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.     

Market reforms and public incentives: finding a balance in the Republic of Macedonia

The Republic of Macedonia is undertaking sweeping reforms of its health sector. Funded by a World Bank credit, the reforms seek to improve the efficiency and quality of primary health care (PHC) by significantly strengthening the role of the market in health care provision. On the supply-side, one of the key reform proposals is to implement a capitation payment system for PHC physicians. By placing individual physicians on productivity-based contracts, these reforms will effectively marketize all PHC provision. In addition, the Ministry of Health is considering the sale or concessions of public PHC clinics to private groups, indicating the government's commitment to marketization of health care provision. Macedonia is in a unique position to develop a new role for the private sector in PHC provision. The private provision of outpatient care was legalized soon after independence in 1991; private physicians now account for nearly 10% of all physicians and 22% of PHC physicians. If the reforms are fully realized, all PHC physicians-over 40% of all physicians-will be financially responsible for their clinical practices. This study draws on Macedonia's experience with limited development of private outpatient care starting in 1991 and the reform proposals for PHC, finding a network of policies and procedures throughout the health sector that negatively impact private and public sector provision. An assessment of the effects that this greater policy environment has on private sector provision identifies opportunities to strategically enhance the reforms. With respect to established market economies, the study finds justification for a greater role for government intervention in private health markets in transition economies. In addition to micro-level payment incentives and administrative controls, marketization in Central and Eastern Europe requires an examination of insurance contracting procedures, quality assurance practices, public clinic ownership, referral practices, hospital privileges, and capital investment policies.     

Competition's flawed perspective on the health care market and an alternative approach

This article contends that competition advocates have treated the public market as peripheral to the development of a private allocative efficient market based on price determinations. A system which omits 40% of distributive resources, 30% of its users and over 50% of hospital revenues sets the stage for cost/charge spirals that promote greater inefficiencies than those which presently exist. The government in the sixties set a goal of universal quality service for medical care. However, this goal has not been achieved and the sky-rocketing cost for medical care is putting an increasing burden on the government. The authors attempt to provide a basis for the incorporation of the concept of the mixed market through a definition of public and private reimbursement systems. The public sector, rather than paying directly for care, purchases it in an efficient market which it helps to form. The government working with other health insurance companies in the private market attempts to set reasonable charges for reimbursement for medical services. Any price above the competitive level will be paid directly by the consumer. However, quality care is guaranteed to the consumer at the reasonable charge by insurance company referred physicians.     

Health services financing in Greece: a role for private health insurance

Private health insurance can play a significant role in the financing and delivery of health services in relatively undeveloped health systems which suffer from limited public expenditures, resource shortages, and quality of care problems. Research results, however, indicate that private health insurance in Greece has not yet assumed that role. The rapid increase of private health insurance was the result of underfinancing by the public sector and restrictive policies for the private sector. The private sector, however, largely financed by private health insurance, found alternative investment and profit opportunities, which, unfortunately, did not improve health system microeconomic efficiency. In this paper we propose that a way of cooperation could exist between the public sector and private health insurance, which would improve public health services provision and the overall technical, allocative and dynamic efficiency of the health system.     

Public and private: insurance companies and medical care in Mexico

During the late 70's and early 80's in Mexico, as in the rest of Latin-America, sanitary policies were directed to support the growth of the private sector of health care at the expense of the public sector. This work analyzes the evolution of the health insurance market as a part of the privatization process of health care. The analysis based on economic data, provides the political profile behind the privatization process as well as the changes in the relations between the State and the health sector. The central hypothesis is that the State promotes and supports the growth of the private market of medical care via a series of legal, fiscal and market procedures. It also discusses the State roll in the legal changes related to the national insurance activity. A comparative analysis is made about the evolution of the insurance industry in Argentina, Brazil, Chile and Mexico during the period 1986-1992, with a particular enfasis in the last country. One of the principal results is that the Premium/GNP and Premium/per capita, display a general growth in the 4 countries. This growth is faster for Mexico for each one) because the privatization process occurred only during the most recent years. For the 1984-1991 period in Mexico the direct premium as percentage of the GNP raised from 0.86% to 1.32%. If one focussed only in the insurance for health and accidents branches the rice goes form 8.84% in 1984 to 19.08% in 1991. This indicates that the insurance industry is one of the main targets of the privatization process of the health care system in Mexico. This is also shown by the State support to fast expansion of the big medical industrial complex of the country. Considering this situation in the continuity of the neoliberal model of Mexico, this will profound the inequity and inequality.     

