Mar
31
BNH Post Good Results, Looks to Gulf Expansion
Filed Under Allianz, Insurance Company, UAE Insurance | 2 Comments
Bahrain National Holding (BNH), the parent company of both Bahrain National Insurance and Bahrain National Life Assurance, held its annual shareholder meeting at BNH Tower this past Tuesday, March 29th 2011. Despite the general political tension occurring in the region, BNH’s progress has remained undeterred and the firm plans on continuing the expansion of its operations throughout the Gulf.
BNH announced a net profit of BD 3.814 million (US$ 10.1 million) for 2010, which resulted in a 5 percent increase of the company’ total net assets, now up to BD 42.157 million (US$ 112 million). There was also an increase in BNH’s Net Earned Premium income which rose to BD 13.587 million (US$ 36 million) over the BD 13.395 million (US$ 35.5 million) registered in 2009. Given the positive results, a 20 percent dividend at 20 fils (US$ 0.50) per share was agreed upon and paid to shareholders from company earnings.
Mahmood Al Soufi , chief executive of BNH, has said of the Group’s performance: “We are content with our business strategies which have provided rewarding results in 2010. We will continue with these initiatives to ensure the stability of our business, to provide value for our clients and business partners and to grow our shareholders value,” he later dismissed any possible spillover impact from events occurring in the Middle East or Japan having effect on the company’s business “We are not revising our budgets and there has been no change in our investment plans regionally or our continued investment in our core insurance business.”
Given the stable forecast, BNH is looking to invest more on top of the BD 8 million (US$ 21.22 million) allotted in 2009 for regional expansion in an attempt at enhancing the scale of business available to the company. BNH is particularly keen on establishing a presence in the UAE and Qatari insurance markets. Mahmood Al Soufi explains the current status of BNH’s regional development strategy: “We are in the final phases of establishing a company in Abu Dhabi with major shareholding from the UAE and also the company is positive to get nod from the Qatari authorities to open a branch in Doha.”
In October 2010, BNH established Bahrain Emirates Insurance Company (BEI), their first joint-venture branch in Abu Dhabi. BNH holds a 30 percent stake in the business with an initial paid-up capital investment of BD 10.5 million (US$ 27.9 million). BEI was successfully granted a license to operate in the country and business in Abu Dhabi is expected to progress quickly given the industry expertise available from its investors. The insurance market in the UAE, which incorporates compulsory private health insurance scheme, has significant growth potential for insurers. BEI is expected to expand its operations further throughout the UAE and other Gulf countries.
BNH is presently waiting on the Qatar Financial Centre Regulatory Authority to grant them a license to operate a subdivision in Doha. Qatar is currently developing a national health insurance scheme as part of substantial reforms planned for the healthcare sector in their National Development Strategy 2011-2016. The system would establish a public-private mix whereby a new federal authority would negotiate closely with private insurers over provision of services. A complimentary basic health service package would be introduced but all those able to pay (including expatriates) would be expected to enter the private insurance market. While the full ramifications of these new national regulations can not yet be evaluated, early entrance into the Qatari insurance market for BNH would be an advantage.
Takaful, or Sharia-compliant, insurance has emerged as a powerful niche securities market in the region. Takaful products are mutually beneficial coverage policies that cater specifically to Middle Eastern and Asian Islamic communities. The takaful insurance industry is projected by industry analysts to grow at 15 percent annually over the next 5 years and generate more than US$7 billion in premium income. Major foreign insurers have taken note of the huge growth potential from this brand of products. In 2010, Standard Chartered and Allianz Takaful in Qatar entered into a 5 year agreement to distribute Alliaz Takaful’s insurance services through Standard Chartered Bank. The two insurers partnered again to allow Standard Chartered SME insurance products to be sold through Allianz Takaful in Bahrain. Zurich established a joint venture operation with Abu Dhabi National Takaful and is looking to involve itself further in the region. BNH are likewise interested at getting into the takaful market and predicted they would be involved with acquisitions involving the Islamic insurance industry within the year.
