How do health insurer market concentration and bargaining power with hospitals affect health insurance premiums?

The US health insurance industry is highly concentrated, and health insurance premiums are high and rising rapidly. Policymakers have focused on the possible link between the two, leading to ACA provisions to increase insurer competition. However, while market power may enable insurers to include higher profit margins in their premiums, it may also result in stronger bargaining leverage with hospitals to negotiate lower payment rates to partially offset these higher premiums. We empirically examine the relationship between employer-sponsored fully-insured health insurance premiums and the level of concentration in local insurer and hospital markets using the nationally-representative 2006–2011 KFF/HRET Employer Health Benefits Survey. We exploit a unique feature of employer-sponsored insurance, in which self-insured employers purchase only administrative services from managed care organizations, to disentangle these different effects on insurer concentration by constructing one concentration measure representing fully-insured plans’ transactions with employers and the other concentration measure representing insurers’ bargaining with hospitals. As expected, we find that premiums are indeed higher for plans sold in markets with higher levels of concentration relevant to insurer transactions with employers, lower for plans in markets with higher levels of insurer concentration relevant to insurer bargaining with hospitals, and higher for plans in markets with higher levels of hospital market concentration.     

If they get sick, they are in trouble: health care restructuring, user charges, and equity in Vietnam.

The transition from a centrally planned economy in the 1980s and the implementation of a series of neoliberal health policy reform measures in 1989 affected the delivery and financing of Vietnam's health care services. More specifically, legalization of private medical practice, liberalization of the pharmaceutical industry, and introduction of user charges at public health facilities have effectively transformed Vietnam's near universal, publicly funded and provided health services into a highly unregulated private-public mix system, with serious consequences for Vietnam's health system. Using Vietnam's most recent household survey data and published facility-based data, this article examines some of the problems faced by Vietnam's health sector, with particular reference to efficiency, access, and equity. The data reveal four important findings: self-treatment is the dominant mode of treatment for both the poor and nonpoor; there is little or no regulation to protect patients from financial abuse by private medical providers, pharmacies, and drug vendors; in the face of a dwindling share of the state health budget in public hospital revenues and low salaries, hospitals increasingly rely on user charges and insurance premiums to finance services, including generous staff bonuses; and health care costs, especially hospital costs, are substantial for many low- and middle-income households.     

The evolution of health insurance in India and China

Health insurance in rapidly developing countries such as India and China needs to be segmented. One challenge is that the main advantage of health insurance for a family is the financial protection the insurance provides, which may trade off against public policy goals of increasing access, since greater access means higher premiums relative to the value of health benefits. As India and China continue on their path to development, they may increasingly face the problem of providing drug benefits, whose cost is difficult to control or constrain, especially in a setting where the country is producing for the world market.     

Private health insurance plans in 1978 and 1979: a review of coverage, enrollment, and financial experience.

The private health insurance industry collected $55.9 billion in premiums in 1979 and returned $50.2 billion in benefits to its subscribers. Premiums rose 12.4 percent, slightly faster than in 1978 when premiums rose 11.4 percent, to $49.7 billion. Benefits rose 11.4 percent in 1979, down from the 12.6 rate in 1978. After operating expenses were deducted, the industry showed underwriting losses of $1.4 billion in 1979 and $1.5 billion in 1978. About 78 percent of the population was insured for hospital care, 76 percent for x-ray and laboratory examinations, and about 76 percent for surgical services in 1979. Smaller percentages had coverage for other types of care. An estimated 64 percent of the aged bought private hospital insurance, and about 43 percent bought surgical insurance, mostly to supplement Medicare benefits. An estimated 12 percent of persons under age 65 had no protection against the cost of hospital care either through private insurance or a public program such as Medicare or Medicaid.     

The role of public employers in a changing health care market

Public employers provide health insurance coverage to nearly 16 percent of all U.S. workers. Their reactions to rapidly rising premiums can have an important effect on local markets for health insurance because of their size, their visibility, and their reflection of public policy. However, public employers are constrained in their responses by tight budgets set by elected officials and statutes regarding due process, public input, and public accountability. As insurance markets consolidate and premiums continue to increase, public employers face tough choices regarding employee benefits.     

