ME33ES MEDICINE AND ECONOMICS HEALTH SYSTEMS I

1. ME33ES MEDICINE AND ECONOMICSHEALTH SYSTEMS I Summary Health care systems India US � current health system US � the Obama reforms France Social insurance systems versus tax financed systems

2. HEALTH SYSTEMS I Health care systems What impact does a country�s health care system have upon its health? Possibly very little! Most comprehensive attempt to assess strengths and weaknesses of different countries� health care systems was World Health Report (WHR) 2000 produced by World Health Organisation: http://www.who.int/whr/2000/en/

3. HEALTH SYSTEMS I Countries investigated Japan (tops several WHR tables) and Sierra Leone (bottom of most WHR tables) Countries which illustrate different types of health care system (India, UK, France, US) Canada and Cuba (US, Canada, France, UK and Cuba all feature in Michael Moore�s film Sicko, www.youtube.com/watch?v=a7pCaK0aASEyoutube)

4. HEALTH SYSTEMS I Disability adjusted life expectancy is measure of how long people live on average but adjusted for the time lived in a state of ill health

6. HEALTH SYSTEMS I Most of the countries at the top of the table are high income countries but Cuba is a notable exception Rankings reflect much more than the health care system including such factors as diet (Japan) and the effects of war/civil war (Sierra Leone)

7. HEALTH SYSTEMS I Impact of the health care system upon a country�s health: How much is spent How health care is financed How well the health care system is organised: both how efficiently and how well it addresses health priorities How much is spent is the least important of these three

9. HEALTH SYSTEMS I US spends 34 times as much per person on health care as Cuba but on average Americans only have 19 months more of healthy life than Cubans

10. HEALTH SYSTEMS I World Health Report judges performance of a health system against five goals (combined in a single index): Health of the population Inequality in health Responsiveness (non health aspects of care) Inequality in responsiveness Fair financing

11. HEALTH SYSTEMS I Responsiveness Respect for persons Respect for people�s dignity Confidentiality Autonomy Client orientation Prompt attention Amenities Access to social support networks Choice of provider

13. HEALTH SYSTEMS I Again, only very rough correspondence between how well a health care system performs and a country�s wealth or how much it spends on health care

14. HEALTH SYSTEMS I Financing health care Out of pocket payments (paying for health care at the point of use); India Private insurance (voluntary health insurance by employers or individuals); US Social insurance (government makes health insurance payments compulsory); France Tax financing (government pays for health care from tax revenues); UK (In many poor countries, health care is financed by international donors, aid provided by rich countries; Sierra Leone)

15. HEALTH SYSTEMS I Wealth can ensure good health care systems if: There is universal coverage People are not denied health care because of inability to pay Health care bills do not lead to people being impoverished Key measure is how much of total health care spending is public spending

17. HEALTH SYSTEMS I Uniquely among rich countries, the US fails to maintain a universal health care system and exposes its citizens to financial risk because of high health care bills Where Cuba succeeds and India and (more understandably) Sierra Leone fail is in maintaining a comprehensive public health care system

18. HEALTH SYSTEMS I All countries have �mixed� health care systems although often with one dominant method of financing Out of pocket payments (India) Private insurance (US) Social insurance (France)

19. HEALTH SYSTEMS I India 75% of spending on health care in India are out of pocket payments People buy health care from private health care providers just like buying mangos from a farmer in the market Result is that often the poor cannot afford health care Out of pocket payments provide no protection against potentially catastrophic health care bills

20. HEALTH SYSTEMS I A quarter of Indians who have to go into hospital for care are driven into poverty by the costs of care In theory, all Indians have access to public health care but coverage and quality is variable due to: low budgets poor management irregular supplies of drugs and equipment problems in retention of health professionals corruption

21. HEALTH SYSTEMS I Private sector accounts for 75% of health workers, 68% of hospitals, 37% of beds 1.3 million businesses, employing 2.2 million people, from hospital doctors to traditional healers

22. HEALTH SYSTEMS I US � current health system Private insurance is basis of health system in just a few countries including US (and, before 1994, Switzerland) US system is dominated by private insurance but it is not compulsory Employer sponsored insurance is most common

23. HEALTH SYSTEMS I Individual insurance, where people pay their own premium, covers the self employed and people who cannot obtain insurance through their employer Insurance plans are administered by private companies Health care benefits vary widely; some insurance plans cover drugs, others do not

24. HEALTH SYSTEMS I To the surprise of some Americans, there is substantial public funding of health care already Medicare is a tax financed federal programme for people of 65 or over but many gaps in coverage (dental, hearing, eyesight care) Medicaid covers low income families but measure of eligible income is set very low

25. HEALTH SYSTEMS I For Obama, main problems of US system include: Lack of security that insured people will receive good care: denial of cover for pre-existing conditions Lack of coverage of many Americans: US is only rich country without universal coverage High and increasing costs of care: over half of personal bankruptcies in US are due to health care bills

30. HEALTH SYSTEMS I US � the Obama reforms Obama reforms preserve the fundamentals of US system but seek to follow Switzerland in 1994 in moving towards: Making insurance compulsory Subsidising the premiums of low income groups Forbidding insurance companies to deny cover

31. HEALTH SYSTEMS I Extremely bitter �debate� culminated in passage of Affordable Health Care for America Act in March 2010 (although not a single Republican voted for it) Obama and Democratic Party was forced to drop idea of a public health insurance alternative to the private insurance companies Large number of further concessions such as insurance cover for abortion

