- David Coady, Benedict Clements, and Sanjeev Gupta
- Published Date:
- June 2012
© 2012 International Monetary Fund
Cover design: IMF Multimedia Services Division
Cover illustration: Design Army
Typesetting: Maryland Composition, Inc.
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.
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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Sanjeev Gupta, Benedict Clements, and David Coady
David Coady and Kenichiro Kashiwase
Mauricio Soto, Baoping Shang, and David Coady
Ludwig Kanzler and Alexander Ng
Tsung-Mei Cheng and Uwe E. Reinhardt
Justin Tyson, Kenichiro Kashiwase, Mauricio Soto, and Benedict Clements
Eva Jenkner, Baoping Shang, and Benedict Clements
John C. Langenbrunner and Ajay Tandon
Jonathan Skinner and Catherine Suarez
Justin Tyson and Izabela Karpowicz
M. Govinda Rao and Mita Choudhury
Pongpisut Jongudomsuk, Supon Limwattananon, Phusit Prakongsai, Samrit Srithamrongsawat, Kumaree Pachanee, Adun Mohara, Walaiporn Patcharanarumol, and Viroj Tangcharoensathien
Baoping Shang and Eva Jenkner
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.
Fiscal Affairs Department
International Monetary Fund
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.
Arzneimittelmarktneuordnungsgesetz (law regulating reimbursement for drugs) (Germany)ASEAN
Association of Southeast Asian NationsBNHI
Bureau of National Health Insurance (Taiwan Province of China)CAGR
compound annual growth rateCAPB
cyclically adjusted primary balanceCDHC
consumer-directed health careCHIP
Children’s Health Insurance Program (United States)CSMBS
Civil Servant Medical Benefit Scheme (Thailand)DALY
data envelopment analysisDMP
disease management programDRG
East Asia and the PacificECG
excess cost growthFDH
free disposable hullG2 NHI
Second-Generation National Health Insurance (Taiwan Province of China)G-BA
Gemeinsamer Bundesausschuss (Federal Joint Committee) (Germany)GP
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 organizationHSA
health savings accountHSRI
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
National Health Account (Thailand)NHI
national health insuranceNHI
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 DevelopmentOLS
ordinary least squaresOOP
out of pocketPHI
Popular Health Insurance (Mexico)PPP
purchasing power parityQALY
Rashtriya Swastya Bima Yojana (health insurance scheme for those below the poverty line) (India)SHI
statutory health insuranceSHI
social health insurance (Thailand)UHC
universal health coverageWHO
World Health Organization