Today is the last of the series on National Plans of the world………………..
The private sector is the predominant provider of health care in Brazil, particularly for inpatient services, and financing is a mix of public (through a prospective reimbursement system) and private. Roughly a quarter of the population has private insurance coverage, reflecting rapid growth in the past decade fuelled by the crisis in the public reimbursement system and the perceived deterioration of publicly provided care.
Four major forms of insurance exist:
- Prepaid group practice
- Medical cooperatives, physician owned and operated preferred provider organizations
- Company health plans where employers ensure employee access to services under various types of arrangements from direct provision to purchasing of private services
- Health indemnity insurance. Each type of plan includes a wide variety of subplans from basic individual/family coverage to comprehensive executive coverage. The paper discusses the characteristics, costs and utilization patterns of all types of privately financed care, as well as the major problems associated with private financing: the limited package of benefits and low payout ceilings, inadequate consumer information and virtually no regulation.
Taiwan’s New National Health Insurance Program: Genesis And Experience So Far – 2003
Taiwan’s NHI is a government-run, single-payer national health insurance scheme, financed through a mix of premiums and taxes, that compensates a mixed public and private delivery system predominantly on a fee-for-service basis.16 NHI enrollment is mandatory, to ensure adequate risk pooling and the broad-based collection of funds to finance the NHI. More than 96 percent of Taiwan’s population is now enrolled
The bulk of Taiwan’s health care facilities—86 percent of hospitals (1999) and 65 percent of all hospital beds (2000)—are privately owned. Most of the privately owned beds are in nonprofit hospitals that nevertheless can earn sizable profits, like their U.S. counterparts. Doctors in Taiwan are either salaried staff physicians in hospitals or self-employed owners of medical practices known as clinics, of which 97 percent are privately owned. As of 2000 about half of Taiwan’s physicians practiced in their own clinics.
Cost sharing by patients. Out-of-pocket spending by households represents services not covered by the NHI, such as orthodontics, prosthodontics, lab tests that are not medically necessary, extra charges for non-NHI beds, special nurses and physicians requested by patients other than those routinely assigned by the hospital, long-term care, and nursing home care. It also includes “user fees” and copayments for NHI-covered ambulatory care, inpatient care, and pharmaceuticals.
The share of the premiums paid by the insured, by employers, and by government varies greatly within the six categories of population subgroups. For employees of public or private enterprises, for example, government pays 10 percent of the premium, the employer 60 percent, and the employee 30 percent (the latter through payroll deduction). The non-poor self-employed pay 100 percent of their income-based premium, without any government subsidy. For military personnel and their dependents, and low-income unemployed people who are unable to pay the premium, the government subsidizes 100 percent of the premium. The premium collected by the NHI for an individual varies based on his or her number of dependents (for whom premiums are levied on a per capita basis), although dependents in excess of three are effectively insured gratis.
Since 1998, however, the NHI’s expenditures have outstripped its revenues. Over the entire period 1995–2001, NHI revenues increased at an average annual rate of 4.26 percent, while expenditures increased at 6.26 percent.58 The large cash reserves accumulated during the first three years were used to cover the deficits for the period 1998–2002. By mid-2002 the cash reserve had dwindled to less than a month’s expenditure, forcing the BNHI to borrow from banks to the tune of NTD$50 billion a month (about one-sixth of total monthly expenditures) to pay claims.59 The NHI has addressed this shortfall in several ways.
Premium increases. For the first seven years of the NHI’s existence, its premium rates remained unchanged. Because the NHI could draw on its cash reserve after 1998 to cover deficits, the public and its political representatives resisted the idea of raising premiums in step with the growth in spending. Furthermore, the KMT government may not have considered it politically wise to raise premium rates shortly before the presidential election year of 2000.
Only in September 2002, with the NHI facing imminent bankruptcy, was the DoH able to push through a premium rate increase of about 7 percent, from 4.25 percent of assessable income to 4.55 percent. For 90 percent of the insured public, this premium increase represents an average of NTD$40 (US$1.14) per month.
Even before the September 2002 premium increase, the BNHI raised copayments in July 2001 for certain types of visits, drugs, and inpatient care, although critics have decried this strategy as regressive. Copayments rose again in September 2002, and the BNHI started to charge copayments for lab tests and examinations at that time.
A 10-Year Experience with Universal Health Insurance in Taiwan: Measuring Changes in Health and Health Disparity – February, 19, 2008
Universal national health insurance, financed jointly by payroll taxes, subsidies, and individual premiums, commenced in Taiwan in 1995. Coverage expanded from 57% of the population (before the introduction of national health insurance) to 98%.
Copayments are required: roughly 10% for inpatient and 20% for outpatient
With an average income of $15,170 in 2004, the average Taiwanese person spent $926 on health care, an increase from $548 the year before the introduction of national health insurance.
