What can the Canadians and Americans learn from each other's health care systems?

Numerous papers have been written comparing the Canadian and US healthcare systems, and a number of health policy experts have recommended that the Americans implement their single‐payer system to save 12–20% of its healthcare expenditures. This paper is different in that it assumes that neither country will undertake a significant philosophic or structural change in their healthcare system, but there are lessons to be learned that are inherent in one that could be a major breakthrough for the other. Following the model in Canada and in Western Europe, the USA could implement universal health insurance so that the 32.0 million (2015) Americans still uninsured would have at least minimal coverage when incurring medical expenditures. Also, the USA could use smart cards to evaluate eligibility and to process health insurance claims; these changes resulting in an estimated 15% reduction in US health expenditures without adversely effecting access or quality of care. Such a strategy would result in the eventual loss of 2.5 million white‐collar jobs at hospitals, physician offices and insurance companies, a long‐term economic gain. Only a few would agree with the statement that Canada already functions with a multi‐payer reimbursement system as evidenced by (1) a federal‐provincial, tax‐supported plan, administered by each of the provinces, providing universal coverage for hospital and physician services and (2) roughly 60% of its residents receiving employer‐paid health insurance benefits, underwritten primarily by investor‐owned plans, that are less than effective to reimburse for pharmaceuticals, dental and other healthcare services. What could be learned from the USA and particularly from Western European countries is possibly implementing an approach, whereby at least upper‐income Canadians could opt out of their federal‐provincial plan and purchase private insurance coverage — being eligible for far more comprehensive “private” benefits for hospital, physician, pharmaceutical, dental and other healthcare services. Aside from generating billions of additional needed revenues from the private sector, it could (1) help eliminate long waits for non‐emergent physicians' care by appointing newly minted specialists to their medical staffs; (2) offer prompt admissions for elective cases to “private” wings of hospitals; (3) increase available funding for what is currently an undercapitalized system; (4) enhance the system's sluggish operations; and (5) encourage more competition among various providers. Although such a two‐tier approach, such as available in the USA and elsewhere, is politically dead on arrival in Canada today, private insurance being already legal and commonly available there. Interestingly, this recommended solution is utilized in most western European countries where there is a higher percentage than in Canada of public (versus private) funding of their total health expenditures. Because of various vested interests, attempts to implement any of the aforementioned proposals will undoubtedly result in considerable political rancor. There is greater likelihood, however, that the Canadians because their need to be more effective and efficient in their delivery of care, and their overall long‐term fiscal outlook will agree to the further privatization of their healthcare system before the Americans will mandate universal access, use the smart card to process insurance eligibility and claims or will impose price controls on high‐tech services and on pharmaceuticals. Copyright © 2016 John Wiley & Sons, Ltd.     

Bucking the trend? Health care expenditures in low-income countries 1990-1995

Health care expenditures in low-income countries are analysed for the years 1990 and 1995 using four key indicators. Key findings include a substantial reduction in public spending per capita across low-income countries between 1990-95; a significant shift towards private expenditures, which appears increasingly to be substituting rather than supplementing public expenditures; a fall in total and public health spending in many countries despite growth in national income, contradicting the relationship found in other studies. Two possible explanations are put forward. First that the patterns found are a direct result of the structural adjustment policies adopted by many low-income countries, which aim to control and often cut public financing, whilst promoting private health expenditures. Secondly, that following the wave of privatization of state industries, many governments are finding problems adapting to their new role as a tax collector, and are thus not benefiting from economic growth to the extent that might be expected.     

Private health care expenditure and quality in Beveridge systems: Cross-regional differences in the Italian NHS

Private health care expenditure ranges from 15% to 30% of total healthcare spending in OECD countries. The literature suggests that there should be an inverse correlation between quality of public services and private expenditures. The main objective of this study is to explore the association between quality of public healthcare and private expenditures in the Italian Regional Healthcare Systems (RHSs). The institutional framework offered by the Italian NHS allows to investigate on the differences among the regions while controlling for institutional factors. The study uses micro-data from the ISTAT Household Consumption Survey (HCS) and a rich set of regional quality indicators. The results indicate that there is a positive and significant correlation between quality and private spending per capita across regions. The study also points out the strong association between the distribution of private consumption and income. In order to account for the influence of income, the study segmented data in three socio-economic classes and computed cross-regional correlations of RHSs quality and household healthcare expenditure per capita, within each class. No correlation was found between the two variables. These findings are quite surprising and call into question the theory that better quality of public services crowds out private spending, or, at the very least, it undermines the simplistic notions that higher levels of private spending are a direct consequence of poor quality in the public sector. This suggests that policies should avoid to simplistically link private spending with judgements or assessments about the functioning or efficacy of the public system and its organizations.     

