13.12 Community rating is underpinned by the reinsurance arrangements - a mechanism which redistributes the risk among funds with high proportion of aged and chronically ill customers and those with low proportion of such customers. 13.13 This system is administered by the Private Health Insurance Administration Council (PHIAC). Each insurance fund pays claims from two separate accounts, namely, the standard account and the reinsurance account. Standard account is used to pay the total value of claims to low cost members (aged below 65 years and stay in hospital for less than 35 days in the previous 12 months) and 21% of each claim to high cost members (aged 65 years or above; or stay in hospital for over 35 days). Reinsurance account will then pay the remaining 79% of the claim to high cost members. Each quarter, PHIAC will pool the reinsurance account payments and divide the sum in proportion to their membership. If a fund has paid more from its reinsurance account than its proportion of the pool, it will receive the difference from PHIAC, and vice versa. 20
Chapter 4 considers a number of international health systems of interest for Australia and how they are responding to the challenge of chronicity – the rise of chronic health conditions in their populations. Four national health systems are discussed including the UK model of primary care organisation and financing through Primary Care Trusts and the national Quality and Outcomes Framework. The UK presents an interesting model of public insurance for social care that is financed through local taxes, and a very inspiring discussion on the future role of hospitals within the framework of integrated care, and the evolution of multidisciplinary teams. Canada is another country of interest for Australia’s potential arrangements. Canada demonstrates good evidence of the effect of implementing disease management programs for people with chronic health conditions, and within the national health system, which has a high presence of private primary care doctors. Canada has implemented a blended reimbursement system for medical services encompassing fees for service, pay for performance, and financial incentives for the correct implementation of chronic disease management programs and preventive strategies. New Zealand and Spain are two other countries with national health systems that have undertaken re-development of healthfinancing arrangements in response to the challenge of chronicity. In section 4.2 we look at examples of social health insurance systems. The Netherlands has implemented a health insurance system with public provision through social contributions and also with private provision through private insurers that are reimbursed using risk adjustment, promoting incentives for efficiency. This bundled payment model addresses the goal of fostering better coordination and integration of care, together with the implementation of chronic disease management programs and preventive strategies. Germany has implemented an additional social contribution directly linked to the financing of social and long term care for means-tested individuals that we also take into consideration in our discussion and development of options for Australia. Japan and South Korea also present interesting social health insurance approaches. Finally, we consider two countries with a high presence of demand side cost share: USA and Singapore and then discuss the features of the health funding arrangements in these groups of countries which offer insights for Australia.
Key to the integration and delivery of a newly devel- oped health technology are health technology assess- ments (HTA), which represent a multidisciplinary field of policy analysis that studies medical, social, ethical and economic implications of a new technology . In Australia, the Medicare Benefits Schedule (MBS) is re- sponsible for subsidising the cost of procedures per- formed in public hospitals with public funds. The MBS requires that a formal HTA is undertaken during the consideration process for public funding of new ortho- paedic technologies other than prosthetic devices [8, 9]. This is to ensure the “optimum value for money in the Government’s subsidisation of medical services, as well as prioritising the uptake of effective new technologies and procedures” . Specifically, it is the Medical Services Advisory Committee (MSAC) which advises the Minister for Health on the listing of MBS subsidies for ortho- paedic technologies other than prostheses. MSAC ap- proval, and the subsequent access to public funding, is the crucial facilitator of the uptake of the new technol- ogy in Australia and important for widespread consumer uptake .
13.10 It is observed that 85% of total healthcareexpenditure was taken up by the NHS, of which, 75% covered hospital and community services, 23% covered family health services and the remaining for other services. Since hospital services have taken up a large proportion of NHS expenditure, the NHS remains predominantly a service for curative care. Of the hospital and community services, nearly half of the expenditure went to acute hospital services. Most of these services are consumed by elderly people. It is expected that with an aging population, there will be greater demand on healthcare services, especially long-term care and community care services. Of the family health services, over half of the expenditure was on drugs and prescription expenses. This implies that an increase in prices of drugs and related expenses would have great impact on the expenditure of family health services. According to Allsop (1996), 41 prescription charges had risen sharply: between 1979 and 1994, there had been an increase from under £1 per item prescribed to almost £5.
