Private sector’s role in national healthcare
The very pertinent observations of Dr Jean Pierre Farrugia (The Sunday Times, August 14) and other commentators from both sides of the political spectrum show that an objective, bipartisan discussion about the financial sustainability of healthcare in Malta is possible.
Private health insurance was inevitably drawn into this discussion because it is still far from having a material impact on the overall financing of healthcare in Malta. Although private health insurance covers roughly 21 per cent of the population, only 10 per cent or about 41,000 people benefit from an extensive refund plan. The rest subscribe to policies for very limited refunds.
People covered by basic plans find their policy useful when paying for low-valued medical consultations but private hospitalisation will greatly exceed their benefit limits. This is why they resort to public healthcare in spite of the insurance cover available.
Patients with a full refund scheme choose to use Mater Dei or other state hospitals because of the more intensive or sophisticated treatment at these hospitals.
Private health insurance business in Malta should be developed to improve the overall local provision of healthcare. There is scope to encourage the uptake of private insurance schemes to reduce demand on state hospitals and cut waiting lists. But this will be slow to come by without serious consideration of some key issues:
1) Private health insurance is no substitute to state healthcare because many health services fall outside its remit. These include chronic and pre-existing conditions, palliative and routine screening tests as well as drug abuse, self-inflicted injuries, out-patient drugs, HIV/AIDS, infertility, normal pregnancy, mobility aids and organ transplant.
Moreover, private insurance covers unforeseen events, not long-term care programmes. Also, all policies have limits on expenses.
2) State healthcare is based on solidarity while private insurance is price-driven through risk selection. The two goals are not easily reconcilable. Risk selection lowers the premium charged to the young and healthy but increases that charged to the sick. Through solidarity, the young and healthy people pay most of the cost of health care for the old and sick.
3) Private health insurance can contribute to a win-win situation with benefits for government and privately insured patients. Government benefits through a reduction in waiting lists and possibly costs. Private patients win through wider choice, and more convenient and timely healthcare.
4) Currently, market penetration of private health insurance cannot increase due to spiralling cost of healthcare, lack of control mechanisms and the absence of meaningful income tax relief on insurance premiums.
Since demand for health insurance is very sensitive to cost, there can be little development of this product without adequate cost controls and a guideline medical fee structure. Moreover it is essential to set up common structures for record keeping and communication of medical data between the various private and public health providers.
Besides being subject to strict supervision and regulation, including comprehensive solvency requirements, insurance companies have unique expertise to efficiently provide sustainable solutions in risk management.
We therefore believe our members are well-positioned to contribute to this debate and that having a national healthcare strategy with complementary roles for the private and the public sectors will result in greater efficiencies, less waste, and better communication and exchange of information.