed.
Such incentive has been found to have clear implications in
reducing delay when it comes to taking a decision on when
and which provider to visit.
With respect to reduction in nancial constraints in
seeking healthcare, minimizing the incidence of asset
depletion andadverse indebtedness-the early evidencesare
indicatingsome positive results of MTL. As mentioned
earlier, 52% of average treatment costs are being nanced
by MTL. It has also been observed that average number of
days required for mobilizing resources to cover treatment
costs has reduced by more than 3 days when MTL became
available. In terms of dependency on extended family
members, relatives and friends to nance health expenditure
there is more than 50% decline in such borrowing with the
introduction of MTL.Finally, with the availability of MTL, there
is a considerable decline in the selling off of marketable
items such as crops, where the transactions often take place
below market price due to distress selling.
future PersPectives
Considering the early nature of the scheme, initial ndings
from the research and evaluation exercises should be
carefully interpreted before deriving nal conclusions.
Still, some of the key indicators related to operational
performance and nancial projections are showing strong
potentials for MTL to be scaled up across the nation. The
project has an impressive loan recovery rate of over 99.5%
despite high risk of default on account of illness and death.
Financial projections show that the programme will attain its
break even at a scale of 1.5 million households havingaccess
to this facility within 3 years. Such prospects for improving
access to quality health services for the poor without relying
on subsidies have encouraged BRAC to scale up this facility
all over Bangladesh within ve years. Accordingly, BRAC
has already initiated the mainstreaming of MTL for all its
micronance clientele that consists of 4.63 million borrowers/
The experience of MTL during its rst year of operation
indicates its strong potentials in getting integrated with
the national health nancing strategy in addressing
the limitations of conventional mechanisms. One such
mechanism is insurance in any form having limitations in
terms of providing a comprehensive coverage without
exclusion. Typical insurance schemes are also constrained
by annual claim limits due to which the coverage does not
nance the entire cost of treatment when the expenses
exceed such limit. A supplementary nancial instrument
like MTL can address such limitations for both formal and
informal mechanisms by virtue of its credible institutional
method and strong presence at the grass-root level through
micronance institutions. As of 2013, micronance sector
in Bangladesh was supporting 33 million registered clients,
most of whom represent low-income households (MRA 2014).
The successful trend of community basedinitiativeswith
credible institutional platforms in Bangladesh presents
a strong platform for innovative approacheslike MTL to
improve access to comprehensive health services for the
poor - supporting the nation’s journey towards Universal
Health Coverage.
1. Chowdhury, AMR, Bhuiya, A, Chowdhury, ME, Rasheed, S, Hussain, Z &
Chen, LC 2013, ‘The Bangladesh paradox: exceptional health achievement
despite economic poverty’, The Lancet.
2. Microcredit Regulatory Authority (MRA) 2014, Microcredit in Bangladesh.
Available from:les/Publications/
3. Health Economics Unit, Ministry of Health and Family Welfare 2012,
Expanding Social Protection for Health Towards Universal Coverage - Health
Care Financing Strategy 2012-2032, MOHFW, Dhaka
ResearchGate has not been able to resolve any citations for this publication.
Full-text available
Bangladesh, the eighth most populous country in the world with about 153 million people, has recently been applauded as an exceptional health performer. In the first paper in this Series, we present evidence to show that Bangladesh has achieved substantial health advances, but the country's success cannot be captured simplistically because health in Bangladesh has the paradox of steep and sustained reductions in birth rate and mortality alongside continued burdens of morbidity. Exceptional performance might be attributed to a pluralistic health system that has many stakeholders pursuing women-centred, gender-equity-oriented, highly focused health programmes in family planning, immunisation, oral rehydration therapy, maternal and child health, tuberculosis, vitamin A supplementation, and other activities, through the work of widely deployed community health workers reaching all households. Government and non-governmental organisations have pioneered many innovations that have been scaled up nationally. However, these remarkable achievements in equity and coverage are counterbalanced by the persistence of child and maternal malnutrition and the low use of maternity-related services. The Bangladesh paradox shows the net outcome of successful direct health action in both positive and negative social determinants of health-ie, positives such as women's empowerment, widespread education, and mitigation of the effect of natural disasters; and negatives such as low gross domestic product, pervasive poverty, and the persistence of income inequality. Bangladesh offers lessons such as how gender equity can improve health outcomes, how health innovations can be scaled up, and how direct health interventions can partly overcome socioeconomic constraints.
the Bangladesh paradox: exceptional health achievement despite economic poverty
  • Bhuiya
  • Me
  • Rasheed
  • Chen
chowdhury, aMR, Bhuiya, a, chowdhury, Me, Rasheed, s, hussain, Z & chen, lc 2013, 'the Bangladesh paradox: exceptional health achievement despite economic poverty', the lancet.