In practice, however, the government role in Australia goes well beyond this. As matters currently stand, Australian governments – and the Commonwealth Government in particular – bear the primary burden of funding residential aged care, even where care recipients are capable of meeting those costs. The Commonwealth also funds community care, which provides care in the home, but shares that respon- sibility with the states and territories). Additionally, the Commonwealth extensively regulates care provision. That regulation extends not only to ensuring service quality but also to controlling the number, composition, and location of the places made available. More specifically, the Com- monwealth uses “planning ratios” that specify the number of aged care places that are to be made available as a function of the population aged 70 and over. Access to these places is controlled through a process of needs assessment, based on medical evaluations of disability that grade potential beneficiaries in terms of the degree of care that they require. This assessment is currently done by ACATs, which are funded by the Commonwealth but managed by the states and territories. Through these controls over numbers, the Com- monwealth rations the use of the service, thus controlling its fiscal exposure. The Commonwealth also regulates the prices that aged-care providers can levy on their residents. While the costs incurred by about a third of residents are entirely borne by the Commonwealth (other than the basic daily fee of 85% of the age pension which is arguably a transfer payment by the
In this subsection we present the estimated Gini coeﬃcients for income, healthexpenditure concentration indices and KIs household co-payments. The results are presented for urban areas of Iran, for the years 1997 to 2007. Table 1 presents the Gini coeﬃcient, concentration index of healthcare and Kakwani’s index (KI). Considering the results of table 1, the mean of Kakwani’s index in total period in urban areas has been negative and equals with (-0.022), This indicates that Healthcare ﬁnancing in this area is descending. In addition, ratio of share richest quintile to poorest quintile for Healthcare is (8.79). Numbers listed in Column Kakwani’s index (KI) are obtained from subtract numbers listed in column (CI) from column (GINI). The following Figure (ﬁgure 3) show Lorenz curves for Income and healthcareexpenditure in urban areas in 2007.
All per person calculations of expenditure in this report have been derived using the whole Australian population at 30 December 2008 as the denominator (ABS 2012). This method has been adopted because there are no reliable prevalence data for diagnosed CVD in Australia for 2007–08. This approach results in much lower per person costs than would have been the case if the numbers of people who had the disease (prevalence data) had been used. The method used here, however, does provide a valid economic measure of per capita expenditure that can be used to compare both individual diseases and results over time. See Methods and limitations chapter for more information.
In line with the indubitable empirical fact that improved health outcomes are an essential instrument for economic development (Ganyaupfu, 2014), financing of healthcareexpenditure remains central to ensuring effective delivery of healthcare services. In South Africa, the two major healthcarefinancing mechanisms are general taxes and private medical schemes, while the rest of financing comes from individuals in form of direct out-of-pocket payments (Matsoso, Fryatt and Andrews, 2015). Nearly half of national healthexpenditure in South Africa comes from healthcare spending in the private healthcare sector (Econex, 2013). Private healthexpenditure principally consists medical schemes for which membership profiles are fundamentally characterised by high- and middle-income population segments (Ataguba and McIntyre, 2012). As a key contribution of this study, monitoring of primary healthcarefinancing trajectories and their relative impacts on overall healthexpenditure thus plays a crucial role in formulation and review of the healthcarefinancing policy.
