1 Asian experiences of the extension of social security coverage - focus on health care 15 October 2007 Bangkok Hiroshi Yamabana Social Security Specialist ILO SRO-Bangkok

2 Structure of the presentation 1.‘Universal coverage’ in Asia 2.Health case as priority 3.Health care financing 4.Where are we on the development? 5.Concluding remarks

3 ‘Universal Coverage’ in Asia 1. ‘Universal Coverage’ in Asia Major two groups Major two groups -Taxation group: Australia, New Zealand =>High compliance Modest benefit level (in case of pensions) -Social Insurance Group: Korea, Japan =>Relatively low compliance Modest benefit level (in case of pensions) Relatively high copayment (health)

4 2.Health as priority 80% of the world population does not have access to adequate social protection, most of them live in social insecurity. 80% of the world population does not have access to adequate social protection, most of them live in social insecurity. Every year 100 million people globally are forced into poverty by health care costs. Every year 100 million people globally are forced into poverty by health care costs. Worldwide, 178 million people are exposed to catastrophic health costs. Worldwide, 178 million people are exposed to catastrophic health costs. =>Notorious vicious circle of poverty and health

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7 Social protection needs of non-covered population - case of Thailand Pensions include “Death of income earner”, “Old-age”, “Disability”, and “Funeral” Agricultural protection includes “Loss of harvest” and “Loss of livestock.”

8 How about affordability - case of Thailand

9 3.Health care financing 1.Where is the financing coming from? Public / private / donor financing Public / private / donor financing 2.Who pays to medical providers? Medical case purchase institutions (e.g. health insurance organizations)? 3.How is the payment paid to medical providers? -Prepayment (risk pooling) / post payment ( out-of-pocket, non risk pooling) -Fee-for-service / case payment / capitation etc.

10 Achieving the Health Millennium Development Goals in Asia and the Pacific, UNESCAP 2007

11 Total health expenditure as a percentage of GDP

12 Public / private health expenditure per capita (OECD countries)

13 Financing of global expenditure on health

14 AFR: Africa, AMR: Americas, EMR: East Mediterranean, EUR: Europe, SEAR: South East Asia, WPR: Western Pacific Source: NHA Unit, EIP/FER/RER, World Health Organization

15 Public expenditure on health as a percentage of total health expenditure

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17 Prepayment in the OECD countries * Health expenditure financed via UC health financing system/total health expenditure, Source: WHO

18 Prepayment ratios in selected SHI systems (2001) Source: WHO (2001)

19 Source: WHO (2001)

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21 3.Where are we on the development? Source: Achieving the Health Millennium Development Goals in Asia and the Pacific, UNESCAP 2007

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23 Source: Social Health Insurance, Selected Case Studies from Asia and the Pacific, WHO 2005

24 Source: Social Health Insurance, Selected Case Studies from Asia and the Pacific, WHO 2005

25 Development of Thailand Source: Dr. Pongpisut Jongudomsuk, NHSO, Thailand

26 Japanese experiences on extension of coverage

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30 Source: Prof. William C. Hsiao, Harvard University

31 Example of different approaches 1.Developed countries Australia, New Zealand Australia, New Zealand Tax-based universal scheme Japan, Korea Japan, Korea Social insurance approach (substantially subsidized, e.g. 50% benefit cost of self- employed in Japan, 40% in Korea) with a supplement of social assistance Singapore Singapore Social insurance approach, mixes of individual savings and risk-pooling for high-cost care

32 Example of approaches of different countries 2.Middle-income countries Thailand Thailand Mixed approach of social insurance (private-sector workers) and tax-based approaches for civil servants and the others Malaysia, Sri Lanka Malaysia, Sri Lanka Tax-based public medical institutions (low charges or free-of-charge) plus private insurances for some companies

33 Example of approaches of different countries 3.Developing countries Vietnam Vietnam Mixed approaches of totally subsidized persons (e.g. war veterans, the poorest), compulsory insured persons (formal-sector employees) and voluntary insurance (CBHIs) under one umbrella (VSS) Lao PDR Lao PDR Mixed approach of compulsory social insurance (private- and public-sector workers), voluntary insurance (CBHIs) and totally subsidized persons by donors (HEFs) Cambodia Cambodia Mixed approach of voluntary insurance (CBHIs) and totally subsidized persons by donors (HEFs), yet no mechanism functioning for formal sector

34 5.Concluding remarks Taking into account the different stage of social and economic development of the present and the future situation, especially: Taking into account the different stage of social and economic development of the present and the future situation, especially: -percentages of those working for the primary sector (farmers, fishermen), -percentage of those working for ‘informal’ economy’, -percentage of the ‘poor’ who may not be able to afford contributions, what is and will be the most adequate sequence of strategy of extending coverage in a country?

35 Substantial government subsidies from taxation seem to be essential for the coverage of the ‘informal’ economy workers and non-workers (Australia, New Zealand, Japan, Korea, Thailand), taking into account low average income of those people, difficulties of administering the targets (registration, income assessments, contribution collections). Substantial government subsidies from taxation seem to be essential for the coverage of the ‘informal’ economy workers and non-workers (Australia, New Zealand, Japan, Korea, Thailand), taking into account low average income of those people, difficulties of administering the targets (registration, income assessments, contribution collections). How far could be handled through ‘voluntary’ mechanism, taking into account the affordability of low-income earners, the possible no-interest, adverse selections, administration cost and financial sustainability? Should it be considered as a transitory measure? How far could be handled through ‘voluntary’ mechanism, taking into account the affordability of low-income earners, the possible no-interest, adverse selections, administration cost and financial sustainability? Should it be considered as a transitory measure?

36 How can we guarantee the linkage / coordination / integration of the financing and the administration between national insurance schemes, CBHIs and HEFs? How can we guarantee the linkage / coordination / integration of the financing and the administration between national insurance schemes, CBHIs and HEFs? How can we better redistribute financial resources among schemes (better risk pooling, ensuring equities)? How can we better redistribute financial resources among schemes (better risk pooling, ensuring equities)?