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强制性医疗保险计划分析
引言
强制性医疗保险计划是政府为了取代现有的模式而提出的，即是由政府资助的新的医疗融资安排之一。
人们对这个计划的意见是多种多样的。中等收入组认为这样的计划是不公平的，因为他们必须花费额外的钱在这个计划上，却没有得到额外的价值。高危险群也担心整个计划的运作，但他们的医疗费用将因此得到保证。
首先，我们将介绍一下强制性医疗保险计划，包括其提出的背景，并与现有的融资安排进行比较。然后，我们将列出本保险计划的公众意见。在那之后，我们会对我们这个计划进行分析。最后，我们将表达我们的观点和计划建议。
什么是强制性医疗保险计划？
背景- 对香港现行的医疗制度和现有融资安排
在我们介绍强制性医疗保险计划之前，我们将首先简单介绍一下香港目前的医疗体制和现有的融资安排。
Analyse The Mandatory Medical Insurance Plan Economics Essay
Introduction
Mandatory Medical Insurance Plan is one of the new medical financing arrangements proposed by the government to replace the existing model, ie government funding.
Public opinions on this plan are diverse. Middle income group feels that such a plan is unfair to them since they have to spend extra money on this plan which has no extra value to them. High risk group, though their medical expenses will be guaranteed, also conserns operation of the whole plan.
We will first introduce the mandatory medical insurance plan, include its background and compare with the existing financing arrangement. Then we will list out public comment on this insurance plan. After that, we will give our analysis of this plan. Lastly, we will like to express our point of view and give our recommendation of the plan.
What is mandatory medical insurance plan?
Background - about the current healthcare system and existing financing arrangement in Hong Kong
Before we introduce the mandatory medical insurance plan, we will first briefly talk about current healthcare system and existing financing arrangement in Hong Kong.
Current healthcare system [2]
The current healthcare system is formed by two sector, they are private and public sector.
The private sector focus on primary healthcare services, which is the first point of contact individuals and their families within a persistent healthcare process, include preventive care, curative care and community-based healthcare.
The public sector focus on secondary and tertiary healthcare services, which specialized ambulatory medical services, general hospital care and highly complex and costly hospital care, include specialist out-patient service, in-patient service and accident and emergency services.
The government subsidize about 83% to 97% of public healthcare services [3] . For example, the government subsidize 97% of the cost of in-patient service, which cost $3290. User of the service only need to pay $100. Such a subsidization assures everyone can use the service provide by the public sector. However, it also cause wastage of resources. For example, patient who consult private doctors also register at public hospital in order to get highly subsidized medicine.
For private healthcare services, there is no subsidize from the government, which means users of the service need to pay 100% of the cost. There is also no regulation on the fee of the services, charges may vary from different service provider.
Here is the table about the fee structure and subsidy level of public healthcare services [4] .
Existing financing arrangement [5]
In 2004 -2005, the total health expenditure is about 68 billion, of which 37 billion are public health expenditure. The rest are private health expenditure.
Under the existing financing arrangement, about 96% of the public health expenditure is funded by the Government’s tax revenue. Since salary tax is the source of government’s tax revenue, it is the major source of fund of public health expenditure.
For private healthcare expenses, 70% of it is funded by out-of-pocket payment. Rest of it is funded by private health insurance.
The graph illustrate distribution of fund of total healthcare services expenditure [6] .
The Plan - Why the government propose this new financing arrangement?
In the consultation document, the government list out several problems current healthcare system and financing arrangement are going to face/cause.
The current healthcare system are facing several problems [7] . They are rapid aging problem, increasing medical cost and increasing health expenditure.
For rapid aging problem, every eight people has an elder (age 65 or above) in 2007 and this proportion will double to every four people has an elder by 2033. Since an elders on average use 6 times more than people age under 65, rapid aging problem will cause a heavier burden on current healthcare system.
For increasing medical cost, this is due to advancement of medical technology. To effectively detect and treat disease, some new, better and often more expensive medical technologies have to be adopted. Adopting new medical technology may also require investment in both equipment and manpower, such as healthcare profession are getting more specialize.
