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We’ve talked quite a bit about the worrying amount of uninsured individuals in the USA, and while we’ve mentioned underinsurance the focus has more been on the plight of individuals with no insurance whatsoever rather than policyholders whose plans are not overly comprehensive. A recent study, however, has shown that the number of underinsured Americans has increased a staggering 60% from 2003 to 2007. This is equivalent to almost 25 million Americans, and in a bizarre twist, many of these individuals are in the middle to high income ranges.

But what’s the issue? Many commentators will say that these underinsured individuals, while not being comprehensively covered by an insurance policy, still have some protection, and due to their above average incomes will be able to contribute towards the cost of any medical treatment that they receive with very little trouble. This may have been true 20 odd years ago, but in the modern world this could be considered slightly delusional.

With the levels medical inflation during the 1990’s and early 21^st century, specifically in the USA, it is no longer possible for moderately wealthy individuals or families to afford out-of-pocket payments for healthcare. In fact the inability to pay for medical costs has become the number one cause of personal bankruptcy in the USA. The issue is that despite the country having some of the best healthcare services in the world, a large portion of the population is completely unable to afford any treatment.

Now an onlooker may say, sure – but that’s individuals with no insurance – people who have insurance should be able to afford this coverage. And they would be right; to a point. The study defined underinsurance as anyone who has an annual health insurance but still contributes 10% of annual income towards medical costs, and whose deductibles were equal to a further 5% of their annual income. Low income individuals who spent 5% of their income on health insurance or deductibles also qualified for this bracket.

Think about that for a second, in the midst of a global credit crisis and worsening economic fortunes for the average American citizen, many of these individuals are spending between 10 and 15 % of their total annual income on healthcare, and for many of these people this is without having ever seen a doctor! Compound the actual deductibles and co-pays on top of this and the situation starts to look extremely grim indeed.

With medical inflation reaching levels never seen before many domestic insurance companies are scaling back coverage, without also scaling back premiums. This is understandable, however it leaves the average policyholder woefully unprotected. International insurance companies are realizing, however, that increased coverage is most definitely needed as the costs continue to rise. A great example of this would be seen with IHI Danmark’s travel insurance; over the last year IHI saw the increased need that travelers have for comprehensive protection and raised the overall maximum benefit of the policy to ‘Unlimited’. This means that under the new IHI travel policy there is no coverage limit, and this move has seen the company increase the number of policyholders obtaining these short term travel medical insurance policies.

Now obviously the above example would only work for individuals who are planning on being outside of their home country for a period of time, but the idea is clear. In a time when domestic health insurance companies in the USA are scaling back coverage a number of international insurers are going in the opposite direction and providing more.

The point is this, increasing premiums and healthcare costs in conjunction with lowered coverage is leading to more and more Americans finding themselves in a position where they are simply unable to access, or afford, the healthcare that they need. With a 60% increase in the number of underinsured Americans in the last 4 years, and the total number of Americans who are either uninsured or underinsured at 75,000,000, its not hard to see how this situation will worsen in the years to come.

Its no secret that the American healthcare system has some serious issues, from massive underinsurance to high treatment costs, the general outlook is pretty grim, which is why the issue has been a key point in the presidential election race. However, despite the rosy promises from the 3 main candidates the problems are about to get a whole lot worse. The issue is this, 78 million baby boomers (individuals who were born between 1946 and 1964) across the USA are about to reach retirement age and are entering a geriatric healthcare system that is simply not prepared for the patient load that it is about to receive.

As individuals age their propensity for developing a serious illness or chronic condition rise enormously, it is a simple truth that older people need more medical care than younger individuals. With this being common knowledge one would assume that the healthcare system would have adequately prepared for this eventuality, yet the reverse is true; doctors, medical facilities, and most importantly the domestic insurance industry, do not have access to the services required by geriatric patients.

