Financing health care
Dr Stephen Fava
The government recently announced that it plans to implement major changes with regard to the financing of health care. This is, of course, a political decision with which the Medical Association of Malta will not interfere. It is however pertinent to make a few general points that, one hopes, would help to make the public debate more focused.
Escalating health care costs is a problem that most countries are facing. There are many factors that contribute to this. Demographic changes have resulted in an aging population with many living well beyond their retiring age; chronic diseases requiring long-term treatment have become more important.
Health care is becoming increasingly high-tech, requiring expensive diagnostic and therapeutic state-of-the-art technology. There has also been an explosion in new effective medicines. We can now do much more than ever before, but this comes at a cost.
Furthermore, as the pace of advances in modern medicine has been so rapid, a much larger proportion of medicines we currently use are relatively new ones. Newer drugs are always more expensive because they are under patent and because the manufacturer has to recoup the large sums of money it had invested in the development of the drug (and of many others that do not make it to the market).
Although requiring high-tech equipment, health is still very labour-intensive, often requiring the input of a large number of highly trained health care professionals. A big chunk of health expenditure overseas is thus on salaries and on training. In Malta, this is much less so because of low salaries, manpower deficiencies and because training is usually left to the individual with very little investment by the government.
In spite of the present emphasis on cost curtailment, this should be remedied if we are to avert a brain drain which would not only result in collapse of our national health service but would also be more costly in the long term as the need to refer patients for treatment overseas will again start to increase. Unfortunately, we are already seeing a large number of doctors leaving our shores.
Countries have adopted different systems of financing health care. However, the essential ingredients of any system are that health care must be readily accessible to all, that it is equitable and non-discriminatory and that the burden of its financing must be fairly distributed.
For example, public health care must not be expensive as this would make it relatively inaccessible to sectors of the population (financial barrier). Modern medicines and certain other aspects of health care can be quite expensive; hence they would constitute a significant financial burden to all but the richest. Hence having a large sector of the population paying for health services is not an option.
In some countries health care might be less easily accessible in certain regions, for example due to geographical isolation or because of disproportionate levels of funding with respect to the disease load of that region. This is often referred to as postcode discrimination in the UK. This is not a problem locally. We also do not have any problems with regard to discrimination in health care delivery on the basis of sex, religion, culture or race.
However, we do have another form of more subtle discrimination, namely discrimination by disease. In our system, two persons may require the same drug and for the same length of time but one gets it free while the other does not, simply because the latter's disease does not appear on the Schedule V list that entitles one to free medication. This anomaly must be addressed in any reform of the health sector.
It is imperative that before any payment of service be introduced, one has to ensure efficient use of financial resources and to curb abuse. The local national health service has been ranked the second most efficient in the world by the WHO; hence there is not much room for improvement in this respect. Much has been said about escalating drug costs but this is largely due to advances in medicine and to factors outlined above. The drug policies in our public health service are already rather restrictive and there is extensive use of generics rather than the more expensive branded drugs. Hence there is not much room for cutting costs here either.
However, it is undoubted that, as with any system that is completely free at the point of delivery, there is significant abuse. Only a small minority of patients abuse the system, but because this small number tend to abuse repeatedly, the effects on the system are nonetheless significant. Such abusive use of services results in extra costs and longer waiting times and waiting lists for deserving patients.
It is imperative that our efforts should first be directed at curbing such abuse. This is why many other countries have introduced nominal fees for certain items of service. This is based on the principle that a small nominal fee will deter an individual from using a service he does not need, but will not discourage someone to seek a service he needs.
This is where the means test fails. If this were to be introduced there would no deterrent to a sector of the population. As there is no evidence that any one sector of the population is less likely to abuse health services than others, introduction of fees based on means testing would not be successful in curbing abuse. This would result in some people paying twice for health service (directly and through taxation), while others may continue to abuse of it.
In some countries, certain categories, for example pregnant women, are exempt for payment of such nominal fees. This is not based on income but on the fact the problem with such categories is usually underuse rather than abuse of health services. Means testing also suffers from another serious drawback: it is an open secret that even today, means testing may not always reflect a person's true financial status.
Sensitising people to the real costs of health care could also help to limit its inappropriate use. Making people aware of the actual costs of treatment or of other items services that they receive - even if they don't pay or only pay a nominal fee - might therefore be useful.
The government must also be more efficient in collecting its dues from foreigners who are treated locally. The fees charged must also reflect true costs; such fees are presently ridiculously low so that we are subsiding foreign patients and their insurance agencies.
When we become EU members, all EU citizens will be entitled to free emergency treatment, but the Maltese government can still recoup the expense from the country of origin. Hence the importance of updating the schedule of fees and of having an efficient set-up of recouping these fees.
Furthermore, foreign insured patients (whether EU citizens or not) should at least be given the option of going to a private hospital/clinic. At present these are often treated in the public sector at the Maltese taxpayer's expense, while the insurer pays nothing.
Another important point in any cost curtailment exercise is that one should look at the long-term. For example, aggressive treatment of diabetes, high blood pressure and high cholesterol is expensive in the short term but because it decreases complications, it is cost-effective even from a purely monetary point of view. Likewise investment in a properly functioning primary health care system might be useful in limiting inappropriate use of hospital facilities.
The government can also consider offering financial and other incentives for people to voluntarily opt to use the private sector. By helping to relieve the financial burden of private medicine, the government would be rendering a service to the public and relieve its own financial burden as less people will opt to use the public sector; this will also help in relieving the problems of over-crowding and long waiting lists.
Finally any reform in public health financing must be taken in full consideration of the more global national situation. The health service may cost a lot, but the returns in terms of population health are well proven, which might not always be the case in other areas of public expenditure.
We must therefore ensure that national resources are not diverted from health to other areas that do not have 'added value' for the country. We must also address those factors that adversely affect the health of the nation. Smoking should be discouraged by education, banning advertising and taxation. Environmental issues that impinge on our health must also be seriously and effectively addressed.
In Malta, we are fortunate that we have a very good health service. This is evidenced by the consistently high ratings by the WHO, excellent health care indicators such as low infant and maternal mortality and by high patient satisfaction that came out in the recent Sunday Times survey carried out by Professor Mario Vassallo. It is important that any reforms ensure the sustainability of our public health service but without in any way adversely affecting our excellent results.
Stephen Fava, MD, MRCP (UK), FACP, FEFIM, M.Phil., is president of the Medical Association of Malta