Public/private financing in the Greek health care system: implications for equity

The 1983 health reforms in Greece were indirectly aimed at increasing equity in financing through expansion of the role of the public sector and restriction of the private sector. However, the rigid application of certain measures, the failure to change health care financing mechanisms, as well as growing dissatisfaction with publicly provided services actually increased the private share of health care financing relative to that of the public share. The greatest portion of this increase involved out-of-pocket payments, which constitute the most regressive form of financing, and hence resulted in reduced equity. The growing share of private insurance financing, though as yet quite small, has also contributed to reducing equity. Within public funding, while a small shift has occurred in favor of tax financing, it is questionable whether this has contributed to increased equity in view of widespread tax evasion. On balance, it is most unlikely that the 1983 health care reforms have led to increased equity; it is rather more likely that the system in operation today is more inequitable from the point of view of financing than the highly inequitable system that was in place in the early 1980s.     

The role of private insurance in public health care systems: conceptual framework and policies

The structure of the health care system ans specifically the type and amount of the public and private mix is not a closed issue. This article provides and update of the arguments that justify public intervention in health, and emphasizes the failures of the private insurance market that call for mandatory universal health insurance, although that does not necessarily mean that state has to be the insurer.The relationship between both sectors and the variables determining the relative level of expenditure in both are also analyzed. Following the literature on the public provision of private goods, the level of expenditure in a democracy is seen to depend on the preferences of the median voter, where private insurance usually tops up public insurance. The key variable determining the decision to buy additional private insurance is the difference in quality, defined broadly, between both sectors.Concerning policies, the appropriateness of fiscal incentives to promote the uptake of private insurance is discussed and it is concluded that there is no clear evidence of its suitability. Also, it is argued that models in which the public and private sectors appear totally segregated or totally integrated are preferable to intermediate models, in which both sectors appear combined. Medical coverage bought by an informed agent in exchange for a capitation payment seems a better way to integrate the private sector than through a system of vouchers.     

Universal Health Insurance in India: Ensuring Equity, Efficiency, and Quality

Indian health system is characterized by a vast public health infrastructure which lies underutilized, and a largely unregulated private market which caters to greater need for curative treatment. High out-of-pocket (OOP) health expenditures poses barrier to access for healthcare. Among those who get hospitalized, nearly 25% are pushed below poverty line by catastrophic impact of OOP healthcare expenditure. Moreover, healthcare costs are spiraling due to epidemiologic, demographic, and social transition. Hence, the need for risk pooling is imperative. The present article applies economic theories to various possibilities for providing risk pooling mechanism with the objective of ensuring equity, efficiency, and quality care. Asymmetry of information leads to failure of actuarially administered private health insurance (PHI). Large proportion of informal sector labor in India''s workforce prevents major upscaling of social health insurance (SHI). Community health insurance schemes are difficult to replicate on a large scale. We strongly recommend institutionalization of tax-funded Universal Health Insurance Scheme (UHIS), with complementary role of PHI. The contextual factors for development of UHIS are favorable. SHI schemes should be merged with UHIS. Benefit package of this scheme should include preventive and in-patient curative care to begin with, and gradually include out-patient care. State-specific priorities should be incorporated in benefit package. Application of such an insurance system besides being essential to the goals of an effective health system provides opportunity to regulate private market, negotiate costs, and plan health services efficiently. Purchaser-provider split provides an opportunity to strengthen public sector by allowing providers to compete.     

Health reform in Mexico: the promotion of inequality.

The Mexican health reform can be understood only in the context of neoliberal structural adjustment, and it reveals some of the basic characteristics of similar reforms in the Latin American region. The strategy to transform the predominantly public health care system into a market-driven system has been a complex process with a hidden agenda to avoid political resistance. The compulsory social security system is the key sector in opening health care to private insurance companies, health maintenance organizations, and hospital enterprises mainly from abroad. Despite the government's commitment to universal coverage, equity, efficiency, and quality, the empirical data analyzed in this article do not confirm compliance with these objectives. Although an alternative health policy that gradually grants the constitutional right to health would be feasible, the new democratically elected government will continue the previous regressive health reform.     

