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SEC Tallinn 2011-03-15

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  • 1. New Developments in Lithuanian Health Care System Romualdas Buivydas Gediminas Černiauskas Sveikatos ekonomikos centras (SEC, Health economics centre) Tallinn, 2011, March 16 Seminar „Private Health Insurance and Medical Savings Accounts – defining the benefit package“
  • 2. HC expenditure in EU, 2008 Health expenditure in EU countries, 2008, EUROSTAT 90% Czech Republic (2007) Denm ark (2007) 681,9 EUR Sw eden 3248,2 EUR 2610,8 EUR 85% Rom aniaTotal Public Health expenditure as percentage of Total France (2007) 278,9 EUR 2501,2 EUR Finland (2007) 80% 1950,7 EUR Austria Spain 2612,6 EUR Health expenditure Estonia Poland 1492,7 EUR 75% 551,2 EUR 449,4 EUR Germ any 2392,4 EUR Belgium (2007) 70% Lithuania 2317,1 EUR 433,2 EUR Hungary Slovenia 527,4 EUR 1050,3 EUR Netherlands (2007) 65% Latvia (2006) 2541,0 EUR 265,9 EUR 60% Bulgaria (2007) Buble size - public health 146,5 EUR expenditure in Euro per capita 55% 5,0 5,5 6,0 6,5 7,0 7,5 8,0 8,5 9,0 9,5 10,0 10,5 11,0 11,5 Total Health expenditure as percentage of GDP © Sveikatos ekonomikos centras (SEC)
  • 3. Expenditure for pharmaceuticals in EU, 2008 Expenditure for pharmaceuticals and other medical non-durables in EU, 2008, EUROSTAT Germ any Spain Buble size - public health 78% 369,9 EUR 321,0 EUR expenditure forGeneral Government expenditure for pharmaceuticals and other medical non-durables, percentual share of pharm aceuticals in Euro Austria per inhabitant 316,9 EUR 68% Denmark Czech Republic Sw eden (2007) 118,0 EUR (2007) total current health expenditure 255,7 EUR 193,5 EUR France (2007) 58% 370,3 EUR Slovenia 169,5 EUR Begium (2007) Hungary 48% Finland (2007) 283,9 EUR 137,0 EUR 215,9 EUR Rom ania Lithuania Estonia 39,8 EUR 38% 65,2 EUR 59,6 EUR Poland Cyprus 57,7 EUR 28% Latvia (2006) 65,4 EUR 32,9 EUR Bulgaria (2007) 18,8 EUR 18% 0,7 0,9 1,1 1,3 1,5 1,7 1,9 2,1 2,3 2,5 Total expenditure for pharmaceuticals and other medical non-durables, percentage of GDP © Sveikatos ekonomikos centras (SEC)
  • 4. HC expenditure in Lithuania SHI expenditure for HC services, 1998-2010 5.000 4.366,8 4.368,4 4.500 3.985,1 4.000 3.620,4 4.240,1 4.361,0 3.500 2.865,2 3.000 3.624,6Mil. Litas 2.340,8 2.500 3.036,9 4.233,4 2.019,8 2.029,3 4.117,8 1.936,3 1.868,7 1.847,2 1.833,5 1.811,6 2.000 2.453,9 3.654,9 3.090,5 2.094,7 1.500 1.936,6 1.902,0 1.847,8 1.836,9 2.512,8 2.112,9 1.957,0 1.893,5 1.869,0 1.845,9 1.808,9 1.791,1 1.000 500 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Invoices received Payments provided Planned expenditures
  • 5. Expenditure for pharmaceuticals in Lithuania SHI expenditure for pharmaceuticals and other medical non-durables 1998 - 2010 m. (mil. Litas) 800,0 748 700,0 643 696 683 600,0M il. Litas 618 680 500,0 701 534 618 400,0 484 547 386 495 420 440 409 300,0 390 322 381 364 318 307 302 297 200,0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Invoices received Paym ents provided Planned expenditures
