Global healthcare and Insurance Companies
Points of Intersection in an Interconnected World
Dr. Marshall Schwartz, MD President of GlobeHealer
Providing medical care to global citizens necessitates an understanding of healthcare worldwide. Unfortunately, healthcare practices and capabilities are far from uniform between different nations, cultures and societies. This fact alone complicates the implementation and execution of any sustainable, science-based, well-funded and thoroughly considered strategy to help people attain the highest level of medical care independent of borders or geography.
Globalism as a philosophical perspective proffers the view that the growing interdependence and interconnectedness of the world’s population will create a more peaceful and verdant world. The integrity and success of international entities faces challenges from many opposing forces, such as major demographic shifts and increased social conflicts. The permeability of borders and rapid means of international travel attests to the fact that nations and medicine no longer live in isolated, discrete ecosystems. In the business of healthcare and health insurance, these barriers hamper insurance company’s entry and expansion into international markets.
There are 196 countries in the world, each with its’ own laws, regulations and capabilities to keep people healthy, tend to the sick and guard against escalating healthcare associated costs. How can any individual insurance company hope to compete, thrive and expand in vastly different countries such as the United States, with a system that blends public and private payers, to countries in Europe or Asia, some of which provide universal health coverage to their citizens? While a country by country analysis would clarify local variations and potential pitfalls facing insurance company’s entry into foreign countries, we do not need to study 196 different systems to understand how other countries manage healthcare because these systems tend to follow four, general structures.
Most European nations, for instance, provide a publicly sponsored single-payer health system to contain costs, incentivize preventative care, and avoid unnecessary procedures and testing. Single-payer systems achieve near universal health insurance coverage among their citizens. This is why single payer systems are also known as universal healthcare systems, providing so called “Socialized Medicine.” In this system, health care is provided, regulated and financed by the government through general tax revenue. Many, but not all, hospitals and clinics are owned by the government, some physicians are government employees, but there are also private doctors who collect their fees from the government. Single-payer models place healthcare delivery and organization in the hands of the government, which provides statutory health insurance for all citizens and pays most healthcare expenses except for copays and coinsurance. In a recent analysis conducted by the Commonwealth Fund, nearly 100% of all the citizens in France, Italy, Sweden and Switzerland received coverage from government-based health insurance. In 2001, Thailand became the first southeast Asian country to institute a single-payer model, and today, the Thai universal coverage scheme provides free basic healthcare coverage to 50 million of its citizens. Then in 2006, the United Arab Eremites followed suit and became the first country in the Middle East to institute a single-payer system.
Germany and England are notable exceptions in Europe, maintaining a “two-tiered” healthcare system. In Germany, England, Israel, Ireland and Singapore, the government provides a statutory health insurance coverage for all citizens. Concomitantly, citizens in these countries have the option to opt out of public insurance plans and purchase substitutive coverage, which may offer complementary or supplementary coverage. Essentially, this two-tiered system creates a private insurance marketplace. In Germany alone there are 124 private insurance companies competing among each other. Given the sheer number of insurance options providing access to healthcare services, Germany and England are obvious outliers in Europe with only 89% of their populations receiving government-based insurance coverage.
In Singapore, however, all citizens receive a government provided catastrophic health policy and a health savings account to pay for routine care even if they opt out of a public plan. Akin to single-payer systems, two-tiered systems tend to have low costs per capita, because the government influences physician practices and what they can charge.
Following Single-Payer and Two-Tiered healthcare systems is the “mandated-insurance” model. Unlike the two previous models, a “mandated-insurance” is one in which the government requires all citizens to purchase insurance. This system is typified in the United States of America, where citizens must acquire insurance from either private, public (Medicare and Medicaid), or non-profit insurers. In some states, the number of available insurance plans is quite limited, while in others a diverse insurance market is available and regulated by the government. In the United States mandated system insurance companies are barred from rejecting individuals with pre-existing conditions, but individuals must purchase insurance to ensure these fee-for-service plans are affordable to those they serve.
The final insurance scheme is the “out-of-pocket model.” In this system, healthcare is dominated by private insurance companies, although various government-financed health insurance plans are available for indigent and vulnerable populations to improve healthcare access and reduce out-of-pocket payments. India is the example par excellence of this model and currently, the majority of Indian citizens lack health insurance and must pay for treatment “out of pocket.” There are several Government sponsored hospitals providing free treatment and prescription drugs at the expense of taxpayers, however, healthcare delivery in India largely depends on the patient’s financial condition. Some government-run hospitals and health clinics in rural areas provide free treatment for common diseases, malnutrition, pregnancy, child birth, and also offer free immunizations. For more complicated conditions, or those requiring specialty intervention, patients are referred to secondary or tertiary care hospitals. The inconsistent quality of care and unsanitary conditions found in government-run hospitals fostered the growth of private insurance companies and hospitals. Those who can afford private insurance inevitably prefer treatment at a privately-run hospital. This private marketplace separates rich from poor, and leaves many quality medical care is unaffordable and inaccessible to many citizens.
How can any policy or view of healthcare delivery address the such a diverse range of issues in vastly different countries such as the United States, with a system that blends public and private payers, to countries in Europe or Asia, some of which provide universal health coverage to their citizens? Policy wonks and healthcare experts around the world posit that these issues are irremediable.
From this brief analysis of the four, primary health insurance systems used on our planet, it is clear that “developing a global health insurance strategy [first requires] an assessment of the legal and regulatory climate in the target country or region, as well as market demographics or needs.” And Insurance company’s seeking to enter or expand into international markets face the following barriers;
- Political risks
- Cultural barriers
- Infrastructure characteristics
- Demand for private health insurance
- Economic Factors
- Private health insurance fit with market needs
- The need to develop or acquire a distribution system
- Geographic distance
- Presence or absence of copayments
Although this list is far from complete and the magnitude of each barriers depends on the specific country of interest, GlobeHealer as our name implies is a global entity seeking to alleviate gaps in healthcare around the world. We are globalists who believe in the import and integrity of a globalized and interconnected world. We believe sharing information leads to mutual advancement and improved outcomes in healthcare delivery for patients and populations. Providing quality and cost information turns an opaque healthcare system into one that empowers patients and delivers equitable, patient-focused care.
Currently, healthcare systems are nationalistic and focus exclusively on the health of their country’s people. There are, of course, global health agencies, such as the World Health Organization and Doctors Without Borders, and there are local agencies that serve specific regions, but the story told by the allocation of political will and funding structures is that the responsibility for collective health is primarily national (e.g. Centers for Disease Control and Prevention, National Institutes of Health, and etc.). Our company addresses this “informational asymmetry” by gathering healthcare data from countries in Europe, Asia, North America and the Middle East to define then compare the precise costs and quality of medical care throughout the world.
 E. Mossialos, M. Wenzl, R. Osborn, and D. Sarnak (eds.), International Profiles of Health Care Systems, 2015, The Commonwealth Fund, January 2016.
 Business for Social Responsibility Guiding Principles on Access to Healthcare: http://gpah.bsr.org/en/principles