A Comparison of Outpatient Healthcare Expenditures Between Public and Private Medical Institutions in Urban China: An Instrumental Variable Approach

The growth of healthcare expenditure provokes constant comments and discussions, as countries battle the issues on cost containment and cost effectiveness. Prior to 1978, medical institutions in China were either state‐owned or were collective public hospitals. Since 1978, China has been trying to rebuild its healthcare system, which was destroyed during the ‘cultural revolution’, allowing private medical institutions to deliver healthcare services. As a result, private medical institutions have grown from 0% to 28.57% between 1978 and 2010. In this context, we compare outpatient healthcare expenditures between public and private medical institutions. The central problem of this comparison is that the choice of medical institution is endogenous. So we apply an instrumental variable (IV) framework utilizing geographic information (whether the closest medical institution is private) as the instrument while controlling for severity of health and other relevant confounding factors. Using China's Urban Resident Basic Medical Insurance Survey 2008–2010, we found that there is no difference in expenditure between public and private medical institutions when IV framework is used. Our econometric tests suggest that our IV model is specified appropriately. However, the ordinary least square model, which is inconsistent in the presence of endogenous regressor(s), reveals that public medical institutions are more expensive. Copyright © 2013 John Wiley & Sons, Ltd.     

Modelling health and output at business cycle horizons for the USA

In this paper we employ a theoretical framework – a simple macro model augmented with health – that draws guidance from the Keynesian view of business cycles to examine the relative importance of permanent and transitory shocks in explaining variations in health expenditure and output at business cycle horizons for the USA. The variance decomposition analysis of shocks reveals that at business cycle horizons permanent shocks explain the bulk of the variations in output, while transitory shocks explain the bulk of the variations in health expenditures. We undertake a shock decomposition analysis for private health expenditures versus public health expenditures and interestingly find that while transitory shocks are more important for private sector expenditures, permanent shocks dominate public health expenditures. Copyright © 2009 John Wiley & Sons, Ltd.     

Risk,trust and patients’ strategic choices of healthcare practitioners

Research on patients’ choice of healthcare practitioners has focussed on countries with regulated and controlled healthcare markets. In contrast, low‐ and middle‐income countries have a pluralistic landscape where untrained, unqualified and unlicensed informal healthcare providers (IHPs) provide significant share of services. Using qualitative data from 58 interviews in an Indian village, this paper explores how patients choose between IHPs and qualified practitioners in the public and formal private sectors. The study found that patients’ choices were structurally constrained by accessibility and affordability of care and choosing a practitioner from any sector presented some risk. Negotiation and engagement with risks depended on perceived severity of the health condition and trust in practitioners. Patients had low institutional trust in public and formal private sectors, whereas IHPs operated outside any institutional framework. Consequently, people relied on relational or competence‐derived interpersonal trust. Care was sought from formal private practitioners for severe issues due to high‐competence‐based interpersonal trust in them, whereas for other issues IHPs were preferred due to high relationship‐based interpersonal trust. The research shows that patients develop a strategic approach to practitioner choice by using trust to negotiate risks, and crucially, in low‐ and middle‐income countries IHPs bridge a gap by providing accessible and affordable care imbued with relational–interpersonal trust.     

Evolving Health Expenditure Landscape of the BRICS Nations and Projections to 2025

Global health spending share of low/middle income countries continues its long‐term growth. BRICS nations remain to be major drivers of such change since 1990s. Governmental, private and out‐of‐pocket health expenditures were analyzed based on WHO sources. Medium‐term projections of national health spending to 2025 were provided based on macroeconomic budgetary excess growth model. In terms of per capita spending Russia was highest in 2013. India's health expenditure did not match overall economic growth and fell to slightly less than 4% of GDP. Up to 2025 China will achieve highest excess growth rate of 2% and increase its GDP% spent on health care from 5.4% in 2012 to 6.6% in 2025. Russia's spending will remain highest among BRICS in absolute per capita terms reaching net gain from $1523 PPP in 2012 to $2214 PPP in 2025. In spite of BRICS' diversity, all countries were able to significantly increase their investments in health care. The major setback was bold rise in out‐of‐pocket spending. Most of BRICS' growing share of global medical spending was heavily attributable to the overachievement of People's Republic of China. Such trend is highly likely to continue beyond 2025. Copyright © 2016 John Wiley & Sons, Ltd.     

