PUBLIC-PRIVATE PARTICIPATION IN UNIVERSAL HEALTH COVERAGE

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1 PUBLIC-PRIVATE PARTICIPATION IN UNIVERSAL HEALTH COVERAGE Dr PHUA Kai Hong AB cum laude SM (Harv), PhD (LSE) Lee Kuan Yew School of Public Policy National University of Singapore

2 The Challenge of Universal Health Coverage Achieving UHC globally is a noble ambition Can transform more lives than any anti-poverty schemes 150 million people each year in developing countries suffer financial catastrophe for healthcare expenditures Challenge is how do we deliver on this goal? no silver bullet or one-size-fits-all formula path to UHC is complex and contingent on conditions Developing countries have to address health policies What? Where? When? How? How much? (Efficiency) Who pays? Who benefits? (Equity)

3 Complex Issues in Providing Universal Health Coverage Free healthcare is alluring Important that countries do not jump on bandwagon without undertaking health infrastructure reform Capacity problems may become exacerbated free national health programmes will unleash unexpected demand and supply (moral hazard) Having more money in risk-pool but not managing its proper utilisation Will lead to greater inefficiency as well as inequity Needs to be effective balancing on the supply side

4 Social Goals of the Optimum Mix Seeks to balance between extremes State Monopoly Total tax-funded Social insurance - Free services - Low quality - Inefficiency Free Market Pure profit-making Private insurance - Moral hazard - Adverse selection - Inequity

5 Effective delivery of UHC requires public-private/non-profit participation Government and public sector Investments in public health measures and PHC e.g. sanitation, vaccination and MCH services Focus limited resources on supplying essential targeted services to the poor Participation of private and voluntary sectors Ensures that everyone s choices are best served Allows room for competition and innovation Mobilises additional resources to meet needs Utilizes local elements and enhances buy-in Involves altruistic and charitable values

6 Private sector has important role for Universal Health Coverage Many downplay role of private/voluntary providers In Africa, 50% patients use non-state/private providers In Asia, 3/4 of the poorest children do so Instead of duplicating private/non-profit services Government should ensure that private sector serves the interest of the poor through effective collaboration Win-win positions to enhance synergy Appropriate regulation of private sector required - Checks and balances of stakeholders interests

7 Role of non-profit providers is important Non-profit providers include: Voluntary welfare organisations Faith-based/religious organisations Driven by humanitarian objectives Help mobilise scarce resources towards the poor, vulnerable and marginalized Identify new needs and may close gaps that public and private providers cannot address Provide checks against excessive profit-seeking Moral compass for both public and private goals

8 Public-Private Healthcare Allocation - What is Public and What is Private? Health Expenditure Density Functions % of population T 1 H 1 Primary Care Acute Care Private Public X 1 Chronic Care OOP Expenses X 2 Total (x) Catastrophic Care $ per person 26

9 World Bank Study of Hospital Reforms - Successful Characteristics Coherent incentive regime - Autonomy/corporatization Covered all critical elements - Human resource - Financing Complementary reforms - Stewardship - Good governance - Performance-based purchasing - Functioning markets - Information

10 Singapore s Optimal Health Financing Financing Taxes Private Payment Compulsory Savings Social/Private Insurance for Universal Health Coverage PUBLIC HEALTH SERVICES PRIMARY CARE ACUTE CARE CATASTROPHIC (LONG TERM CARE) Medisave Medishield Life (Eldershield) Medifund PUBLIC SUBSIDIES Source: Dr. Phua Kai Hong

11 Public Policies to Cost-Share Tax Financing with Savings and Insurance Social Insurance Prepaid Premiums Government Subsidy? Pricing? Provider/ Organization Private Insurance S avings Patients/ Households Premiums

12 Towards an Optimal Public-Private Balance in Health Care Systems? Universal coverage of basic health care Choice of public, private or voluntary systems Competition and integration between public, private and voluntary (non-profit) sectors Appropriate mix of provision and financing Targeted public subsidies to address inequity Co-payment at the point of consumption Selective risk-pooling to avoid moral hazard Government benchmarks for prices & quality

13 Paradigm Shifts in New Public Governance for Universal Health Coverage Democratization Globalization Government Universal Health Coverage Civil Society Business Public-Private Participation

14 Integrated Health Governance The Whole of Society Approach Policy Levels Provision/Financing/Regulation/Information National/Societal Local/Community Individual/Family Public / Government Private/ Business Sectors People/ Civil Society

15 Thank You for your Attention!

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