Health Care Spending in the New EU Member States: by Mukesh Chawla

By Mukesh Chawla

Following the transition from vital making plans towards market-based economies, the previously communist states of imperative and jap Europe brought a couple of reforms within the finance, administration, and association of the healthiness zone. whereas health and wellbeing quarter reforms in those nations have concerned deep structural alterations, they've got in general been much less profitable in bettering potency, bettering fairness in healthcare financing and supply, and handling medical caliber of well-being prone. overall health and wellbeing charges have elevated in just about all international locations, specifically lately, and with sales no longer conserving speed, large bills have amassed within the health and wellbeing region. potency profits were few and much among, and with the dynamic nature of know-how and demographic adjustments expanding the complexity of healthiness prone and the well-being industry, extra reforms have gotten much more tough. This file takes inventory of modern traits in overall healthiness expenditure aggregates within the public area and identifies particular parts of well-being expenditure reform in step with the targets of stabilizing the financial state of affairs in those international locations (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia) with out adversely affecting the creation, supply and usage of healthiness prone.

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Extra info for Health Care Spending in the New EU Member States: Controlling Costs and Improving Quality (World Bank Working Papers)

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In addition to price controls, the regulation of the consumption of pharmaceuticals is critical in order to contain expenditures on drugs. Most countries have adopted demand-side measures for controlling consumption, and cost-sharing has proven to be the most effective measure. In the Netherlands, for example, the introduction of copayments on prescribed pharmaceuticals (a fixed amount per prescription), led to a substantial decrease in the total number of prescriptions. When this was compensated by an increase in the prescription size (pharmaceuticals per prescription), and in quantities prescribed, the government responded by limiting the number of drugs per prescription and allowing virtually unlimited cheaper prescriptions (HIT Netherlands 2004).

There also are significant incentives for private health insurers to engage in “cream-skimming,” the practice of covering low-risk persons and not serving a broad range of risk profiles. This can be done by refusing to offer or renew coverage to highrisk individuals or charging significantly higher rates to such individuals (thereby reducing the likelihood that they will purchase coverage and making them pay a higher premium if they do). ” This practice can serve the important purpose of protecting insurers against adverse selection.

23. ” 40 World Bank Working Paper covered populations, the presence or absence of a risk adjustment or cross-subsidization mechanism among insurers and between the public and private system, and the extent to which there are existing inefficiencies in the system that private insurance could address (and that could not otherwise be addressed through public financing). Finally, private insurers may promote innovation in financing and delivery, help offer consumers a broader choice of providers and create incentives for more efficiency in aspects of the system.

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