Assessing income redistributive effect of health financing in Zambia.

Ensuring an equitable health financing system is a major concern particularly in many developing countries. Internationally, there is a strong debate to move away from excessive reliance on direct out-of-pocket (OOP) spending towards a system that incorporates a greater element of risk pooling and thus affords greater protection for the poor. This is a major focus of the move towards universal health coverage (UHC). Currently, Zambia with high levels of poverty and income inequality is implementing health sector reforms for UHC through a social health insurance scheme. However, the way to identify the health financing mechanisms that are best suited to achieving this goal is to conduct empirical analysis and consider international evidence on funding universal health systems. This study assesses, for the first time, the progressivity of health financing and how it impacts on income inequality in Zambia. Three broad health financing mechanisms (general tax, a health levy and OOP spending) were considered. Data come from the 2010 nationally representative Zambian Living Conditions and Monitoring Survey with a sample size of 19,397 households. Applying standard methodologies, the findings show that total health financing in Zambia is progressive. It also leads to a statistically significant reduction in income inequality (i.e. a pro-poor redistributive effect estimated at 0.0110 (p < 0.01)). Similar significant pro-poor redistribution was reported for general taxes (0.0101 (p < 0.01)) and a health levy (0.0002 (p < 0.01)). However, the redistributive effect was not significant for OOP spending (0.0006). These results further imply that health financing redistributes income from the rich to the poor with a greater potential via general taxes. This points to areas where government policy may focus in attempting to reduce the high level of income inequality and to improve equity in health financing towards UHC in Zambia.

Group insurance: a better deal for most people than individual plans.

This paper compares health plans currently available on the individual market with employer-sponsored plans. Points of comparison include the scope of benefits, cost-sharing provisions, premiums, expected out-of-pocket costs, and actuarial value. We draw from the 2007 KFF/HRET Health Benefits Survey, our own survey of individual-market plans, the MarketScan medical claims database, and a computer simulation of medical claims. We find that in 2007, employment-based plans covered 80 percent of all charges paid by the plan and the member, while individual plans covered 64 percent. For most people, premiums and out-of-pocket costs were more affordable in tax-advantaged employer plans than in individual-market plans. Proposed health reforms would fundamentally alter the plan offerings available to Americans, particularly those offered in the individual market.

Las Mutuas, esas grandes desconocidas / No disponible

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Modeling and detecting potentially ruinous streaks in health expenditures.

The mean of a distribution of medical expenditures in an insured population can be affected significantly by the occurrence of a few high cost cases. This fact leads some organizations that hold the primary risk for the population (e.g., health plans or self-insured employers) to seek reinsurance arrangements that spread the risk of high cost cases across a broader pool. Recently, the private reinsurance market has experienced some difficulties, attributable to information asymmetries between primary risk holders and reinsurers. The disproportionate effect of a few high cost cases also has generated interest in the development of "risk-adjustment" systems that attempt to reduce the difference in health plans' unreimbursed costs either to endogenous management decisions or random chance. We discuss these issues in light of a well-known statistical result regarding the probability of "streaks" in random data. We illustrate problems that can arise and suggest methods to distinguish random streaks from systematic trends.

The 'graying' of group health insurance.

We examine differential declines in private insurance by income and age. We show that older, higher-income people in working families are more likely to retain private coverage as premiums rise, and we project these effects on future coverage rates. The analysis suggests that trends are leading to the "graying" of the employment-based health insurance system, where older, higher-income people get private health insurance, and others increasingly have public coverage or go without. These changes raise questions about the private health care system's ability to pool health risks. Population aging could interact with rising premiums and place additional pressure on an already strained employment-based health insurance system.

Do welfare caseload declines make the Medicaid risk pool sicker?

Declining welfare caseloads may lead to a sicker population remaining in the Medicaid program, which could increase per enrollee costs and the level of adequate capitation rates. Using data from the 1997 National Survey of America's Families for adults and children, we examine differences in health status and utilization among welfare recipients and welfare leavers who did and did not retain Medicaid. We adjust utilization differences for insurance status and factors often used to adjust capitation rates. We conclude that declining welfare caseloads likely will result in a sicker and more expensive adult Medicaid risk pool.

The effect of income pooling within a call group on rates of obstetric intervention.

BACKGROUND: On July 1, 1997, the call group at a tertiary referral hospital in Ottawa changed its remuneration. The authors tested the hypothesis that change in an obstetric call group's remuneration from individual fee-for-service billing to equal sharing of the pooled group income would result in reduced rates of obstetric intervention. METHODS: Intervention rates were compared for the 12 months before (1678 births) and the 12 months after (1934 births) the change. Data were collected on onset of labour, indication for induction of labour, mode of delivery and neonatal outcome. Statistical analysis was performed with Wilcoxon's signed-rank test. RESULTS: The mean rate of elective induction of labour was 38.6% in the year before the change and 33.3% in the year after the change (p = 0.01). There were small but statistically significant increases in the mean duration of labour and mean length of the second stage (p = 0.03). INTERPRETATION: Billing policy may affect clinical decisions. Our findings add weight to the literature showing increased intervention rates with fee-for-service remuneration.

Health insurance in South Africa: an empirical analysis of trends in risk-pooling and efficiency following deregulation.

This paper reports an empirical investigation into the pattern of private health insurance coverage in South Africa before and after deregulation of the health insurance industry. More specifically, we sought to measure trends in risk-pooling over the period 1985-95, and to assess the impact of risk pooling on the costs of health insurance cover over this period. South African mutual health insurers (Medical Schemes) have existed for over 100 years, and have been regulated under a specific Act since 1967. Up until 1989, health insurers were required by law to community rate their premiums, and were not allowed to exclude high-risk enrolees from cover. In 1989 these regulations were removed, effectively allowing health insurers to risk-rate the cover which they provided, and exclude 'medically uninsurables'. Data were obtained from the office of the health insurance regulator (the Registrar of Medical Schemes) for the period 1985-95, and consisted of the statutory returns from all registered medical schemes for each year during the study period. Multiple regression methods were used to assess the determinants of changes in the risk pools of insurers, and their costs. Both cross-sectional and longitudinal models were estimated. Unadjusted data suggest changes in risk-pooling since the deregulation period after 1985. Health insurers with open enrolment had worse than average risk profiles in the 1980s, but this reversed by the early 1990s, leaving them with significantly better risk profiles by 1995. Worsening risk profiles were associated with decreasing fund size, higher loss-ratios and past premium increases. Most models showed that risk rating of premiums was consistently associated with higher premiums, after adjustment for risk, quality, scale and other environmental differences between insurers. Likely explanations include the additional costs required for marketing and underwriting risk-rated policies, insufficient incentives to use cost-control techniques, and higher levels of moral hazard associated with diminished risk-pooling. Current re-regulation of risk-pooling within medical schemes may thus improve both equity and efficiency of private health care cover.

Pooled purchasing: who are the players?

Data from the 1997 Robert Wood Johnson Foundation Employer Health Insurance Survey provide the first national estimates of the prevalence of pooled purchasing under all major arrangements. About one-quarter of all businesses participate in a pool; smaller businesses are more likely to participate, and there is substantial geographic variation in the prevalence of pool participation. Pooling appears to have modest positive effects on the availability of employee choice among plans (especially health maintenance organizations) and on the availability of information about plan quality. On the other hand, pooling as now construed does not seem to have enhanced the accessibility or affordability of insurance to employers.