The Economics of Public Health Care Reform in Advanced and Emerging Economies
Front Matter

Front Matter

Author(s):
David Coady, Benedict Clements, and Sanjeev Gupta
Published Date:
June 2012
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    © 2012 International Monetary Fund

    Cover design: IMF Multimedia Services Division

    Cover illustration: Design Army

    Typesetting: Maryland Composition, Inc.

    Cataloging-in-Publication Data

    The economics of public health care reform in advanced and emerging economies / editors, Benedict Clements, David Coady, and Sanjeev Gupta. – Washington, D.C. : International Monetary Fund, 2012.

    • p. ; cm.

    Includes bibliographical references.

    ISBN 978-1-61635-244-8

    1. Health care reform. 2. Health care reform—Developed countries. 3. Health care reform—Developing countries. 4. Health care reform—Case studies. I. Clements, Benedict J. II. Coady, David. III. Gupta, Sanjeev. IV. International Monetary Fund.

    RA384 .E26 2012

    Disclaimer: The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its members.

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    Contents

    Foreword

    The mandate of the International Monetary Fund is primarily focused on macroeconomic stability. While recognizing that the issue of health care reform has much broader implications, in this volume we look at health care reform through the lens of our mandate, focusing primarily on macroeconomic stability and—of special importance to us in the IMF’s Fiscal Affairs Department—on fiscal stability.

    Health care reform has key implications for fiscal stability. Public spending on health care has been a key driver of aggregate increases in public spending over the past 40 years. As discussed in this book, spending is projected to continue rising as a share of GDP unless reforms are undertaken to help break these trends. The projected increases in public health spending will take place at a time when most countries need to undertake large fiscal adjustments to help bring public debt ratios down to more prudent levels. In this light, public health care spending is indeed an important macro-fiscal issue. Moderating the growth of age-related spending, including on health, will have to be a major element of the fiscal consolidation strategy in the advanced economies over the coming years. For many emerging economies, the outlook for health spending is better, and immediate pressures are expected to be more benign. But it will by no means be easy for emerging economies to expand access to and improve the quality of health care services in light of the limited fiscal space to increase public health spending.

    Despite the fiscal importance of health care reform, there has been relatively little systematic work on the macro-fiscal implications of reforms in advanced economies and emerging markets. Recent work by the Fiscal Affairs Department has tried to fill that void, both by projecting future health care spending if current policies were to be maintained and by estimating the potential fiscal impact of various reform options to contain health spending growth. This book draws on a recent study on the macro-fiscal implications of health care reforms presented to the IMF Executive Board in January 2011 and on papers prepared by outside experts for conferences at the IMF Regional Offices for Europe and Asia and the Pacific in June 2011 and October 2011, respectively.

    An important objective of the IMF’s analytical work in this area—and of our continued dialogue with health experts—is to improve our understanding of how feasible it would be to slow down the projected growth of health spending. This, in turn, has an important bearing on the composition of fiscal consolidation strategies going forward, since insufficient scope for containing health spending increases would shift the burden of expenditure cuts to other areas or require revenues to increase.

    Health care reform is a difficult policy issue. It involves complex trade-offs between policy goals, such as ensuring access to high-quality health care and keeping public spending at fiscally affordable levels. Preferences regarding the role of the state in the provision and financing of health care services also vary significantly across countries. Many of these issues go beyond the scope of our work in this area. However, with a combination of cross-country analyses and case studies—and not least based on the stimulating debate within and outside the IMF on these issues—this book identifies potential policy responses to contain public health spending pressures in an efficient and equitable manner. Of course, much remains for us to learn, and the IMF will continue to stay abreast of new developments and insights in this complex area of policy.

    Carlo Cottarelli

    Director

    Fiscal Affairs Department

    International Monetary Fund

    Acknowledgments

    We first would like to thank the contributing authors. Without their hard work and dedication, this book would not have been possible. The book has also benefited from the comments of staff in the IMF’s Fiscal Affairs Department, staff in other IMF departments, and seminar participants from the European Commission, the World Bank, and the Organization for Economic Cooperation and Development. Many of the chapters in this volume were presented as papers at IMF health conferences in Paris in June 2011 and Tokyo in October 2011. We would like to thank conference participants for their valuable comments.

    We are grateful to Joanne Blake and Michael Harrup of the IMF’s External Relations Department for managing the production of the book. We are thankful to Pierre Jean Albert, Jeffrey Pichocki, and Mileva Radisavljevic, staff in the Fiscal Affairs Department’s Expenditure Policy Division, for their support throughout the entire process. We are also grateful to Baoping Shang—who worked with us from the beginning when the book project was conceived—for his written contributions and efforts to ensure that all steps in the production process were followed in a timely manner.

    Benedict Clements

    David Coady

    Sanjeev Gupta

    Abbreviations

    AMNOG

    Arzneimittelmarktneuordnungsgesetz (law regulating reimbursement for drugs) (Germany)

    ASEAN

    Association of Southeast Asian Nations

    BNHI

    Bureau of National Health Insurance (Taiwan Province of China)

    CAGR

    compound annual growth rate

    CAPB

    cyclically adjusted primary balance

    CDHC

    consumer-directed health care

    CHIP

    Children’s Health Insurance Program (United States)

    CSMBS

    Civil Servant Medical Benefit Scheme (Thailand)

    DALY

    disability-adjusted life-year

    DEA

    data envelopment analysis

    DMP

    disease management program

    DRG

    diagnosis-related group

    EAP

    East Asia and the Pacific

    ECG

    excess cost growth

    FDH

    free disposable hull

    G2 NHI

    Second-Generation National Health Insurance (Taiwan Province of China)

    G-BA

    Gemeinsamer Bundesausschuss (Federal Joint Committee) (Germany)

    GP

    general practitioner

    GSDP

    gross state domestic product (India)

    HIF

    Health Insurance Fund (Hungary)

    HISRO

    Health Insurance System Research Office (Thailand)

    HITAP

    Health Intervention and Technology Assessment Program (Thailand)

    HMO

    health maintenance organization

    HSA

    health savings account

    HSRI

    Health Systems Research Institute (Thailand)

    IHPP

    International Health Policy Program (Thailand)

    IQWiG

    Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen (Institute for Quality and Efficiency in Health Care) (Germany)

    LTC

    long-term care

    NCD

    noncommunicable disease

    NHA

    National Health Account (Thailand)

    NHI

    national health insurance

    NHI

    National Health Insurance (Japan, Taiwan Province of China)

    NHIC

    National Health Insurance Corporation (Republic of Korea)

    NHS

    National Health Service (U.K.)

    NRHM

    National Rural Health Mission (India)

    OECD

    Organization for Economic Cooperation and Development

    OLS

    ordinary least squares

    OOP

    out of pocket

    PHI

    Popular Health Insurance (Mexico)

    PPP

    purchasing power parity

    QALY

    quality-adjusted life-year

    RSBY

    Rashtriya Swastya Bima Yojana (health insurance scheme for those below the poverty line) (India)

    SHI

    statutory health insurance

    SHI

    social health insurance (Thailand)

    UHC

    universal health coverage

    WHO

    World Health Organization

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