UHI - what is it and will it work?

  • Niall Hunter, Editor

26/2/2014

Since the current Government took office in 2011, there has been much public debate about Health Minister James Reilly's ambitious plan to introduce a system of universal health insurance (UHI).

But what exactly is UHI? A cynic might say it is VHI with a different letter, and there may turn out to be more than a grain of truth in this in terms of rising costs.

Basically, under UHI, the entire population would be insured and given a guarantee of equal access, free at the point of delivery, to a yet-to-be-determined basic package of hospital, GP, community and mental health services.

The distinction between private and public healthcare and our iniquitous ‘two-tier' system will it is promised, disappear.

This sounds like a great system- healthcare free at the point of access and no waiting lists, presumably. What's not to like?

However, it will obviously not come cheap and will not be without its bureaucratic and logistical challenges. A plethora of new ‘quangos' have been outlined as necessary for the implementation of UHI and other healthcare reforms.

Presumably too there will be a need for labyrinthine and contentious contract changes with doctors and other healthcare providers.

With the publication of a draft White Paper by the Government on the plans for the new scheme expected shortly, debate on the feasibility of the plan has intensified.

It can be argued that the debate so far on UHI has involved many people talking about something they don't know very much about and this is understandable, given that the proposals to date have been very sketchy.

A draft version of the White Paper, recently drawn up by the Government, has put some flesh on the UHI proposals, although there remain many unanswered questions, particularly on how much exactly this radical scheme going to cost us as insurance subscribers and as taxpayers. The scheme is set to be introduced by 2019.

Under the UHI model proposed, every member of the population will purchase a universal health insurance policy from one of a series of designated health insurers appointed under the scheme. The insurers will purchase services on behalf of subscribers from hospitals and other health agencies.

Those on lower incomes, equivalent, probably to current medical card holders, will have their insurance premia paid for by the State, while most of those on higher incomes will have the cost of their premiums subsidised by the State.

The document says the State will pay or subsidise UHI policy premia for all those who qualify on income grounds. The paper does not indicate what the income guidelines for this will be, or what proportion of higher income people may have to pay full, unsubsidised premia.

Where a person refuses to pay premia to the scheme, the State will be able to deduct the amount as source from their earnings or benefits.

The premium will cover people for a ‘basket' of healthcare services-what exactly is in the basket has yet to be decided, but it would include a basic package of hospital, GP, community and mental health services.

People would have to take out additional private insurance if they want ‘extras' such as presumably, a more luxurious hospital room, cosmetic surgery, or perhaps, IVF. This extra cover would not be community rated - older people would have to pay more for it.

Extra cover cannot be purchased that would allow faster access to services covered by the standard package of care - in other words ‘Queue-skipping' for richer people, a feature of the current system, would be outlawed.

Some basic health and social services will continue to be provided by State health services, funded through taxation.

While acute hospital care would be covered by UHI premia as part of a basic suite of services, emergency department care would probably be separately State-funded. A levy may be placed on all UHI policies which could be used to fund ED services.

The White Paper does not give an indication of what these premia will be, but it is fair supposition, given the cost of healthcare, that they may well be equivalent for the rate paid for an average health insurance plan at present- around E1,500 to E2,000 per year.

However, the premia under UHI would cover people for direct access to a much wider range of services than currently available under a fairly basic private health insurance plan, which covers for certain levels of hospital care.

Then draft plans seek to control costs under the scheme, by implementing a policy of an ‘efficient market rate' for setting reasonable premia in order to protect those on low incomes, and protecting the taxpayer by stipulating the maximum monetary threshold the State will pay.

The document says the effective market rate will be set above which the State will not pay financial support for UHI.

The draft White Paper says there will also be a suite of other cost control mechanisms employed, including maximum prices for services from healthcare providers and global budget caps for each insurer, to ensure that costs of the scheme do not escalate.

It stresses that the government is determined that total spending under the new single-tier UHI system should not exceed its total spending under the two-tier system it replaces.

