Funding Alternatives and Models For The Management of Benefits

1
Funding Alternatives and Models For The
Management of Benefits
M. Kharma GlobeMed Ltd. -GMF- 12/05/2004
2
National Social Contracts Yielded Many Social
Health Insurance Systems
Mandatory Private Insurance (For Profit or
not for Profit)
Statutory Insurance Funds
Tax or Public Resources
Private Providers
Public Providers
Hospitals

• Other Options
• - Micro-insurance.
• Mix Up
• Components Across
• Archetypes.
• More Complex
• Difficult to Categorize.

Population
AMB Services
Patients
Out-Patients
Etc.
Semashko Tax Based. Public Provider.
Bismarck S.H.I., Public and Private Providers.
Segmented 1. Tax Based S.H.I., Public
S.H.I. Providers. 2. Private. Private
Providers.
Semashko/Beveridge Tax Based. Large Private
Sector. Public Private Providers.
Private Private (Voluntary). Private Providers.
Beveridge Tax Based. Public Provider.
GlobeMed Ltd. -GMF- 12/05/2004
3
Pressure For Reform

• Systems are undergoing considerable reform.
  Typical complaints
• The S.I. system was designed for a different age.
  It is no longer adequate.
• It can not be financially sustained
• Health expenditure growing faster than G.D.P.
• Fewer percentage of people will contribute to
  solidarity fund.
• Higher dependency ratio.
• Limited ability to tax and to collect tax.
• People living longer and spending more health
  money.
• System performance is not adequate in context of
• Fair distribution of health services.
• Level of responsiveness of health delivery
  system.
• Fairness of financial distribution.
• Pooling of resources and cross-subsidy (not
  effective)
• Low risk to high risk.
• Rich to poor.
• Productive to non-productive.
• Large out of pocket payment by lower income
  families.
• Limited supplementary insurance for those that
  can afford it.

4
Alarming Figures Where are the Developing
Nations Heading to?

• Global GDP (2000)
• US 31 Trillions 3-4 growth rate .
• Global Health Spending
• US 2.6 Trillions (8 of Global GDP).
• Source Dr. Pablo Gottret

GlobeMed Ltd. -GMF- 12/05/2004
5
Three Strong Basis of the System

• 1- Sustainable Funding
• Budgetary Constraint, High health inflations
  rate.
• S.I. Rates impact on unemployment and
  competitiveness.
• Private Insurance (for and not for profit).
• Users Fees.

Sustainable Funding (Tax, S.I., Private)
S.H.I.

• 2- Health Delivery System
• Public Budgetary constraints, efficiency,
  effectiveness,
• Private Excessiveness, moral hazards,
• Microeconomic incentives for providers and
  patients.
• Managed Care.

System
Health Delivery System
Regulations, Policy Governance

• 3- Regulations, Policy Governance
• Vision.
• Well thought strategy and plans Optimization.
• Modern regulations and policy.
• Effective Governance.
• Technology.

GlobeMed Ltd. -GMF- 12/05/2004
6
Two Key Words Pragmatism and Optimization

• What matters most is access to affordable health
  services. People should take charge of their own
  health.
• Many difficulties to insure universal access to
  equal quality care Pluralism is a fact of life.
• Match limited resources to best opportunities.
• Private sector A major partner under the S.H.I.
  System.
• Pooling of funding resources is a strong must.
• Deflate unrealistic expectations.
• Do not postpone problems to future generations.
• Use strengths of each sub-system and out-source
  work under its weak sub-systems.

7
Will More Funding Alone Solve the Problem?
Social Insurance Tax
Private Insurance
Direct Tax
User Fees
Structure Improvements Info. Base, Planning ,
Development Research ,
Budget
Manage Communicable Diseases
Awareness Prevention
Etc.
Health Care Fund
Health Care Fund
Inefficiency
Inefficiency
Road Work Accidents
Fraud
Primary Care
Epidemics
Excessiveness
Secondary Tertiary Care
Long Term Care
Fraud
Abuse Misuse
GlobeMed Ltd. -GMF- 12/05/2004
GlobeMed Ltd. -GMF- 12/05/2004
8
Role of Third Party Administration (T.P.A.)
S.H.I. Private Programs
Citizens
T.P.A.
(Coordination of Benefits)
Healthcare Providers
GlobeMed Ltd. -GMF- 12/05/2004