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National Health Insurance – a game-changer whose time has finally come?

Bruce Golding

Sunday, December 02, 2018

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The minister of health, Dr Christopher Tufton, announced recently that proposals for a National Health Insurance Scheme are to be submitted shortly to the Cabinet and it is expected that it will come into being next year. It is an issue that has been contemplated for more than 50 years. Hopefully, its time has finally come.

When the National Insurance Scheme was being designed in 1965, consideration was given to including health insurance along with pension and disability benefits. It was calculated that this would have required wage-related contributions of 12 per cent to be borne equally by employees and employers.

There was strong resistance from employer groups to this level of contribution and in the face of the vigorous campaign against the scheme as a whole by the then Opposition, the health coverage component was scrapped and the wage-related contributions rolled back to five per cent.

The idea was again put forward in a Green Paper tabled in Parliament in 1974 but it was eventually shelved to make way for the National Housing Trust that was introduced in 1976 and which required similar wage-related contributions of five per cent.

Detailed technical studies

During the 1980s, the Government, with funding from the World Bank, IDB and US-AID, commissioned a number of studies designed to iron out the technical issues encountered in previous efforts that had caused significant limitations in the application of the concept and its expected outcomes.

In 1997, another Green Paper was tabled in Parliament and an elaborate process of stakeholder consultations and public education commenced. Observation visits were made to a number of countries, including Bermuda and Colombia, that had successfully established similar schemes.

Over these many years, momentum was sometimes lost because of major economic disruptions that would have made it impossible for either payrolls or the Government revenues to bear the costs involved in such an expensive undertaking. With the economy now on a more positive and sustainable trajectory, the time may, indeed, have finally come.

There is much of value and relevance in the various studies and reports that have been done in the past and I hope that those who are designing the new proposals have availed themselves of all that material. We will have to await the details to find out who will be covered, how the scheme will be funded, how those funds will be disbursed, what services will be provided and by whom. There are variations in similar schemes that have been in operation in countries across the world and we will no doubt have to tailor ours to fit our own circumstances.

Who will be covered

The question of who will be covered is the most critical issue that will have to be addressed and it will have a significant bearing on how the scheme is to be funded. In Britain and Canada, for example, the entire population is covered, services can be accessed from both public and registered private facilities and the programme is financed directly from general revenue to which the entire population contributes. In such a system a secure means of personal identification (such as that proposed in NIDS) is crucial to facilitate reimbursement to service providers and ensure accountability.

In some other countries, coverage is funded by wage-related contributions — much like our NIS and NHT programmes — but benefits are restricted to registered contributors and specified dependents. Service is provided by both public and private facilities. The Medicaid programme in the United States is one example of this.

In choosing the best approach, we will have to reckon with the fact that a half of the employed labour force of 1.2 million is outside of the formal sector, currently makes no NIS or NHT contributions and would, more than likely, make no contribution to a health insurance scheme either. It would be unfair for formal sector workers and their employers to have to bear the burden of those who make no contribution to the scheme. The failure of so many persons of working age, despite constant appeals, to enrol in the NIS as self-employed contributors was one of the factors that necessitated the introduction of the Programme of Advancement Through Health and Education (PATH). Small as the PATH benefit is, thousands of them could hardly survive without it.

Yet, in a contributor-funded scheme, appropriate arrangements for access to health services would have to be made for non-contributors — informal sector workers and the remainder of the population comprising the unemployed and persons who, for a variety of reasons, are outside of the labour force. In these circumstances, a dedicated portion of indirect taxes to which everyone contributes, as is the case in Britain and Canada, has been found to be the most equitable way of funding universal coverage. This is the method currently being used in financing the National Health Fund (NHF) and the CHASE Fund.

Healthcare a worldwide problem

Jamaica has struggled to provide universal access to quality healthcare. We are not alone in that struggle and the bashing that is directed at our health services should be pause to take note of what is occurring even in highly developed countries. Britain is regarded as having one of the world's best public healthcare systems. Yet, when one looks at the benchmarks it sets in terms of the maximum waiting time for service delivery, it becomes clear that the problems we face in Jamaica are not ours alone:

• Accident and Emergency treatment – 4 hours;

• Admission to hospital (trolley-wait) – 4 hours;

• Consultant-led treatment (after referral) – 18 weeks;

• Prescribed diagnostic tests – 6 weeks;

• First treatment for cancer patients after treatment is prescribed – 62 days.

A briefing paper submitted to the British Parliament by the National Health Service in October indicates that performance at several hospitals continues to fall far below these targets. Canada's performance, as detailed in the Fraser Institute report for 2017, is somewhat better but waiting times are still considerable.

In the United States it took several attempts over more than 100 years before it was able to establish a universal health insurance scheme in the form of Obamacare. The number of persons without insurance fell steadily from 44 million to 28 million before starting to rise again after President Trump withdrew the federal subsidies that enabled low-income persons to enrol.

At the time of independence, approximately 10 per cent of Jamaica's national budget was allocated to the health sector. That figure steadily declined after 1972 and, for many years, hovered around 5-6 per cent, reflecting, in large part, the crowding out effect of our heavy debt service burden. Happily, it started rising in 2010 and by last year had reached 10 per cent, inclusive of health sector expenditure by the NHF and the CHASE Fund, which is funded from tax revenues and was equivalent to 1.2 per cent of the national budget.

Inevitable increase in demand for health services

The projected demand for health services and the plans for a National Health Insurance Scheme must also take account of the fact that Jamaica's population is ageing, with average life expectancy having risen from 65 to 76 years since independence. This is attributable, in no small measure, to the services provided by our much maligned health sector. Over the next 30 years, the number of persons living beyond 80 years is expected to increase from just over 50,000 to almost 200,000 and the median age will rise from 29 to 42 years.

Dr Tufton is to be commended for his efforts to get the population turned on to a healthier lifestyle. If this culture of healthy living is embraced, it will reduce the incidence of avoidable illnesses, especially among the middle-aged population, and go some way in reducing pressure on our health services. But as people continue to live even longer as a result, their need for health services will increase at a stage in their life when their ability to afford healthcare is in steady decline or non-existent. A National Health Insurance Scheme will be of particular importance to the vast majority of them.

I hope that in developing the proposals for the National Health Insurance Scheme, careful consideration is being given to the much-needed improvements in the physical facilities and technological capabilities of our public health system in order to enhance the quality of services delivered. We have some of the most talented and dedicated health professionals who work wonders everyday in saving lives and restoring wellness but they could be so much more efficient and effective if they had more modern, cutting-edge tools with which to work.

If a significant portion of the operational costs of our public health facilities can be funded by the National Health Insurance Scheme, more of the national budget could be devoted to the capital improvements that are needed.

I hope, also, that the proposal will enjoy bi-partisan support as well as public acceptance. It could be as transformational an initiative as the NIS was more than 50 years ago.

— Bruce Golding is a former Prime Minister of Jamaica

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