People will have their premia either completely covered or subsidised, depending on income, having been assessed by a new National Insurance Fund.

A key component of the new scheme will be the ‘basket of services', which will determine how much bang for their premium buck people will get.

The document outlines a complex three-stage process to be undertaken by a Government Commission to decide exactly what will be included in the basket. The process will decide which services will be covered by UHI premia, which will be outside the basket, requiring extra insurance cover, and which services will be outside UHI but provided by the public health system.

The White Paper states that the Government's favoured broad option for inclusion in the standard basket of UHI-covered services is:

• Universal primary care, including GP care.
• Chronic disease management (eg diabetes, asthma, heart failure), mostly at GP/primary care level.
• Hospital care
• Acute mental health care
• Rehabilitation care
• Step-down care.
• Other services such as ‘health and wellbeing', long-term mental care and social and continuing care would continue to be provided by the public health system, funded separately to UHI.

The document also includes another basket option with fewer services covered; leaving out, for example, step-down care and non GP-delivered primary care.

Drug costs would be covered either as part of the UHI standard package or through a separate scheme, the document states. Most people would have to meet part of the cost of their drugs under the new system.

The report says issues to consider in deciding on products in the essential services basket will include whether a new treatment is essential, how safe it is, and whether palliative as well as curative services should be included.

The health safety body HIQA is to have a role in reviewing which services should be included or excluded from the basic basket of cover as time goes on.

In detailing how the UHI scheme and the reformed healthcare delivery system will be paid for, the document says it will be through:

• People paying their UHI premia directly to one of the designated insurers.
• The State supplementing premia by making financial support payments directly to insurers on behalf of qualifying individuals.
• The State funding certain other UHI services or costs, eg ambulance services.
• The State funding certain other health and social services outside the standard UHI package, for example-long-term residential care.

In addition to funding the new system through insurance premium payments, the paper says the Government has decided to retain general taxation as the core method for raising healthcare resources for subsidisation of UHI premia and other directly-funded services such as ambulance services.

It points out that earmarked taxation funding for health services, which is favoured by some does not necessarily guarantee stability or adequacy of funding.

The current tax relief scheme for health insurance will be subsumed into the new State subsidies scheme for the UHI premia.

Payments into the UHI system will be centrally pooled in a National Insurance Fund.

The document says the premium prices under UHI will not be determined until the year for the planned launch of the scheme - 2019.

The only hint given in the document as to the likely level of premia is that the premium levels will in part be influenced by the balance of UHI funding between tax revenue, co-payments and the likely demand and resulting cost for health services in future.

The document also says a likely fall in the number of medical cards over the next five years, as the economy recovers, should help reduce demands and costs, although the rapidly ageing population will drive up costs.

The document states that in order to fund the State subsidies for insurance premia under UHI, in addition to direct service costs not covered by insurance that would be met by the State, continuing the general funding taxation system is the preferred option.

It points out that earmarked taxation funding for health services, which is favoured by some do not necessarily guarantee stability or adequacy of funding.

On adequately controlling overall costs of UHI, the paper describes this goal as a 'moving target', dependent on the success of a number of factors such as improving population health; enhancing community health services, introducing 'Money follows the patient' and cost-control measures in areas such as doctor and hospital payments and drugs.

The document, in addition to outlining how universal health insurance will work, also highlights other aspects of health reform, such as the replacement of the HSE with a Health Commissioning Agency, the establishment of independent hospital trusts, new primary and community care organisations, and a patient safety authority.

Indeed, the document is notable for the number of new health agencies it enumerates, including a new commission to decide on services to be included in the basic UHI ‘basket'.

While the White Paper does shed more light on the UHI plan three years after it was promised, there are still many unanswered questions and concerns.

These mainly centre on controlling costs, ensuring that equal access for all is guaranteed and preventing abuses of a system that could potentially end up benefiting insurers and healthcare providers at the expense of service users.

It is nonetheless an ambitious plan, and, if the State manages to square the circle on exponentially rising healthcare costs, it just might work.

 

 


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