An example of this upcoming fiasco can clearly be seen in California, where state legislature estimates that there is only one specialist geriatric doctor for every 4000 patients over the age of 65. In a situation like that there are going to be some serious problems, mainly pertaining to availability of treatment and quality of care especially when taking into account that a majority of these geriatric ‘specialists’ have received only rudimentary training and that doctors who have been trained in geriatric care are quickly moving to different specialties in search of better pay.

Add to this, already grim scenario, the shortfall in social security, the limited coverage offered by Medicare, and future budget cuts (expected to begin in July of this year), and essentially you are left with a healthcare system that is leaving a large proportion of Americans without the coverage, or treatment, that they deserve, but it doesn’t end there. As the healthcare system struggles to address the problem with the baby boomers other parts of the population will have services denied to them.

So what are the options? How can the system possibly cope with a patient load of this magnitude that will require constant care and attention without suffering? A good start would probably be to totally re-examine the system as it exists today. With millions of individuals either underinsured or with no insurance coverage whatsoever, the highest costs associated with medical treatment in the world, doctors with insufficient training, a high patient to doctor ratio, and a patient load that will increase every year, especially with regards to care intensive conditions (approximately 18% of the baby boomer population, or 14 million people, are expected to develop Alzheimer’s in their lifetime), it is difficult to see what can be done to resolve the matter of a system that is unable to cope with the burdens required of it.

One of the proposed solutions in to create a universal healthcare system that would be heavily subsidized by the government, however with the myriad of problems that currently exist in the system (namely healthcare in the USA being incredibly over burdened already) a universal healthcare service would be incredibly hard to implement. Add to this the wide ranging medical budget cuts, and it becomes evident that there is simply no room to create a national healthcare service providing low-cost, available care, despite the fact that this is tremendously appealing to the American public.

One, potentially, workable idea would be to subsidize the primary physicians as on of the major factors contributing to this situation arising is the extremely poor pay that frontline medical staff receive (half of the medical professionals providing care for the elderly receive less than US$ 9.56 an hour). If this is not workable, then perhaps low cost training could be used as an incentive to bring more qualified professionals to the field, as the training and qualification structure exists right now many doctors and nurses have to undergo extensive testing and, in some states, more than 150 hours on the job practice in order to be considered ‘geriatric qualified’; that’s a lot to ask for such poor reimbursement.

However, when looking at the reasons for this crisis and how it developed, a large amount of the blame seems to lay with Medicare, Medicaid, and the rest of the low-cost, ‘budget’, government backed insurers. By not providing quality coverage, creating absurdly low limits, and placing long lists of exclusions on many policies, these organizations don’t seem to have the interests of their policyholders, or the American public, at heart. Many elderly patients require care from a team, rather than just one medical professional, yet this extremely valuable service is not an included benefit under a Medicare plan, depriving these older policyholders the treatment that they need.

There is no easy or quick fix for the present medical nightmare that is about to hit the USA, all the proposed solutions, and even the possible solutions, will require a large amount of money and a complete shift in the way that Americans obtain their healthcare. All that can be done now is to wait for the major problems to start and address them as they happen, that or purchase an insurance policy from a company not linked to the US government.

In recent years, China has been facing a health care crisis in its rural regions. During China’s great Cultural Revolution and the several decades following it, rural health care was in prime form. Nine out of ten country people had access to subsidized health clinics run by government sponsored doctors. From 1952 to 1982, the infant mortality rate fell from 200 per 1,000 live births to only 34. Average life expectancy increased nearly doubled from 35 years of age to 68 years of age.

However, after an age of great development in health care, progress in rural China seems to be reversing. China’s nationwide push towards capitalist ideals has been a large cause of this. While China’s cities are developing at incredible speeds, rural China is being left in the dust. But ignoring these rural areas may end up hurting China as a whole if not dealt with soon.

Today, 79% of rural residents have little or no health insurance. With new capitalistic ideals, China’s hospitals have been told that they now need to finance a larger portion of their expenses themselves (previously, hospitals were heavily subsidized by the government). To cope with this, hospitals are increasing fees for their patients. It follows that out-of-pocket spending for country residents on health care is sky-high.

