is there a trade-off between cost control and equity? - evidence from a single-payer approach j....
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Is there a trade-off between cost control and equity?
- Evidence from a single-payer
approach
J. Rachel Lu, Sc.D.
Chang Gung University, TAIWANand
Takemi Fellow, Harvard School of Public Health, USAEmail: [email protected]
Outline Outline
Introduction Universal coverage
Single –Payer Approach
Case study Taiwan’s National Health Insurance
IntroductionIntroduction
Universal Coverage Long achieved by most of the
European Union member state Still an unaffordable policy objective
by some nations? Mongolia: the only low-income
developing country to achieve the goal of universal coverage.
IntroductionIntroduction
Universal Coverage Common fear
Cost Debate over the “best” financing
mechanism to ensure sustainability
Single-Payer ApproachSingle-Payer Approach
Viewed as a non-market approach
Market approach Goods distributed on the basis of
supply and demand Price mechanism People can be priced out of the market
Violates equalitarian principle in delivering health care
One SingleAdministration
One GoverningRule
Adm entity Public or NFP NFP, private
# of insurers one multiple insurers
Service covered uniform uniform coreservices
Fee schedule uniform uniform
Countryexamples
Taiwan, Canada Belgium, France
Single-Payer Approach
Single-Payer ApproachSingle-Payer Approach
Canada Advantages of a single-payer
approach (Deber, 2003) Lower cost for universal coverage Avoidance of risk selection
Well embraced on the ground of equity as well as economic efficiency.
National Health Insurance in Taiwan National Health Insurance in Taiwan
Taiwan implemented NHI in 1995. A compulsory payroll-tax financed
social insurance scheme Comprehensive service coverage to
23 million population.
National Health Insurance in Taiwan National Health Insurance in Taiwan
Bureau of National Health Insurance Quasi-governmental agency
By law, the only administration that operates the insurance program
Annual budget: US$ 10 billion Monopoly and monopsony in the
market place
National Health Insurance in Taiwan National Health Insurance in Taiwan
Taiwan Market-driven delivery system
A mix of publicly (35% of beds) and privately (65%) owned hospitals
63% physicians employed by the hospital on salary basis
A uniform FFS payment schedule with global budget
DOH reported 6% of GDP on health in 2002.
Note: %: percentage of total health expenditure from main sources) ;K index: Kakwani index
Source: O’Donnell O, van Doorslaer E, Rannan-Eliya RP, et al, “Who pays for health care in Asia”, EQUITAP
Project:Working Paper #1.
Financing Sources
Direct taxes
Indirect taxes
Social insurance
Private insurance
Direct payments
Total financing
%K
index%
K index
%K
index%
K index
%K
index%
K index
Japan(1998)
19.52% 0.095 13.68% -0.2232 54.00% -0.0415 No data No data 12.80% -0.2691 100% -0.0688
Korea Rep.(2000)
8.31% 0.2683 7.92% 0.0379 33.90% -0.1634 N/A N/A 49.87% 0.0124 100% -0.0239
Taiwan(2000)
5.60% 0.2438 3.24% 0.0404 51.97% -0.0749 8.93% 0.2053 30.26% -0.0780 100% -0.0292
Table 1. Health finance mix in Asia
National Health Insurance in Taiwan National Health Insurance in Taiwan
NHI as a single-payer One single administration
Direct saving through market power Uniform claim filing system and uniform fee
schedule Sufficient information and tools for effective
management Payment reform
Avoid cost shifting and risk selection
Cost containment efforts The residuals for NHE growth rate for
pre-NHI and post-NHI year (Lu, Hsiao, 2003)
Decomposing into known causes Population growth Aging of the population Change in demand due to increases in income Input factor prices
Graph A: Residuals for Total Health Expenditure/Person (in real terms)
-0.01
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
1992 1993 1994 1995 1996 1997 1998 1999 2000
Source: The residual was computed based on Taiwan’s national health expenditures estimated by the authors. The detailed computation process is presented in Appendix A.
