Sustaining the healthcare system by private insurance?
George Cautherley, Convenor, Healthcare Policy Forum
Regulating the private health insurance market and industry to protect consumer interests would seem uncontentious as a public policy objective. What would be contentious is using private insurance as a policy tool to "enhance the long-term sustainability of our healthcare system" through encouraging the uptake of private insurance with public subsidies. For this policy tool to have a chance of helping sustain the healthcare system, apart from bringing more private funding to the system, private insurance must at least be able to contain healthcare costs and improve the quality of care. If not, the "alleged" runaway costs now blamed on the public healthcare system can similarly break the private purse. The government's faith in the cost-containing and quality-enhancing capability of private insurance however appears misplaced.
Australia, like Hong Kong, introduced a policy in 1998 to proactively encourage the uptake of private healthcare by providing a 30% subsidy on premiums to ease pressures on the public system and to contain healthcare costs. Notwithstanding the fact that Australian private healthcare insurance is highly regulated and premium increases require government approval, premium rises have been well above general inflation since the introduction of the policy. According to official statistics, annual increases in premiums averaged over 6% between 2002 and 2009. The projection is that premium increases higher than general inflation will continue. Meanwhile, Australia's total healthcare expenditures have risen with the increase in private insurance coverage. According to OECD data in 2005, the country's rate of increase in total healthcare expenditures was higher than other advanced countries.
Leonie Segal, Deputy Director at the Centre for Health Economics, Monash University argues that the private insurance policy has made the healthcare system less rather than more efficient, and calls for a total overhaul of the policy to transfer the insurance subsidy to the public system instead.
The Australian case is in fact not atypical. It simply confirms the empirical observation that health systems relying more on private insurance to fund healthcare tend to be more expensive but lacking in evidence of improved health outcomes, whereas systems confining private insurance to their periphery tend to be more able to keep healthcare costs under control.
The costliness of private insurance lies less in moral hazard - over utilization and over treatment - than it is commonly believed. All forms of healthcare insurance - private or public (tax-based or social insurance) - are subject to moral hazard so long as they are third-party paying systems. What makes private insurance more expensive than a public system is its lack of cost-containing measures and capability. As governments are in control of a single pool of funding in public systems, they have greater bargaining powers vis-a-vis healthcare providers and hence greater ability to exercise cost and quality control than private insurance systems. Cost measures like global budgets and price regulation used in public systems are absent in private insurance systems.
It has always been argued that competition in private insurance market can help contain costs and keep premiums low. However, market force does not necessarily work. Because of information asymmetry, the public may have difficulty in comparing insurance products, the performance of different insurers as well as the quality of care of different providers. The transaction costs of switching insurance plans across different insurers may be high. Also, as noted above, insurers may be simply unable to compete on premium prices as they lack bargaining powers to negotiate with healthcare providers on prices and quality.
High overhead costs are another major factor accounting for the costliness of systems replying more private insurance. The costs may also further limit insurers' ability to compete on premium prices. Marketing, underwriting, billing, claims administration, dispute arbitration, and contracting with providers have to be paid for on the part of insurers though all these activities contribute to no one's health. In public systems, most of these activities do not exist. In the United States, according to an OECD study, the administrative cost of private insurers is about 11.7% while the corresponding costs of the public programmes Medicare and Medicaid are only 3.6% and 6.8% respectively. Likewise, in Australia, the administrative cost of the public system is about 3.7% while that of the private insurance industry averages about 11.1%. Similar levels of administration costs of private insurers are found in other OECD countries: Netherlands (10.4%), Canada (13.2%), Ireland (9.7%) and Germany (14%). The figures do not necessarily suggest mismanagement in the private insurance industry but simply that room for cutting administration cost in the long run is limited and that at the same level of healthcare output, systems with a greater private insurance presence are bound to be more expensive.
The OECD concludes in a country report regarding the experience of Australia that: "Private funds have not effectively engaged in cost controls. They seem to have limited tools and few incentives to promote cost-efficient care". One may try to argue that the Australian experience is not directly transferable to Hong Kong. Yet, it is difficult to avoid the following general conclusion in another study summarizing OECD experience: "It is important to be realistic about the potential benefits of competitive [private healthcare insurance] markets and what they mostly likely will not achieve. For example, cost-containment within health system is often best achieved through means other than an expansion of private health insurance's role."
The challenge that confronts the Government is to demonstrate convincingly to the community that its voluntary private insurance package contains unique elements that can protect against the negative outcomes that have been the experience of publicly subsidized health insurance in other jurisdictions so far.
The Chinese version of this article was published in Ming Pao on 27 January 2011.