It is no doubt that China’s economy has been booming. A look at almost any economic measure shows significant progress. For the past 20 years, average annual GDP growth has been a stunning 9.7%. According to the World Bank, China has lifted 400 million people out of poverty in the past two decades.

The trends in economic prosperity and health insurance coverage are on a crash course and it looks as if China’s health care problems could overpower China’s economic growth. Many rural residents who fall ill choose not to seek necessary medical attention. This choice is dangerous and often lethal. Oftentimes, many residents who do chose to seek medical care do so at the expense of living above the poverty line. In other words, the out-of-pocket expenses the rural residents pay, when ill, put them back below poverty. There have been numerous reports of rural citizens using education, food, and living expenses towards medical bills.

Furthermore, the traditional Chinese way of borrowing money from friends and family to pay for expensive medical conditions could become difficult. The working population, alike much of the developed world, is ageing fast and according to some predictions, China will have only two working people per person over 60 years old in 2040 – in other words, there will be fewer working people to borrow from. Currently there are 6.4 people for every person over 60 years old. According to a report by the Centre for Strategic and International Studies, China may be the first country to grow old before it becomes rich.

These obstacles have nation-wide, and even global, health implications too. Many epidemics such as SARS, Bird Flu, and HIV are not easily contained in rural China directly because these areas lack proper health care. In a worst case scenario, it is imaginable that these diseases could become more widespread internationally as a result of poor containment in rural China.

The most effective way to curb this dilemma is to offer affordable health insurance in rural China. Increases in national economic prosperity and development can only take China so far. Full development into a mature and well-developed country requires a comfortable lifestyle for all of its citizens, or at least accessibility to it. The inability for so many residents to pay for their own health care and well being does not make for a comfortable lifestyle. Thus providing adequate healthcare to all of its citizens is one area China will need to master before it can be labeled well-developed.

Xiamen is one of the oldest trading ports in China. First used by Europeans in 1541, it was the primary source of Chinese tea to the west. When China went through a period of isolation it was Xiamen, along with 4 other major cities in China, which reopened the country with the Treaty of Nanjing following the Opium wars in 1842. All of this has contributed to the global feel of the city and is one of the reasons that in this new age of Chinese prosperity more and more foreign nationals are choosing to relocate to Xiamen on a permanent basis as expatriates.

One of the major concerns facing many individuals who have newly arrived in Xiamen is in regards to the state of healthcare in the city. As a Special Economic Zone (SEZ) Xiamen has some major differences from the rest of the PRC, mainly with regards to the standard of living and the way that the local economy works, however the healthcare system in the city works along very similar lines to the system of care throughout the rest of the country with only a few minor differences.

Public health is a major concern in China. Since the founding of the People’s Republic the provision of quality healthcare to all citizens has been a major concern for the government. The main emphasis of the Chinese healthcare system has always been towards preventative care, and this is no different in Xiamen. With stress being placed on adequate sewage services and primary care points, the Xiamen healthcare service aims to prevent disease before it starts. Sanitation, hygiene, and the irradiation of the four major Chinese ‘pests’ (mosquitoes, rats, flies, and sparrows) have all contributed the health of the Xiamen population as it exists today.

Despite a number of failed public health initiatives, including the unsuccessful ‘barefoot doctor’ scheme, many of China’s major cities have managed to provide healthcare services on par with a majority of 1^st world countries. In Xiamen, partly due to its status as an SEZ and the fact that so many expatriates reside there year round, the city has realized the development of a number of VIP medical institutions, known colloquially as gaogan binfang. While these ‘VIP’ hospitals and medical clinics do not typically offer services that are easily affordable by many Xiamen residents, they will provide the services and treatments demanded by expatriates throughout the city, although at a much higher cost than any of the cities many public hospitals.

