health insurance basics
Tuesday, March 29, 2011 at 10:49AM Health financing forms the most fundamental part of a health system and any reform efforts. The reason is simple: without proper funding, any reform intervention may fail. Kuwait, for years, has relied on its oil revenues to subsidize health care services. Until the year 2000, this welfare system covered all residents, including the expatriate population, within the public health care system. Due to mounting costs and economic pressures of the times, private health insurance was enforced for all expatriates entering the nation.
Today, Kuwaiti nationals receive free care at public facilities while expatriates, forming over 60% of the population, must be covered by health insurance provided by the MOH. Following complaints by Kuwaiti nationals regarding wait times at public facilities, government officials have issued a plan to create a large for-profit private health insurance company that would take over the coverage of expatriates from the MOH and offer them care at three dedicated secondary care hospitals and several primary care clinics. Regrettably, this plan has been formulated by businessmen and not by health economists or health policy experts and finds support within a pool of private sector stakeholders who have to gain from this privatization scheme.
A few facts, even to the layperson, are obvious:
- Purchasing power: In general, the larger the insurance fund (as a proportion of the population), the more it has purchasing power and, therefore, the ability to control costs in the long-run. Indeed, the insurer is now responsible for buying care from the health care providers (hospitals, doctors, etc.). Also keep in mind that Kuwait has a very small population and that even 3 million is a tiny customer base for a health insurer. By reducing and fragmenting this further, you automatically lose the ability to enforce price control.
- Profits: Despite common belief, health insurance is not an easy way to make money. This is because health care is expensive. Furthermore, if you are maintaining low premiums (expatriates must pay KD 65 per year--multiplied by the 2 million or so expatriates gives you KD 130 million a year, a minute amount when considering the cost of care), have high administrative costs (generally the case for private insurance), and seek to make a profit at the end of the day, you easily see that sacrifices must be made somehow, usually in the amount of care reimbursed (so limiting the benefits to the insured). Politicians and MOH officials will tell you that our expatriate population is, overall, a healthy one. It is true. However, ill health cannot be predicted. Also, preventive care is not a desirable intervention in the private sector since doctors don't get reimbursed much for it. And we know that the cost of health care will keep rising--as opposed to other products (computers, food, etc.) new technologies in health are generally more expensive. If all remains equal (operational costs such as salaries of the health insurance company staff, etc.), then one must assume that cuts will occur in the benefits provided or rises in the premiums will be necessary to continue generating profits.
- Quality of care: By forcing the largest portion of the population into a privately owned and managed scheme, you inevitably create a tiered system. In the near-future, Kuwaitis will have access to all services in the nation, both private and public. Therefore, certain services will improve--to attract these higher reimbursements--and the other (expatriate one) will see a drop in quality of care. This is because the private insurance company will likely place limits on the qualification of providers within its system. Why hire more costly doctors or purchase expensive medical technology and lose profits?
- Equity: It is our duty to talk about equity even though this argument cannot be appreciated by many in Kuwait--it is not in its people's narrative or value-base. Simply put, the nation has been built on politics of exclusion to "protect" the nationals, its minority. This is why today we still talk in "Kuwaiti" and "non-Kuwaiti" terms and it is why few see the harm in this proposed segregated system. Truth be told, segregation is becoming a growing problem in Kuwait's health system. In recent years, we have seen the separation of primary care services (distinct hours for each population) and even intensive care units.
Nations that have had many decades of experience with health reform have understood that health is a right and that it should be offered equally to all residents who live within their borders. A social compact must be the basis for your health financing reform strategies. This translates into recommendations for unified nonprofit insurance funds (e.g. social health insurance, general revenue taxation) that cover the entire population with a single benefit package. Such schemes offer better health outcomes (nationals of most OECD nations live longer than Americans), customer satisfaction (Canadians are happier with their health system than Americans), and financial risk protection. Examples include many of the Western European nations, Canada, Taiwan and dozens of other nations that made a promise of universal and equal access to their people. This is supported by most international agencies and health reform experts. Lastly, for our economists, there is a simple financial argument: by covering the entire population under a single fund, you pool the risk of each individual and may even reduce the premiums for all, including Kuwaiti nationals. Yes, if you add 2 million relatively healthy expatriates to the pool of insured, the risk and, therefore, cost of the diabetic or cardiac Kuwaiti will be diluted. You also gain a large amount of funds with which you can purchase cost-effective care from the nation's providers and will more successfully control costs.
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kuwait, reform in Health financing, Health policy, Health reform
Reader Comments (3)
Nair
Posted on Sunday, May 15, 2011
why MOH gone for overseas?.... one year back the MOH Kuwait published an advertisement reg: recruitment and from the starting day in front of the MOH office thousands of nurses was waiting to submit their Bio data and ready to attend the test & interview. but if the MOH recruit nurses from here means the agents and their counterparts in MOH cant yearn anything so they misguide some of the senior MOH officials and planed for INDIAN tour with MOH officials and the great malayalee agents (iam also malayalee and i know the persons and their rates) put advertisements in malayalam news papers through lot of malayalee sub-agencies and they collected the money--. DEAR ALL THE KUWAITI GOVERNMENT OR THE COMPANIES WHO ARE TAKEN THE PERMISSION FROM OUR GOVERNMENT FOR RECRUITMENT WILL NOT TAKE ANY SINGLE FILLS FOR INTERVIEW, VISA PROCESSING CHARGE FIRST AIR TICKET. IT IS THE RULE OF THE GOVERNMENT OF KUWAIT THEY WILL NOT HOLD YOUR PASSPORT, CERTIFICATES ETC..( i am working in a private company in shuaiba and i didn't give any single Rs.for processing charge, visa, air ticket, medical or any type of expence for this job in Kuwait ) THEN WHY THE MOH & ITS AGENTS CHARGE 4to 5 Lacks for nurses??? "THE MOH & MOI SHOULD TAKE ACTION AGAINST THIS TYPE OF CORRUPTION"..
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