以私人醫保維持 醫療系統可持續性？
高德禮（George Cautherley），醫療政策論壇召集人
規管私人醫療保險市場和產業以保障消費者及病人權益，似乎不是一項具爭議的政策目標。可爭議的是把私人醫保作為政策工具，透過公帑資助購買醫保，以提升醫療系統長遠的可持續性。要維持可持續性，除引入更多資金外，私人醫保同時必須能控制成本和提升醫療質素，否則，那令公營系統「爆煲」的「醫療通脹」同樣會令私營系統「爆煲」。政府對私人醫保控制成本和提升質素的信心是過於樂觀。
像香港一樣，澳洲在1998年推行政策，提供30%的保費資助鼓勵市民購買私人醫保，希望以此減輕公營系統的負擔和控制醫療開支。然而，即使澳洲的私人醫保已受嚴格監管，而保費調整也需政府批核，保費增幅在政策實施以來仍遠高於通脹。根據官方數字，2002至2009年間，保費每年平均增幅為6%。同時，澳洲整體醫療開支也隨投保人數上升而增加。根據經濟合作與發展組織（OECD）2005年的數據，澳洲整體醫療開支的增幅高於其他發達國家。
澳洲專家﹕
澳洲私人醫保令系統更沒效率
澳洲Monash University醫療經濟中心副主任Leonie Segal認為澳洲的私人醫保政策不單沒有令醫療系統更有效率，相反，它令系統更沒有效率。他主張徹底修改政策，並將保費津貼投放在公營系統內。
其實，澳洲的經驗並不單一。它只是再次印證以下的觀察：
1、 較依賴私人保險融資的醫療系統的開支通常都較高，但卻沒有證據顯示較高的開支能提升社會的健康水平；
2、 將私人保險限制於次要位置的醫療系統較能控制成本。
市場力量
未能在保險市場有效運作
私人保險是較昂貴的融資方法的重要原因，並非是普遍認知中的道德風險問題（moral hazard）——即病人／醫護人員過度使用／提供非必要醫療服務的問題。所有形式的醫療保險，不論是私營或公營（以稅收為基礎或社會保險），只要是第三者付費的制度，都有道德風險問題。私人保險較昂貴主要是因為它缺乏控制成本的措施和能力。由於政府控制公營系統的單一資金來源，相對於私人保險系統，公營系統對醫療服務提供者擁有較高議價能力，因此它較有能力控制成本及質素。公營系統可以使用的成本控制措施，例如總額預算和價格控制，在私人保險業界中並不存在。
經常有評論指市場競爭可降低成本和保費，但事實上市場力量卻未能在保險市場有效運作。由於資訊不對稱，公眾很難適當比較不同保險產品的好壞、不同保險公司的表現，以及不同醫療服務提供者的質素。同時，轉投其他保險產品或公司的交易費用又可能很高，市民可能沒有選擇不同產品和公司的空間。再者，由於保險公司對醫療服務提供者在價格及服務質素上缺乏議價能力，保險公司也可能無法以降低保費為競爭手段。
另一令私人保險成為昂貴的融資方法的原因，是高昂的營運成本。這成本可能削弱保險公司以降低保費為競爭手段的能力。保險公司的營運成本包括市場推廣、索償、仲裁、與服務提供者制訂合約等。要注意的是，這些開支與市民的健康完全無關，並且大部分在公營部門並不存在。根據OECD的研究，美國保險公司的行政費用為11.7%，但美國的公營醫療計劃Medicare和Medicaid的行政費用則分別只為3.6%及6.8%。同樣，澳洲公營醫療系統的行政費用為3.7%，而私人保險的則平均為11.1%。其他OECD國家的保險公司的行政費用都大致相同：荷蘭（10.4%），加拿大（13.2%），愛爾蘭（9.7%），德國（14%）。這些數字不一定顯示保險業界管理不善，它只揭示業界降低營運開支的空間不大，而依賴私人保險融資的醫療系統的開支亦因而必然偏高。
踏實認清私人醫保市場利弊
至為重要
就澳洲的經驗，OECD的研究總結是：「澳洲保險公司沒有切實地控制成本。它們似乎只有有限的措施和誘因去推動成本效益高的醫療服務。」我們或可辯稱澳洲的經驗未必適用於香港，但我們不能迴避OECD另一研究總結：「踏實地認清私人醫保市場的利弊至為重要，例如，要有效控制醫療系統的開支往往是透過其他措施，而非擴大私人醫保的角色。」
政府有需要說服公眾，它所建議的醫保計劃獨備能力，可免蹈私人醫保在其他國家所造成的流弊。
文章刋登於2011年1月27日明報
The above does not necessarily represent the views of the Foundation. Reproduction of the presentation requires written permission from the author.