Introduction
POVILL is a four-year project (2005-2009) under EU 6th Framework, which is aimed at contributing to national and international efforts to reduce the incidence of severe poverty due to illness and improve access to effective health services by poor people, particularly in Asian transitional economies. It is being undertaken by a partnership of ten Asian and European institutions and the field work is in Laos, Cambodia and Hubei and Sichuan Provinces in China.

Background
China, Cambodia and Lao PDR share a history of a command economy with collective agricultural production. All three countries are in transition to a market economy, although at different stages in this transition. In China, where the transition is most advanced, incomes have risen substantially for most households and the number living in poverty has greatly decreased. However, households are exposed to higher levels of financial risk. When things go wrong they can no longer depend on state-owned enterprises or agricultural collectives to provide support. The circumstances of Cambodia and Laos have been complicated by the need to recover from the effects of prolonged conflict. These countries still have very high levels of household poverty and vulnerability.
Several factors are increasing the exposure of households to the financial costs of major illness. The shift to household production has not been accompanied by the creation of effective mechanisms to insure against the loss of capacity to work the land. In China, the decline of the communes was associated with the collapse of local health insurance schemes. In all three countries, there has been a growth of market relationships in the health sector and health providers have a financial incentive to promote high levels of pharmaceutical use. The change in the pattern of ill-health with demographic transition has led to a growing problem of chronic illness with acute exacerbations amongst the elderly. There is evidence that major illness has become an important contributor to household poverty.
Governments of the three counties are actively looking for new approaches to help people cope with these risks. In China this has been associated with a much greater political interest in addressing poverty and in strengthening the social sector. China has recently announced national policies for the creation of rural health insurance and health safety nets for the poor. Cambodia has experimented with demand-side approaches in which local NGOs purchase hospital care for the poor and it is considering strategies for scaling up these “equity funds” and/or establishing health insurance. Lao PDR has depended on less formal mechanisms for exempting the poor from user charges. It is now giving more attention to measures for meeting the health needs of the poor and is experimenting with a variety of interventions. This research has been designed in close consultation with policy makers and local government and NGO managers in the three Asian countries to ensure that it contributes to the refinement of policy and to effective implementation.