Chinese hospitals are all ranked based on the quality of treatment and the types of services that they provide. The ranking system will assign a number (1 – 3) to a medical facility, and under this ranking a hospital or clinic with the number 3 attached to it will always offer the best services; a rank of 1 is extremely low, and these facilities may not offer services outside of immediate emergency care. Under this numerical ranking system each hospital will also receive a letter grade of A through C, 3A hospitals will always provide the best medical services while 3C hospitals will still provide good, if slightly limited, care.

Xiamen has over 1000 medical facilities, although not all of these will be able to cater to foreign patients, mainly due to language barriers. In order to resolve this situation Zhongshan Hospital created a special ward specifically targeting foreign nationals with doctors and nurses who are fluent in English and afford patients fast and efficient care. In addition to this the Xiamen Chinese People’s Liberation Army Hospital also has an excellent reputation among the Xiamen expatriate community, especially with regards to maternity and dental treatment.

For foreign nationals in China the local healthcare system essentially boils down to finding a medical facility that is trustworthy and able to provide a high standard of care. Some of the better medical facilities in the city catering to expatriate needs are:

Zhongshan Hospital

201 – 206 Hubin Nan Lu

Tel: 2212328

Email: admin@xmzsh.com

Xiamen #1 Hospital

Zhenhai Lu, #10 Gujie

Tel: 2137275

Email: yb@xmfh.com

Chinese People’s Liberation Army Hospital

94 – 96 Wenyuan Lu

Tel: 6335500

Email: info@xm174.com

Xiamen University Hospital

172 University Road

Tel: 2186203

Outside of these main medical facilities are a number of primary care (out-patient) clinics, and every neighborhood will have a number of doctors providing out-patient services. In addition to this Xiamen is able to provide Traditional Chinese Medicine (TCM) treatment and there will typically be a traditional ‘pharmacist’ or practitioner in every district.

Healthcare in China can be a scary proposition to expatriates who have recently arrived in the country; however the country is able to provide world class healthcare services. For anyone arriving in Xiamen, get involved in the community and find the medical facility that is right for you and your loved ones, it could be a more important choice than you realize.

 

One of the biggest issues facing modern America is the fact that large portions of the population are underinsured, an no where is this more evident than within the nation’s tertiary student community. In fact, it’s not just underinsurance that is an issue; it’s the total lack of health insurance within 20%, almost 1.7 million individuals, of the American student population that is so worrying.

Even among those college students that are covered by some form of health insurance the prevalence of underinsurance is staggering. 31% of part time students (those attending college for less than 8 hours a week) and 18% of full time students in the USA have insurance coverage that is less than comprehensive. To illustrate, many colleges and universities in the United States obtain plans for their students that have relatively low coverage limits; Ohio University, for instance, provides a plan with a maximum benefit of US$ 50,000 per medical condition per year. This is in a country with the highest average medical costs in the world, so it doesn’t take much of an imagination to see that a coverage limit of $ 50,000 isn’t going to go very far in the event of an individual developing a serious condition, such as cancer.

Of course the schools say that they’re not to blame, and that the problem is in the fact that insurance premiums (especially with domestic American insurers) tend to get more expensive each year, and that by obtaining these lower coverage limits the educational institution is actually helping their students by saving them money. In this regards many schools have these group policies, but it is up to the individual students as to whether they purchase it (the only variation to this rule is with regards to international students who are forced to obtain a university insurance plan prior to starting classes). Only 30% of the 4,182 tertiary education institutes in the USA require full time students to obtain health insurance, and just over half these institutions actually have any student healthcare plan at all.

Where colleges and universities in the US actually do have health insurance plans in place these often provide only the most essential coverage. Exclusions placed on pre-existing conditions, emergency evacuation, specialist consultations, and even out-patient treatments in some cases lead to high priced (US$ 918 per year at Ohio University) plans that afford students very little in the way of actual medical protection. On top of this is the issue that if a student does develop a serious medical condition that would require them to reduce their course load, they will no longer be provided, in the majority of cases, with the full time student plan, even though, through no fault of their own, they were a full time student prior to the sickness or injury.