Reconsidering the role of private health funds in Australia: a dynamic model

In recent years the private sector has played a more important role in the funding and provision of Australian hospital care as a consequence of federal government policies aimed at increasing participation in private health insurance (health funds). These policies include tax incentives, a 30% rebate on premiums and lifetime community rating (premiums set by age). While these policies have improved the short-term profitability of the private sector, its long-term success is not certain. This is because negotiations between health funds and private hospitals are often myopic, the nature of the insurance product may be inefficient, and there is a general lack of academic research on the private sector. This paper highlights the importance of the relationship between health funds and private hospitals in ensuring the long-term viability of the industry. It uses a simple overlapping generations model to demonstrate that it is not only the price that health funds pay that impacts on the capital value of hospitals, but also it is important how they structure their policies and attract individuals. The model demonstrates the potential benefits of implementing health insurance based on intertemporal transfers of funds rather than the current cross-subsidization. Such a policy would see health funds become an important store of capital. Also highlighted are the difficulties of discussing fundamental changes to the health care system. While recent health care reforms have been described as driven by ideology rather than evidence, in the Australian context there is little evidence on which to base policy. Researchers need to be more proactive in their consideration and evaluation of alternative health care policies. Through quality research on the private sector, academics can better guide policy makers at the national and institutional level.     

Ownership and average premiums for Medicare supplementary insurance policies

This article describes private supplementary health insurance holdings and average premiums paid by Medicare enrollees. Data were collected as part of the 1992 Medicare Current Beneficiary Survey (MCBS). Data show the number of persons with insurance and average premiums paid by type of insurance held--individually purchased policies, employer-sponsored policies, or both. Distributions are shown for a variety of demographic, socioeconomic, and health status variables. Primary findings include: Seventy-eight percent of Medicare beneficiaries have private supplementary insurance; 25 percent of those with private insurance hold more than one policy. The average premium paid for private insurance in 1992 was $914.     

Genetic screening,health care and the insurance industry

The potential use of genetic tests in insurance has raised concerns about discrimination and individuals losing access to health care either because of refusals to test for treatable diseases, or because test-positives cannot afford premiums. Governments have so far largely sought to restrict the use of genetic information by insurance companies. To date the number of tests available with significant actuarial value is limited. However, this is likely to change, raising more clearly the question as to whether the social costs of adverse selection outweigh the social costs of individuals not accessing health care for fear of the consequences of test information being used in insurance markets. In this contribution we set out the policy context and model the potential trade-offs between the losses faced by insurers from adverse selection by insurees (which will increase premiums reducing consumer welfare) and the detrimental health effects that may result from persons refusing to undergo tests that could identify treatable health conditions. It argues that the optimal public policy on genetic testing should reflect overall societal benefit, taking account of these trade-offs. Based on our model, the factors that influence the outcome include: the size of and value attached to the health gains from treatment; deterrent effects of a disclosure requirement on testing for health reasons; incidence of the disease; propensity of test-positives to adverse select; policy value adverse selectors buy in a non-disclosure environment; and price elasticity of demand for insurance. Our illustrative model can be used as a benchmark for developing other scenarios or incorporating real data in order to address the impact of different policies on disclosure and requirement to test.     

部分国家政府举办公立医院的经验与启示

世界各国不论经济发达与否,均举办一定数量的公立医院。公立医院的重要地位和作用是：弥补市场缺陷、体现政府保障居民健康权益的责任,并在控制医药费用、提高卫生服务公平可及性、有效利用资源等方面发挥重要作用。不同卫生保健体制国家的公立医院功能定位具有不同特点：国民卫生服务体系国家强调政府主导卫生筹资,公立医院为人群提供免费或廉价的基本卫生服务;社会健康保险体制国家以德国为例,公立医院除承担一般性功能外主要提供住院服务;商业健康保险体制国家以市场为主导,公立医院的作用在于调节市场失灵,在医疗服务体系中发挥基础性但非主体性作用,并履行一定的社会职责。各国政府通过探索公立医院改革,如实行“管办分离”,以明确政府举办公立医院的职责。国际经验对我国的启示是：政府应举办一定数量的公立医院,为其承担大部分筹资,完善监管政策,促使其落实社会职能和责任;公立医院要通过高效率运行,为群众提供高质量的服务,并要代表国家医疗服务体系的先进水平,起到示范作用;政府进行公立医院改革要以转变政府职能为前提,并保障公立医院的社会功能;公立医院的功能应适应国家医药卫生体制的制度环境。     

The 'graying' of group health insurance

We examine differential declines in private insurance by income and age. We show that older, higher-income people in working families are more likely to retain private coverage as premiums rise, and we project these effects on future coverage rates. The analysis suggests that trends are leading to the "graying" of the employment-based health insurance system, where older, higher-income people get private health insurance, and others increasingly have public coverage or go without. These changes raise questions about the private health care system's ability to pool health risks. Population aging could interact with rising premiums and place additional pressure on an already strained employment-based health insurance system.     

