Characterises of Private Financing of Healthcare: New Challenges and Prospects

Aim. Analysis of features and dynamics of development of private financing of healthcare in the world and in the groups of countries; identification of tendencies, as well as the most suitable areas of development of private healthcare financing.

Objectives. Identification of dynamics and structure of expenses for healthcare; study of the factors determining development of the healthcare private healthcare providers; characteristic of the healthcare private sources of financing; analysis of the structure of private healthcare expenses in different groups of countries; detection of the most prospective and effective areas of development of the healthcare private financing; definition of the main criteria of the government policy for raising private funds to healthcare and analysis of the role of state in establishing tendencies of development of the healthcare private financing.

Methods. Methods of logic, statistical, comparative analysis; synthesis; deduction and induction were used in the research.

Results. Willingness of the government of the number of countries to increase accessibility and quality of the health services rendered to population without violation of the principles of equality and social equity, development of human medicine, enhancement of the social value of health, as well as people expectations from the healthcare system, social and demographic changes in the world result in growth of the absolute and relative indicators of financing of the area concerned. The healthcare private services are enlarged. Increase of expenses for this area is observed in the conditions of both economic growth and economic crisis, though some reduction of expenses to healthcare is obvious for crisis. Analysis of the structural dynamics of expenses allows detecting the most significant growth of private payments in comparison with the state ones in the periods before crisis, after crisis and in crisis. At the same time the state/insurance share of expenses for healthcare is kept constant (about 73 %), the tendency of the private financing expansion is obvious, which is stipulated by the legal changes, revisions of the social package and introduction/enlargement of costs division. The highest growth was detected in private insurance.

The crucial factors for raising private investments in the area concerned include economic development of the country, absolute and relative indicators of the state financing of healthcare; volume, structure, quality of the health services rendered within the national insurance; elasticity of the state and private expenses per revenue; as well as features of the country (cultural, historical, geographical, political, and social). At the same time, specificity of the health services as a product and the market of health services require mandatory state regulation of the private providers operation. Spreading of private payments, according to the experience, reduces access to health services, deteriorates population health indicators creating threats to the national safety and prerequisites for healthcare expenses increase in the future. High expenses for health services, loss of profit can result in financial disasters, which are observed in both developing and developed countries. Analysis of the sources of private financing demonstrates that voluntary health insurance and co-payments are the most aligned and effective types of private payments. Therefore direct and informal payments cannot be an alternative source of financing. They are used as the main mechanism for raising private capital only in developing countries; however, are typical to developed countries to a certain extent. The most reliable and effective types of private payment — private health insurance and co-payments are used in the countries with high and medium level of income.

Conclusions. Analysis of dynamics and structure of expenses for healthcare shows that the growth of private expenses for healthcare exceeds the growth of the state expenses, this tendency is the most vivid in the crisis and post-crisis periods. Expansion of private financing is initiated by the state to a certain extent. The government policy in raising private funds includes formation of additional source of financing without violation of the principles of social equity, solidarity, equality and accessibility of the health services for the citizens of the country. This means increase of the share of the government financing and improvement of criteria of setting priorities when selecting health services in the state free package, reduction of the share of direct and inofficial payments and stimulation of expansion of voluntary health insurance and co-payments introducing new mechanisms for improving the social equity and equal access.

1. The world health report 2000. Health systems: Improving performance. Geneva: World Health Organization; 2000. 10 p. URL: http://apps.who.int/gb/archive/pdf_files/WHA53/ea4.pdf

2. WHO conference on European health care reforms. Proc. conf. (Ljubljana, 17-19 June, 1996). Copenhagen: WHO Regional Office for Europe; 1996. 101 p. URL: https://apps.who.int/iris/bit-stream/handle/10665/108068/EUR_ICP_CARE_01_02_01.pdf?sequence=1&isAllowed=y

3. The World Bank database. 2018. URL: https://data.worldbank.org/indicator/SH.XPD.PCAP.PP.KD?end=2014&start=1995&view=chart

4. OECD health statistics 2015: FOCUS on health spending. URL: https://www.oecd.org/health/health-systems/Focus-Health-Spending-2015.pdf

5. OECD health statistics 2016: Definitions, sources and methods. 2016. URL: https://www.oecd.org/els/health-systems/Table-of-Content-Metadata-OECD-Health-Statistics-2016.pdf

6. Schreiber G., Maeda A. A Curmudgeon’s guide to financing health care in developing countries. In: Innovation in health care financing. Proc. World Bank conf. (10-11 March, 1997). Washington, DC: The World Bank; 1997:6-40. (World Bank Discussion Paper. 1997;(365). URL: http://www1.worldbank.org/publicsector/pe/PEAMMarch2005/multi_page.pdf

7. Gottret P., Schieber G. Health financing revisited: A practitioner’s guide. Washington, DC: The World Bank; 2006. 340 p. URL: https://openknowledge.worldbank.org/bitstream/handle/10986/7094/370910Health0f101OFFICIAL0USE0ONLY1.pdf?sequence=1&isAllowed=y

8. Kutzin J. Health financing policy: A guide for decision-makers. Copenhagen: WHO Regional Office for Europe; 2008. 36 p. (Health Financing Policy Paper. 2008;(1)). URL: https://apps.who.int/iris/bitstream/handle/10665/107899/E91422.pdf?sequence=1&isAllowed=y

9. Aleshin N. A. Realization of economic interests of subjects of the market of medical services. Cand. econ. sci. diss. Synopsis. Saratov: Saratov State Socio-Economic University; 2007. 28 p. (In Russ.).

