Filenews 17 July 2022
By Andreas Papakonstantinou*
2021 was the first year in which a representative picture was reflected regarding the total revenues of the General Health System (System), which amounted to €1.32 billion and are analyzed as follows: GRAPHIC 1A - 1B.
Contributions
Total revenues from contributions in 2021 amounted to €1.19 billion, which have been paid mainly by the state, employers and employees. The participation of the three social partners in the financing of the System through contributions in absolute numbers as well as in percentages is analyzed below: GRAPHIC 2A - 2B
The way the System is financed through contributions serves one of the four fundamental principles of the System, the principle of solidarity, where the contribution of each citizen is made on the basis of his financial capacity. In this way, the one who receives high incomes pays more contributions (an income cap has been set at €180,000), compared to another, who has limited or no incomes (unemployed).
Contribution financing is the most popular way to finance a health system (Bismark model). There is of course also the model where the budget of a health system is financed directly from the state budget (Beveridge model), but in general the trend internationally leans towards the Bismark model, where there is less state interventionism and contributes to a more direct, active and responsible participation of the citizen in the system, through the payment of contributions and supplements (awareness).
Here it should be mentioned that the logic of the management of the System by the representatives of the contributions themselves (social partners) is considered a very good practice, where to the extent possible the responsible management of the revenues of the System is ensured, since the members of the Board of Directors of the Health Insurance Organization are essentially called upon to manage their "own" contributions wisely.
The combination of the above two factors, namely on the one hand the System to be financed by contributions and on the other hand the participation of the social partners in the Board of Directors, creates the conditions for a balanced approach to issues of critical importance. For example, while there is a general tendency for organizations to demand an enrichment of the system's service package for the benefit of their patients - members, at the same time they know that any excessive requests can lead to a financial burden on their member contributions, through any forced increase in contribution rates. That is why, when the two are disconnected, that is, some decide on the package and others decide on the financing, conditions are created for constant and barren confrontations.
Of course, the above in no way negates the need for the support of the members of the Board of Directors by various advisory committees, consisting of specialized individuals, depending on the subject. This is imperative, since the members of the Board of Directors regardless of their academic or other capacity would never be able to know all the specialized issues (eg financial, medical, legal). In this context, a significant number of such specialized committees have been set up in the Health Insurance Organization.
Supplements
In absolute numbers, the additions in 2021 amounted to €45m and are analyzed as follows: GRAPHIC 3A - 3B
The additions, as a percentage of the total revenues, were limited to 3.4% of the total revenues, which is considered as a very positive element, since as a general rule, as this percentage increases, the logic of the existence of a general health system is negated, since the burden of funding through the supplements is passed on from the contribution to the user / patient, resulting in the creation of an unequal system, where access depends more on the patient's financial capacity.
Of course, it would be a mistake to completely deconstruct the importance of supplements. Essentially, the application of supplements, in addition to being a small source of revenue, helps to limit the moral hazard phenomenon, which is caused when the service is provided completely free of charge at the level of the user, resulting in the user (patient) showing a tendency to "irresponsible" behaviour, constantly seeking to receive services that, based on his state of health, they are not justified. Hence the plausible argument from some mainly providers that any increase in supplements will significantly reduce abuses.
Having in mind the above, the equilibrium point is reached where the amount of the supplements is determined so that on the one hand it discourages the patient from operating wastefully within the system but also on the other hand not to discourage him from receiving services in a timely manner when these are necessary for his health. This is very difficult in practice, since each user - beneficiary of the System has a different sensitivity compared to any co-payment (price elasticity of demand). That is, the amount of €10 co-payment is expected to affect very differently the behaviour of a rich person, compared to a poor person. This could be addressed by applying different amounts of supplements per beneficiary (e.g. instead of a fixed amount of co-payment, the co-payment being determined as a fixed percentage of the income), but in such a case the System becomes dangerously complex, increasing the cost and the degree of difficulty of proper management and control of the System, as well as its understanding on the part of the beneficiaries.
Therefore, as a rule, it is right to limit supplements to low levels and generally apply them in a relatively simple way, which seems to have been achieved in the GHS. It is also recalled that the GHS also applies an annual ceiling of total additions, further strengthening the financial protection of the beneficiary. It is also advisable that the additions are applied more strongly to services where the beneficiary seems to have a greater active participation in the abuses (e.g. outpatient services instead of inpatient services). In addition, they can be applied more strongly to services where they are considered "not so necessary" or "trial stage" or "luxury". As for the topic of dealing with abuses, this is what we will analyze in another article.
Finally, it should be remembered that the GHS has a very strict funding framework, since it is obliged to remain constantly financially viable, that is, its expenses do not exceed its revenues. Bearing in mind that the revenues come mainly from the above two specific sources (contributions and supplements), whose increase in absolute numbers is intertwined with the development of the economy and given that no one favours an increase in the contribution rates, any proposals concerning the inclusion of additional services in the System should be made, to be evaluated on the one hand with the greatest sensitivity to the needs of our patients, on the other hand with great care, since any additional service added will be an annual recurrent expenditure, which was obviously not foreseen in the initial financial planning.
The above, although aimed at the general information on GHS issues, may also be useful, given that we are going through an election period, during which there is a risk of an increased tendency to submit proposals for the inclusion of additional services in the General Health System.
* Director of the Health Insurance Organization (HIO)
(The opinions expressed in this article reflect only the views of the columnist).
