ALLOWING commercial health insurance companies to introduce their concept of risk into the health insurance market would spell disaster for public health systems in Europe, an American academic has warned.
Dr Donald Light, Professor of Comparative Health Care Systems in the University of Medicine and Dentistry of New Jersey, was giving the keynote address at an international health-care conference in Dublin yesterday.
He outlined the history of health insurance in the US, pointing out that it had its origins in the non-profit-making Blue Cross insurance plans. However, when commercial insurance companies were allowed to come in the 1940s, no controls were placed on how they wrote policies. As a result they offered lower rates to the employers with younger, healthier employees, and created new policies for the most profitable and expensive forms of care.
"The use of selection and exclusion by the commercial health insurance companies undermined the non-selective, non-exclusive, community-rated practices of Blue Cross plans," he said.
They based their policies on actuarial "fairness", he said, which has as its central principle that low-risk groups should not subsidise high-risk groups. But this is the central flaw of allowing commercial insurance for health care.
"People have lives, from birth to death, and as they get older they get sicker. They need a lifelong system of coverage that does not discriminate against them as they gel older," he said.
He was addressing the conference of the Association Internationale de la Mutualile (AIM), an association of nonprofit-making health insurance companies from 22 countries. The conference is being hosted by the VHI.
Dr Light described coming from the US to the AIM conference as "like coming out of a storm into the sunlight". He praised AIM's stated purpose, "to uphold and strengthen social solidarity world-wide through the promotion of well-managed mutual benefit organisations".
He added: "By contrast, the purpose of American health insurance is to uphold and strengthen social division by age, social class and health risk through the promotion of profit."
This had led to a situation where one in three of the working poor had no health insurance, many of the middle class had only spotty coverage, and, according to a major study, 42 per cent of the families of the seriously ill under 45 lost most or all of their life savings.
"The main point is that AIM and its members constitute a valuable third way between slate health care and for-profit private markets," he said.
He outlined a number of benchmarks of fairness for health-care reform. These would include universal access, with mandatory coverage; comprehensive and uniform benefits, with no categorical exclusion of services; community rating and financing on an ability-to-pay basis; the minimisation of administration; and public accountability.
The rationing of health care should not be accepted as inevitable, he said. It could be avoided by eliminating waste, which was endemic in most health services through the existence of professional fiefdoms, which needed to be broken down and replaced by multi-skilled, flexible members of integrated clinical teams.
Hospitals were "bottomless pits for money", and rates of admission and lengths of stay could be drastically reduced.