Farouk Almoayyed, Chairman of the BNH, summarized the firm’s situation and predicted upward trajectory for the company: “The proactive approach the Group implemented previously has manifested itself in the positive financials achieved for this year. We strongly believe in our experienced team and effective strategies and are confident to say that today we are well positioned to sustain our growth organically, regionally and internationally.”
The general outlook for the insurance industry in the Middle East and Gulf regions is currently difficult to determine. Prior to the civil unrest and political revolutions in Tunisia, Egypt and Libya, the forecast was very positive throughout. The preexisting low insurance penetration levels, high growth rate in population and emerging economies were all conducive to growth. The degree of increased risk now varies much more from country to country. The three most lucrative markets in the region, UAE, Qatar, and Saudi Arabia, have remained strong with renewed commitment to health infrastructure encouraging further demand for insurance services. Areas under more duress are more likely to suffer from disruption to business activity as well as liquidity issues. The degree to which the current political turmoil will spill over into the economy and become a more substantial long term issue in many Middle Eastern countries is still evolving.
Insurance Companies Mentioned
Bahrain National Holding
BNH, with its subsidiaries, offers a wide range of insurance and risk management solutions in Bahrain. The Company was established in 1998 and is based in Manama, Bahrain.
Allianz Takaful
A fully owned subsidiary of the Allianz Group, Allianz Takaful was established in March 2009 and is headquartered in Bahrain. Allianz Takaful is the Allianz group’s first foray into the Gulf Cooperation Council or GCC, and offers Shariah-compliant products and services.
Standard Chartered Bank Qatar
Standard Chartered Bank first opened a branch office in Qatar in 1950, making it the oldest foreign bank in Qatar. It operates 3 branches and 6 ATM machines in the country, employing 167 employees from 30 different countries. Their two core divisions of Wholesale and Consumer Banking have given them a 27% market share in Qatar.
Zurich
Headquartered in Zurich, Switzerland, Zurich Financial Services Group is an insurance-based financial services provider with a network of subsidiaries andoffices in North America and Europe and also in Asia-Pacific, Latin America and other markets. Zurich is one of the world’s largest insurance groups, and one of the few to operate on a truly global basis. With 60,000 employees serving customers in more than 170 countries, our business is concentrated in three business segments: General Insurance, Global Life, and Farmers.
Mar
31
Maternity Tourists Strain Healthcare Services
Filed Under China, China insurance, Healthcare, Hong Kong | 7 Comments
Hong Kong, this week, has again raised the issue of so-called “maternity tourists,” and is questioning how to best fix the strain that an influx of Chinese mothers seeking to give birth in the city is placing on the SAR’s healthcare system. Following hot on the heels of the announced closure of a Maternity House in San Gabriel California, Hong Kong authorities are looking for options which would allow them to further control the flow of pregnant PRC nationals into the city.
Recent figures from the Hong Kong Hospital Authority and Department of Health have revealed that mainland mothers accounted for approximately 40,000 births in Hong Kong during 2010; roughly 46% of the city’s 88,000 total. This is a massive increase from the “few hundred” births from 2004 – 2005, and is set to rise even further in 2011 and again in 2012, with healthcare officials projecting the numbers at 92,000 and 100,000 respectively.
In 2007 the Hong Kong government introduced legislation which prevents women past the 28th week of pregnancy from entering the city without providing proof of a booking at a local hospital. In addition to this, the government later introduced mandatory pricing for non-resident mothers seeking to give birth in one of the city’s public hospitals; and while these initiatives were initially successful at stemming the tide, China’s recent, and explosive, economic success has again seen the numbers move upwards.
For Chinese nationals there are a number of reasons for giving birth outside of the People’s Republic, not in the least of which is the country’s notorious “One Child Policy.” The legislation severely penalizes families who have more than one child, and in the case of Guangzhou the fines associated with having a second baby can be as much as RMB 180,000 (US$ 27,450). In order to avoid the fines, while still being able to have a second, or even third child, many mainland parents are simply choosing to travel abroad to give birth.
