The Health | November , 2020

Insurance Scheme ( NHIS ) is a popular one . However , different people have different ideas as to what it actually means .

Broadly , there are four main ways to pay for healthcare needs : socialised non-risk-rated , socialised risk-rated , commercial risk-rated and out-of-pocket .

One also needs to distinguish between the payment model ( ability to pay ) and the actual health care delivery system . We may have the money to pay for healthcare , but if the hospital system itself is overburdened , we might receive inferior care regardless .

So , any NHIS has to incorporate a component of “ health responsibility ” to be placed on the individual so that they don ’ t overburden and exhaust medical staff .

When people talk of a NHIS , they likely mean the United Kingdom ( UK ) National Health Service ( NHS ) type model which is the “ social non-risk rated premium ” model . The NHIS is expected to work this way ; Everybody ( or every capable person ) contributes a sum of money to a central pooled health coffer by way of taxes / premiums . When they need medical care , the money from the central coffer is used to pay for treatment .

That brings up the question as to how those who are less able ( unemployed , underemployed , unemployable , very young , very old , very sick ) are expected to pay for their healthcare ? The logical answer would be tax-payer largess .

But the problem with this model is the fact that it does not encourage personal responsibility towards healthcare . And if eventually a large number of people become irresponsible about their health , the healthcare system will fail for two reasons .

To explain further , imagine a group of 10 initially healthy people paying RM100 per year into this scheme .

Socialised risk-rated premiums

Reason ( 1 ): The “ responsible 5 ” are responsible and maintain good health . On he other hand , the “ irresponsible 5 ” start

BY DR MANIMALAR SELVI NAICKER to be sedentary , drink and smoke on a daily basis . The “ irresponsible 5 ” are more likely to fall sick and use up the money in the coffer .

Eventually , the money in the coffer will run out and the next years ’ premiums for everybody will increase . This clearly penalises the “ responsible 5 ” group who chose a responsible healthy lifestyle and provide incentives for the “ irresponsible 5 ” group which pursues an irresponsible unhealthy lifestyle . Reason ( 2 ): The next problem will arise because the “ irresponsible 5 ” who are sedentary , drink and smoke will more likely occupy hospital beds more often and for longer . So , when any of the “ responsible 5 ” fall sick , they might find that there is a shortage of beds for them . Unfortunately , hospital beds and trained staff cannot be commissioned at short notice .

This is the thing that doctors fear the most . That a “ socialised non risk-rated NHIS ” will eventually lead to a lack of personal responsibility towards healthcare . That doctors and the health care system will be inundated and collapse with the burden of “ lifestyle diseases ”.

How do we prevent a “ socialised non risk-rated NHIS ” from encouraging bad health care practices and paralysing the healthcare system ?

Logically , we would need look at something like a “ socialised risk-rated ” premium model . Here , those with riskier health behaviours which are statistically known to lead to poorer health are taxed with higher premiums . We don ’ t tax a pre-existing illness itself , just the risky behaviour which might make or has made the disease a higher probability .

This is very different from the “ commercial risk-rated ” premium model . In this model , those with pre-existing illness or those with riskier health behaviours are both taxed with higher premiums .

Why should we not tax pre-existing illness ? For example , there are some illness which have a large “ self-induced ” component such as vascular heart disease or lung cancer in a smoker . On the other hand , the same vascular heart disease and lung cancer can also occur in non-smokers .

Even if the disease occurs in a smoker , it will not always be possible to attribute the disease to the smoking in that particular individual as these individuals may be pre-disposed to the disease and would have got it anyway .

However , statistically we know that the incidence of these diseases is higher in smokers , hence we tax their risky behaviour . We can also tax them a second time by taxing cigarettes itself and channeling the money to the coffer . Using the same logic , we can tax alcohol and sugar .

Encouraging a healthy lifestyle

By the same token we should reward healthy behaviours . We know that lifestyle behaviours like sedentary lifestyle and obesity can statistically be a cause of illness .

Here we can ’ t tax people but we can reward good indicators . For example , those within the healthy Body Mass Index ( BMI ) range can be given a small reduction in premium for the year . Additionally , those who remain healthy and don ’ t dip into the coffer should be given a “ No Claim Discount ” ( NCD ) just like car insurers do . These will motivate people to remain healthy .

The next question is for economists and finance trained people to answer in a comprehensive manner . Who pays the premium for those who are unemployed , underemployed , unemployable , too young , too old , too sick to work ? I would like to raise some issues for them to ponder .

The logical answer would be the taxpayer . So , how do we encourage “ healthy lifestyle ” behaviours in these people so that they do not tax the healthcare system more than necessary ? This group of people don ’ t pay anything towards their healthcare costs but can significantly overburden the healthcare system .

Unnecessarily burdening the healthcare system is more than just an issue of money . A burdened healthcare system means less optimal care , shortages , medical errors and negligence . So , would it be a good idea to reward even those who can ’ t pay premiums to stay healthy and not burden the health care system ?

Or should we take a more utilitarian approach where only certain conditions such as accidents , emergencies , cancers , very old and very young are covered fully by a “ social non risk-rated ” model and everything else has to buy their own commercial risk-rated insurance or pay out-of-pocket ? In this model , it will become obvious to everyone that they better remain healthy as otherwise the treatment itself is going to cost them heavily . Also being sick will decrease their employment prospects .

This is a decision that society has to make for itself collectively .

At the end of the day , the biggest determinant of the efficacy of the healthcare system is the percentage of the population who are responsible and are incentivised enough to keep out of hospital because they have taken steps to remain healthy . This leaves the hospital uncrowded for those who become ill due to bad luck . — The Health

Dr Manimalar is Medical Lecturer and Consultant Histopathologist & Statistician , Department of Pathology , Faculty of Medicine , University of Malaya