  • 6. 10,0 20,0 30,0 40,0 50,0 60,0 70,0 1998.03 1998.05 1998.07 1998.10 1998.12 1999.02Trust 1999.04 1999.06 1999.09 1999.11 2000.01 2000.03 2000.05 2000.07Not trust 2000.11 2001.01 2001.03 2001.05 2001.07 2001.10 2001.12 2002.02 2002.04 2002.06 2002.09 2002.11Linear (Not trust) 2003.01 2003.03 2003.05 2003.07 2003.10 2003.12 2004.02 2004.04 2004.06 2004.09Linear (Trust) 2004.11 2005.01 2005.03 2005.05 Trust in Health Care 2005.07 2005.10 2005.12 2006.02 2006.04 2006.06 2006.09 2006.11 2007.01 2007.03 2007.053 per. Mov. Avg. (Trust) 2007.07 2007.10 2007.12 2008.02 2008.04 Population Trust in Health Care 2008.06 2008.09 2008.12 2009.02 2009.04 2009.06 2009.09 2009.11 2010.01 2010.03 2010.05 2010.073 per. Mov. Avg. (Not trust) 2010.10 2010.12 2011.02
  • 7. What exactly has been discussed in Lithuania about private health insurance and MSAs?• Since year 1996 in Government’s programs are included proposal to develop SHI in Lithuania• Discussions about MSA started in 2007• First draft proposals about MSA discussed in the Government at the fall of 2008• Revised version of the draft of SHI and MSA has been developed in mid 2010
  • 8. Supplementary Health Insurance in EU (1) Private insurance expenditure as percentage of Current health care expenditure EUROSTAT (2007 or last available) 16 13,52 13,45 14 12 9,59 10Percentage 8 6,2 6,19 6,08 5,6 6 4,87 4,29 4 2,61 2,24 1,8 1,71 2 1,18 0,58 0,42 0,41 0,3 0,22 0,22 0,21 0 Germany Hungary Poland Spain Finland Sweden France Portugal* Latvia* Luxembourg** Bulgaria Romania Slovakia Slovenia Netherlands Cyprus Austria* Denmark Lithuania Estonia Czech Republic Belgium
  • 9. Supplementary Health Insurance in EU (2) Private insurance expenditure as part of total private helth expenditure EUROSTAT, (2007 or last available)70% 63,94%60%50% 46,57% 42,32%40% 34,52%30% 22,53% 21,24% 21,23% 18,97%20% 14,91% 10,71% 10,54%10% 8,77% 6,78% 3,97% 1,98% 1,47% 1,45% 1,25% 1,18% 1,09% 0,96%0% Germany Hungary Poland Sweden Portugal Spain Luxembourg Finland France Netherlands Austria Latvia Lithuania Czech Republic Bulgaria Slovakia Belgium Slovenia Cyprus Denmark Estonia Romania
  • 10. Supplementary Health Insurance in EU Conclusions (3)• Supplementary health insurance (SHI) in EU member states mainely is an addition to main schemes of social health insurance or NHS type systems with an aim to reduce weaknesses inherited by these main schemes• International practice is indicating some preconditions for massive introduction of SHI: – Relatively big co-payments for health services (Ireland, France, Slovenia) – Tax subsidies (Ireland, Austria, Germany, Slovenia, Spain) – Insurance of certain groups of population by public funding (Germany) – Certain obligatory measures (France, Slovenia) Countries with SHI close to or above of 10 percent of total health expenditures do have at least 3 of these preconditions
  • 11. What have been the main obstacles for the implementation?For traditional SHI:• Health care risks not covered by Statutory HI are of limited attraction for private insurance companies (risks mainly predictable and small)• Insurance plans provided by private companies are of limited attraction to corporate clients (premiums are high, benefits not clear)
  • 12. No match between supply and demand of commercial SHIWhy Lithuanian people do not want to be insured by SHI? I II III IV V VI VII VIII IX XCitizens expenditure forHC per year in Litas 69,6 135,6 164,4 223,2 231,6 325,2 399,6 436,8 595,2 1147,2(2008 m.)Average SHI premiumper person per year in 1108,2Litas
