Cross-subsidization schemes in the Netherlands
127 choice to consumers and relieves pressure on the public health care system”
(ABI, 2001b). Similar claims are made about tax incentives to encourage the purchase of VHI (see 2.4.2).
Initially, the idea that increased take-up of VHI will reduce demand and re-lieve pressure on the statutory health care system seems plausible, but it may not happen in practice, as we will discuss in the following section. Furthermore, tax relief for those who purchase VHI may be inequitable where it benefits those in employment at the expense of those without employment, and where it is applied at the marginal tax rate, thereby increasing the value of the relief to those in higher tax bands. As employer-paid VHI policies in most member states are not subject to a benefit-in-kind tax, they provide employees with a tax-free benefit in kind that is not available to those who pay for VHI them-selves and that favours individuals in higher tax bands.
3.3.2 Equity in the delivery of health care
As we noted in the introduction to this section, the existence of VHI could present a barrier to access in the statutory health care system by distorting the allocation of public resources, to the detriment of public patients. This is most likely to happen when the boundaries between public and private health care are not clearly defined, particularly if capacity is limited, if providers are paid by both the public and the private sector and if VHI creates incentives for health care professionals to treat public and private patients differently (see section 2.3.3). Under such circumstances the total equity effect of complemen-tary and supplemencomplemen-tary VHI (taking into account both equity in funding health care and equity in the receipt of health care benefits) is likely to be negative.20 With regard to the argument that increasing VHI coverage reduces demand for statutory health care, the extent to which an expansion of VHI results in lower demand for statutory health care also depends on whether boundaries between public and private health care are clearly defined. In the United King-dom, for example, where both sectors make use of the same supply of doctors, an increase in private sector activity per se may not lead to an increase in the public sector’s capacity to tackle waiting lists. In fact, increasing private sector activity might actually reduce public sector capacity.
A more recent study by the ECuity II Project attempted to assess the degree of horizontal equity achieved in health care utilization in 14 OECD countries (the United States, Canada and 12 EU member states, excluding Finland, France and Sweden); that is, the degree to which the overall use of doctor visits is distrib-uted according to need (van Doorslaer, Koolman, Puffer, 2001). Using data from the European Community Household Panel (for the European countries), the au-thors found that after standardizing for need differences across the income
dis-20 It is also difficult to see how an expansion of complementary and supplementary VHI would in-crease the redistributive effect of health care funding.
Section 3 Access, equity and consumer protection
tribution, significant horizontal inequity in total doctor visits was only evident in Austria, Greece, Portugal and the United States. However, when doctor visits were disaggregated into visits to general practitioners and visits to specialists, it was found that in every country except Luxembourg, richer people visited spe-cialists more often than expected on the basis of need, while the use of general practitioners was relatively closely correlated with need (and in some countries it was slightly pro-poor). “Excess” specialist visits (not correlated with need) by higher income groups were particularly high in Ireland and Portugal.
The same study found that the degree and distribution of VHI coverage and regional disparities reduced equity in the use of doctor visits, although in most countries the negative effect on equity was fairly small. However, the effect of VHI coverage on the use of specialist visits in Ireland was very high, indicating that the lack of VHI coverage does act as a barrier to specialist care for lower income groups, in spite of their entitlement to free specialist care. VHI coverage also had a considerable impact on “excess” specialist use in the United King-dom (where supplementary VHI cover buys faster access to specialist care) and, to a lesser extent, in Spain, Belgium, Denmark, Austria, Canada and Italy.
A Spanish study suggests that the existence of VHI may increase inequality in the Spanish health care system, with negative consequences for the health of poorer people (Borràs et al., 1999). The authors found that Catalonian women with VHI showed a higher percentage of cancer screening tests than the rest of the population, perhaps because double coverage (by both the National Health System, or NHS, and VHI) provides women with more personalized care and in-creased involvement by physicians. An investigation into inequalities by social class in access to and utilization of health services in Catalonia found that al-though double coverage did not influence the social pattern of visits to health services provided by the NHS, there were social inequalities in the use of those health services provided only partially by the NHS (mostly dental care), and visits to a dentist were more frequent among those with complementary VHI (Rajmil, et al. 2000).
In the Netherlands, weak gate-keeping in the private sector (leading to fewer general practitioner contacts for VHI subscribers) has negatively affected gate-keeping in the public sector. Until recently it was compulsory for individuals with statutory health insurance to obtain a general practitioner’s referral before seeing a specialist or receiving treatment in hospital, but as a result of compe-tition from voluntary health insurers, who do not insist on referral, some pub-lic sickness funds have decided to relax their gate-keeping requirements (Kulu-Glasgow, Delnois, de Bakker, 1998).
