Market failure in long-term private health insurance markets: a proposed solution

Recently, private health insurance rates have declined in many countries. In places requiring community rating in their health insurance premiums, a major cause is age-based adverse selection. However, even in countries without community rating, a de facto type of partial community rating tends to occur. In this note, a modified version of Pauly et al.'s guaranteed renewability model, which addresses the problem of age-based adverse selection (Pauly et al., 1995) is presented. Their model is extended from three to 35 periods. Also, probabilities are allowed to increase by age for low-risk types using actual age-based probabilities. This extension of their work shows that private health insurance contracts available stray far from optimal contracts that deal with age-based adverse selection. This suggests that government actions to affect private insurance options are warranted.

Lifetime Subsidies in Australian Private Health Insurance Markets with Community Rating

This paper considers the problem of inducing low-risk individuals of all ages to buy private health insurance in Australia. Our proposed subsidy scheme improves upon the age-based penalty scheme under the current "Australian Lifetime Cover" (LTC) scheme. We generate an alternative subsidy profile that obviates adverse selection in private health insurance markets with mandated, age-based, community rating. Our proposal is novel in that we generate subsidies that are both risk- and age-specific, based upon actual risk probabilities. The approach we take may prove useful in other jurisdictions where the extant law mandates community rating in private health insurance markets. Furthermore, our approach is useful in jurisdictions that seek to maintain private insurance to complement existing universal public systems.

Health system reform in Mexico 5: Assessing the effect of the 2001-06 Mexican health reform: an interim report card

Since 2001, Mexico has been designing, legislating, and implementing a major health-system reform. A key component was the creation of Seguro Popular, which is intended to expand insurance coverage over 7 years to uninsured people, nearly half the total population at the start of 2001. The reform included five actions: legislation of entitlement per family affiliated which, with full implementation, will increase public spending on health by 0.8-1.0% of gross domestic product; creation of explicit benefits packages; allocation of monies to decentralised state ministries of health in proportion to number of families affiliated; division of federal resources flowing to states into separate funds for personal and non-personal health services; and creation of a fund to protect families against catastrophic health expenditures. Using the WHO health-systems framework, we used a wide range of datasets to assess the effect of this reform on different dimensions of the health system. Key findings include: affiliation is preferentially reaching the poor and the marginalised communities; federal non-social security expenditure in real per-head terms increased by 38% from 2000 to 2005; equity of public-health expenditure across states improved; Seguro Popular affiliates used more inpatient and outpatient services than uninsured people; effective coverage of 11 interventions has improved between 2000 and 2005-06; inequalities in effective coverage across states and wealth deciles has decreased over this period; catastrophic expenditures for Seguro Popular affiliates are lower than for uninsured people even though use of services has increased. We present some lessons for Mexico based on this interim evaluation and explore implications for other countries considering health reforms.

Lifetime cover in private insurance markets

In the last few decades, private health insurance rates have declined in many countries. In countries and states with community rating, a major cause is adverse selection. In order to address age-based adverse selection, Australia has recently begun a novel approach which imposes stiff penalties for buying private insurance later in life, when expected costs are higher. In this paper, we analyze Australiarsquos Lifetime Cover in the context of a modified version of the Rothschild-Stiglitz insurance model (Rothschild and Stiglitz, 1976). We allow empirically-based probabilities to increase by age for low-risk types. The model highlights the shortcomings of the Australian plan. Based on empirically-based probabilities of illness, we predict that Lifetime Cover will not arrest adverse selection. The model has many policy implications for government regulation encouraging long-term health coverage.

Never-married childless women in Australia: Health and social circumstances in older age

A growing proportion of women reach older age without having married or having children. Assumptions that these older women are lonely, impoverished, and high users of social and health services are based on little evidence. This paper uses data from the Older cohort of the Australian Longitudinal Study on Women's Health to describe self-reported demographics, physical and emotional health, and use of services among 10,108 women aged 73-78, of whom 2.7% are never-married and childless. The most striking characteristic of this group is their high levels of education, which are associated with fewer reported financial difficulties and higher rates of private health insurance. There are few differences in self-reported physical or emotional health or use of health services between these and other groups of older women. Compared with older married women with children, they make higher use of formal services such as home maintenance and meal services, and are also more likely to provide volunteer services and belong to social groups. Overall, there is no evidence to suggest that these women are a problem group. Rather, it seems that their life experiences and opportunities prepare them for a successful and productive older age. (c) 2005 Elsevier Ltd. All rights reserved.

