Health Care: A Right or a Privilege?

S. Theodoulou

Health Policy• Goal: to promote and attain the population’s good

health• Involvement of the State in the provision of health is a

modern phenomenon• Link between welfare provision and good health• Clear link between labor productivity, economic

growth, and the population’s good health• 1 more year of male life expectancy=1% GDP growth

after 15 years• 2000- World Health Organization (WHO) published the

first ever analysis of health systems (192 countries)

WHO

• Health insurance sould be extended to as many individuals as possible (especially the poor)

State Roles in the Provision of Health

• Regulator• Funder/Purchaser• Provider/Planner

Brazil• 1940 Special Services for Public Health (SESP)• 1960s-80s The military centralized the system Privatization • 1967 National Institute of Social Wellness (INPS) optional

care to the (urban) employed• Early 1970s Movement supporting public health reform—

Obstacles (lack of resources, opposition of the private sector, the bureaucracy, corruption) The same obstacles exist today)

• 1975 Plan for Immediate Care (PPA) First real step towards universalization- the INPS becomes more ambitious in scope, with the creation of the National Institute of Medical Assistance and Social Security.

• Early 1980s: Centralization (Integrated Health Act Program)

• Reforma Sanitaria: decentralization inthe provision of health services.– Goal: to create a network of health services that

cover the entire population—also the rural part of the population.

• 1988 Constitution: Sistema Único de Saúde (SUS) Single and ambitious health system, in principle covering the whole nation. Foundation of the present system– 1990 Organic Health Law: Universal State health care

• Hindered by successive financial (and debt) crises• Gvt. Stronger commitment from 1985-92, then

diminished for financial problems (IMF, World Bank loans, etc)

Organization• Two health care systems in Brazil

– Public: federal (basic services), state (endemic diseases, parental and infant care), municipal (emergency)

– Private: for profit institutions, philantropic institutions (Catholic Church), prepaid systems, cooperatives—Managed care (corporations) since the mid 1990s

• Imbalanced system, both geographically and in terms of class

Germany• Corporatist-Governmed system established by

Bismark in the 1880s• Autonomous from the State• 90% Germans are covered• Principles

– Solidarity: commitment to take care of each other– Subsidiarity: belief in shared power, mutual respect,

and incorporating as many people as possible into the system. Self-help, family, voluntary associations

– Corporatism: party and labor forms of representation

History• 1864 Mutual Aid Societies• 1883 Health Insurance Act (sickness funds)• After WWII, 2 systems

– East: nationalized health care (erosion of the private sector)

– West: renewed commitment to the pre-War principles. Extension of coverage in the 1960s

• 1970s Cost crisis (1975-1992, 13 laws addressed the problem)

• 1992 Health Care Structural Reform Law (limits budgets to contributions, increases consumer choice, stricter controls, opens sickness funds to competition for clients)

Organization• Productive & Efficient system• Corporatist, decentralized, multi-payer system based upon

the same principles• The Federal gvt. Has no power of implementation• System centered on sickness fundssickness funds, which have the status

of public-law bodies and make health care decisions– Sickness funds are intermediaries between the Gvt. And

the people– Comprehensive benefits– 9/10 Germans are enrolled in sickness funds– Disincentives to profit– Funded by taxes, gvt. Subsidies, and individual

contributions. Also, private insurance

Great BritainHistory

• The Poor Laws (workhouses/poorhouses)• 1911 National Health Insurance (all manual workers over 16

earning small salaries). Weekly payment• Until 1948, administered through voluntary associations and a

few public facilities (most medicine was paid)• WWII and post-War led to the expansion of the system• 1942 Beveridge Report: recommended the creation of a

comprehensive national health system• 1946 National Health Service Act (NHS): nationalization of all

hospitals, creation of health centers, redistribution of physicians across the country, teaching facilities, physicians could have private practice. Funded through taxes.

• 1974 Attempt to integrate the national with the regional with the local levels. Creation of Regional Health Authorities (RHA) and District Health Authorities (DHA)

• 1980 NHS becomes more autonomous and specialized. More power ffor RHAs

• 1982 Elimination of RHAs. DHAs become fully responsible for the administration of health

• 1979 Margareth Thatcher (backed by Milton Friedman and von Hayek) believed that privatization would improve the performance of the system– 1983 Griffith Report, recommended to move to an

insurance-based health system. Did not work

The 1990s and New Labour

• 1989 the NHS in crisis • 1990 National Health Service and Community

Act (encourages competition within the health industry)