Line represents the historical average of the residual for total health expenditure/person
Equity performanceEquity performance
Horizontal equity principle Equal treatment for equal medical need
Index of horizontal inequity was employed Developed by Wagstaff and van Doorslaer (2000) Standardize for differences in need
Proxied by age, gender and common health indicators Negative value indicates a PRO-POOR
distribution
Note: WM: western medicine; CM: Chinese medicine. Types of services ranked by inequity index (HI) for total number of visits (last column). Statistically significant indices in bold type (p<0.05).
Table 2. Inequality and inequity in uses of health services In Taiwan, 2001
GP visits Probability of a visit Conditional # of visits Total # of visits
Inequality(Cm)
Inequity(HI)
Inequality(Cm)
Inequity(HI)
Inequality(Cm)
Inequity(HI)
TAIWAN
Admissions -0.1285 -0.0391 -0.0186 0.0161 -0.1489 -0.0251
Physician visits -WM practitioners -0.0161 0.0233 -0.0405 -0.0115 -0.0562 0.0102
Emergency visits -0.0351 0.0116 -0.0043 0.0214 -0.0378 0.0285
Visits - dentists 0.0592 0.0778 -0.0463 -0.0462 0.0160 0.0351
Physician visits -CM practitioners 0.0475 0.0765 -0.0109 -0.0075 0.0400 0.0740
Visits -traditional healer 0.0511 0.0910 0.0201 0.0393 0.0717 0.1267
Note: Figures for Austria, Belgium, Germany, Denmark, Netherlands and UK are adopted from Van Doorslaer E, Koolman X, Jones AM, 2004, “Explaining income-related inequalities in doctor utilization in Europe”, Health Economics 13(7): 629-647; Figures for Taiwan are computed by JR Lu. Statistically significant indices in bold type (p<0.05).
Table 3. Inequality and inequity in uses of health services in selected European countries and Taiwan
Probability of a visit Conditional # of visits Total # of visits
GP visits, 1996Inequality
(Cm)Inequity(HI)
Inequality(Cm)
Inequity(HI)
Inequality(Cm)
Inequity(HI)
Belgium 0.0037 0.0121 -0.1183 -0.0564 -0.1145 -0.0508
Germany -0.0124 -0.0082 -0.0513 -0.0173 -0.0636 -0.0268
UK -0.0076 0.0109 -0.0930 -0.0301 -0.1006 -0.0240
Netherlands -0.0019 0.0103 -0.0517 -0.0201 -0.0535 -0.0113
Denmark -0.0200 0.0061 -0.0631 -0.0085 -0.0831 -0.0008
Austria -0.0082 -0.0018 -0.0417 0.0114 -0.0499 0.0146
Specialist visits, 1996
Belgium 0.0125 0.0344 -0.0394 -0.0008 -0.0269 0.0255
Netherlands -0.0041 0.0307 -0.0137 0.0197 -0.0178 0.0413
Germany 0.0130 0.0243 0.0029 0.0269 0.0158 0.0517
UK 0.0163 0.0723 -0.0397 -0.0062 -0.0234 0.0524
Austria 0.0108 0.0214 0.0237 0.0554 0.0345 0.0740
Denmark -0.0074 0.0223 0.0297 0.0581 0.0223 0.0844
Physician visits, 2001
TAIWAN -0.0161 0.0233 -0.0405 -0.0115 -0.0562 0.0102
Cost control and equity performanceCost control and equity performance
The trade-off between cost control and equity in access to care can be minimized. TAIWAN, through a single-payer
approach, can achieve gains in economic efficiency.
Cost growth well managed. Fair equity performance of the system.
Reminder…..Reminder…..
Quality issues are not addressed in the equity study. Equity study largely centered upon
whether socioeconomic factors are deterrents to access to care.
Final wordsFinal words
Each health care system has unique features Generalization may not be
applicable.
Exchange of hard-earned experiences may still minimize the chances of painful lessons.