However, while laying the blame at the feet of the “One Child Policy” may be conveniently easy, there are a number of more in-depth social factors which may be playing a role in the rapid development of the Chinese Maternity Tourism trend. One of these is to do with the way that the PRC’s education system is structured.
In China, as elsewhere around the world, there is high concern from many parents regarding their child’s education. Due to the way in which the PRC’s school system is set up, if the child has a Chinese passport and/or residency in certain districts or states, the standards they need to reach in order to access the top schools is prohibitively high – they will need to score extremely well on both the middle and high school entrance exams. It is important to bear in mind the fact that China has a population of approximately 1.3 billion people, and as such competition for the best schools in the country is extremely stiff.
However, one of the major loopholes to this system is through the child possessing a foreign passport, or official residency outside of China, in this case Hong Kong. If the child is not a Chinese passport holder, and does not have official residency in China, then the standards of entry into the country’s most prestigious educational facilities are dramatically lowered. In this case the child is treated as an “international” student, rather than a local one; although the family must pay the high fees associated with this status. In fact, some Chinese families have gone on record saying that they will raise their infant in China until the child reaches high school age, and then send them to Hong Kong to continue their education.
Outside of the Hong Kong healthcare system, the potential strain on the city’s educational services is highly concerning. As with healthcare, Hong Kong has a public education system through which the children all permanent residents are allowed to receive their schooling. While competition for places at Hong Kong schools may be less stiff than across the border, the city has been experiencing severe issues with increasing class sizes and a lack of spaces for secondary students.
One option then is that the Chinese maternity tourists will send their children to private educational institutions within the city, and when looking at the costs involved with a non-resident mother giving birth within Hong Kong, this may not present as much of a significant financial challenge as one may think.
According to one recent interviewee, the Chinese husband of a PRC Maternity Tourist, he paid HK$ 80,000 (US$ 10,272) for a C-Section maternity package at a private hospital in Hong Kong. The package included antenatal medical checkups in the city. The source is quoted as saying that, even were the HKSAR government to impose further restrictions on public hospitals within the city, this would not pose a problem at private maternity hospitals, such as the Matilda, Sanatorium, or Baptist; primarily due to the fact that local Hong Kong mothers vastly prefer the services offered through the low-cost public system.
The increased preference of Maternity Tourists for the city’s exceptional private medical facilities has highlighted an alarming issue with the Hong Kong medical community. Currently the Hong Kong Public Healthcare system is experiencing an alarming shortfall of qualified medical professionals, with many moving from public facilities to private institutions. This has left the city’s public medical community severely short staffed, to such an extent that there have been calls to allow overseas medical practitioners, who have not passed the Hong Kong medical exam, to practice within Hong Kong public hospitals.
Additionally, the flood of doctors away from the public system has emphasized a serious supply concern; as private medical facilities receive more bookings, and expand ever further, the costs associated with treatment are likely to increase. This does not bode well for a city whose private medical costs are tied with Israel for being the second highest, on average, in the world; the USA is, of course, the most expensive place to receive healthcare treatment on earth.
Outside of medical pricing, there are additional problems posed by the Hong Kong public medical sector’s “brain drain;” namely that, public hospitals within the city are vastly more prepared to handle any complications arising from a pregnancy. For example, Prince of Wales hospital, one of the city’s most well regarded public healthcare facilities, in the last two years lost more than 10 senior doctors (including obstetricians) to the private sector. Prince of Wales hospital is also one of the few hospitals in the city which is able to offer comprehensive intensive care to newborns in the event of a complication of pregnancy, which will occur in roughly 2 out of every 100 births in Hong Kong.
The move of qualified medical practitioners away from the hospital means that, given enough time, such facilities may simply not be able to handle the treatment associated with complications of pregnancy, and will not be able to offer local mothers the treatment which has long been promised to them.
Hong Kong’s close proximity to China has seen the city bear the brunt of the Birth, or Maternity Tourism trend for most of the phenomenon’s existence. However, as recent events, such as the closure of the San Gabriel “Maternity House,” show, mere proximity is not the underlying cause, and distance will not ensure protection. While local policy makers are stating that a flat ban on maternity tourists would be unacceptable, they are asking how the situation can be resolved.
