Skip to main page content
U.S. flag

An official website of the United States government

Dot gov

The .gov means it’s official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Access keys NCBI Homepage MyNCBI Homepage Main Content Main Navigation
Comparative Study
. 2015 Oct 19:15:473.
doi: 10.1186/s12913-015-1132-5.

Evasion of "mandatory" social health insurance for the formal sector: evidence from Lao PDR

Sarah Alkenbrack  1 , Kara Hanson  2 , Magnus Lindelow  3
Affiliations
Comparative Study

Evasion of "mandatory" social health insurance for the formal sector: evidence from Lao PDR

Sarah Alkenbrack et al. BMC Health Serv Res. .

Abstract

Background: In the last decade, almost every low- or middle-income country in the world has expressed support for universal health coverage (UHC). While at the beginning of the UHC movement, country strategies focused on increasing access to the formal sector as the first step of UHC, there is now consensus that countries should cover the entire population, with particular attention to covering the poor. However, it is often assumed that mandatory schemes will automatically cover their target populations, and consequently little is known about why firms comply or do not comply with enrolment requirements. Using the experience of Lao PDR, where the enrolment rate in the mandatory social security scheme is low and the capacity for regulation is weak, we conducted this study to better understand the determinants of enrolment of private sector firms in mandatory social security.

Methods: We used a cross-sectional case-comparison design, surveying 130 firms. We applied a structured questionnaire to explore determinants of enrolment, specifically looking at firm characteristics (e.g., industry category, ownership); sociodemographic characteristics of company heads; firms' risk perceptions; details of employment contracts; employee benefits; and exposure to social security. Closed ended questions were analysed quantitatively, while content analysis was applied to open-ended questions. Logistic regression was used to examine the determinants of enrolment.

Results: Smaller privately owned firms in the services industry were the least likely to enrol in social security, while firms in the trade industry were more likely to enrol than firms in manufacturing, construction, or services. The main reason for not enrolling was that firms offered a better package of benefits to their employees, although further investigation of company benefits showed that this was not the case in practice. Additional reasons for non-compliance were lack of knowledge and poor quality of care at government hospitals.

Conclusions: The study contributes to the dialogue on how best to increase coverage in the formal sector, which is an important element of achieving UHC. It also provides much needed information about the motivation of private sector firms to comply with mandatory schemes.

PubMed Disclaimer

Figures

Fig. 1
Fig. 1
Benefits offered to SSO and non-SSO employees
Fig. 2
Fig. 2
Composition of workforce by industry and SSO status
Fig. 3
Fig. 3
Percent of permanent workforce enrolled with SSO
See this image and copyright information in PMC

References

    1. McGillivray W. Contribution evasion: implications for social security pension schemes. Int Soc Secur Rev. 2001;54(4):3. doi: 10.1111/1468-246X.t01-1-00102. - DOI
    1. Bailey C, Turner J. Strategies to reduce contribution evasion in social security financing. World Dev. 2001;29(2):385–393. doi: 10.1016/S0305-750X(00)00100-5. - DOI
    1. Wagstaff A. Social health insurance vs. Tax-financed health systems - evidence from the OECD, in Policy Research Working Paper #4821. Washington, DC: The World Bank; 2009.
    1. Nyland C, Smyth R, Zhu CJ. What determines the extent to which employers will comply with their social security obligations? Evidence from Chinese Firm-level Data. Soc Policy Adm. 2006;40(2):196–214. doi: 10.1111/j.1467-9515.2006.00484.x. - DOI
    1. World Bank. World Development Indicators. 2010 February 1, 2011. Available from: http://data.worldbank.org/data-catalog/world-development-indicators.

Publication types