Vouchers for primary healthcare services in an ageing world? The perspectives of elderly voucher recipients in Hong Kong

Considering the ageing population in economically advanced regions across the world, measures are necessary to enhance the health of the older population as well as contain public healthcare spending. Hong Kong implements the Elderly Health Care Voucher Scheme (EHCVS), providing older people aged 65 or above an annual subsidy of visiting private healthcare service providers for chronic disease prevention and management. The services also aim at reallocating demand from the public to private sector as well as improve quality of services. This qualitative study explored the experiences of EHCVS recipients (n = 55, aged 61–94) with eight focus group interviews in Hong Kong in the year 2016. Convenience sampling was used. Research questions were: (1) Why do older people choose not to use EHCVS for preventive as well as disease management services among older people in Hong Kong? (2) What are the barriers to reallocating demand from the public to private sector? (3) In what ways did EHCVS improve the quality of primary care services for older people? Using a deductive and inductive approach, eight qualitative themes were identified. Findings suggested that the non‐targeted services and inadequate knowledge on EHCVS deterred older people from using the vouchers for disease management and prevention. The relatively expensive private services, lack of trust in the private sector, low public clinic fees and good services quality of the public sector, together with inadequate private practitioners in the healthcare market were barriers that hinder demand reallocation. Nevertheless, the quality of primary care services had been improved after the implementation of EHCVS with shortened wait times and opportunities to discuss health‐related issues with private practitioners. Findings were discussed with practice, policy and research implications.     

The Role of Policy and Institutions on Health Spending

This paper investigates the impact of policies and institutions on health expenditures for a large panel of Organisation for Economic Co‐operation and Development countries for the period of 2000–2010. A set of 20 policy and institutional indicators developed by the Organisation for Economic Co‐operation and Development are integrated into a theoretically motivated econometric framework, alongside control variables related to demographic (dependency ratio) and non‐demographic (income, prices and technology) drivers of health expenditures per capita. Although a large share of cross‐country differences in public health expenditures can be explained by demographic and economic factors (around 71%), cross‐country variations in policies and institutions also have a significant influence, explaining most of the remaining difference in public health spending (23%). Copyright © 2016 John Wiley & Sons, Ltd.     

HEALTH CARE AND IDEOLOGY: A RECONSIDERATION OF POLITICAL DETERMINANTS OF PUBLIC HEALTHCARE FUNDING IN THE OECD

In this article, we examined if partisan ideology and electoral motives influence public healthcare expenditure (HCE) in countries of the Organization for Economic Cooperation and Development. We distinguished between the effects on the growth of the expenditures and its adjustment to violations of a long‐run equilibrium linking HCE with macroeconomic and demographic trends. Regarding the influence of partisan ideology, we found that if governments are sufficiently long in power, right‐wing governments spend less on public health than their left‐wing counterparts. Furthermore, if a right‐wing party governs without coalition partners, it responds more strongly to deviations from the long‐run HCE equilibrium than left‐wing governments. With regard to electoral motives, we found that health expenditure increases in years of elections. Independent of their partisan ideology, single‐party (minority) governments induce higher (lower) growth of public HCE. Each of these political factors by its own may increase (decrease) HCE growth by approximately one percentage point. Given an average annual growth of HCE of approximately 4.1%, political factors turn out to be important determinants of trends in public HCE. Copyright © 2013 John Wiley & Sons, Ltd.     

A review of the sustainability of vaccine funding across Europe and implications for post-COVID policymaking

BackgroundApproaches to routine vaccine funding and the underlying budget-setting process vary greatly across European countries. The ongoing COVID-19 pandemic has put enormous pressure on healthcare systems, affecting resilience of the overall vaccine ecosystem.MethodsThis article reviews how vaccine budgets are structured across 8 European countries (England, Finland, France, Germany, Italy, Norway, Romania, and Spain). First a literature review of the landscape was undertaken, followed by expert interviews to review the findings and consider policy principles to secure prioritisation and sustainability of routine vaccination budgets post-COVID.ResultsThe organisation of budgets and vaccine spending varies greatly across Europe. In 2/8 countries (France and Germany) vaccine spending is subsumed into a wider healthcare budget. In 2/8 countries (Italy and Romania) the budget differentiates public health and prevention spending from other areas of healthcare, though there is no standalone vaccine budget. In 4/8 countries (England, Finland, Norway and Spain) there is a standalone vaccine budget, however this may not cover all elements needed for immunisation delivery and is not always transparent.ConclusionEnsuring adequate and dynamic country vaccine budgets, with horizon scanning approaches like in England and Finland, or flexible vaccines expenditures like Germany, would greatly help the timely availability of public funding for new vaccines and strengthen vaccines supply security in Europe through a more virtuous European vaccine ecosystem.     

The determinants of the public-private mix in Canadian health care expenditures: 1975-1996

The health care policy issue regarding the balance between public and private health spending is examined. An empirical model of the determinants of the public-private mix in Canadian health care expenditures over the period 1975-1996 is estimated for total health care expenditures as well as separate expenditure categories such as hospitals, physicians and drugs. The results find that the key determinants of the split are per capita income, government transfer variables and the share of individual income held by the top quintile of the income distribution. Much of the public-private split is determined by long term economic forces. However, the importance of the federal health transfer variables and the variables representing shifts in fiscal transfer regimes suggest the increase in the private share of health spending since 1975 is also partly the result of the policy choice to reduce federal health transfers.     