Dr York Chow, Hong Kong’s Secretary for Food and Health, has said that he is keen to liaise with both the public and private sectors to improve the outlook for healthcare in Hong Kong. However, the Private Hospitals Association president, Dr Alan Lau, has said of any potential legislation or reforms, “we are willing to discuss the matter and strive for good quality of care … but any drastic measures contradicting the free market would be regrettable. The government would need good justification to limit our maternity beds.”
As such, it is highly likely that yet another mandatory rate increase on non-resident mothers giving birth in Hong Kong public hospitals is on the cards. Local mothers can expect the government to act in their interests and protect public healthcare services, and the accessibility of those services to pregnant residents. While any legislation would potentially avoid instituting stringent requirements on Hong Kong private hospitals, due to the city’s commitment to free-market principals and standing as the world’s freest economy, simple supply vs. demand suggests that medical inflation within HKSAR is not set to decrease any time soon. With the growing demand for private hospitals and private medical services, the sector could see a record pay day and increased costs at the expense of HK residents, in favor of mainland mothers who are prepared to pay for the best services available.
Mar
30
Chinatrust Financial Seal MetLife Taiwan Deal
Filed Under Insurance Company, Life Insurance, MetLife | 1 Comment
Chinatrust Financial Co. Ltd, Taiwan’s third-largest financial services provider by assets, has agreed to purchase US-based MetLife Inc’s Taiwanese life insurance unit for US$180 million. With the acquisition of MetLife Taiwan, Chinatrust will finally be able to enter the life insurance market it has long coveted.
The ownership transfer deal, which is pending approval of the Insurance Bureau under Taiwan’s Financial Supervisory Commission, will be wholly financed by Chinatrust Financial. The company has been attempting to both internationalize, and diversify its financial products, and build a strong platform in the insurance sector. Chinatrust Financial had competed for every foreign life insurance unit put up for sale in recent years, pursuing every opportunity to enter the local market. The company’s most recent bid attempt resulted in a failure to buy Nan Shan Life Insurance, the Taiwanese branch of AIG, in January.
Chinatrust Financial has already experienced success in the bank insurance sector in Taiwan, becoming a domestic industry leader through its subsidiary Chinatrust Commercial Bank. The bank generated premium revenue of over NT$100 billion (US$3.4 billion) for two consecutive years through its bancassurance business platform; with profits exceeding NT$16 billion (US$ 542 million) for 2010. The addition of MetLife will expand Chinatrust’s capacity to sell insurance, and diversify their revenue sources.
Speaking at an evening press conference, Chinatrust Financial company president ,Daniel Wu, said of the upcoming purchase of MetLife Taiwan: “This will not just be a simple financial investment, but a strategic investment,” he added “the group wanted to purchase a life insurance unit so it could tap into the local market and use it as springboard into the Chinese market.”
Chinatrust Financial has promised to retain MetLife Taiwan’s 624 domestic employees, and fully guarantee the rights of the company’s 307,000 preexisting policy holders. Chinatrust are prepared to pool resources from the company’s other financial services subsidiaries to help make inroads into the lucrative mainland China insurance market. President Wu said he planned to increase Metlife Taiwan’s assets up to NT$500 billion (US$ 16.7 billion) from less than the NT$100 billion (US$3.4 billion) at present.
MetLife Taiwan, founded in 1989, is the fourth largest foreign life insurance company in Taiwan by gross premium, totaling NT$14billion (US$ 480 million) in gross premiums for 2010. MetLife management, however, has been looking to divest itself from its Taiwanese branch due to limited growth prospects, and an unprofitable local investment environment. MetLife’s regional managing director, Peter Smyth, explained: “The scope of business prospects for MetLife Taiwan is limited due to the absence of its own distribution channel,” adding, “that is not a concern with a domestic financial group, however.”