For increasing health expenditure, assuming the current form of healthcare system remains unchange, the total healthcare expenses, which measured in terms of price level at 2005, will increase from from $67.8 billion to $315.2 billion between 2004 and 2033, while GDP will increase only from $1,287 billion to $3,413 billion. Also, if we assume the government remain public expenses at below 20%, the public healthcare expenses will increase its share from 14.7 at 2004 to 27.3 at 2033 due to rapid aging problem that causes rapidly increasing healthcare needs.
The current financing arrangement are causing several problems [8] . They are salaries tax rate will be increased, public hospital monopolize healthcare services market and inability to enhance the quality and efficiency of public hospitals’ healthcare services.
For salaries tax rate will be increased, this conclusion is base on the assumption that the public healthcare expenses are mostly funded by government tax revenue, without any changing any public services’ quality. Since the public healthcare expenses keep on increasing, if the government remain the proportion of public expenses over GDP at 20%, the public health expenditure will rise from 14.7% of total public expenditure in 2004 to 27.3% in 2033. In other words, proportion of other public services expenditure, such as education, social welfare etc, over total public expenditure will have to decrease. To remain all public services’ quality unchange, the government will have to increase salaries tax rate.
For public hospital monopolize healthcare services market, this is because the fee that service users need to pay is very low. In figure C4 (Page 5), it shows that 55% of healcare expenses are public healthcare expenditure. If the government continue to highly subsidize public healthcare service it will continue to channel people into the public healthcare system and cause imbalance between public and private sector. As a result, competition between these two sector more and more restricted. Public hospital monopolize healthcare services market
Since competition between public and private is limited, it is therefore hard to enhance the quality and efficiency of public hospitals’ healthcare services.
The Plan - What’s the plan about? [9]
The mandatory medical insurance plan forces everyone in HK to buy a private health insurance.
The range of coverage, usually include essential healthcare services such as in-patient services, prescription drugs and other related healthcare services, and level of benefit, usually at a basic level such as covering in‐patient services at a lower class of quality, will be specfied by law.
The premium and insurance plan for all insured will be unified, irrespective of insured age, gender and health condition. The government will subsidize for low-income people/community to pay their premium since these groups may not be able to afford it.
Compare mandatory medical insurance plan with the existing financing arrangement, which is government funding, by following standard [10] :
Financial Stability
Accessibility to healthcare
Choice of services
Market competition
Cost Control
Operation Cost
The mandatory medical insurance plan has a better financial stability as number of participants is predictable, thus provide a relatively stable source of fund for healthcare. Financing arrangement through government funding, however, is relatively not stable as it will be affected by business cycle.#p#分页标题#e#
Both of them have similar accessibility of healthcare. The mandatory medical insurance plan guarantee every insuree, irrespective of his age, gender and health condition, can use healthcare services. The financing arrangement through government funding assures every citizen has a equal chance to use public healthcare services.
3+4) The mandatory medical insurance provide more choice of healthcare service than financing arrangement through government funding. The former one allow insuree to choose services provide by public or private sector. The latter one only provide public healthcare services. As insuree can choose whether to use healthcare service provide public or private sector under the mandatory medical insurance, it can also enhance competition between public hospital and private hospital.
5) Both of them are effective in cost controling. The mandatory medical insurance plan allows insurers to bargain with service provider in order to lower the healthcare cost as the insured pool is big enough. Financing arrangement through government funding can also effectively control cost by arranging medical resources according to patients’ needs.
6) Financing arrangement through government funding has a lower operation cost as the public healthcare expenses are directly funded by the government. The mandatory medical insurance plan requires the government to monitor claims payout and operation of the mandatory medical insurance system.