  • 13. Supplementary Health Insurance. Situation in Lithuania Supplementary HI market in Lithuania 120 100,00% 90,00%Premiums, benefits sum per year, mil. Litas Benefits/premiums ratio, percentage 100 80,00% 70,00% 80 60,00% 53,47% 60 50,00% 40,00% 40 35,83% 30,00% 32,29% 31,80% 29,60% 27,88% 27,24% 27,42% 20,00% 20 10,00% 0 0,00% 2002 m. 2003 m. 2004 m. 2005 m. 2006 m. 2007 m. 2008 m. 2009 m. Benefits/premiums ratio, percentage Premiums sum per year, mil. Litas Benefits sum per year, mil. Litas
  • 14. What have been the main obstacles for the implementation? (2)For MSA:• Limited experience world-wide, almost no practical experience in Europe• Limited and uncertain gains for consumers• Ministry of Finance is suspicious about new financial products• Insurance industry is opposing the product partially regulated by the State
  • 15. Are the people ready for such a system?• Medical society is in favor• General public would prefer MSA to SHI, but support is limited• Politicians are lost in between
  • 16. What services should be excluded from the state’sbenefit package, should there be any changes and what could be the methodology for doing that? • Main stream thinking in Lithuania is to use MSA as a certain relieve of currently existing financial burden • Medical personnel do have second thoughts about significant co-payments, but they are not able to convince politicians to support this “greedy” approach
  • 17. What problems would implementing MSAs orPrivate Health Insurance solve in the system?
  • 18. Supplementary Health Insurance in EU (4) Different objectives had been indicated as a rational for the design of SHI. The practise presented evidence in favour of just some of these objectives Objectives Conclusions regarding precision of the objectiveExpansion of SHI is leading to reduction of Only partially true Public expenditures may even grow because of tax andpublic health care expenditures budget subsidies and demand inflated by SHICompetition created by SHI will improve quality Partially true, depend on conditions, Competition is between private insuranceand effectiveness of health services companies mainly about engagement of rich and healthy. Companies usually are too weak to have any influence on quality of care. They can’t manage investments in to qualityImprove efficiency and transparency of using Not true. Cross subsidies between obligatory and supplementary schemes mayrecourses in health sector. make transparency even lowerIncrease of consumer choice what regards Partially t true. Monopoly of obligatory health insurance is effected but resultsinsurance company and provider of health care. what regards competition are quite marginal. Consumers are lacking knowledge to make informed choices, individuals have limited rights to choose under group insurance purchased by employers.Revenues of health sector is going to increase Partially true. Certain countries do managed to improve moderately health care financing by SHIBetter accessibility and less waiting lists. Partially true. Insured may gain but not insured may face even less accessibility and more waiting listsLess informal payments No clear evidenceBetter assurances ageist financial risks Partially true. Insured may gain but not insured may face even more risks.Increased responsibility of people regarding the Not true. Tax subsidies, group insurance practices make responsibly usuallypersonal health . marginal.
