HFS Phua
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Dr Phua Kai Hong, AB cum laude SM (Harvard), PhD (LSE) Lee Kuan Yew School of Public Policy National University of Singapore
Health Systems Financing in Asia
Current Trends and Issues in Health Care Financing in Asia
• Predominantly out-of-pocket expenditure in WHO SEARO and WPRO (Asia-Pacific)
• Growth in social insurance and less taxation in WPRO region (eg Korea, China, Vietnam)
• Increasing catastrophic expenditure and impoverishment due to healthcare spending (China and transitional economies)
• High expenditures for drugs and diagnostics (50-60 % of total health budget in China)
• Strong fundamentals and driving forces for increasing demand and consumption
Comparative Health and Expenditure in Selected Asian Countries (WHO Report 2000)
$/capita (Int $) Public/Total %GNP %Pop>60 DALE
Japan 2373 (1759) 80.2 7.1 22.6 74.5 Korea 700 (862) 37.8 6.7 10.2 65.0 China 20 (74) 24.9 2.7 10.0 62.3 India 23 (84) 13.0 5.2 7.5 53.2
Singapore 843 (750) 35.8 3.1 10.3 69.3 Brunei - (857) 40.6 5.4 5.0 64.4 Malaysia 110 (202) 57.6 2.4 6.5 61.4 Thailand 133 (327) 33.0 5.7 8.5 60.2 Philippines 40 (100) 48.5 3.4 5.6 58.9 Indonesia 18 (56) 36.8 1.7 7.3 59.7 Vietnam 17 (65) 20.0 4.8 7.5 58.2 Myanmar 100 (78) 12.6 2.6 7.4 51.6 Cambodia 21 (73) 9.4 7.2 4.8 45.7 Laos 13 (53) 62.7 3.6 5.2 46.1
Health Expenditure % GDP Per capita 1. France 9.8% $2,369 2. Italy 9.3% $1,855 3. San Marino 7.5% $2,257 4. Andorra 7.5% $1,368 5. Malta 6.3% $551 6. Singapore 3.1% $876 7. Spain 8.0% $1,071 8. Oman 3.9% $370 9. Austria 9.0% $2,277 10. Japan 7.1% $2,373
Health Systems Performance WHO Rankings 2000
WHO Health Systems Performance Assessment
• Health Attainment (Effectiveness) • Responsiveness (Efficiency) - basic amenities, social support, respect, confidentiality, autonomy, choice, communications • Fairness in Financing (Equity) - distribution of risks, social protection
Effects of Health Care Financing and Payment Systems
• EQUITY Who pays? Who benefits? - Distribution - Access • EFFICIENCY Supply & Demand - Allocation - Production • EFFECTIVENESS Outcomes - Quality of Care - Health Status
Comparative Health Expenditure in Selected Developed Countries
U.S.
Germany Canada Japan U.K.
Singapore
Year
Some Reasons for Singapore’s High Ranking and Low Expenditure
• Relatively high GNP growth in denominator • Lower consumption due to age structure
(age-adjusted projection up to 6-8% of GNP) • Strong budgetary controls on public spending • Absence of comprehensive health insurance • Government subsidies for public health and
differential pricing for personal consumption • ? Cost-sharing and co-payment system
Health Expenditures as % of GDP in East Asian Economies (2000)
• National Health Insurance Systems Japan 7.1 Korea 6.7 Taiwan 5.0 • National Health Service Systems Hong Kong 4.7 Malaysia 2.4 Singapore 3.1
Healthcare Expenditure in East Asia
Japan 7.1 80 : 20 Taiwan 5.0 66 : 34 Malaysia 2.4 58 : 43 Hong Kong 4.7 54 : 46 Korea 6.7 38 : 62 Singapore 3.1 36 : 64
% GNP Public:Private
Asian Health Care Financing Systems With Universal Coverage • Social Health Insurance - Japan, Republic of Korea, Taiwan, Thailand • National Health Service
- Singapore, Hong Kong, Malaysia, Sri Lanka Without Universal Coverage • Social Health Insurance
- China, Vietnam and transitional economies
• National Health Service - India, Indonesia and other developing countries
Selected Health Care Financing - Social Health Insurance Models
• JAPAN Universal health insurance (1922/1939) NHI Law amended (1984/1990) Trial DRG/PPS in 10 Hospitals (1/11/1998) Long term care insurance (1997/2000) • KOREA Universal health insurance (1976/1989) Health Care Reform Committee (1994/1997) K-RDRG Pilot Program (1997-1998) • TAIWAN Universal health insurance (1995) Partial DRG system (from 1998) Cost-containment measures (from 2000)
Selected Health Care Financing – National Health Service Models
• SINGAPORE National Health Plan (1983) Medisave/Medishield/Medifund (1984/1990/1993) Review Committee on National Health Policies (1992) White Paper on Affordable Health Care (1993) Casemix Funding (1999) Eldercare Fund/Eldershield (2000/2002) Enhanced Medishield/Private Insurance (2005) • HONG KONG Scott Report (1985) Consultation Paper - Towards Better Health (1993) Harvard Consultant’s Report (1999) Consultative Paper - Lifelong Investments in Health Care(2000) Proposal for Supplementary Private Insurance (2010)
Changing Features of the Singapore Health Care System
