Universal health coverage (UHC) allows countries to invest in the foundation of their human capital. A strong asset of human resources ensures future economic growth. This invariably raises the issue of assessing the strength of the existing healthcare system.
Health systems are judged by the number of people having access to healthcare, timeliness of treatment, the cost and quality of the treatment, and continuous innovation for better and equitable care.
Developed countries have social protection schemes to avoid health related financial catastrophes. The US has a complex multi-payer system to cover their population. Other developed and developing nations have single-payer or hybrid systems implemented over the decades.
A constructive discussion on some of the systems existing around the world might enlighten Bangladesh’s policy makers to design a suitable strategy for Bangladesh to achieve the UHC goal.
How does the single-payer system work?
In a single-payer healthcare system, the government is responsible for paying health care claims, using money collected from tax. Each single-payer system across the globe is tailored to its own specific needs.
Single-payer systems and universal health coverage are often used interchangeably, but they are not the same thing. UHC can be achieved without a single-payer system. 17 countries in the world use this system -- including Norway, Japan, the UK, Kuwait, Sweden, Bahrain, Brunei, Canada, the UAE, Denmark, Finland, Slovenia, Italy, Portugal, Cyprus, Spain, and Iceland.
As the government pays for the health of its population, it has the purchasing power to standardize all costs and benefits. The providers in the national network are controlled by the government for their services and charges.
This system has lower administrative costs, where the government would pay something closer to an at-cost price. It ensures low or no out-of-pocket (OOP) expense, and that no one goes broke fighting long-term diseases.
Opponents of the system argue that there is a lengthy waiting time to get service, services may not be fully available, it will be entangled with bureaucracy, and will inevitably raise taxes.
A two-tier system
It is possible to have UHC where the government administers basic health care via the single-payer system, and supplemental private coverage is available for those who can afford it. Canada, France, Australia, Singapore, Japan, and many others have this system.
Germany has UHC through two systems -- Statutory Health Insurance (SHI) and private health insurance (PHI).
SHI is mandatory and consists of more than 100 competitive not-for-profit health insurance plans which are privately run “sickness funds.” It is financed from equal contribution by employee and employer along with an additional tax subsidy.
The country has a high proportion of the world’s best medical technology universities.
Japan has a similar Statutory Health Insurance System (SHIS) that covers 98% of their population. The residents are mandated to avail coverage from any one of the thousands of competing health insurance plans by paying ongoing premiums. They also have supplemental private insurance.
China attained UHC in 2011 through two public insurance plans -- one is for urban residents with jobs; the other is a merger of the rural resident’s scheme and the urban residents’ scheme who are unemployed or self-employed, which includes children too.
China is an exceptional case where, despite having 95% UHC, the out-of-pocket expense remained high and was 28% of the total health expense in 2018. Their health system and reimbursements are covered by multiple programs.
The government is encouraging more medical student enrollment to increase the national pool of doctors; their medical schools are all public and medical education is highly subsidized.
To ensure medical providers in rural areas, students are given high tuition waivers and entrance qualifications are also lowered for some. Medical students who attend these education programs must work in rural or remote areas for at least six years after graduation.
Healthcare in South Korea is universal, and one of the best in the world where there is no quality difference between the public and private providers. Public healthcare is not free, but it is not expensive either.
A mix of government subsidies, tobacco surcharge and employee’s contribution go into the National Health Insurance Plan. Citizens must pay a fixed monthly amount in their National Health Insurance and there is private insurance as well.
Both these policies cost similar amounts, and all services are covered with only a 20% copay by the residents.
France has UHC under government control; the OOP expenses paid for doctors’ appointments are also reimbursed. Switzerland has UHC which is covered by mandatory private health insurance.
Citizens in The Netherlands are required to purchase basic insurance and are fined if they don’t. Luxembourg is a medically advanced country and is home to a large health technology sector.
All these countries score at the top for health outcomes.
Thailand has a large population working in the informal sector, but was able to design a national health insurance that is overseen by three different schemes. The schemes fundamentally provide the same services at similar costs across different segments of the population, and are separately managed by the finance ministry, labour ministry, and health ministry.
Their focus was on equitable services to all beneficiaries, primary health care used as gatekeepers, capping the per capita outlay on health, and price control on drugs and medical devices.