That however, is a situation that may change. Senate Bill 1168 has been passed with the aim of providing ‘full time coverage’ to seriously sick students who are unable to attend classes full time for up to 12 months after the condition originally emerges. Known as Michelle’s law, the bill is aiming to support this large portion of the US population that is currently deemed to be ‘high risk’. However, there needs to be a reassessment of the American healthcare system as a whole and not just in regards to the student population. Outside of this fairly separated community millions of Americans are either uninsured or underinsured leading to the fact that medical treatment and sickness are the number one cause for an individual claiming personal bankruptcy in the USA.

There are other options, especially with regards to foreign students in the country. With the emergence of a strong international health insurance industry (as opposed to the local/domestic market) many major insurers have come to the realization that students deserve quality protection as much, and possibly even more, as the rest of society. This has lead to the creation of specialized ‘international health insurance student plans’ giving individuals around the world the security that they need in order to get the education that they deserve.

Despite this development of customized international student plans however, and the creation of senate bill 1168 the US is facing a serious crisis. It is a situation that needs to be examined further.

Hong Kong, a city internationally renowned for its high standard of living, quality social services, and its attraction as a global tourism destination, is facing a crisis when it comes to the provision of local healthcare services. This issue is this; Hong Kong is one of the most expensive places to seek medical treatment in the world, in fact according to many insurance companies Hong Kong is tied with Israel for second place in terms of most expensive healthcare costs, just behind the USA. Offering high quality public healthcare services that are heavily subsidized by the government has allowed this reputation to continue in recent years, yet the Government of the SAR is starting to feel the pressure on the budget with billions of dollars being spent on healthcare every year, with the actual figure of healthcare expenditure set to rise by 2011 to HK$ 48 billion (US$ 6.15 billion).

This is a serious issue for Hong Kong, and contributing to an already grim situation is the fact that the number of elderly persons in the city is expected to double by 2028, couple this with the elderly’s increased need for healthcare and general medical inflation around the world and it becomes fairly obvious that this is a situation that needs addressing. In fact, when examined closer it seems that the problems that Hong Kong is experiencing are running along the same lines as those associated with the American healthcare system, namely that large amounts of money are being spent for little or no return while the overall cost of medical services and treatment continues to rise at the fastest rate ever.

The solutions being proposed in the most recent public consultation on healthcare in Hong Kong are extremely varied. Ranging from purely out-of-pocket payment to personal healthcare reserve, the 6 options all have their pros and con’s and a number of these choices sound like some of the ones being thrown around by American political parties in the primary elections. Below is a brief outline of the various options being suggested in Hong Kong:

• Out of Pocket Payments

This option, as the name suggests, is fairly straight forward. An out-of-pocket healthcare scheme would force all but the poorest Hong Kong residents to pay for their treatment out-of-pocket. However, under this option the government would continue to subsidize public healthcare services and slightly raise the prices associated with all treatments. So while members of the public would see medical costs rise, the overall cost of medical treatments would still remain relatively low.

• Social health insurance

A social, or national, health insurance scheme would force members of the work force to contribute a pre-determined percentage of their monthly salary towards the public healthcare system. This is an initiative that is already in place in a number of other countries and one that has experienced a large amount of success around the world. However the major complaint the Hong Kong population has with this proposal is that it would be in addition to a number of taxes already in effect. Currently middle class citizens in Hong Kong have to pay a 15% income tax and a 5% mandatory provident fund tax (forced retirement fund). The introduction of a social health insurance scheme would see an additional monthly tax of 5%, bringing the annual middleclass tax rate up to 25%, an extremely large amount for a place with a worldwide reputation for relatively low taxes.