Mixed Public-Private Health Care Market • Choice of private and public systems • Competition and integration between public,
private and voluntary sectors • Appropriate mix of financing methods • Co-payment at the point of consumption • Selective insurance to avoid moral hazard • Targeted public subsidies to address inequity • Government benchmarks for prices & quality
Public-Private Health Expenditure in Singapore (1965-2000)
Singapore Health Statistics – Past and Present
1980 2005 • Life expectancy 70 years 80 years • Infant mortality 12/’000 2.5/’000 • Aged/total population 5 % 9 % • Public hospital mix 85 % 80 % • Health expenditure/GDP 3 % 4 % • Health expenditure/ 6 % 7 %
government budget • User fees recovered / 3 % 60%
public expenditure
Singapore’s Hybrid Health Care Financing
Seeks to avoid either extremes - Welfare State Tax-funded/ Social insurance - ‘Free’ services - Low quality - Inefficiency
Free Market Fee for service Private insurance - Moral hazard - Adverse selection - Inequity
Healthcare Financing Strategies
Instill personal and family responsibility (Cost-sharing)
+ Ensure future sustainability with ageing and avoid inter-generational problems
(Savings) +
Enhance risk-pooling and social protection (Insurance)
+ Target subsidy and equitable distribution
(Taxation)
Medisave
Medishield
Medifund
PRIMARY CARE
ACUTE CARE
CATASTROPHIC (LONG TERM CARE)
Financing Method
Private Payment
Compulsory Savings
Social/Private Insurance
PUBLIC SUBSIDIES Source: Dr. Phua Kai Hong
Taxes PUBLIC HEALTH SERVICES
(Eldershield)
(Eldercare fund)
Health Care Financing in Singapore
Public Hospitals: Bed Distribution
Health Care Financing Reforms - The Unfinished Agenda
1983 Blue Paper – National Health Plan 1984 Medisave 1990 Medishield 1993 Medifund 1993 White Paper - Affordable Health Care 2000 Eldercare Fund 2008 Eldershield 2005 Enhanced Medishield/Private Insurance 2017 Means Test (Targeted Public Subsidies) 2018 ?
The Singapore Health Care Model • Singapore’s health system ranked extremely high • Reputation for high quality, choice and efficiency • Equity risks covered by subsidies and safety nets • Fully funded medical savings with social insurance
to finance increasing needs of ageing population • Balance between health care supply and demand
with pricing and subsidy, while containing costs • Goals of efficiency, equity, quality and sustainability
to be maintained by appropriate public-private mix in provision, financing, regulation and education
Similar Approaches to Old Age Security and Health Care Financing
World Bank’s 3 Pillars for Old Age Security • Redistribution (Taxation) • Savings • Insurance Singapore’s 3M for Health Care Financing • Medisave (avoids inter-generational transfers) • Medishield (pools risks for catastrophic care) • Medifund (subsidizes the poor and indigent)
4 8 12 16 20 24 28
0
2
4
6
8
10
12
14
France Switzerland
Russia Germany
Italy
Finland
Norway Sweden
Belgium
United Kingdom
Denmark
Spain Portugal
Greece
Japan
Ireland
New Zealand
Australia
Canada
United States
Hong Kong
Taiwan
Korea
Malaysia Singapore
Hea
lth E
xpen
ditu
re a
s %
of G
DP
Aged Dependency Ratio (>65/Aged 15-64)
Health Expenditures and Ageing
Population Ageing: Impact on Health Expenditure
• Health expenditure will increase with growing proportion of the aged
• Health expenditure will increase with longer survival of the aged population
• Health expenditure will increase with widening periods of morbidity and disability before death
Population Ageing Trends by 2030
Health and Long Term Care Financing in Japan
• Universal health insurance 1922-1939 • National Health Insurance (1961) • Health Service Law for the Aged (1982/1986) • National Health Insurance amendments 1984-1990 • The Golden Plan / New Golden Plan (1990) - 10 -Year Gold Plan for the Development of Health
and Welfare Services for the Elderly • Public Long Term Care Insurance Act (1997) -
implemented in 2000 - 50% insurance (40 years and above) - 50% general taxation
Health and Long Term Care Financing in Singapore
FINANCING METHOD • Personal savings • Compulsory savings • Catastrophic
insurance • Disability insurance • Endowment • Taxation
3-M SYSTEM + 2E
• MEDISAVE (1984) • MEDISHIELD (1990) • + ELDERSHIELD(2002) • MEDIFUND (1992) • + ELDERCARE FUND
(2000)
Special Conditions in Asia
• Fastest pace of economic transition • Highest rates of population ageing and
population growth • Great propensity for savings • Strong traditional family support systems
Old age security and health care financing must contend with such considerations