Lecture Fourteen Health Insurance and Comparison of Health Insurance System in the World
Learning Objectives • Identify a person’s health risks in his or her life • Explain the two concepts of health care system and health insurance system • Explain the classification of health insurance programs • Compare different health insurance system in the world
Main Contents • Health risks in a person’s life • Health care system and health insurance system • The health insurance system and reforms in the U.S. • The health insurance system reforms in Europe • Health insurance system in Canada • Health insurance system in France • Health insurance system in Germany • Health insurance system in Japan • Health insurance system in China
What’s the problem with our health? • Health is wealth. Good health is a universal objective of human beings. • In people’s life, however, there are different kinds of health risk. Such as: Illness premature death injury
what’s the costs of poor health in the USA? Case 1: Tom, 36, is a self-employed hair-dresser who has got a brain tumor that required immediate surgery, his surgeon’s fees, hospital expenses, and other medical bills totaled $125,000. Tom has not health insurance. In addition, he was out of work for more than one year and did not have any social health insurance . In short, because of lack of health insurance, Tom was exposed to serious financial burden as result of the unexpected surgery.
Tom’s experiences shows: Bad health results in two major financial problems: • Payment of medical bills (expenses for medical services) • The loss of income ( a person will loose his or her income when he or she is unable to work due to an injury or illness)
Health insurance plays great roles in managing personal financial risk resulted from poor health. • Different countries has different health insurance system
? Two concepts Health Care System Health Insurance System
Figure 1: Health Care System Government Public Health Health Care Service Person Health Resources Health Insurance
Health insurance System in U.S. • Health insurance programs are provided by different organizations in the U.S., which are classified into three types: • Social health insurance programs provided by governments • MHOs, PPOs, etc. provided by non-profit making associations • Commercial health insurance provided by private insurers
The social health insurance programs in U.S. The US is the most typical country where health insurance is provided by commercial insurers. However, still there are two major types of social health insurance programs. That’s: • Medicare • Medicaid
The social health insurance programs in the U.S. • Medicare (医疗照顾制度) ： The insured: 1n 1965, the U.S. Congress created Medicare. it provides health insurance for the persons aged 65 or older, as well as those under age 65 who have been receiving Social Securities disability benefits for at least two years.
The social health insurance programs in the U.S. • Medicare (医疗照顾制度) ： Coverage: • Inpatient hospital care: a maximum of 90days’ care for any individual period of illness with deductibles The patient must bear a deductible of $879 for the first 60days, and $219 a day for each day between 60 and 90 days.
The social health insurance programs in the U.S. • Skilled nursing home care • Home health care • Hospice care.
The social health insurance programs in the U.S. • Medicaid (医疗救济制度) The insured: Provide health insurance for the low income persons. The programs are financed by both state and federal government tax revenues. It was established in 1965. Coverage: The coverage is similar to Medicare. But the benefits vary somewhat among the states.
Health insurance provided by non-profit making organizations • Blue Cross Association(蓝十字协会) • Blue Shield Association (蓝盾协会) • Health Maintenance Organization (健康维护组织） • Point-of-Service Plans( 定点服务计划） • Preferred Provider Organizations(优先医疗服务提供者组织）
what’s the costs of poor health in the USA? Case 1: Jim Carson, aged 22, is a recent college graduate who is looking for a job. One problem that Jim is encountering in his job search is that he has had asthma since childhood and sometimes suffering severe problems. Thus, he must be especially careful about the type of job he takes and the environment in which he will work. Jim also fears that when he finds and accepts a job, his new employer’s health insurance plan might exclude him. Jim’s parents are urging him to buy an individual health insurance policy as soon.
Commercial health insurance in the US There are over 1800 private insurers proving health insurance in the US. The coverage of health insurance policies are various as follows (see figure2: health insurance classifications):
Health Insurance Health Expenses Coverage Disability Income Coverage Basic Health Insurance Major Medical Insurance Miscellaneous Coverage Short-term Plans Long-term Plans Hospital Insurance Dental Insurance Surgical Insurance Long-term Care Insurance Regular Medical Expenses Insurance Others
Confronted problems of health insurance system in the U.S. • Unequal access to health care: still 35-45 million people have no any health insurance, especially Hispanics, immigrants, etc. • Rising health care expenditures: total health care spending has increased substantially over time. Over 14.8% of GPD is invested in health, the highest in the world.
Confronted problems of health insurance system in the U.S. • Unsatisfied service quality: low coverage and insufficient health services, especially for aging populations. • Long waiting line: lower efficiency. • Urging for universal coverage
Health care system reforms • In 1993, President Bill Clinton proposed a comprehensive health care system reforms. The emphasis is placed on the expansion of health insurance for those uncovered, requiring all the employers to provide insurance to their employees • However, the proposals by Clinton were defeated by the business community.
