Funding of health system and insurance

The article "Private healthcare insurance no substitute to state service" carried in The Times of November 7 gave an account of the views of the Malta Insurance Association on the relationship between private healthcare insurance and the social obligations of the state to provide healthcare for all.

The problem of funding the provision of healthcare accessible to all is somewhat complicated and the position adopted by the MIA, that private healthcare is no substitute to a state service, is undoubtedly correct for all the reasons mentioned in the article. Such a big problem, therefore, must be addressed by breaking it down into different 'compartments' and a solution found for each 'compartment'.

As an example, one can consider the medical service provided by the state following an accident. Although I do not have statistics to quote I am sure that if the state were to charge out medical expenses incurred following accidents at work, on the roads and in our daily lives, a significant proportion of the state's outlay would be recoverable.

It is ironic that most accidents are, in fact, already covered by some form of insurance. For example, traffic accidents are covered by motor insurance, accidents at work by employer's liability insurance and, in most cases where a collective agreement exists, unions insist on group personal accident insurance.

In some instances, home insurance policies provide medical expenses cover-up to a small amount for the householder and his family.

The victims of such accidents naturally claim compensation for their loss but the state is never reimbursed for the medical care granted to the victim because it is assumed, quite rightly, that this service is 'free' which means that the taxpayer will pay for it. Is it therefore fair that the taxpayer should pay for the consequences of an accident which is or should be insured?

If the government were to charge out this service to the victim of an accident on a cost basis, he or she would in turn be able to claim the expenses from the insurance policy which covers the accident.

I do not advocate an increase in claims on insurers without them being able to charge a fair and correct premium for such an increase. Insurers must be given the empirical data required to arrive at a fair price and set a realistic maximum limit for covering medical expenses and the additional premium could be built into the premium for the policies concerned.

Many will complain that this will cause insurance premiums to rise but in reality the increase in premiums should not make waves. Most of us would not blink twice to pay an additional premium for, say, increasing the cover on a motor vehicle, so why should we not pay a small additional premium to cover medical costs in case of an accident?

In order to ensure that no victim of an accident is uninsured for such expenses, the state may legislate accordingly and it should also provide a contingency cover for those who genuinely fall outside the scope of a proper insurance cover.

Such a step would necessitate that the method of financing the service must be changed to one where billing for services, on a cost basis, is introduced. One way to do this would be to introduce a "point of sale" system and the social security department issues plastic debit cards to each taxpayer.

The user of the healthcare service would not be expected to pay for the service but will use this card to "settle" the bill. This would introduce an audit trail in the operation of the service and would identify the users of the service and guard against abuse.

More importantly, the state can identify those services which are chargeable and would expect the user to reimburse it by claiming on the insurance covering the accident which gave rise to the medical treatment. The health department may organise a 'claims department' to handle all such claims directly with insurers concerned.

Clearly, the above is a conceptual view of one of the many solutions which need to be found to address healthcare funding. It is one where our private insurance sector, which is capable of assuming the risks involved in a professional and profitable manner, can provide one remedy to the state's burdens of funding healthcare.