32. HEALTH SYSTEMS I Act prohibits insurers from refusing coverage or charging different rates according to patients' medical histories Establishes minimum standards for qualified health insurance plans Requires Americans to have health insurance coverage (or pay a fine)

33. HEALTH SYSTEMS I Subsidy to low and middle income Americans to help buy insurance Expansion of Medicaid to include more low income Americans Requires most employers to provide coverage for their workers or pay a surtax on their worker's wages Tax credits to help small businesses provide insurance cover

34. HEALTH SYSTEMS I http://www.barackobama.com/issues/healthcare/index.php Still not clear what reforms will actually take place or what effect they will have www.qmu.ac.uk/iihd

35. HEALTH SYSTEMS I France France has a social health insurance system Social insurance systems are ones in which there are compulsory income-based health insurance contributions First system established in Germany by Bismarck Some systems such as UK (�national insurance contributions�), Sweden and Finland have remnants of social insurance

36. HEALTH SYSTEMS I Since 1994 reforms, Switzerland is usually classified as a social health insurance system Social insurance systems are not true insurance systems in which the benefit package is defined by the insurance policy Benefits are not linked directly to contributions but are defined by need Social insurance systems are thus explicitly redistributive: from rich to poor and from well to ill

37. HEALTH SYSTEMS I There are five health insurance funds in France covering: employees (much the largest fund), farmers, other self employed, civil servants and students Each of the funds covers the family of the insured person Insurance cover for those who are not members of any of the five funds is met by the government from general taxation

38. HEALTH SYSTEMS I Employees have a health insurance contribution deducted from their pay at 7.5% of income; employers contribute 12.8% French people pay for most services and drugs up front but can then reclaim a proportion of the payment The copayment (the residual which cannot be reclaimed) can be large: 20% for hospital care and 30% for consultations with a doctor

39. HEALTH SYSTEMS I Reimbursements are meant to be prompt (within two weeks) but are often not System can be complex and expensive Concerns that some people may not seek care because of the copayments and the delays in reimbursement

40. HEALTH SYSTEMS I Social insurance systems versus tax financed systems Comparison of �ideal types� or �pure systems� although such systems do not exist in practice Differences between social insurance and tax financing: Earmarking Choice Providers Spending levels Similarities: Equity Rationing

42. HEALTH SYSTEMS I Earmarking Earmarking (hypothecation) refers to whether funds can only be used for a specific purpose Social insurance is usually based on an earmarked fund but in tax financed system, health care has to compete with other demands on how taxes be spent Earmarking contributes to certainty and stability but it also means it will be less likely that health care budgets are topped up when there is pressure on resources

43. HEALTH SYSTEMS I There is evidence of greater willingness to contribute wherever there is earmarking and the use of funds is known Earmarking is one of the possible reasons why there tends to be greater satisfaction with health care provision in countries with social insurance

45. HEALTH SYSTEMS I Choice In social (and private) insurance systems there tends to be greater choice of providers than with tax financing People can choose the health facilities (and often individual doctors) where they will be treated, from a list of approved providers Choice is valued in itself by many Presence of choice also contributes to satisfaction with the health service and feeling it is responsive to public needs and preferences

46. Patients access to providers

47. HEALTH SYSTEMS I Providers Social insurance and tax financed systems differ in relationship between financing of health care and institutions (hospitals, clinics, doctors) which provide care Tax financed systems most often follow an �integrated� model: the financer is the provider Hospitals and clinics are publicly owned and managed; doctors and other health care professionals are employed by government

48. HEALTH SYSTEMS I In social insurance systems, there is generally separation of the functions of financing and providing care: �contract� model The social insurance fund purchases services from independent providers � corresponds to �third party payer� model in private insurance Social insurance payments are not usually collected directly by government but by quasi public bodies which are regulated rather than controlled by government

49. HEALTH SYSTEMS I Spending levels Spending levels tend to be higher under social insurance systems (% of GDP, 2002) Germany 10.9 Belgium 9.1 France 9.7 Netherlands 8.8 UK 7.1 Denmark 6.5 Sweden 7.9 New Zealand 7.7

51. HEALTH SYSTEMS I In some ways, surprising since contract models should be associated with lower costs Providers are paid on the basis of work done not by global budgets However, social insurance systems are less effective at combating demands upon health care resources (moral hazard)

52. HEALTH SYSTEMS I Greater acceptability of health insurance contributions over taxes Role of social insurance funds, semi independent of government (�third party payer� problem) In addition, administrative costs tend to be higher under social insurance (France is exception)

54. HEALTH SYSTEMS I Unresolved debate whether higher expenditure under social insurance reflects: better quality care and more generous benefit packages and/or (relatively) inefficient, high cost services

55. HEALTH SYSTEMS I Equity Social health insurance and tax financing systems tend to be similar in their strong emphasis on equity Access to health care is not determined by ability to pay

56. HEALTH SYSTEMS I Rationing Fairly explicit, mainly non price rationing is virtually inevitable under both social insurance and tax financing In Germany, planning mechanisms are used primarily to ration resources Benefit package which all providers are obliged to meet is planned according to available resources Copayments for drugs are small, 5% of costs

57. HEALTH SYSTEMS I In France, price mechanisms are used to a greater extent to ration health care spending Traditionally, tax financed systems such as the NHS have relied upon waiting as the main rationing mechanism More recently, with the creation of NICE (National Institute for Health and Clinical Excellence), there has been a move towards the German model, defining what the NHS will pay for