Unmet Health Care Needs Among Children with Special Health Care Needs Enrolled in Tricare

TRICARE provides health care benefits to nearly two million children of active duty, retired, National Guard, and reserve service members. Child health advocates and congressional reports have raised questions regarding the adequacy access to care for children with military health benefits, particularly children with special health care needs (CSHCN). The objective of this study was to compare the health care experiences of CSHCN in TRICARE with those of CSHCN with other sources of health insurance. A cross-sectional analysis comparing unmet health care needs among CSHCN with TRICARE versus CSHCN with other sources of health insurance using nationally representative data from three years of the National Survey of Children’s Health (NSCH), 2016-2018. The NSCH includes a broad range of questions related to child health and health care to provide national level estimates, and the data allow for comparisons between insurance coverage groups and TRICARE. The survey data contain responses from over 100,000 parents or primary caregivers (parents) of children, representative of over 73 million children annually. This includes 804 children who were representative of approximately 367,000 CSHCN covered by TRICARE annually. Children with special health care needs. Overall, 21 percent (95% CI 19-24 percent) of parents of children covered by TRICARE reported their child had a special health care need, compared to 16 percent of children with commercial insurance (95% CI 15-16 percent) and 24 percent of children with public insurance (95% CI 23-25 percent). Eight percent of parents of CSHCN covered by TRICARE (95% CI 4-16 percent) reported any unmet health care needs in the prior 12 months, compared to 4 percent of CSHCN with private insurance (95% CI 4-5 percent) and 9 percent of CSHCN with public insurance (95% CI 8-11 percent). Among specific needs, 3 percent or fewer CSHCN covered by TRICARE had unmet needs for medical, dental, vision, hearing, or mental health care. Similarly, 5 percent or fewer reported difficulty or delays in getting services because of eligibility for coverage of the service, availability in the area, difficulty in getting an appointment, or cost. About 11 percent of parents of CSHCN covered by TRICARE reported usually or always being frustrated in getting needed services for their child during the prior 12 months, compared to 4 percent of those with private insurance and 9 percent of those with public insurance. About 12 percent of parents of CSHCN covered by TRICARE reported problems with paying for their child’s health care needs in the prior 12 months, compared to 23 percent of those with private insurance and 8 percent of those with public insurance. TRICARE is largely meeting the needs of the CSHCN for whom it provides benefits, but there are opportunities for improvement. CSHCN in TRICARE face higher rates of unmet needs than privately insured children, and their parents face higher levels of frustration in getting needed services. TRICARE should continue to work with families of CSHCN to identify specific unmet needs and sources of frustration with getting needed services.     

The Canadian health care system: an overview

Although health care is a provincial responsibility in Canada, universal hospital insurance was fully adopted by 1961; universal medical insurance followed 10 years later. Each province enacted universal insurance after the federal government offered to pay 50% of provincial hospital and medical care costs. Hospital insurance had wide public and provider support but universal medical care insurance was opposed by organized medicine. The federal government soon realized that it had no control over total expenditures and no mechanisms for controlling costs. In 1977 it enacted Bill C-37 which limited total federal contributions and made those contributions independent of provincial health care expenditures so that increased costs had to be met by the provinces. Since private health care insurance for universal benefits is prohibited by the federal terms of reference for health insurance, the provinces must raise the money by taxes and (in some provinces) premiums. Although prohibited by the terms of reference of the universal program, some provinces have adopted hospital user fees and are allowing their physicians to bill patients in excess of provincial fee schedules. The 1980s have seen increased confrontations between the federal and provincial governments and between the provinces and their providers. The issues are cost containment and control of the system. The provinces have two broad options. The first is more private funding through private insurance and user fees. The proposed new Canada Health Act will probably prohibit such charges. A second option involves greater control and management of the system by the provinces; this has already occurred in Quebec. Greater control is vigorously opposed by physicians and hospitals. The Canadian solution to health insurance problems in the past has been moderation. Extreme moves in either direction would represent a break with tradition, but they may prove to be unavoidable.     