  • 19. What are the main aspects of assessing the implementation of such a system?• Actual demand of a new product• Financial and political sustainability of new scheme
  • 20. Potential for MSA/SHI Private expenditure, mil. Litas2500200015001000 1999,8 1792,8 1640,2 1546,1 1341,1 1141,4 500 0 2004 2005 2006 2007 2008 2009 Private household expenditure for HC SHI expenditure
  • 21. Proposals directed towards SHI market expansion • To better compensate health expenditures of the inhabitants, work must be concentrated in following direction: – Promotion of commercial supplementary (voluntary) health insurance, to guarantee protection from large financial loss due to illness. – Utilization of international experience what regards the medical saving accounts in Lithuania
  • 22. Proposals directed towards SHI market expansion Commercial health insurance Main parameters – Annual contributions are 200-400 Litas – Number of insured in 3 years growing up to 1,5-2 millions. At least 100 000 per plan – Administrative costs are up to 7 percent to contributions – Individual and group insurance – Almost equal premiums
  • 23. Proposals directed towards SHI market expansion Model of medical saving accounts Plan of the scheme – All goods sold in pharmacies – Health services not covered by the statutory scheme – Owner of the account may use his savings to buy SHI from commercial insurance – Accounts may be used for coverage of financial expenditures of relatives and other persons
  • 24. Proposals directed towards SHI market expansion Model of medical saving accounts Contributions – May be paid by a person or his/her employer. – The scheme may have additional revenues Public financial support; – For taxed income earners. Tax free regime for contributions up to 400 per year – Alternative: 15 percent budget subsidy for contributions up to 400 Litas per year. Tax subsidies cancelled Administrative costs – Up to 4 percent of contributions
  • 25. Comparison of Ratio of Average Consumption Expenditures by Households between 10 and 1 Deciles with Life Expectancy Comparison of Ratio of Average Consumption Expenditures by Households between 10 and 1 Deciles with Life Expectancy 72,4 72,2 72,14 72,05Life expectancy in yeras (1997-2008) 71,99 72,0 71,94 71,79 71,76 71,8 71,66 71,6 71,39 71,4 71,32 71,12 71,2 71,08 70,92 71,0 y = -0,8204x + 78,367 70,8 70,6 7,5 7,7 7,9 8,1 8,3 8,5 8,7 8,9 9,1 9,3 9,5 Ratio of Average Consumption Expenditures by Households between 10 (richest) and 1 (poorest) Deciles (1997-2008) Correlation between these two data sets is (-)0,873
  • 26. Questionnaires about SHI and co- payments Citizens – representativeMedical personnel, Managers of HC institutions, Insurers – qualitative
  • 27. What you like or dislike in Lithuanian HC system? (points form 0 to 4) 1. What you like or dislike in Lithuanian HC system? (points form 0 to 4) Accessability of services Citizens 3,00 2,50 Medical personnel (135) 2,00Managem ent of HC system 1,50 Solidarity in HC system HC institutions Managers of 1,00 (36) 0,50 Insurers (7) 0,00 List of services Quality of HC services Quality of provision of services in HC institutions
  • 28. What level of solidarity you accept most? (one answer), percentage 2.What level of solidarity you accept most? (one answer), percentage80,0% 75,0%70,0% 67,0% 66,7% Citizens Medical personnel (135)60,0% 50,0% Managers of HC institutions (36)50,0% Insurers (7)40,0% 28,4%30,0% 23,0%20,0% 16,7% 17,2%16,7%16,7% 8,3% 7,0%10,0% 4,0% 4,5% 0,0% 0,0%0,0% All permanent citizens are equal and Government should guaranty same Citizens, who pay more taxes and Have no opinion should receive the same HC services. level and quality HC services only to insurance premiums should receive those who pay taxes or are socially more services than those for whom supported persons. pay Government.