Appendix: Healthcare system in Netherlands and Canada [11]
Netherlands
Canada
Major funding source
Private health insurance + Social insurance
General taxation
Main tax
Income tax 52%; Sales tax 19%
Income tax 46.4%; Sales tax 7‐17%
Major scheme
Compulsory health insurance
Medicare
Contributions for major scheme
Community-rated premiums, average annual Eur1050;
Premiums of children aged 18 or below are covered by public funds;
Income‐related contribution of 4.4% or 6.5% up to EUR 1,950 per year (for risk adjustment and children’s premium
Health premiums (only in British Columbia, Alberta and Ontario) ‐ e.g. Alberta: C$44 (HK$234) or C$88
(family) per month, with the elderly exempted
Range of coverage
(Population; Service)
Universal but individually insured; Defined and uniform basic coverage
Universal; Defined in Canada Health Act as essential or medically necessary services
Service exclusion
Hospital care exceeding 365 days, and vaccinations, which are covered under a separate long‐term care social insurance
Dental, ambulance, prescription drugs, visual aids
Service provider
Mostly private providers; Contracted by insurance companies
Private or public providers; Patients can choose both providers and doctors
The healthcare system in Netherlands is successful [12] . It is because the Dutch government provides a structure that allows competition among healthcare service provider. The healthcare system is open up by the Dutch government from a “more control” by the government to a “more competition” among service providers.
The Dutch government also standardize coverage contract so that there is no tricky exclusion or confusion. It has an entire department to regulate what insurance companies have to cover and then seize to it and checks up that they are covering those items.
The healthcare system in Netherlands only cost USD3527 per person, 9.8% of its GDP. The average Dutch life expectancy is 80 years.
The healthcare system in Canada is not successful. It is because Canada, like Hong Kong, is facing having rapid aging problem and increasing medical cost. Similar situation happens in United Kingdom. The British government decides to expand public healthcare expenses. However, critics concern whether British government can afford and maintain the increased level of public healthcare expenses when there is a huge budget deficit in the future.
Public comments
We will like to show some public comments on the mandatory medical insurance plan before we do the analysis. The following are the main groups that the insurance will affect:
Low-risk people (against)
They think that they get a lower chance to get sick than those high-risk people. They are not willing to pay for the medical insurance which spends them extra money.
High-risk people (for) [13]
They agree for this plan as the medical expense spent on them can be guaranteed. However, some of them are worried about whether they can get their compensation in time due to the complicated approval process.
Middle-class (against) [14]
Same as low-risk people, the mandatory medical insurance spends them extra money. Additionally, compared with the low-income group, they can’t get any subsidy from the government.
Insurance company (against) [15]
They mainly worried about the uniform premium set by the government may not be enough to cover the risk of underwriting the high-risk people with chronic diseases.
Insurance company (for) [16]
The plan can bring them extra client and they may be able to generate more profit.
Our economic analysis-who gain who lose
Firstly, money will transfer from the low risk to high risk. Since the premiums of the high-risk and low-risk are the same, the probability of the high-risk of visiting the doctor is much higher than the low-risk. So that the low-risk has a lower probability then the high-risk to get back their compensation.
Secondly, the premium is a regressive tax [17] . As each person needs to pay the same amount of premium of the insurance, the low income group will need to pay a higher proportion of income to the insurance company than the high income group. So it will widen the income gap. However, in Hong Kong’s plan, the government will subsidize the low income group; therefore the middle class will need to pay the highest proportion of their income for the premium.
Thirdly, the quantity demanded of medical service will increase. As the price of consuming a medical service decreases, the marginal utility per dollar will increase. So people will want more of the service. However, such an increase in quantity demanded of medical service may cause the misuse of it. This is because when people use the healthcare service more frequently, hospital may even have to hire more doctors to deal with it. This may higher government expenses on medical expenses, which is contradictory to the plan’s denotation.
Forth, as the private insurance plan also allow insuree to use service from private hospital, quantity demanded for private hospital healthcare services increase. This may lower citizens’ reliance on public healthcare services will decrease and will be more efficient on resource allocation. It is because in the past, the public hospital needs to take care about 90% of patient in Hong Kong.
Fifthly, if there is a price control on the insurance company under the equilibrium price, the insurance company will take some action to lower the cost. For example the insurance company may delay the compensation of the patient. This non money cost may cause inconvenient to the patient.
Lastly the general health level will decrease. Because healthy is an economic good, getting healthy needs cost. Unhealthy is also a good [18] . Its cost included the premiums. If the premium decrease, the opportunity cost of being unhealthy will decrease. According to the law of demand when the cost decrease more people will want to be not so healthy [19] .