Indian healthcare is chronically underfunded and they spend 3.6% of their GDP on health. Out of several government funded health insurance schemes, the National Health Insurance Program (Rashtriya Swastha Bima Yojana) launched in 2008 was aimed at reducing the catastrophic health cost for the lower-income population.
Even though they had 41 million people enrolled by 2016, evidence showed that OOP spending did not reduce significantly. 37% of their population are covered with some insurance and, as of 2018, their flagship public health initiative, PM-JAY, is a step towards achieving UHC, which aims to cover 40% of the low-income population. They are revamping their primary health facilities.
Singapore and the moral hazard
A randomized study published in the New England Journal of Medicine showed that expanded health insurance coverage actually led to a consistent 40% increase in emergency department visits over a two-year period.
Singapore’s approach is different; they make their people morally conscious while utilizing healthcare services. The country spends 4.9% of its GDP on health and has achieved UHC through Medisave, Medifund, and Medishield.
All Singaporeans are mandated to contribute 4% to 10.5% of their income in a MediSave account, which is a health savings account. The Medisave money can only be used for health expenses, but it is tax free, interest bearing, and inheritable. The moral hazard is that, ultimately, the person is using their own hard-earned money and not insurance money.
MediShield is an affordable catastrophic medical insurance scheme which helps Medisave account holders pay large bills regardless of age or health conditions, and is administered by the Central Provident Fund Board.
Medifund is an endowment fund set up by the government for the needy Singaporeans. The interest is distributed to hospitals to utilize the funds to best care for the local community.
Socialized medicine
The UK has attained UHC with a single-payer system. It is a truly socialized medicine where the government owns most of the hospitals and employs the medical providers, finances the care, and provides care through the National Health Service. Coverage is broad, and most services are free to citizens, with the system financed by taxes.
The system was founded on three guidelines -- that everyone’s needs are met, it is free at the point of delivery, and is based on clinical need and not people’s ability to pay.
Residents can still purchase private health insurance. It is mainly used for elective procedures in private hospitals or to gain faster access to care without the waiting period. Only about 10% buy private insurance.
Government spending accounts for more than 80% of all health care spending. A similar system exists in the UAE, Spain, and Hong Kong.
What is common across all these systems?
The crux of UHC is to ensure coverage, reduce OOP expense, ensure equitable health services, and provide easy and timely access. All developed nations have governments as the primary health service provider, followed by additional coverage through private insurers and governments’ set up catastrophic funds as safety nets.
To make the healthcare providers accountable, these countries invest on accreditation and health information. Accreditation ensures the quality of care, patient safety, and infection control. An integrated health information system enables providers to make claims for the services given, reduce duplication of services, and maintain transparency.
Where does the funding for UHC come from?
Health economists recommend that governments should commit to spending at least 5% of the GDP on health in order to achieve UHC. Public health financing is largely from taxpayers’ money. Overall, the health systems are funded from public, private, nongovernmental organizations, and the development sector.
- Public funding
The funds pooled for health expenses are all derived from various taxes. Contributions can be from individual income tax, property tax, value added tax, excise duties, taxes on tobacco, sugary and alcoholic beverages, corporate tax, tariffs on trades, wage earners tax, etc. In countries that are specifically providing Medicare, the funds are pooled from payroll taxes and earmarked for use in healthcare only.
- Private funding
There are two types of resources for private funding. One is the direct payments as OOP expenses, which is typically high in countries without social protection schemes, and then there is the voluntary prepayment for health insurance, which are usually managed by private companies but can also be managed by governments, NGOs, and local communities.
- External fundings
Funds come from the development sector, foreign direct investment, remittances which may flow through government or nongovernment organizations. Most of these are used in public spendings on programs, infrastructure, and health human resource development.
Bangladesh has a 20-year country strategy from 2012- 2032 that aims to bring down the OOP from 74% to 32% of total health expenditure. The government plans to increase public spending from 26% to 30% and increase the social protection scheme to 32% which at present is only 1%. The country also plans to reduce dependency on external funds from 8% to 5%.
This strategy is put in place to achieve UHC by introducing and expanding the financial risk protection.
Dr Maliha Mannan Ahmed is the Founder and Executive Director of Organikare. She has an MBBS, MBA, and a Master’s in Health Care Leadership.