Health care systemreforms • In 2003, Congress passed legislation signed by President W. Bush, authorizing to create Health Savings Accounts (HSAs) . There are many argues. The opponents’ voice is much louder than the supporter.
Health insurance system in Europe Two types of health insurance system 1. National health services (Denmark, Sweden, UK, Italy, Greece, Spain and Portugal) Funded by general taxation Universal coverage Guaranteed by public organizations such as health authorities Public ownership of health care facilities
Health insurance system in Europe 2. Social insurance systems (France, Germany and Austria) Funded by payroll contributions Private facilities Physicians paid according to services provided Coverage segmented Guaranteed by sickness funds organized according to region, occupation or workplace
Current Canadian Health insurance system As U.K., Canada is social health insurance system funded by general taxation Universal coverage Guaranteed by public organizations such as health authorities Public ownership of health care facilities
Current Canadian Health insurance system Restrict access to specialists Longer waiting times for non-emergency surgeries Closing and merging of hospitals loss of beds Restriction of equipment--have to be approved by provincial government
Current Canadian Health insurance system New Plans Allow private insurance?? Not allow direct-to-consumer pharmaceutical ads Move for fee-for-service to managed care??
French Health insurance system • Employer pays 3X individual contribution • Contribute to higher unemployment in lean times • Universal health care widely accepted but takes 40% of worker’s pay
French Health Care System • New law to devote more resources to elderly • Local government cover full costs until death • Recoup costs from patients estate
German Health insurance system 1880s national health insurance laws Occupational guilds basis of insurance--sickness funds membership according to location or occupation rather than choice contributions based on income (with single persons subsidizing families) rather than risk Members managed the funds 1883 employees contributed 2/3 and employers 1/3 of costs governed by board of employees and employers government set minimum benefit level by statute--sick pay, medical expenses and hospital treatment membership compulsory if income below a set level (3x avg wage)
German Health insurance system • 1913 separate funds white-collar from blue-collar • 1980s started to implement cost controls • 1989 1,100 different funds • blue collar below certain wage--no choice of funds • white collar could join substitute fund • above certain income did not have to join
Health Insurance system in U.K. First to have universal coverage 1948 “socialized medicine” or budgeted UK offer access to a system of care not insurance for care UK integrated system--no cost-shifting between state and federal--covers all costs--hospitals, physicians , clinics Criticism led to reform in 1989--put interests and wishes of the patients first--not more money but new forms of management and competition within the National Health service
Health Insurance system in U.K. Reform 1989 1. tried to introduce National Health Insurance and privatization 2. Introduced general managers at all levels, not work--no change to original system, managers little information to work with
UK current crisis How to fund increased taxes shift public spending expand the private sector
Japan Government managed Health Insurance Fund for employees of company not self insured Pay 8.2% of payroll—1/2 from employee and ½ from employer Other Occupations covered—seaman and day laborers
Japan National Health Insurance for occupations not covered by employer based—farmers, small business owners, retired from employer based funds, doctors. State pays 32-52% of cost
Health insurance system in China • Dualistic health care systems : Since establishment of PRC, based on its economic systems, China has established different health care systems in urban and rural areas • Wide differences are existing in health care financing and service delivering systems between the urban and rural areas
The pre-reform health care system in China In the urban areas In the rural areas Government Insurance Program (GIP) Labor Insurance Program (LIP) Cooperative Medical System (CMS)
In the urban areas GIP and LIP turned to partially out-of -pocket (OOP) payment schemes Co-payment (20% vs 80%), strengthening the individual accountability In the rural areas CMS collapsed in most areas The majority of people lost health insurance The majority of people paying medical costs out-of-pocket money The first reform period
The second reform period (late 1990s – present) • Health care financing system reform in urban areas • Health care financing system reform in rural areas
In the urban areas • In 1998, UEBHIS was launched nationwide
In the rural areas • In 2002, launched the New Rural Cooperative Medical Scheme (RCMS) • The pilot programs of the New RCMS has been expanding rapidly nationwide • The New RCMS is expected to cover 80% of the rural population in 2008, and the entire rural population by 2010
Large disparities in health • Disparities in health status • Disparities in access to healthcare
Disparities in health status Under-5 year mortality by regions, 2000
Disparities in health status Maternal mortality rate by regions Similar patterns exist for maternal mortality 9.6, 111 and 399 in Shanghai, Guizhou and Tibet, respectively
Disparities in access to healthcare Failure to treat illness due to financial problems Source: NHSS, 1998, 2003
Health problems create poverty • 30 to 50 percent of the poor report illness and injury being the main reason of poverty • Over 2/3 of China’s population needs to fully rely on their savings to pay for health services