Penalizing patients and rewarding providers: user charges and health care utilization in Vietnam

The introduction of a comprehensive system of user charges in 1995 provided public health facilities in Vietnam, especially hospitals, with a growing source of revenue. By 1998 revenues from user charges accounted for 30% of public hospital revenues. Increasingly, provider incomes have relied on fee revenues and provision-based bonuses, the effect of which is that a poorly regulated fee-for-service system has replaced a salary system based upon a centrally determined global budget. This paper examines the potential influence of providers' on the use of publicly provided health services. Using facility-based data over the period 1996-98, the relative contribution of treatment intensity is compared and contrasted under the two sources of hospital revenues from patients, namely a user charge system and a third party payment system based on fee-for-services. The primary focus of the comparison is on the treatment intensity for all hospital contacts, hospital admissions and the length of hospital stays, decisions normally taken by the providers and over which patients have little or no influence. The results indicate that growth in patient revenues was associated with large increases in intensity. The growth in intensity was more pronounced in the case of inpatient contacts. Moreover, both the admission rate and the length of hospital stay were far higher for better off individuals than for the poor, and greater for the insured than the uninsured. The increase in the intensity of hospital care for both health insurance enrollees and the uninsured can be seen as, among other things, an attempt on the part of providers to increase revenue from health insurance premiums and user charges in the face of a shrinking share of public resources allocated to hospitals, and low wages and salaries.     

U.S. health care policy and the rising uninsured: an alternative solution

The lack of adequate health insurance affects one's ability to access care, which directly affects one's health. In the 21st century, there are 44 million people in the United States without health care insurance. The majority of people without health care insurance are working people under age 65, because most people over age 65 are retired and have health insurance through the federal Medicare program. Maintaining a healthy population makes good business sense because healthy people are more able to work, buy goods, and pay taxes that contribute to a healthy economy and strong government. We must understand, through provider "cost shifting," the American public is already "footing the bill" for the uninsured. However, the actual amount is hidden and passed on to consumers in payments to insurance companies through raised premiums, deductibles, co-payments, exclusions from coverage, and direct out-of-pocket payments to providers (e.g., physicians, hospitals). Ironically, the very working poor who are uninsured and underinsured help fund the health insurance of select federally protected groups through taxation. A huge gap exists in the current United States system of health care wherein there is no cogent benefit, only a vicious cycle as the insured continue to pay more for their care to help compensate provider losses due to the uninsured. This in turn causes a growing rank of uninsured individuals that lack access to adequate health care. The purpose of this article is to assert an alternative to the current U.S. health care insurance system. It takes advantage of structures already in place to promote a "win-win" American health system premised on a workable tiered universal health care system in which there is a benefit to the major populace. As an emanation of a diverse society, the proposed system does not advocate a one-payer universal system that is not amenable to the U.S. health care, social, or political environment.     

Testing the HMO competitive strategy: an analysis of its impact on medical resources

Competitive approaches to health care reform, including managed competition, are hypothesized to reduce health care expenditures and the resources devoted to medical care. Empirical evidence has been limited. The short- and long-run effects of an experiment closely resembling managed competition are analyzed. We examine effects on hospitals, technology diffusion, physicians, and health insurance premiums. The strategy reduces capital in hospitals, has minor effects on physicians and technology, and has only initial effects on average premiums.     

Willingness to pay for health insurance in a developing economy. A pilot study of the informal sector of Ghana using contingent valuation

In the midst of high cost of health care both at the macro and micro levels, health insurance becomes a viable alternative for financing health care in Ghana. It is also a way of mobilising private funds for improving health care delivery at the macro level. This study uses a contingent valuation method to assess the willingness of households in the informal sector of Ghana to join and pay premiums for a proposed National Health Insurance scheme. Focus group discussions, in-depth and structured interviews were used to collect data for the study. There was a high degree of acceptance of health insurance in all the communities surveyed. Over 90% of the respondents agreed to participate in the scheme and up to 63.6% of the respondents were willing to pay a premium of 5000 cents or $3.03 a month for a household of five persons. Using an ordered probit model, the level of premiums households were willing to pay were found to be influenced by dependency ratio, income or whether a household has difficulty in paying for health care or not, sex, health care expenditures and education. As income increases, or the proportion of unemployed household members drop, people are willing to pay higher premiums for health insurance.     

