How best to pay for health care?

Different countries have developed varying ways of funding essential medical services

 People stream through the halls of Burjeel Hospital in Abu Dhabi. Silvia Razgova / The National
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Everybody gets sick and illness is often a burden on our wallets due to the high cost of drugs and medical procedures. As our life expectancies increase, thanks largely to advancements in medicine, so does the national healthcare bill, placing a burden on individuals, families and the community.

Governments have long played a role in health care, not least in overseeing standards of care and the qualifications of medical professionals. In many countries, there is a system of universal health care where basic medical treatment is available to everybody and funded by the government through taxation revenue. While the nature of what is and what is not covered varies from place to place, this system, augmented by premium private care, exists in most western European countries, Australia and Canada. An example of this is the National Health Service in the United Kingdom.

Arguably, these systems function best in poor, authoritarian countries such as Cuba, where costs can be kept low.

At the other extreme are systems where all citizens are deemed responsible for their own health care – either by paying for treatment as needed or by taking out private health insurance. Health insurance is sometimes paid for by employers as an employee benefit. This user-pays model has long been in place in the United States, and is still the norm despite attempts by former president Barack Obama to introduce a universal healthcare model.

Co-payment systems – where patients who otherwise have comprehensive health insurance are required to pay either a flat fee or a percentage of the cost of treatment – are being embraced in some countries as an affordable middle position.

One model for this is Singapore’s health system, which Bloomberg ranked as the world’s most efficient in 2014, and second best in 2015. A key plank of the system is that no medical service is provided free of charge. The amount paid by the patient is, however, subsidised under a nationalised health insurance plan that is funded by compulsory payroll deductions. The scheme is set up to protect individual patients from having to pay exorbitant costs in the case of a major illness or accident.

Proponents of co-payment systems point out that their greatest benefit is that they prevent people from presenting at medical clinics or hospital emergency departures with minor illnesses or injuries. This means more efficient use of medical staff and resources.

In the UAE, there has been a steady move towards ensuring all employees have health insurance, with a requirement that employers provide a minimum standard of cover. In Dubai, Emiratis who are not covered by any other scheme qualify for Saada, which allows access to a range of treatment options. For Thiqa plan holders in Abu Dhabi, treatment in public hospitals remains free but a 20 per cent fee applies for the use of private hospitals.

As in other countries, the discussion continues about the most appropriate, efficient and affordable healthcare solution.