  • 29. Are you insured by supplementary voluntary health insurance? 4. Are you insured by supplementary voluntary health insurance?80,0% 72,2%70,0% Citizens Medical personnel (135)60,0% 57,0% Managers of HC institutions (36) 52,2%50,0% 43,3%40,0%30,0% 25,0% 25,0%20,0% 17,0%10,0% 4,5% 2,8%0,0% Yes, or would like to be insured No, and do not intend to be insured I do not know what it is
  • 30. What benefits SHI provide/may provide (up to 3 answers) 6. What benefits SHI provide/may provide (up to 3 answers)120,0% Citizens 100,0%100,0% Medical personnel (135) Managers of HC institutions (36)80,0% Insurers (7) 72,2%60,0% 53,0% 50,0% 50,0% 47,4% 43,0% 44,4% 41,7% 38,0% 38,0% 38,9%40,0% 33,3% 33,3% 29,6% 29,6% 28,0% 24,4% 21,5% 20,0% 20,7% 19,4%20,0% 13,0% 14,0% 11,1% 11,9% 11,1% 11,0% 0,0% 0,0% 0,0% 0,0% 0,0% HC serv ices Improv ed quality of Higher quality of Less corruption in Vanish monopoly of Guarantee, that if you Higher salaries for More effectiv e use of prov ided in time serv ice prov ision serv ices HC institution Statutory Health fell seriously ill, will medical personnel financial means in insurance system be no lack of HC system financing for treatment
  • 31. Should State financially support SHI? 7. Should State financially support SHI?70,0% 66,7% Citizens 58,0%60,0% Medical personnel (135) Managers of HC institutions (36)50,0% 47,2% Insurers (7) 39,4% 38,9% 37,9%40,0% 33,3%30,0% 27,0% 22,7%20,0% 15,0% 13,9%10,0% 0,0%0,0% Yes Yes, partly (by tax exem ptions) No
  • 32. What should be reimbursed by SHI? 8. What should be reimbursed by SHI?120,0% Citizens 100,0% 100,0% Medical personnel (135)100,0% Managers of HC institutions (36) Insurers (7)80,0% 66,7% 66,7% 63,9% 61,0% 60,0% 59,0%60,0% 55,6% 50,0% 44,4% 45,0% 35,6% 36,1% 37,0% 36,1%40,0% 30,4% 29,0% 27,8% 21,0% 20,0% 21,5% 16,7% 16,0%20,0% 0,0% Pharmaceuticals Odontology treatment and Invoices from public HC Invoices form private HC Expenses for SPA Additional expenses for dental prostheses institutions for out of institutions. treatments. higher quality for services, pocket payments for not guaranteed by State services or co-payments. (single bed boom in hospital, treatment without waiting list, specialist consultation without referral)
  • 33. Do you support SHI system development? 9. Do you support SHI system development?80,0% Citizens 69,4%70,0% Medical personnel (135) Managers of HC institutions (36)60,0% 49,0% 47,7%50,0% 40,0%40,0%30,0% 27,8% 25,0% 26,0%20,0% 12,3%10,0% 2,8%0,0% Yes, agree Agree with condition, that for those, No, not agree who are not insured by SHI, HC service provision will be not worse
  • 34. What premium for SHI per year you agree to pay? 10. What premium for SHI per year you agree to pay?70,0% Citizens 59,0% Medical personnel (135)60,0% Managers of HC institutions (36)50,0% 45,7% Insurers (7) 44,4% 41,7%40,0% 35,0% 31,8% 33,3% 33,3%30,0%20,0% 17,1% 16,7% 16,7% 8,3%10,0% 5,6% 4,0% 3,1% 1,0% 2,3% 1,0% 0,0% 0,0% 0,0% 0,2% 0,0% 0,0% 0,0% Not agree to pay 1-200 litų 201-500 litų 501- 1000 litų 1001-2000 litų 2001- 3000 litų any premiums
  • 35. For which group of Lithuanian population SHI is/will be most needed? 11. For which group of Lithuanian population SHI is/will be most needed?120,0% 100,0% Citizens100,0% Medical personnel (135) 86,1% Managers of HC institutions (36)80,0% Insurers (7) 59,0%60,8%60,0%40,0%20,0% 16,2% 15,0% 16,0% 10,0% 11,1% 10,8% 12,3% 2,8% 0,0% 0,0% 0,0% 0,0% 0,0% For majority of Lithuanian For rich people For socially supported Nobody population people
  • 36. If you agree to pay additionally for SHI, what methods are most convenient for you? (possible few answers) 12. If you agree to pay additionally for SHI, what methods are most convenient for you? (possible few ansvers)70,0% Citizens 61,1% 58,3%60,0% Medical personnel (135) 57,0% 53,3% Managers of HC institutions (36)50,0%40,0% 30,0%30,0% 23,0% 23,0%20,0% 11,1% 12,0%10,0% 7,0% 5,9% 5,6%0,0% Agree to pay higher premium to Would like to be insured by SHI Collect money in special health saving Do not agree to pay additionally for Statutory Health Insurance accounts. health insurance