The major benefit with this proposal however, would be with regards to the fact that medical costs will continue to remain low, and people will not have to delve into their personal finances in order to receive quality treatment.

• Medical Savings Account

This option would work along the lines of a disaster relief fund. A specific portion of the Hong Kong population (namely the lower and middle classes) would be required to contribute money into a specially created fund in order to meet any future medical costs. People with these accounts will have the option to invest the money that they save, much along the lines of the Mandatory Provident Fund scheme, and all monies accrued in the fund can be used to pay insurance premiums, so in actuality this type of proposal is extremely flexible and comprehensive. However it does not address the issue that many employees in Hong Kong receive health insurance coverage through their job, so an enforced extra account would hurt their monthly salaries, much in the same way as the social health insurance idea.

A medical savings account could potentially be an extremely effective solution. However individuals should be able to ‘opt out’ if they so choose. In order to do so they should have to prove that they have coverage through some other means, or in the case of many expatriates living in the city, that they will not remain in Hong Kong for long enough for this scheme to be of any practical use. Outside of this the medical savings account proposal would still create a higher ‘tax’ if you will as individuals must contribute.

• Voluntary Private Health Insurance

Hong Kong has an extremely vibrant insurance industry, and this proposal would involve creating incentives for individuals to obtain private health insurance rather than depend on the government funded public healthcare services. Giving individuals a dollar-for-dollar tax break on all health insurance premiums would help to ensure that Hong Kong residents obtain more protection without actually hurting their own finances to the extent of the other reform ideas.

A voluntary insurance scheme, with incentives (such as tax breaks etc.), would ease the pressure on the government in terms of funding, ensure that a large portion of the Hong Kong population is able to receive coverage under their own health insurance, and create a safety net for an aging population. The other direction that could be taken with this idea is to force employers to provide their employees with some form of medical coverage, so in the event of a catastrophic situation the burden of provision would be taken off an already strained healthcare system

• Mandatory Private Health Insurance

This proposal would force every Hong Kong resident to obtain health insurance, much like the previous ‘voluntary’ idea, but on a ‘must do’ scale. While the suggestion of health insurance is good, it is the mandatory part that potentially creates the issue. If this scheme were enforced then there would most likely be the creation of ‘preferred’ health insurance providers, much in the same way that there are only a certain number of MPF funds. This would stagnate the thriving Hong Kong insurance industry in addition to creating insurance policies that only cover the most basic necessities.

One of the questions asked with the ‘mandatory’ health insurance scheme is with regards to regulation and what will be done to ensure that adequate coverage is provided. Not every individual will be able to afford the better quality plans, and this could potentially lead to a whole host of individuals who are ‘under insured’, a problem that the USA is experiencing at the moment, and this is something that will contribute to even more issues with the Hong Kong healthcare service.

• Personal Healthcare Reserve

The personal healthcare reserve proposal is a mixture of the Medical Savings Account idea and the mandatory health insurance initiative. This proposal would require a specific portion of the Hong Kong population to deposit savings into a personal account which would then cover the costs of private health insurance before and after retirement. These accounts would be linked to investment options with a view to building up capital for a person’s retirement and thereby creating a ‘retirement healthcare fund’. In this sense the Personal healthcare reserve idea is extremely similar to the MPF scheme as the goal is to force individuals to set aside healthcare funds for their retirement.

So there you have it, the 6 ideas currently being floated in regards to reforming the Hong Kong healthcare system. Essentially these changes are only targeting the middle and upper classes of society as the government has promised that it will retain its commitment to low-income and underprivileged elements of Hong Kong society. However the proposals as they stand at the moment will potentially have a massive impact across all of Hong Kong.

It is not only Hong Kong that is experiencing these types of issues, the costs associated with medical treatment around the world have been getting more expensive, and medical inflation is at an all time high. Nations that run a national healthcare system, and nations that operate on open market ideals alike are facing trouble, and although Hong Kong may not have the answer, it is starting to look at the problem before it becomes even more of an issue.

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