The first private sector health insurance company in Ghana

This article analyses the development of Ghana's first private sector health insurance company, the Nationwide Medical Insurance Company. Taking both policy and practical considerations into account (stakeholders' perspectives, economic viability, equity and efficiency), it is structured around key questions which help to define the position and roles of stakeholders--the insurance agency itself, contributors, beneficiaries, and providers--and how they relate to one another and the insurance scheme. These relationships will to a large extent determine Nationwide's long-term success or failure. By creating a unique alliance between physician providers and private sector companies, Nationwide has used employers' interest in cost containment and physicians' interest in expanding their client base as an entrée into the virgin territory of health insurance, and created a hybrid variety of private sector insurance with some of the attributes of a health maintenance organization or managed care. The case study is unusual in that, while public sector programs are often open to academic scrutiny, researchers have rarely had access to detailed data on the establishment of a single private sector insurance company in a developing country. Given that Ghana is planning to launch a national health insurance plan, the article concludes by considering what the experience of this private sector initiative might have to offer public sector planners.     

社会资本投资于医疗服务领域的相关政策

目前,我国开放医疗服务市场,鼓励社会资本投资于卫生领域,需要明确几个重要的相关政策:打破行政垄断,放宽市场准入;平衡卫生服务的规划指导与市场竞争的关系;在市场开放的同时,必须保证基本医疗服务需求;明确社会资本投资与卫生的重点和途径;完善分类管理政策和公立医院向民办营利性医院和非营利性医院转制的政策;鼓励公立医院的管理体制和治理结构创新;加强对医疗服务市场的监管,克服市场失灵.     

Social class related inequalities in household health expenditure and economic burden: evidence from Kerala, south India

Background  

In the Indian context, a household's caste characteristics are most relevant for identifying its poverty and vulnerability status. Inadequate provision of public health care, the near-absence of health insurance and increasing dependence on the private health sector have impoverished the poor and the marginalised, especially the scheduled tribe population. This study examines caste-based inequalities in households' out-of-pocket health expenditure in the south Indian state of Kerala and provides evidence on the consequent financial burden inflicted upon households in different caste groups.     

Public and private health-care financing with alternate public rationing rules

We develop a model to analyze parallel public and private health-care financing under two alternative public sector rationing rules: needs-based rationing and random rationing. Individuals vary in income and severity of illness. There is a limited supply of health-care resources used to treat individuals, causing some individuals to go untreated. Insurers (both public and private) must bid to obtain the necessary health-care resources to treat their beneficiaries. Given individuals' willingnesses-to-pay for private insurance are increasing in income, the introduction of private insurance diverts treatment from relatively poor to relatively rich individuals. Further, the impact of introducing parallel private insurance depends on the rationing mechanism in the public sector. We show that the private health insurance market is smaller when the public sector rations according to need than when allocation is random.     

Unwinding the State subsidisation of private health insurance in Ireland

Ireland's private health insurance market provides primarily supplementary health insurance for hospital services, operating alongside a public hospital system to which residents have universal access entitlements, subject to some copayments for those without a medical card. The State subsidises the purchase of private health insurance through measures including tax relief on premiums and not charging the full economic cost for private beds in public hospitals. Furthermore, privately insured patients occupying public beds in public hospitals did not, until 2014, incur charges for such accommodation, apart from modest statutory charges. In the Budget in October 2013, a number of measures were announced that began to unwind these subsidies. Although it was initially feared that these measures would add to premium inflation, leading in turn to further discontinuation of health insurance, the evidence suggests that premium inflation has eased and take-up has stabilised, although some of this may have been due to the introduction of lifetime community rating in May 2015. Nevertheless, it would appear that the restriction on the subsidisation of private health insurance has not had a significant adverse effect on the market, while it has reduced an inequitable cross-subsidy.     