Modelling the implications of moving towards universal coverage in Tanzania

A model was developed to assess the impact of possible moves towards universal coverage in Tanzania over a 15-year time frame. Three scenarios were considered: maintaining the current situation ('the status quo'); expanded health insurance coverage (the estimated maximum achievable coverage in the absence of premium subsidies, coverage restricted to those who can pay); universal coverage to all (government revenues used to pay the premiums for the poor). The model estimated the costs of delivering public health services and all health services to the population as a proportion of Gross Domestic Product (GDP), and forecast revenue from user fees and insurance premiums. Under the status quo, financial protection is provided to 10% of the population through health insurance schemes, with the remaining population benefiting from subsidized user charges in public facilities. Seventy-six per cent of the population would benefit from financial protection through health insurance under the expanded coverage scenario, and 100% of the population would receive such protection through a mix of insurance cover and government funding under the universal coverage scenario. The expanded and universal coverage scenarios have a significant effect on utilization levels, especially for public outpatient care. Universal coverage would require an initial doubling in the proportion of GDP going to the public health system. Government health expenditure would increase to 18% of total government expenditure. The results are sensitive to the cost of health system strengthening, the level of real GDP growth, provider reimbursement rates and administrative costs. Promoting greater cross-subsidization between insurance schemes would provide sufficient resources to finance universal coverage. Alternately, greater tax funding for health could be generated through an increase in the rate of Value-Added Tax (VAT) or expanding the income tax base. The feasibility and sustainability of efforts to promote universal coverage will depend on the ability of the system to contain costs.     

Improving access to health care in Latino communities.

Public debate about health care reform often focuses on the need for health insurance coverage, but in Latino communities many other barriers also inhibit access to medical care. In addition, basic public health services often go underfunded or ignored. Thus, health care reform efforts, nationally and in each State, must embrace a broader view of the issues if the needs of Latino communities are to be served. This report reviews and summarizes information about the mounting problems Latino communities face in gaining access to medical care. Access to appropriate medical care is reduced by numerous financial, structural, and institutional barriers. Financial barriers include the lack of health insurance coverage and low family incomes common in Latino communities. More than 7 million Latinos (39 percent) go without health insurance coverage. Latinos without health insurance receive about half as much medical care as those who are insured. Structurally, the delivery system organization rarely reflects the cultural or social concerns of the communities where they are located. Therefore, providers and patients fail to communicate their concerns adequately. These communication problems are exacerbated by the extreme shortage of Latino health care professionals and other resources available. Institutional barriers often reflect the failure to consider what it means to provide good service as well as high-quality medical care. Reducing these barriers to medical care requires modifying governmental and institutional policies, expanding the supply of competent providers, restructuring delivery system incentives to ensure primary care and public health services, and enhancing service and satisfaction with care.     

Paying the hospital: American problems and foreign solutions

Hospital financing in the United States suffers from many problems. Many persons lack access because they lack third-party coverage. Among those covered, benefits vary, and persons receive unequal services. Costs are high and are uncontrolled. The hospital is burdened by complicated relations with many payers. In order to cover their costs and earn extra cash, hospitals overcharge the more generous third parties, and recriminations result. All other developed countries have either statutory health insurance, national health services, or full public financing of privately managed hospitals. Whatever the financing method, all countries avoid the problems prevailing in the United States. All citizens are covered, all have access, and hospitals reject no one for financial reasons. All citizens have equal benefits and receive the same basic services. Regulation by government and negotiations with health insurance carriers guarantee the hospital's operating costs to service its catchment area adequately, but also prevent the hospital from installing excessive equipment and excessive staff. Each hospital is paid by all-payer standard rates, administration of reimbursement is simple, and shifting of costs among payers is both unnecessary and administratively impossible. Costs are contained by the total management of the system, not by fragmented efforts by separate insurance carriers. Considerable strategic thinking by government, the providers, and other interest groups sets guidelines for spending levels every year to meet the country's clinical needs but also to stay within its fiscal capacity. Capital investment for new treatments depends on government grants and evaluation of needs.