A Digital Platform to Manage Out-of-Pocket Health Care Expenses

By Pamela Riley | Original Post Found on Consultative Group to Assist the Poor (CGAP) 

Patients in developing countries spent $148 billion in out-of-pocket health care expenses in 2015. The Sustainable Development Goal for health envisions universal coverage for “essential health services,” and there’s no doubt that efforts made to achieve this goal will reduce the burden of out-of-pocket expenses. But what about services that aren’t considered “essential” and covered by insurance? There will always be some services that are considered nonessential, particularly in the budget-constrained environments of low-income countries. The financial inclusion and health care communities must find ways to help low-income households to manage these out-of-pocket expenses, too, and digital financial services (DFS) offer a way forward.

A pharmacist assists patients in Kenya. Photo: Sarah Farhat / The World Bank

DFS make it possible to bundle financial products in a way that helps customers manage a range of health care expenses. In a previous blog post, we discussed the potential of bundling microinsurance and microcredit, as MicroEnsure is doing in Kenya. Another Kenyan provider, CarePay, is taking a different approach through a mobile health wallet called M-TIBA, which bundles savings, credit and remittance products, among others, with discounted health care services and health insurance to help subscribers manage a range of health care expenses.

How does M-TIBA work?

Launched in 2016 by FinTech and payments administrator CarePay, in partnership with Safaricom, PharmAccess and UAP Insurance, M-TIBA has built a network of 500 participating health care providers and enrolled more than 1 million Kenyans. M-TIBA enables subscribers to save, send, receive and pay for medical treatment through their phone. It also enables friends and family to send funds to loved ones exclusively for health expenditures and provides a secure channel for subsidies or vouchers from donors. M-TIBA funds are earmarked for use at participating clinics, which protects them from other uses and improves access to health financing. On the supply side, participating clinics that meet M-TIBA criteria receive access to the system, an M-PESA till (electronic payment system) and quality and business management training. Providers benefit from more reliable revenue streams, more efficient payment processing and more secure cash management.

Addressing the needs of patients, providers and payors

Earlier attempts to launch sustainable, health-specific digital products in Kenya, such as Changamka and Linda Jamii, were hampered by low consumer awareness of the products’ value and how to use them. Research underscores patients’ need for products that are simple, affordable and convenient as well as health care providers’ need for features that increase real-time communications and transparency of clinic expenditures and revenues. M-TIBA incorporated lessons from earlier ventures to design a platform that connects patients, providers and payors in a seamless system and provides important benefits to each of these stakeholders.

  • Patients can more easily save and access resources such as government subsidies, product vouchers and contributions from family and friends. Early adopters received matching funds from PharmAccess to incentivize enrollment and savings. M-TIBA is designed for transactions in small, irregular amounts, reflecting the uneven income and expenses of low-income populations. Savings used for preventative services reduce risks of long-term, costlier illnesses.
  • Participating providers benefit from M-TIBA’s marketing and training, receive faster payout for services and have more options to engage proactively with patients. Banks otherwise leery of lending to clinical providers with weak accounting systems can use M-TIBA data to establish creditworthiness. The Medical Credit Fund provides cash advances based on clinics’ cash flows through M-TIBA and M-PESA. Terms of repayment are calculated as a percentage of revenues earned at clinics, deducted directly from M-TIBA payments to the clinics.
  • Insurance companies connected through CarePay have lower administration costs and receive instant analysis of transactional data for diagnoses made; treatments provided; and costs per patient, per clinic and per region. By tracking patient journey and treatment protocols, the platform measures quality of care and benchmarks providers.

Contributing to universal health coverage

Every year, over 1 million Kenyans are pushed below the poverty line due to health care expenses, and 83 percent lack health insurance. M-TIBA links with Kenya’s National Hospital Insurance Fund (NHIF) to help advance universal health coverage. Enrollment in NHIF is mandatory for all salaried employees, and premiums are deducted from their paychecks. However, membership for the informal sector (over 80 percent of Kenya’s workforce) is voluntary. It costs roughly $5 per month for a family, and enrollment has been low. To gather more data on barriers to participation, PharmAccess Foundation in 2017 sponsored health insurance premiums through M-TIBA for 2,000 families living in Nairobi slums. An M-TIBA app is being used to register all citizens in NHIF in two Kenyan counties. Citizens use the app to pay their premiums digitally.

The data generated by the app are also helping insurance programs to improve coverage. Data on what types of services people use and how often are helping NHIF to tailor premium costs and benefits covered to increase its population coverage. Employer-supported insurance programs also gain valuable insights for managing their costs and improving staff health. Oserian, a flower farm, enrolled its 4,600 workers in health insurance through M-TIBA. Through M-TIBA’s backend data, Oserian now has visibility into what services its employees are accessing and where those treatments are most successful.

What are the challenges?

M-TIBA’s rapid growth is impressive, but it faces some challenges. Approximately 4,000 users sign into M-TIBA every day, enabling real-time analysis of how, when and where the platform is used. The data show that many accounts are dormant, because low-income consumers have limited funds to save. M-TIBA has developed tailored incentives, such as bonus top-ups, to encourage people to save. M-TIBA also allows relatives, friends and donors to make mobile money transfers to others, knowing that the money will be used for health care. Another challenge is that enrolling new participants into Kenya’s national health insurance requires intensive education and ways to help low-income Kenyans pay their monthly premiums through savings and nudges.

M-TIBA must also find ways to increase its efficiency, sustain its growth and reduce its dependence on donor funding. One lesson has been to slow its enrollment of new providers. This is a costly process that requires training, the installation and maintenance of electronic devices, and service quality monitoring. Currently, providers upload their service data to a parallel reporting system, which increases their administrative burden. M-TIBA is exploring how to integrate its platform with providers’ existing systems and how to improve the quality of data.


Health and poverty are intrinsically linked, and DFS offer promising, if unproven, means for closing the gap between universal health care targets and budgetary constraints in low-income countries. M-TIBA’s innovative business model demonstrates the value of bundling simple services like stored-valued accounts to support access to nano-credit for health emergencies and build toward inclusive national social insurance schemes. Digital technology provides an essential channel for networking disparate actors and making visible what is working and why. There is urgency and much opportunity for the financial inclusion community to invest more broadly in the health sector.

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