Costs and determinants of privately financed home-based health care in Ontario, Canada

The Canadian context in which home-based healthcare services are delivered is characterised by limited resources and escalating healthcare costs. As a result, a financing shift has occurred, whereby care recipients receive a mixture of publicly and privately financed home-based services. Although ensuring that care recipients receive efficient and equitable care is crucial, a limited understanding of the economic outcomes and determinants of privately financed services exists. The purposes of this study were (i) to determine costs incurred by families and the healthcare system; (ii) to assess the determinants of privately financed home-based care; and (iii) to identify whether public and private expenditures are complements or substitutes. Two hundred and fifty-eight short-term clients (<90 days of service utilisation) and 256 continuing care clients (>90 days of utilisation) were recruited from six regions across the province of Ontario, Canada, from November 2003 to August 2004. Participants were interviewed by telephone once a week for 4 weeks and asked to provide information about time and monetary costs of care, activities of daily living (ADL), and chronic conditions. The mean total cost of care for a 4-week period was $7670.67 (in 2004 Canadian dollars), with the overwhelming majority of these costs (75%) associated with private expenditures. Higher age, ADL impairment, being female, and a having four or more chronic conditions predicted higher private expenditures. While private and public expenditures were complementary, private expenditures were somewhat inelastic to changes in public expenditures. A 10% increase in public expenditures was associated with a 6% increase in private expenditures. A greater appreciation of the financing of home-based care is necessary for practitioners, health managers and policy decision-makers to ensure that critical issues such as inequalities in access to care and financial burden on care recipients and families are addressed.     

National health expenditures: a global analysis.

As part of the background research to the World development report 1993: investing in health, an effort was made to estimate public, private and total expenditures on health for all countries of the world. Estimates could be found for public spending for most countries, but for private expenditure in many fewer countries. Regressions were used to predict the missing values of regional and global estimates. These econometric exercises were also used to relate expenditure to measures of health status. In 1990 the world spent an estimated US$ 1.7 trillion (1.7 x 10(12) on health, or $1.9 trillion (1.9 x 10(12)) in dollars adjusted for higher purchasing power in poorer countries. This amount was about 60% public and 40% private in origin. However, as incomes rise, public health expenditure tends to displace private spending and to account for the increasing share of incomes devoted to health.     

Interpreting forty-three-year trends of expenditures on public health in Canada: Long-run trends,temporal periods,and data differences

The COVID-19 pandemic has raised concerns around public health (PH) investments. Among OECD countries, Canada devotes one of the largest shares of total health expenditures to PH. Examining retrospectively PH spending growth over a very long period may hold lessons on how to reach this high share. Further, different historical periods can be used to understand how macroeconomic conditions affect PH spending growth. Using forty-three years of data, we examine real PH spending growth per capita, comparatively between thirteen Canadian jurisdictions and with other key publicly funded healthcare sectors (physicians, hospitals, and pharmaceuticals), as well as by four periods defined by macroeconomic conditions. We find a five-fold increase on average in PH spending since 1975, a growth above physicians and hospitals, but below pharmaceuticals. However, there is substantial variation in PH growth between periods and across the country. Because concerns have been raised over PH spending data in other OECD countries, we explore differences between spending estimates reported by the national agency and ten provincial budgetary estimates, and find the former is larger. The magnitude of the difference varies between jurisdictions but not much over time. Although these differences do not challenge the presence of growth in PH spending, they show that the growth may be below that of hospitals. A better categorization of PH financing data is warranted.     

VOLUNTARY PRIVATE HEALTH INSURANCE AMONG THE OVER 50s IN EUROPE

Using data from Survey of Health, Ageing and Retirement in Europe (SHARE), we investigate the determinants of voluntary private health insurance (VPHI) among the over 50s in 11 European countries and their effects on healthcare spending. First, we find that the main determinants of VPHI are different in each country, reflecting differences in the underlying healthcare systems, but in most countries, education levels and cognitive abilities have a strong positive effect on holding a VPHI policy. We also analyse the effect of holding a voluntary additional health insurance policy on out‐of‐pocket (OOP) healthcare spending. We adopt a simultaneous equations approach to control for self‐selection into VPHI policy holding and find that, only in the Netherlands, VPHI policyholders have lower OOP spending than the rest of the population, whereas in some countries (Italy, Spain, Denmark and Austria), they spend significantly more. This could be due to not only increased utilisation but also cost‐sharing measures adopted by the insurers to counter the effects of moral hazard and to keep adverse selection under control. Copyright © 2012 John Wiley & Sons, Ltd.