Resilience and Health Shocks: The Potential of Health Savings Accounts and Health Loans
In arid agricultural regions such as the Passoré Province of Burkina Faso, households have access to few resources for facing numerous health and environmental shocks. This paper presents the results of a field experiment which used economic games to introduce health savings accounts (HSAs) and health loans to participants, mimicking real-life products by a local financial service provider (FSP). Participants encountered real-life scenarios and were asked to manage shocks with the resources provided through their game, and their decisions on the use of those resources were recorded.
The research identified key strategies that households used to respond to shocks - with and without access to the HSA and loan. This research sought to understand whether households using these products were better off in light of these trade-offs and limitations. The research also aimed to help FSPs better understand the potential impacts of financial tools created specifically to cope with shocks and build resilience.
The findings suggest that HSA and health loans have the potential to help the poor better manage health shocks, leaving them better off financially and reducing their long-term costs. It highlights the value of FSPs and development practitioners investing in the design and development of shock-specific financial tools.
