Dr PHUA Kai Hong AB cum laude SM (Harv), PhD (LSE)

Lee Kuan Yew School of Public Policy

National University of Singapore

PUBLIC-PRIVATE PARTICIPATION

IN UNIVERSAL HEALTH COVERAGE

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)

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

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

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

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

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

Public-Private Healthcare Allocation - What is Public and What is Private?

26

% of population

$ per personX

H1

T1

X1

Private Public

Total (x)

OOP Expenses

Health Expenditure Density Functions

2

Catastrophic Care

Primary Care

Acute Care

Chronic Care

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

Medisave

Medishield Life

Medifund

PRIMARY

CARE

ACUTE

CARE

CATASTROPHIC

(LONG TERM CARE)

Financing

Private

Payment

Compulsory

Savings

Social/Private

Insurance

PUBLIC SUBSIDIES Source: Dr. Phua Kai Hong

Taxes PUBLIC HEALTH SERVICES

(Eldershield)

Singapore’s Optimal Health Financing

for Universal Health Coverage

Public Policies to Cost-Share

Tax Financing with Savings and Insurance

Provider/

Organization

Social

Insurance

Private

Insurance

Patients/

HouseholdsSavings Premiums

Prepaid

Premiums

Government

Pricing?Subsidy?

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

Paradigm Shifts in New Public Governance for Universal Health Coverage

Universal Health Coverage

Government

Civil Society Business

Democratization Globalization

Public-Private Participation

National/Societal

Provision/Financing/Regulation/Information

Local/Community

Individual/Family

Public /

Government

People/

Civil Society

Private/

Business

Policy Levels

Sectors

Integrated Health Governance – The Whole of Society Approach

Thank You for your Attention!