Sunday, 26 July 2015

Universal health insurance comes one step closer - but who's paying?

The big healthcare news from China this week is that a health insurance safety net for serious illness is being extended nationally. This means that if all goes to plan, poor people who develop catastrophic diseases such as cancer should not be left destitute by medical bills for care. Pilot programs that have been running at provincial level will now be extended to all provinces, according to an announcement by the State Council on July 22.
This will be good news for the many sad and desperate Chinese families who face financial ruin because of medical bills - or who are simply unable to pay and have to watch their loved ones die of treatable diseases. Some of them resort to all kinds of bizarre publicity stunts and begging methods to try raise the money to pay the medical bills. I have recently before about a girl who offered herself as a bride to any man who would pay her brother's medical bills.

According to the China Daily (hardly the most reliable of outlets), the meeting chaired by Premier Li Keqiang, cover for major illnesses will "cover all the subscribers to the urban and rural resident basic medical insurance as of the end of 2015", with full implementation in all 6800 public hospital in China by 2017.

A spokesman for the council said that there were 700 million impoverished people in China, of whom about 10 million are suffering from a chronic disease or major illness.The scheme will cover 50% of expenses initially, but this will be increased over time.

According to state media, the funding for the scheme will come from existing insurance accounts and therefore "will not be a financial burden to the beneficiaries". However, it also slipped in the detail that the safety net scheme will be run by commercial insurance agencies chosen by the government through bidding, with limits of 2-5% on profit margins.

"Introducing the third-party commercial insurance as operators will bring a better inspection performance to control medical fees and prevent waste or ill-designed fees" a government spokesman said.

China's commercial insurance companies are keen to get into the lucrative business of providing private health insurance. However, reading between the lines, it looks like the government has told them that covering the safety net for the impoverished will be a condition of their getting access to this market.

As China Daily, puts it:

Wu Ming, a professor of public health at Peking University, said many insurance companies may compete for the business despite lower profit margins, since it can bring many potential benefits.
"Participation in the program can pave the way for the insurers to enter further into the medical care sector in the future," she said.

However, as the more reliable Caixin magazine reports, commercial insurance companies are worried about the financial implications of taking on serious health insurance policies. The various pilot projects run in places such as Jiangsu and Zhejiang have shown the potential for major cost blowouts for uncapped schemes, and also problems with defining which illnesses are covered and who should pay for what. In some cases local governments, which administer (and fund) health insurance schemes tried to unload all their difficult patients onto the safety net. Or as they told Caixin magazine: "all the risk, none of the power, no voice".

The commercial companies also fear that they will be required to take on patients only after they have gone through the regular health insurance system over which they have not control. They believe that if they have a full package of insurance they would be able to control costs (and potentially prevent patients from developing serious illness) rather than just picking up the pieces.

At the State Council meeting chaired by Premier Li Keqiang, the government said it would be keeping a close watch on the safety net scheme and conducting many checks and inspections to ensure there was no abuse of the scheme.

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