PHM-Exch> Finance Healthcare, Not Insurance Premia By Jomo Kwame Sundaram

[Roman Vega]

Dear Claudio, thank you for this information.
Do you get Adam Wagstaff´s paper on his research ?
Roman


On Mon, Jul 1, 2024 at 4:42 PM Claudio Schuftan <schuftan at gmail.com> wrote:

>
> KUALA LUMPUR, Malaysia, Jun 26 2024 (IPS) - Comparative research on
> healthcare financing options shows revenue-financed healthcare to be the
> most cost-effective, efficient, and equitable, while all health insurance
> imposes avoidable additional costs.
>
> *Private health insurance*
> Rejecting the private health insurance option is easy due to well-known US
> problems. Risk pooling is limited as private insurance only covers those
> who can afford it.
>
> The resulting ‘moral hazard’ and ‘cherry-picking’ problems reflect the
> public’s weak bargaining power vis-à-vis healthcare providers and insurance
> companies.
>
> US health spending per capita is the highest, partly due to additional
> private health insurance costs. The share of US national income spent on
> healthcare has risen to 18%!
>
> Such avoidable insurance management costs are quite high, averaging almost
> 4% more. Consequently, upward cost pressures remain intense.
>
> Yet, despite spending so much, it only ranks 40th in average life
> expectancy worldwide. Its other health indicators also leave much to be
> desired.
>
> Hence, greater spending does not necessarily improve health outcomes, and
> spending more on insurance does not improve health either.
>
> *Revenue financing*
> Hence, the main healthcare financing choices are social health insurance
> (SHI) and revenue financing, which enables risk pooling for entire national
> populations.
>
> After reviewing extensive evidence, the World Bank’s Adam Wagstaff found
> revenue financing much more cost-effective, efficient, and less expensive
> than insurance options.
>
> Germany, the only major OECD country heavily reliant on SHI, is second
> only to the US in health spending per capita, largely due to insurance
> administration costs.
>
> With insurance premium revenue increasingly inadequate, the government
> finances the ever-growing funding gap. Rather than being a healthcare
> financing option for the future, it should be recognised as an atavism,
> even for highly unionised Germany.
>
> *Social health insurance*
> SHI advocates insist it is needed owing to inadequate fiscal means. But
> budget shortfalls imply a lack of political will. SHI’s claims to raise
> more money are grossly exaggerated.
>
> SHI premiums are effectively flat or pro rata taxes, making overall tax
> incidence more regressive. SHI financing is inadequate everywhere and under
> growing stress due to ageing societies.
>
> Most governments claim to be committed to inclusion and equitable access,
> but SHI would undermine declared national commitments to the WHO’s
> ‘healthcare for all’ and the UN SDGs’ ‘universal healthcare’.
>
> Besides betraying these commitments, SHI cannot ensure the needed funding
> or financial sustainability. Any realistic government should recognise SHI
> will be politically unpopular.
>
> SHI’s costs and dangers, including the perverse incentives involved, are
> rarely acknowledged. Employers have minimised their SHI liabilities by
> casualising labour contracts. Rather than employ workers directly, they
> hire indirectly, using various contract labour arrangements.
>
> *Priorities?*
> The typical emphasis on curative health services has also worsened health
> outcomes by neglecting vital public health programmes. By emphasising
> curative services, many causes of ill health do not get sufficient
> attention.
>
> Many preventive and public health problems remain neglected and
> underfunded. Most governments must spend more on prevention, especially to
> address largely preventable non-communicable diseases (NCDs).
>
> The world needs far better healthcare financing. Various complementary
> reforms are also required. Instead, poorly sequenced, ill-considered
> reforms have been the norm in recent decades.
>
> The resulting ‘non-system’ offers poor, weak and ineffective incentives
> for public and preventive health provision. Meanwhile, potentially
> lucrative segments have been privatised or contracted out, often to
> incompetent political cronies.
>
> The UK NHS capitation system successfully transformed doctors’ incentives.
> Instead of prioritising patient payments, UK doctors are incentivised to
> ensure the well-being of those under their care.
>
> *Recognise market failure*
> Former UK Conservative Party adviser and “non-interventionist market
> economist” Professor Geoffrey Williams rejects “any [government]
> intervention … in almost every area of economic activity, but not in
> health, because health is quintessentially the place where markets fail.
>
> “That is why we use health more often than any other example when we teach
> about market failure, particularly insurance market failure. We know the
> health market fails and that we cannot find market solutions to those
> market failures as we might in other forms of market failure.
>
> “We know that government tax funding is the only real way of providing
> universal healthcare.” Neither universal healthcare nor health for all can
> be achieved without adequate revenue financing, even if termed insurance.
>
> *Improving healthcare*
> Malaysia has low infant and maternal mortality rates and improved life
> expectancy thanks to simple, low-cost reforms introduced from the 1960s,
> especially training village midwives to help mothers and babies.
>
> Lowering such mortality is responsible for over four-fifths of increased
> Malaysian life expectancy over the decades. Now, much more should be done
> to improve babies’ and mothers’ nutrition for the ‘first thousand days’
> from conception to age two.
>
> A ‘hybrid system’ would not work, as it would only provide some public
> financing to address egregious ‘market failures’. Targeting would be worse,
> both costly and involving both inclusion and exclusion errors.
>
> With political will, revenue financing is sustainable despite rising
> costs. We should renew our commitment to public healthcare, not as it has
> become, but as it should be.
>
>
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