Agree/Disagree
If we AGREE, our reasons are…
Compare with the other financing arrangement, the mandatory medical insurance plan has following advantages:
Financial stability
It has a better financial stability. The response of health care will transfer from the government to the insurance company.
More choice of healthcare service
There are more choices of service. Patients can choose the public and private hospital freely because the plan allow insuree to use service provide by private or public sector.#p#分页标题#e#
Quality of service will be improved
Since patient can choose whether t use service provide by private or public sector, there is more competition between two sectors. As there is a competition, both of them will enhance their service to attract patients.
Some additional regulations can be used to overcome the disadvantages of the policy. For example, the government can make more advertisement for the public for doing more exercise to keep a healthy body, to prevent the health level decrease.
On the other hand, if we DISAGREE, our reasons are...
Problem of fairness
The mandatory medical insurance is not fair to the low-risk people and the middle-income group.
For low-risk people, they have a lower chance than high-risk people to get the compensation.
For the middle-income group, they can’t get the subsidy from the government but the low-income group can get it.
Such a fairness problem may elevate the difficulty and so the cost of enacting and implementing the plan due to the disagreement of these parties.
Misuse of medical services
The mandatory medical insurance plan enables the patients to get most of their medical expense as compensation. As a result, the monetary cost of using medical services will decrease drastically. According to the law of demand, the quantity-demanded of using medical services will increase. It will in turn increase the burden of the healthcare system.
High monitoring cost
In the past, the charge of the public medical services is less than the private one. However, due to the plan, the charge will no longer be paid by the patient but indirectly by the insurance company. The gap of charge between public and private medical services disappears. Then citizens will rely more on the private medical services since the relative cost of it decrease.
In order to maintain the quality of the medical services, the government must put more resources on monitoring the private healthcare system. Some current problem in private healthcare system, such as transparency in pricing must be solved.
On the other hand, the operation of the insurance company should also be monitored in order to avoid misbehavior such as incident of delay of paying compensation.
Decrease in health level
As stated in the part of theory, the plan causes a decrease in health level. In the moral perspective, the government should not encourage such an atmosphere.
To a society, a decrease in the health level will also cause a decrease of productivity in long term.
High administrative cost
The plan involves a process of claiming compensation. The process will cause much administrative cost such as recruiting extra staff for providing such a claiming process. The cost will in turn shift to the premium that the citizen paid and it elevates the premium. It somehow spends the social resources.
To conclude, we AGREE that the government need to set up mandatory medical insurance plan. Due to the rapid aging problem, the medical expenses will increase year by year. To maintain the quality of medical services, it is a must to implement the mandatory medical insurance plan.
We understand that there are cons in the plan, therefore some measures and regulations are recommended to overcome the cons of this policy.
Our recommendation
We think that some of the disadvantages can be solved by some measures, but some cannot.
Overuse of medical services
For the overuse problem, we think that if some minor claiming process can be lengthened, the problem can be solved. It is to increase the non-monetary cost of using the medical services. The people with minor sickness have relatively a larger increase in the total cost of using medical services than those with serious sickness. And the quantity demanded of the people with minor sickness will decrease will decrease more than those with serious sickness. The overuse problem can then be relieved.
Decrease in health level
The problem is due to the overuse problem. If people cannot use the medical services under a very low cost (total cost), they will not scarify their health anymore.
High monitoring cost
In fact, the high monitoring cost can’t be avoided, as it is a must when a system is under a market mechanism (the competition between the insurance company and the hospital) but not under central planning (the government).
The only thing that we can do is to minimize it. We think that the government should set up a control commission to monitor the behavior of the hospital and the insurance company. Also the government should set the relevant laws and execute them well to avoid the misbehavior of the market.
High administrative cost
It is also difficult to be solved. But actually the economic waste done by this problem can be offset by the competition between the insurance company and the hospital. They will minimize their administrative cost as much as possible in order to survive in the market.
Fairness problem
Lastly, for the fairness problem, it is also difficult to be solved. If the government subsidizes those middle-income group or low-risk people, the fund raised will not be enough to finance the medical expenses.
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