10. Global health expenditure database. World Health Organization. 2017. URL: http://apps.who.int/nha/database

11. Xu K., Saksena P., Jowett M., Indikadahena C., Kutzin J., Evans D.B. Exploring the thresholds of health expenditure for protection against financial risk. World Health Report Background Paper. 2010;(19). URL: https://www.who.int/healthsystems/topics/financing/healthreport/19THE-thresv2.pdf

12. Abuja declaration on HIV/AIDS, tuberculosis and other related infectious diseases. In: African summit on HIV/AIDS, tuberculosis and other related infectious diseases (Abuja, Nigeria, 24-27 Apr., 2001). URL: https://au.int/sites/default/files/pages/32904-file-2001_abuja_declaration.pdf

13. Global health expenditure database. World Health Organization. 2018. URL: http://apps.who.int/nha/database

14. Goudge J., Gilson L., Russell S., Gumede T., Mills A. The household costs of health care in rural South Africa with free public primary care and hospital exemptions for the poor. Tropical Medicine & International Health. 2009;14(4):458-467. DOI: 10.1111/j.1365-3156.2009.02256.x

15. Clemans-Cope L., Perry C. D., Kenney G. M., Pelletier J. E., Pantell M. S. Access to and use of paid sick leave among low-income families with children. Pediatrics. 2008;122(2):480-486. DOI: 10.1542/peds.2007-3294

16. Mamedov Z. F., Mamedova S. K. Features and trends in the development of the private health financing. In: Proc. 37th Int. sci. conf. on economic and social development “Socio Economic Problems of Sustainable Development” (Baku, 14-15 Feb. 2019). Varazdin: VADEA; 2019:15081516.

17. Xu В. K., Evans D. B., Kawabata K., Zeramdini R., Klavus J., Murray C.J.L. Understanding household catastrophic health expenditures: A multi-country analysis. In: Murray C.J.L., Evans D.B., eds. Health systems performance assessment: Debates, methods, and empiricism. Geneva: World Health Organization; 2003:565-572.

18. Shishkin S. V. Formal and informal rules for payment of medical care. Mir Rossii. Sotsiologiya. Etnologiya = Universe of Russia. Sociology. Ethnology. 2003;12(3):104-129. (In Russ.).

19. Sari N., Langenbrunner J., Lewis M. Affording out-of-pocket payments in health care: evidence from Kazakhstan. EuroHealth. 2000;16(2):37-39.

20. Ginzburq A. I. Insurance. St. Petersburg: Piter; 2004. 174 p. (In Russ.).

21. Sheiman I. M. Health economics. Moscow: Teis; 2001. 324 p. (In Russ.).

22. Baji P., Boncz I., Jenei G., Gulacsi L. Comparing cost-sharing practices for pharmaceuticals and health care services among four Central European countries. Society and Economy. 2012;34(2):221-240. DOI: 10.1556/SocEc.34.2012.2.3

23. Paris V., Hewlett E., Auraaen A., Alexa J., Simon L. Health care coverage in OECD countries in 2012. OECD Health Working Papers. 2016;(88). URL: https://www.oecd-ilibrary.org/docserver/5jlz3kbf7pzv-en.pdf?expires=1574167506&id=id&accname=guest&checksum=0EB182CF36D820A9021A018218269BDA

24. Christensen B. Payment and attendance at general practice preventive health examinations. Family Medicine. 1995;27(8):531-534.

25. Rice T., Morrison K. R. Patient cost sharing for medical services: A review of the literature and implications for health care reform. Medical Care Research and Review. 1994;51(3):235-287. DOI: 10.1177/107755879405100302

26. Kasje W. N. Timmer J. W., Boendermaker P. M., Haaijer-Ruskamp F. M. Dutch GPs’ perceptions: The influence of out-of-pocket costs on prescribing. Social Science and Medicine. 2002;55(9):1571-1578. DOI: 10.1016/S0277-9536(01)00291-X

27. Massaro T., Nemec J., Kalman I. Health system reform in the Czech Republic: Policy lessons from the initial experience of the general health insurance company. Journal of the American Medical Association. 1994;271(23):1870-1874. DOI:10.1001/jama.1994.03510470074038

28. Mamedova S. K. Economic value of co-payments in healthcare. In: Proc. 37th Int. sci. conf. on economic and social development “Socio Economic Problems of Sustainable Development” (Baku, 14-15 Feb. 2019). Varazdin: VADEA; 2019:552-558.

29. De Pietro C., Camenzind P., Sturny I., Crivelli L., Edwards-Garavoglia S., Spranger A., Wittenbecher F., Quentin W. Switzerland: Health system review. Health Systems in Transition. 2015;17(4):1-288. URL: http://www.euro.who.int/data/assets/pdf_file/0010/293689/Switzerland-HiT.pdf?ua=1

30. Bihari-Axelsson S. Developing priorities in the field of health. Teis. 2002

31. Mossialos E., Thompson S. Voluntary health insurance in the European Union. Brussels: European Observatory on Health Systems and Policies; 2004. 208 p. URL: http://www.euro.who.int/data/assets/pdf_file/0006/98448/E84885.pdf

32. Busse R., Blumel M. Germany: Health system review. Health Systems in Transition. 2014;16(2):1-296. URL: https://apps.who.int/iris/bitstream/handle/10665/130246/HiT%20Germany.pdf?sequence=1&isAllowed=y

33. Zaborovskaya A., Shishkin S. Transformation of guarantees of medical services in countries with transitional economy. Obshchestvo i ekonomika = Society and Economy. 2005;(1):184-192. (In Russ.).