Overall, while Taiwan’s population grew 5.2 percent between 1994 and 2000, the volume of services delivered greatly increased. Between 1994 and 2000 total hospital outpatient visits increased by 16.6 percent, emergency room visits by 42.2 percent, outpatient surgery by 56.4 percent, inpatient surgery by 19.7 percent, kidney dialysis by 80.4 percent, and inpatient hospitalization by 18 percent.
With the exception of certain costly high-tech treatments (for example, heart, lung, liver, and bone marrow transplants, or gamma radiation) for which prior BNHI authorization is needed, there are effectively no ceilings on utilization in the NHI. This has resulted in high health care use rates, especially outpatient care. Outpatient visits averaged 14.4 per capita in 2001, compared with 5.8 for the United States (1996), 6.4 in Canada (1998), 6.5 in Germany (1996), and 16 in Japan (1996). In Taiwan there were 129 hospital admissions per 1,000 population in 2001, which is roughly comparable with the acute care hospital admission rate of 118 per 1,000 population in the United States and 99 in Canada.
Payment of providers
Taiwan’s health care providers obtain their revenues from three sources:
(1) payments by the NHI
(2) patient user fees and copayments, and
(3) proceeds from the sale of products and services not covered by the NHI
Experts in Taiwan appear to believe that the absolute level of fees paid by the NHI is too low and that many fees are considered to be below cost. In the absence of effective volume controls, providers’ simplest response to low fees is to expand the volume of services they provide while reducing the resources going into each unit of service (for example, shortened visit length). The BNHI’s chief executive officer, Hong-Jen Chang, remarked that “Taiwan’s doctors are well paid. But they work very, very hard to use volume to make up for the low fees.”
Ta-Fu Huang, chairman of the DoH’s Quality Commission, has written extensively about Taiwan’s medical culture of the “three-minute patient visit“ with physicians that is typical of doctors in Taiwan. That fee-driven practice style may lead to misdiagnosis, improper treatment, or delays in proper treatment.
Rewards for revenue generation
With rare exceptions, hospitals in Taiwan now reward their staff physicians individually for bringing in revenue. Traditionally, hospital-based physicians in Taiwan had been paid fixed salaries. In recent years more and more hospitals have shifted partially (mainly large public hospitals) or wholly (all private hospitals and some public hospitals) to the “professional fee” (PF) system. That system compensates doctors mainly on the basis of their revenue productivity: the number of patients seen, procedures performed, lab tests ordered. Although seniority counts as well, the higher the service volume a doctor or a hospital delivers, the greater will be the hospital’s revenue and the doctor’s pay.
It is to be expected that such a reward system can trigger physician-induced care that may not always be clinically indicated. The BNHI’s Chang estimates that overuse and misuse of health care may well constitute up to a third of the BNHI’s current expenditure, a view that is widely shared.
Others decry the “commercialization of medicine” in Taiwan and the “profit-driven motives” of Taiwan’s providers. Finally, providers in Taiwan can and do respond to low fees for some services by profiting from the sale of products and services not covered by the NHI or by emphasizing the sale of NHI-covered products on which the NHI allows large profits. Prominent among these are prescription drugs. Drugs constituted 22 percent of total national health spending in 2000 and 23.8 percent in 2001.
Coupled with the PF system of rewarding hospital-based doctors, permitting hospitals to profit from the sale of drugs leads to a serious conflicts of interest, as it invites the overmedication of patients, including a perilous overmedication with antibiotics. According to a December 2002 study report by the DoH, close to half of the doctors in Taiwan prescribe four to five drugs per visit for upper respiratory infections, and 10 percent prescribe more than eight drugs.
Care can be Deadly Care
According to the previously cited chairman of the DoH Quality Commission, “When patients in Taiwan are faced with life-threatening illnesses, although their economic burden is reduced [by the NHI], the probability of their losing their lives is several times greater than it is in the U.S.
- Survival for all cancers in Taiwan is half the rate in the U.S.
- Deaths from anesthesia is eight times that of the U.S.
- Deaths from tuberculosis is ten times that of the U.S.
- Antibiotic resistance in streptococci [sic] pneumonia is the highest in the world.
In its April 2002 global budget report, Taiwan’s DoH concurred that “the policy of low cost insurance with prices frozen, which resulted in ‘fast-food health care,’ has seriously negatively impacted on both the quality of care and the medical environment.“
A major lesson to emerge from Taiwan’s experience is that social insurance programs can easily fall victim to the Tragedy of the Commons, in which commonly owned properties face the risk of depletion from overuse by individuals seeking to maximize their own well-being without regard for the common good. The challenge health policymakers face is to educate the public to the fact that a social health insurance system, too, faces this type of threat.