  • 37. If you agree to be insured by SHI, what type premiums payment you prefer? 13. If you agree to be insured by SHI, what type premiums payment you prefer?90,0% 83,3%80,0% Citizens Medical personnel (135)70,0% Managers of HC institutions (36)60,0% Insurers (7)50,0% 42,7%41,7%40,0% 33,0% 32,0% 29,0% 27,8%30,0% 22,2% 20,6% 19,8%20,0% 16,8% 16,7% 8,3%10,0% 6,0% 0,0% 0,0%0,0% Equal for everyone Healthier should pay less Volnurable persons Have no opinion should pay less
  • 38. If you agree to be insured by SHI, what type of insurers you will trust mostly? (possible few answers) 14. If you agree to be insured by SHI, what type of insurers you will trust mostly? (possible few ansvers)40,0% Citizens Medical personnel (135) 35,0%35,0% 33,0% Managers of HC institutions (36) 31,9% 30,6%30,0% 27,8% 27,8% 27,8%25,0% 22,0%22,2% 20,0% 19,0%20,0% 16,3%15,0% 13,3% 11,1% 9,0%10,0%5,0%0,0% Private insurance Non profit HC providers State institutions Have no opinion com panies institutions
  • 39. If co-payments will be introduced for services provided by State institutions, what option you will prefer? 15. If copayments will be introduced for services provided by State institutions, what option you will prefere?80,0% Citizens 71,4%70,0% Medical personnel (135) 60,0%60,0% Managers of HC institutions (36) Insurers (7) 48,9%50,0%40,0% 33,3% 33,3% 29,3%30,0% 22,9% 21,0%20,0% 16,5% 16,7% 16,7% 14,0%10,0% 5,0% 5,3% 5,7% 0,0%0,0% All without exceptions should pay co- Volnurable people should not pay any Co-payments should be only for some Any additional co-payments should be payments co-payments services introduced
  • 40. Who should pay SHI premiums? (population, percentage) Who should pay SHI premiums? (population, percentage)40,0% 37,0%35,0% 30,0%30,0% 27,0%25,0% 23,0%20,0%15,0%10,0%5,0%0,0% State Everyone personally Em ployer Have no opinion
  • 41. Will you agree to pay official co-payments for better quality and better accessibility of HC services? (population, percentage) Will you agree to pay official co-payments for better quality and better accesability of HC services? (population, percentage)60,0% 51,0%50,0%40,0%30,0% 22,0%20,0% 15,0% 10,0% 8,0%10,0%0,0% Not agree Yes, via SHI, if Yes, even if co- Yes, via SHI, if I do not know premiums will be payments I should premiums should be paid by employer pay myself paid from my personal money
  • 42. MSA business planHow MSA may influence citizens expenditure for health care and for savings 2012. 2013 2014 2015Number of insured 300.000 800.000 1.500.000 2.000.000Average premium, litas 200 250 300 350Amount of money for premiums peryear, mln. litas 60 200 450 700Existing HC household expenditurescompensation, mln. litas 30 100 225 350Annual increase of HC spending peryear, mln. litų 15 70 135 280Amount of money saved in MSA, mln.litas 15 45 135 205
  • 43. Supplementary Health Insurance. Situation in LithuaniaInsurance Supervision commision of the Republic of LithuaniaHC related insurance results, mil. Litas 2002 2003 2004 2005 2006 2007 2008 2009Insurance premiums 39,19 41,34 44,64 55,45 69,75 87,13 103,55 84,05Supplementary Health Insurance 25,92 18,17Other Health Insurance 77,63 65,88Health insurance ans insurance fromaccidents 39,19 41,34 44,64 55,45 69,75 87,13 2002 2003 2004 2005 2006 2007 2008 2009Insurance benefits 10,68 13,35 14,20 15,20 20,65 24,29 37,11 44,94Supplementary Health Insurance 15,53 24,10Other Health Insurance 21,57 20,84Health insurance ans insurance fromaccidents 10,68 13,35 14,20 15,20 20,65 24,29
  • 44. Thank you