important for the ability of households to access dental care. Thus as a policy instrument, removing the price barrier to care is fundamental . Yet specifically to Canada, how this price barrier is removed warrants attention. Leake and Birch  state that the net effect of Canada ’ s method of financing dental care is a ‘ perver- sion ’ : since employment based insurance is present for those with stable jobs and incomes, and since dental insurance is excluded from payroll taxation, those with insurance (the rich) pay for dental care using pre-tax dollars, and those with no insurance (the poor) pay with after-tax dollars. As stated in our introduction, this means that the poor in effect subsidise the rich, repre- senting a damning view of the wealth transfer principle in the Canadian welfare state as it applies to dental care. Moreover, in the context of available public insurance, which is targeted mainly at children, and social policy that largely functions on the bases of ‘ deserving and undeserving poverty ’ , this magnifies the need for public subsidies among working poor families. Policy leaders should thus pay closer attention to the changing nature of employment and explore policy and legislative instruments that aim to secure or promote non-wage benefits for low income and/or temporary work arrange- ments. Similarly, low-income programs will need to broaden their eligibility in order to buffer changing eco- nomic conditions for families, not just children. These recommendations also apply to countries that finance dental care in a similar manner (a combination of employment-based insurance supplemented by public subsidies for the poor), in particular the United States, and to a lesser extent countries such as Belgium, Fin- land, Sweden and the United Kingdom, and for those without substantial amounts of employment-based insurance, but with tax subsidies aimed at promoting the direct purchase of private dental insurance, such as Australia, the Netherlands, and France [44,45]. That said, another way to remove the price barrier to care is through universal coverage, which in most countries exists in a targeted approach, such as school based ser- vices in Chile and Brazil, or dedicated direct delivery systems such as in the United Kingdom, Sweden, and Norway .
The fundamental principle of the Malaysian healthcare system is that accessibility to healthcare not to be related to ATP, particularly in the event of sickness . The gov- ernment is concerned with the performance of the healthcare system, whose primary purpose is to improve health of the nation . This stems from the understanding that health represents the human capital, which is the central thrust to sustainable economic growth and development of the country. The Malaysian healthcare system has been improving over time, such that a higher standard of health status has been achieved with the relatively limited resources available to the health sector. For example, throughout the period of 1990 to 2005, life expectancy at birth increased significantly (males from 69.0 years to 71.8 years, females from 73.5 years to 76.2 years), the infant mortality rate has fallen (from 13.5 to 5.1 per 1,000 live births), whilst maternal mortality rate has been held steady (at 30 per 100,000 live births) . Such improve- ment in health status has been achieved within the range of 2.0% to 4.0% of GDP being spent on health services in Malaysia. The total healthexpenditure was 3.1% of GDP during the HES 1998/99 (with per capita total expendi- ture on health at 112 US$ average exchange rate or 261 international dollar rate), and has increased to 3.8% of GDP in 2003 (with per capita total expenditure on health at 163 US$ average exchange rate or 374 international dollar rate) . Malaysia was ranked at 49 from 191 WHO member countries in the World Health Report 2000 , which assessed the overall health system performance against three objectives of good health, responsiveness and fair financial contribution. Malaysia performed unsatisfactory in fair financial contribution, with ranking at 122–123 from 191 WHO member countries, whilst moderately in the other two objectives (the level of good health was ranked at 89 whilst distribution at 49 from 191, the level of responsiveness was ranked at 31 whilst distribution at 62).
One might wonder why the risks for the health system’s sustainability associated with ageing have been so greatly emphasised before any definite conclusions about ageing effects on healthexpenditure have been reached. According to Evans et al. (2004), it may be for political reasons: the claim that healthexpenditure will grow dramatically to meet increasing needs is a way to obtain more resources with which to increase the incomes of healthcare providers. At the same time, ageing may be used as justification for past increases in spending. This may distract attention from the actual causes of expenditure growth, from considerations concerning the appropriateness or effectiveness of care provision and from evaluation and accountability. Finally, the prediction that universal public healthcare systems will collapse strengthens the argument for a shift to a more mixed financing system, with a greater level of private payment. These and similar observations have prompted some experts to wonder whether the risk of huge healthexpenditure increases due to ageing is not a ’red herring’ (see Zweifel et al., 1999, and the reply by Seshamani & Gray, 2004).
Data for several of the independent variables of interest were not available for all the years of the DHS surveys used in the analysis. National health account (NHA) data were only available for 1990 (World Bank data) and then from 1998 onward (WHO data). Therefore, for countries where we were using DHS values from 1990 or from 1998 onward, we also used national health account data (government health expen- diture as a percentage of total healthexpenditure and per capita total healthexpenditure) from the matching year. For six countries (surveys 1991–1997) for which exact year NHA data were not available, we used an average of 1990 and 1998 values for the NHA variables. This method is similar to that used by Wang (2002). Survey-derived empiric values for female literacy were available for a single year between 2000 and 2004 for each country. We also performed sensitivity analysis using several different year-matching methods to test the effect of such approaches on our results. First we assessed all models using only the most recent data for all independent variable indicators. We then used a combination of matching the year of the survey where possible and using the temporally closest available data where same year data was not available. Neither of these approaches appreciably changed the results.
