Abu Dhabi Health Care Reforms - Research Paper Example

Topic: Abu Dhabi Health Care Reforms One of the countries that have been recognized as having a considerably high health care is the United Arab Emirates and this can be attributed to the increased government spending during the years that the country’s economy was strong. The government of the country estimated that the total expenditures on health care from 1996 to 2003 were US$436 million as other estimates from the World Health Organization, in 2004 total expenditures on health care constituted 2.9 percent of gross domestic product (GDP), and the per capita expenditure for health care was US$497 which is generally remarkable, (World Health Organization, 2010). Health care facilities in the country are currently offering free health care for Abu Dhabi residents as well as being covered by a new comprehensive health care insurance program. This program is financed by a shared cost of the employer and the employees as the number of doctors per 100,000 (annual average, 1990–99) is 181, (Rosenau, 2000) Other developments include a state of-the-art general hospital opened in Abu Dhabi with a projected bed capacity of 143, a trauma unit, and the first home health care program in the UAE as on the other hand there are efforts to attract those individuals who had preferred medical treatment abroad for serious medical care. This treatment Centre seeks to offer a hospital free zone that will offer international-standards, advanced private health care and provide an academic medical training center; On the other hand, there has been the introduction of a mandatory health insurance scheme and the transitioning of hospital financing towards revenue-based model necessitated thinking about how to create price transparency and better align incentives between all parties involved, (Yeung, 2012). Health expenditures are the most predominant expense in government spending and the more the population grows, the more private sectors will become a component part of the health system and the increasing need for private health insurance to cover expenses paid directly or enable access to private health care e.g., reforms and privatization in Spain, Netherlands, Switzerland, USA. There is also a growth of specialized health players in private sectors as well as the public healthcare spending in OECD countries Long-term sustainability challenge has cropped, (Yeung, 2012) The total healthcare expenditure already accounts for an average 9% of GDP (2008) among OECD countries as the public sources constitute majority of the spending and are already facing challenges in terms of long-term sustainability. The Social Insurance policy in most countries does not prioritize the needs of the aging population or address their particular problems and the public financed healthcare alone is inadequate & unsustainable; strengths of such a strategy would lie in the largest member base and public sponsored coverage making it affordable for everyone. On the other hand the weaknesses include longer life expectancy and aging population basis requires increasingly dedicated resources for healthcare of the aging population. The health care demand driven by increased knowledge of options and by less healthy lifestyles, Medical innovation and technological advances propel healthcare expenditure to higher levels, Efficiency and quality concerns and Rationing of care and escalating waiting time, (Peloso, 2002) A look into the Private-Public Partnership in Abu Dhabi background reveals that Abu Dhabi being the Capital of United Arab Emirates has a population of about 1.9 million that is comprised of twenty per cent nationals and eight per cent are foreign expatriates. Before the introduction of this reformed healthcare plan, there existed a healthcare system which offered free healthcare for nationals and heavily subsidized healthcare for foreigners, the government would like to increase quality of care while reducing costs and achieving guaranteed sustainability of the healthcare system. With this approach, the government needed full range support including risk management, product development, service design, management support, and back-office system Private-Public Partnership in Abu Dhabi has seen development and the progressive mandatory health insurance for foreigners & nationals have been made possible by expats in government, semi- government entities and larger companies. All expats, all nationals of income-based segmentation, expats below AED 4,000 per month are eligible for government-subsidized product from Daman and other Expats purchase private insurance from competitive market have been introduced to the programme. The Daman scheme is also the sole insurer for civil servants and government owned companies as the government reinsures the low-income basic product where Munich Re also reinsures the enhanced products, (Yeung, 2012) A look into the Private-Public Partnership in Abu Dhabi Initial challenges can be said to include the support for the reform of the health care system and ensuring the health insurance of expats working in Abu Dhabi. The objectives were to ensure affordable access to essential health care for both nationals & foreigners, improve the quality of healthcare by providing a reliable & equitable funding system and gradually reduce the need for government subsidies, (Paul, 2003). The resultant solutions introduced were Daman, managed by Munich Re, specializing in the health insurer in the UAE, licensed 2006, money follows patients and serves as proper incentive to providers; Munich Re is the exclusive reinsurer as an incentive alignment as well as supports competition among private insurers. Hence the public-private partnership was profitable since Day 1 and the success extended even outside the Emirate of Abu Dhabi. There was a steady increase of membership to 1.8 million members enrolled after 3 years and Munich Re’s management contract was extended for another 10 years in 2009. Other cities have experienced different challenges; for the Health Protection Scheme (HPS) to be viable in Hong Kong, it must attract a broad cross-section of risks and the preferred approach would be a mandatory scheme. Alternatively, the voluntary HPS needs to attract the majority of the Hong Kong population and ensure a less fragmented healthcare infrastructure and therefore adverse selection is a by-product of voluntary health insurance market and the well-intended rules (e.g., guaranteed issue and guaranteed renewability) may exacerbate adverse selection by offering misguided incentives and disincentives. Market competition requires a level playing field as new regulation about the government-endorsed product needs to take into account the incentives for participating insurers especially given the flexibility of the free market outside this scheme. In such a market, private insurers need assurances about profitability and branding to avoid cases where unreasonable restrictions on profit margin and claim management would discourage participation, but will not curb innovation to undercut and out do the scheme. This calls for government intervention to provide a level playing field between the large and small insurers who will also diversify the various products they offer, (Zhou, 2001). There is the fear of the medical cost being managed over the long run as the increases of medical costs, coupled with unchecked pricing practices of private hospitals and physicians would endanger the insurance industry, the broader healthcare profession, and the society. Care should be taken to avoid excessive risk-shifting from existing risk-takers such as employers to the government as well as the consideration of price controls in monitoring the premiums. References Paul, L. (2003). Privatisation & public private partnership review 2003/2004. Colchester, UK: Euromoney Peloso, J. (2002). Health care. New York: H.W. Wilson. Rosenau, P. V. (2000). Public-private policy partnerships. Cambridge, Mass: MIT Press World Health Organization. (2010). Gender, women and primary health care renewal: A discussion paper. Geneva: World Health Organisation. Yeung, S. (2012). Healthcare Reform: Opportunity for Public-Private-Partnership. Accessed on 18th January 2014 http://www.actuaries.org/HongKong2012/Presentations/MBR7_Yeung.pdf Zhou, H. (2001). The political economy of health care reforms. Kalamazoo, Mich: W.E. Upjohn Institute for Employment Research. Read More