Financing adolescent health care: the role of Medicaid and CHIP

Financing health care for adolescents involves a combination of public and private sources of payment and, in the public sector, a combination of insurance coverage and categorical programs. In recent years, the importance of health insurance coverage has increased along with the potential for insuring more adolescents. Medicaid and the new State Children's Health Insurance Program (CHIP) offer numerous options for reducing the proportion of uninsured adolescents and for increasing adolescents' access to necessary health care. This article explores the potential of Medicaid and CHIP for meeting adolescents' needs, the extent to which they have done so already, and the gaps or missing links that remain. It also reviews issues that cut across funding sources related to managed care, consent, and confidentiality.     

Health care plans: interfaces between the public and private system in the dental sector

The present work presents a brief history of health plans in Brazil examining the interface between the public and the private sector. The evolution and regulation of the supplementary care system is analyzed, the different care modalities are defined and the main differences between health plans and dental care insurance are pointed out. The coverage provided by the supplementary care system and its relationship with the public health system is shown on the basis of current data. On the other hand, the study focuses on the care services, health plans and the labor market in the sector correlating, also on the basis of current data, the challenges and new opportunities of the supplementary care market, mainly in the dental sector. Although the dental sector is living an extraordinary moment within the private health care system and given that ANS data are pointing to a growth of this sector of 210% over last the 7 years, the service coverage of the supplementary care sector mainly directed to medical and inpatient care does not meet the real demand for integrated health care.     

Expanding coverage: reflections on recent efforts

This paper focuses on the major health care initiatives and proposals that policymakers have enacted or considered since 1980 and describes what we can learn from these efforts to expand coverage. Most proposals have focused on incremental strategies, through expansion of public programs or tax incentives for the purchase of private coverage, although universal proposals have also emerged. Incremental approaches, which seem more politically feasible, still involve complex policy trade-offs. Efforts to improve take-up rates of public and private insurance could greatly expand coverage as well.     

Chilean health insurance system: a source of inequity and selective social insecurity

More than 20 years after its radical market-oriented reform, the Chilean health care system shows serious equity and fairness problems. Private insurance companies have used ex-ante as well as ex-post risk selection to avoid the affiliation of poorer and older enrolees presenting higher risks. The coexistence of a solidarity-driven public sector and a for-profit private sector operating with risk-adjusted premiums has led to a two-tier health insurance system. Unpredictable, often existentially threatening co-payments have become an serious problem for the users of the Chilean health care system, and coverage-lacks have become a major menace for patients. Private insurers supplement “Cream Skimming” and risk selection with contracts calling for significant out-of-pocket payments for health services. This article develops and applies a methodology to measure and compare systematically the impact of user charges for varying levels and complexity of treatment in the public and private health care sector. Co-payments in the private sub-sector show enormous variation, are hyper-regressive and discriminate not only against the ill, but also against the members of the lower socio-economic classes once they have passed the high access barriers. As cost-sharing affects the financial coverage and thus the accessibility of health care, it has become an important mechanism of quality skimping and active disenrolment. Private health insurance companies are relatively well prepared to cover costs for a wide array of traditional health problems; they fail, however, to respond for the costs of other leading diseases in Chile. The private system seems to be poorly prepared to face the challenges of the epidemiological transition in emerging countries.     

Incoherent policies on universal coverage of health insurance and promotion of international trade in health services in Thailand

The Thai government has implemented universal coverage of health insurance since October 2001. Universal access to antiretroviral (ARV) drugs has also been included since October 2003. These two policies have greatly increased the demand for health services and human resources for health, particularly among public health care providers. After the 1997 economic crisis, private health care providers, with the support of the government, embarked on new marketing strategies targeted at attracting foreign patients. Consequently, increasing numbers of foreign patients are visiting Thailand to seek medical care. In addition, the economic recovery since 2001 has greatly increased the demand for private health services among the Thai population. The increasing demand and much higher financial incentives from urban private providers have attracted health personnel, particularly medical doctors, from rural public health care facilities. Responding to this increasing demand and internal brain drain, in mid-2004 the Thai government approved the increased production of medical doctors by 10,678 in the following 15 years. Many additional financial incentives have also been applied. However, the immediate shortage of human resources needs to be addressed competently and urgently. Equity in health care access under this situation of competing demands from dual track policies is a challenge to policy makers and analysts. This paper summarizes the situation and trends as well as the responses by the Thai government. Both supply and demand side responses are described, and some solutions to restore equity in health care access are proposed.