In many low- and middle-income countries, the level of government spending on health is low compared with other sectors and OOP expenditure is the principal source of healthfinancing in those nations. OOP expend- iture accounts for more than 80% of the private expend- iture on health in many developing countries  which likely has catastrophic economic effects on individuals and their families, as well as limits their possibilities to receive adequate healthcare  In Vietnam, total healthexpenditure (THE) in 2008 was 7.3% of Gross Domestic Product (GDP), with government expenditure account- ing for only 38.5% of total health budget [5,6]. The intro- duction of “ Doi Moi ” , the new economic reform that transforms Vietnam from a centrally planned economy to a socialist-oriented market economy in 1986, increased the
In this study, we examine the effects of Japan’s rapidly aging population on the cost of its healthcare system and the tax burden using a structural approach that captures income and medical expenditure profiles/uncertainties over the life cycle. The implications of this study may be useful for countries confronting similar problems, including many European countries. We find that if the pop- ulation age structure in 2050 conforms to current projections, then the govern- ment will require an additional 9-14% in labor income taxes to finance the ad- ditional cost of the UHI system. This additional revenue is needed because the UHI system requires lower co-payments from the elderly and because financing the system relies primarily on labor income taxes. However, a higher tax bur- den on the working-age population is undesirable because it discourages labor supply and further undermines the abilities of young individuals’ to smooth consumption over the life cycle and other economic states. Potential reforms that lower the labor tax burden on the young are expected to reduce the nega- tive effect of aging under the current UHI/tax system.
TB patients incur high costs for diagnosis and treatment despite the free TB care offered in most settings in China. A recent study analyzed the high costs among multi-drug resistant TB patients in China . This study aimed to estimate the costs associated with and analyze the extent of CHE for TB care in China. It is widely agreed that catastrophic healthcareexpenditure occurs when OOP payments for care force a household to reduce expenditure on basic necessities over an extended period of time . However, there is still no consensus on the formal definition of CHE. Some researchers define CHE as the total healthexpenditure exceeding a threshold (varying from 5–20 %) of house- hold annual income [3, 5, 28, 29]. Others argue that a measure of the ‘capacity to pay’ (effective income) would better reflect purchasing power than total household in- come, and define CHE as health payment exceeding a threshold (usually 40 %) of effective income remaining after basic necessities have been met [3, 30]. Many researchers have used household non-food expenditure as a proxy measure for household effective income [9, 30]. In this study, we used two common measures: OOP payments exceeding 10 % of household annual income and OOP payments equaling or exceeding 40 % of household non- food expenditure. Even though both of the definitions are
Our focus is on population and aging because of the very different population trajectories in developed and developing regions and their different starting posi- tions. It is now firmly established, for example, that older people consume more health services per capita than any other age group except perhaps the newly born. On average, their ability to perform daily tasks slowly erodes until, at some stage, they become dependent on others for home help, or possibly residential care or long-term care in a hospital. The degree of dependency, and sometimes also the need for medication, reaches a maximum in the period just before death (Seale and Cartwright, 1994). The economic consequences are therefore varied, directly or in- directly involving the work place, households, and agencies in the public, private, and voluntary sectors (see, e.g., Jackson, 1998). Not surprisingly, governments are becoming increasingly aware of the need for coordinated policies in the fields of employment, pensions, disability, and health.
Prior research indicates that retirees with less cognitive ability are at greater financial risk because they have lower incomes yet higher medical expenditures. Linking HRS data to administrative records, we evaluate two hypotheses about why this group spends more on health: (1) they are in worse health; (2) they receive more expensive or less effective care for the same conditions. We find that the bulk, but not all, of the cross-sectional relationship can be attributed to the poorer health of those with lower cognitive functioning. Much of this relationship appears to be driven by coincident declines in cognitive ability and health. While, in this respect, the data have important limitations, we find no evidence of substantial differences in care, conditional on observable health.