In France, where insurers provide complementary cover for co-payments im-posed by the statutory health care system, research shows that those with com-plementary VHI consume more health care than those without (Breuil-Genier, 2000), particularly ambulatory care, dental care and corrective lenses
(Bocogna-129 no et al., 2000). Individuals with complementary VHI made 1.5 visits to a
doc-tor in a three month period (compared to 1.1 visits for individuals without com-plementary VHI), seeking health care once every 73 days on average, compared to once every 100 days for those without this type of insurance (Breuil-Genier, 2000).21 The market for complementary VHI has grown rapidly in France, cov-ering a third of the population in 1960, 50% in 1970, 70% in 1980 and 85% in 1998 (Sandier, Ulmann, 2001). As a result of concerns about complementary VHI exacerbating existing inequalities in access to health care, in January 2001 the French government introduced a law on universal health coverage ( CMU) to extend complementary VHI coverage to the 15% of the population that was not already covered (see section 3.2.1).
There is also some evidence to suggest that higher social classes in Germany use more specialist care than lower social classes, and it is claimed that this re-flects their VHI coverage (Wysong, Abel, 1990), although it may also be linked to other determinants of access to health care, such as information and educa-tional levels.
Irish patients with VHI are able to make use of private and semiprivate beds in public hospitals and publicly salaried consultants’ private services in both public and private hospitals, in spite of long waiting times for public patients in public hospitals for certain types of specialist care (Vhi Healthcare, 2001c). Private and semiprivate beds have accounted for about 20% of acute hospital beds since the process was introduced in the early 1990s (Nolan, Wiley, 2000). The results of a recent study by the Dublin-based Economic and Social Research Institute sug-gest that private patient usage of public hospital facilities is growing at a faster rate than that of public patients (Wiley, 2001). Data presented in the study show that for each category of hospital admission, including planned (elective), emer-gency and day care, utilization by private patients has been increasing at a fast-er rate than utilization by public patients. The study also found that private pa-tients accounted for close to 30% of discharges in 1999 and 2000, even though only about 20% of acute beds at the national level are designated as private.
The situation in Ireland is a source of controversy, leading to a debate about the future of the public–private mix in the health care system. Voluntary health insurers are of the opinion that:
“the level of inpatient beds set aside for private patients in public hospitals should be reviewed upwards from its current notional level of 20 per cent to reflect the enormous growth in private health insurance take up over the last decade in Ire-land, and to ensure that patients who have provided for their own health care can continue to access facilities to which they are entitled” (Vhi Healthcare, 2001c).
21 A report on the French health care system published recently by the Organisation for Economic Co-operation and Development recommends that complementary insurers devise more appropriate methods of funding health care, in order to strike a better balance between preventive and curative care (Imai, Jacobzone, Lenain, 2000).
Section 3 Access, equity and consumer protection
However, increasing use of public resources by private patients would appear to be at the expense of equity in the receipt of benefits in the overall health care system. Consequently, the Irish government’s health strategy published in No-vember 2001 proposes that all additional beds made available in public hos-pitals be solely for public use; that is, that there be no additional private beds made available in public hospitals (Department of Health and Children, 2001a).
The government also proposes that the rules governing access to public beds be clarified and suggests that action be taken to suspend the admission of pri-vate patients for planned (elective) treatment if the maximum target waiting time for public patients is exceeded (Society of Actuaries in Ireland, 2001 ).
Ensuring clear boundaries between public and private health care is a mat-ter for public policy at a national level. The equity (and efficiency) implications of voluntary health insurers’ relationships with providers in different member states should also be of concern to policy-makers. Overall, however, knowledge about the equity implications of VHI is limited and more research is needed, as the available research results may not be generalizable.
131
This section aims to:
• review briefly the free movement of patients in statutory health care sys-tems;
• examine the impact of VHI on the free movement of people within the European Union; and
• examine the impact of VHI on the free movement of services within the European Union.
4.1 The free movement of patients in statutory health care systems
The impact of VHI on the free movement of people must be seen within the con-text of statutory arrangements for the provision of health care across borders. In theory, national boundaries do not exist for individuals seeking health care in an-other member state, in so far as people are free to move and live anywhere with-in the territory of the European Union22. In practice, however, national authori-ties responsible for health care usually confine their activiauthori-ties to their own coun-try, so statutory health coverage has traditionally been limited to providers es-tablished within national boundaries. This is known as the territoriality princi-ple. Since 1958, the European Community (EC) Treaty has provided an exemp-tion to the territoriality principle in order to encourage the free movement of peo-ple within the European Union.
The Community mechanism for the coordination of social security sys-tems, based on EC Regulations 1408/71 and 574/72, allows migrant workers and their dependants to obtain health care in a country in which they are liv-ing for work purposes (Council of the European Communities, 1997). These regulations have subsequently been extended to almost the whole EU