Quantifying the use of the statin antilipemic drugs: Comparisons and contrasts between Nova Scotia, Canada, and Queensland, Australia

Background: jurisdictions are developing public drug insurance systems to improve access to pharmaceuticals, cost-effective prescribing, and patient health and well-being. We compared 2 Jurisdictions with different pharmaceutical policies to determine prescribing patterns for 3-hydroxy-3-methylglutaryl coenzyme A reductase inhibitors (le, statins). Objective: The aim of this work was to investigate the feasibility of using available prescription admimstrative databases to compare the use of statins in Queensland, Australia, and in Nova Scotia, Canada. Methods: Data from the Nova Scotia Pharmacare Program and the Health Insurance Commission in Australia were used to obtain dispensing data. Utilization was compared for the 5-year period from 1997 through 2001, using the World Health Organization anatomic therapeutic chemical/defined daily dose (DDD) system. Results: In the year 2001, there were 177,000 beneficiaries in the public drug plan in Nova Scotia (62% aged ≥ 65 years old) and 960,000 concession beneficiaries (pensioners and social security recipients, 61% aged ≥ 65 years) in Queensland. These 2 groups were comparable. The overall utilization of statin medications increased steadily in both areas over the study period, from 50 to 205 DDD/1000 beneficiaries per day. Comparison of the 2 growth lines showed no statistically significant differences in overall statin use despite differences in brand availabilities and policies about prescribing. In the year 2001, atorvastatin was the most commonly prescribed statin in both areas, comprising 46% of statin use in Nova Scotia and 51% in Queensland. Mean doses of each statin prescribed were slightly above the DDDs. Expenditure on statins per 1000 beneficiaries and per DDD were similar in each jurisdiction, being slightly higher in Nova Scotia. Conclusions: Despite differences in pharmaceutical reimbursement systems, use of the statins was similar in Nova Scotia and Queensland. The feasibility of the methodology was demonstrated. Future studies, including comparisons of drug utilization for other classes of drugs for which drug policies may be divergent (eg, different pricing structures or prior authorization requirements), or for which less evidence for appropriate use is available, may be useful. © 2005 Excerpta Medica, Inc.

Remunerating private psychiatrists for participating in case conferences

ABSTRACT : BACKGROUND : On 1 November 2000, a series of new item numbers was added to the Medicare Benefits Schedule, which allowed for case conferences between physicians (including psychiatrists) and other multidisciplinary providers. On 1 November 2002, an additional set of numbers was added, designed especially for use by psychiatrists. This paper reports the findings of an evaluation of these item numbers. RESULTS : The uptake of the item numbers in the three years post their introduction was low to moderate at best. Eighty nine psychiatrists rendered 479 case conferences at a cost to the Health Insurance Commission of $70,584. Psychiatrists who have used the item numbers are generally positive about them, as are consumers. Psychiatrists who have not used them have generally not done so because of a lack of knowledge, rather than direct opposition. The use of the item numbers is increasing over time, perhaps as psychiatrists become more aware of their existence and of their utility in maximising quality of care. CONCLUSION : The case conferencing item numbers have potential, but as yet this potential is not being realised. Some small changes to the conditions associated with the use of the item numbers could assist their uptake.

The role of catastrophic misinterpretation of bodily sensations and panic self-efficacy in predicting panic severity

This study investigated the role of both negative and positive cognitions in predicting panic severity in an international sample of patients diagnosed with panic disorder (with and without agoraphobia). One hundred and fifty-nine patients were administered the Brief Bodily Sensations Interpretation Questionnaire (BBSIQ), the Self-efficacy to Control Panic Attacks Questionnaire, and the Panic and Agoraphobia Scale (PAS) prior to receiving treatment. Regression analyses indicated that both catastrophic misinterpretation of bodily sensations and panic self-efficacy independently predicted panic severity. The influence of panic self-efficacy upon panic severity remained significant even after controlling for the presence or absence of agoraphobia. There was no evidence to suggest a moderating relationship between the two cognitive factors. Results are discussed in terms of the need to consider both negative and positive cognitions in cognitive accounts of panic disorder. (C) 2002 Elsevier Science Inc. All rights reserved.

Cognitive mediation of panic severity: The role of catastrophic misinterpretation of bodily sensations and panic self-efficacy

This study examined the differential role of negative and positive cognitions in mediating treatment outcome in CBT for Panic Disorder through comparison of a Standard CBT (n = 36) versus a Waitlist Condition (n = 24). Regression analyses indicated that, relative to the Waitlist Condition, patients in the Standard CBT condition reported significantly greater shifts both towards higher panic self-efficacy and lower catastrophic misinterpretation of bodily sensations during treatment, as well as a significantly lower level of panic severity at posttreatment. Changes in catastrophic misinterpretation of bodily sensations and panic self-efficacy contributed significantly more to prediction of panic severity than did assignment to either Standard CB T or a Waitlist Condition. Results are discussed in terms of the importance of including both negative and positive cognitions in demonstrating cognitive mediation.