• Since 1997 New Labour has maintained the system

• 1990s—the State imposed a Market into the state-administered system

Organization• Universal Access to Health Care for all citizens• 80% paid through general taxation (plus individuals’

regular contributions plus co-payments)• NHS, internal market made up of purchasers and

providers. State central control• DHAs buy services from public, private, or semi-

private providers• 2002 Integrated care, groups practitioners in local

community groups• Health gap (mostly geographical)

Japan

• WHO 2000 Report ranks the Japanese as the #1• Japanese culture introduces healthy habits• Comprehensive national health care program

History• Before WWII, German influence• 1922 Health Insurance Law offered coverage to

certain workers (2,000,000)• 1938 Ministry of Health and Welfare• War led to extend coverage to many more

Japanese• After WWII and the American occupation

– 1948 Medical Service Law/Social Medical Fee Payment Fund

– 1961 Every Japanese had coverage (Universal System). “Golden Era”

Problems

• 1970s Rising Costs (1972 Free Health for 72+)• 1970s/80s Gaps and inequities• New Health Problems: drugs, suicide, pollution,

inadequate housing, cancer• Japan has the fastest-aging population in the

world

Organization• Universal Coverage• More beds than any other nation• Sophisticated technology• Insurance funded by both employers and employees• Physicians are revered (and make a lot of $$$$)• Complex and fragmented system

– Public health centers (prevention), physicians’ offices (diagnoses), clinics (treatment), and hospitals (intensive care)

– Public/private (20% co-payments)• 2000 National Long Term Care Insurance Program

(foreign corporations)

Sweden• 1660 Collegium Medicum• 1752 First General Hospital in Stockholm• 1800 King Gustavus Adolphus created “crown” hospitals (for

soldiers with syphilis)• 119th century- Expansion of “crown hospitals” in scope and

territory—Decentralization of health care at the county level• 1874 Public Health Act (expanded coverage)• From the late 1930s, the Social Democrats organized a

universal health care system• 1955 the National Insurance Law covered the entire

population• 1959 Elimination of private beds• 1969 Elimination of private practice for physicians• 1976 Reversal (allows private health services)• 1982 Health and Medical Services Act• 1990s Objective: decentralization

Organization• Health Care is seen as public responsibility and

supported by the national insurance system• Health care is seen as a basic human right• All residents are covered• Physicians perceive salaries• National Ministry, National Board of Health and

Welfare, County councils (provide health, run hospitals). Some competition with private providers

• System funded by personal income taxes, the National Health Insurance System, National Grants, and user fees

Problems

• Lack of physicians• Uneven geographical distribution of

resources

United States

• #1 in per capita expenditure in health• #37 in performance (in our sample, only

better than Brazil)• The best technology and research, but...• 18% population uninsured, and 50%

underinsured

• Why?

History• Entrepreneurial tradition• Since the 1798 Public Health Service, Gvt. Seen as only a

“safety net” for the poorest• Prior to WWI, 4,000 hospitals run by religious or civil

associations were established (charged fees)/ “workshops” for training physicians

• 1933 Blue Cross (1st pre-payment system)• 1940s Private Insurance growth• 1946 Hill-Burton hospital and Survey and Construction

Act–Federal contribution to build hospitals• President Truman’s attempt to develop national insurance

defeated by lobbysts from the American Medical Association

• 1960s, Johnson’s extension of health insurance to those who qualified for social security

• 1963 Community Mental Centers• 1966 Comprehensive Health Planning Act

– Medicare/Medicaid (intended to work as private insurance)• 1973 Health Maintenance Organization Act (HMO)

subsidized the formation of prepaid insurance groups (offering good services)– Managed Care System (PPOs & IPAs)

• 1974 National Health Planning and Resource Development Act (NHPRD)—200 health planning areas to guide the provision of health services

• 1980s Reagan’s further privatization– Escalating health costs

The 1990s• Acknowledgment of crisis of the system (“emergency”)• Congress examined different plans to reorganize the

system• 1992 Clinton’s goals: to extend health insurance to all

Americans, to reduce costs• October 1993 Clinton’s project begun to be discussed.

Proposal to pass a Health Security Act. Republicans had their own plans. All plans reached a dead end.

• Why? Lobbying by the Medical Associations and drug corporations

Problems• Business lobbying• American political culture that sees national

health care as socialism and fears “big gvt.”– The American system of checks and balances does

not work well in the area of health

• The U.S., a “paradox of excess and deprivation”• 3 tiers: people with private insurance coverage,

people in the HMOs, and the uninsured• System financed with federal funds (56%), and

resources provided by the state and local levels