This was Metlife’s second attempt at offloading their Taiwan unit. In April 2010, the company had agreed a deal with Waterland Financial Holdings Co, a smaller financial conglomerate, to purchase Metlife Taiwan for about US$ 112 million. The move was struck down by Taiwanese financial regulators in October, citing concerns over Waterland’s financial and management capacity to run the life insurer after the acquisition.
Metlife has become the latest major multinational investment company to sell its stake, or a significant share of its assets, in Taiwan’s US$ 52 billion insurance market. The forecast for Taiwanese business has remained slow-moving in the aftermath of the global economic crisis, and the market has been inhibited by historic business secured at base interest rates which are no longer sustainable. New international accounting rules that increase capital requirements for insurers, coupled with strict local regulators and general market volatility, have led many international firms to question their continued presence in the country. All of this is occurring at a time when profits, and business opportunity, return in regional neighbors such as, Japan, Thailand and particularly China.
Prudential, Aegon and the ING Group all have retreated from Taiwan, usually selling to local financial services companies who are looking to diversify into insurance. Following the 2008 economic crisis, ING agreed to sell its life insurance business to Fubon Financial Holdings for US$ 600 million, Aegon followed suit for only $65 million a year later. China Life acquired Prudential’s Taiwanese branch in 2009. In addition, MassMutual International Holdings Inc. sold its 39 percent stake in joint venture MassMutual Mercuries Life Insurance Co and even more recently AIG, after a protracted bidding war, sold Nan Shan Life Insurance to Taiwan-based Ruen Chen Investment Holdings Co. Both New York Life Insurance and Aviva PLC are thought to be considering their exits from the island country as well.
Merger and acquisition activity throughout the rest of Asia is set to maintain significant growth in 2011 due to stronger investor confidence in the market. Insurance business growth in Asia is expected to outperform that of other more mature markets, with Vietnam, Indonesia and China leading the way.
Insurance Companies Mentioned:
Chinatrust Financial
Chinatrust Financial Holding Co Ltd. Is a financial holding company based in Taiwan. The firm operates business through commercial banking, financial market services, trading, investment consulting, insurance business and many other services. The company presently has operations in Taiwan, Hong Kong, Vietnam, USA and China.
MetLife
Metlife Insurance: Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Nan Shan
Nan Shan Life Insurance Company, Ltd. was established in July 1963. After its restructuring in January 1970, Mr. K.K. Tse, the then Chairman of American International Underwriters, became the first Chairman of the company. In forty years, Nan Shan has become a super insurance company with the most professional management, the best operational performance, and a solid financial foundation. Its agency force has been recognized as the best in Taiwan’s life insurance industry.
Prudential
Prudential life Insurance has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
ING
ING provides banking, investments, life insurance and retirement services and operates in more than 50 countries. It serves over 85 million private, corporate and institutional customers throughout Europe, North and Latin America, Asia and Australia.
Fubon Life
Fubon Life was founded in 1993 and is based in Taipei, Taiwan. Fubon Life provides life insurance and health insurance services. Fubon Life Insurance Co. Ltd. was formerly known as Fubon Life Assurance Co., Ltd. and change its name to Fubon Life Insurance Co. Ltd. in June 2009. Fubon Life operates as a subsidiary of Fubon Financial Holding Co. Ltd.
Mar
30
US Maternity Medical Tourist Situation Mirrors Hong Kong
Filed Under China, China insurance, Expat Insurance, Health Insurance, Healthcare, Hong Kong, Medical Insurance, USA Health Insurance | 1 Comment
American authorities have announced the closure of a “Maternity House” in the Californian city of San Gabriel, according to a New York Times report published March 29th, 2011. Neighborhood residents had complained repeatedly about the excessive noise coming from a local building, and the large number of pregnant women seen entering and exiting the area. Police officers and building inspectors discovered that the building was a center for Chinese medical tourists, who were using the home as a means to deliver their babies in the USA, thereby granting the child American citizenship. This situation is by no means unique to the USA as Hong Kong, for many years, has experienced a massive influx of mainland mothers looking to give birth within the city.
There are a number of reasons which can be used to explain the increase in Chinese mothers traveling abroad to give birth. One of these is with regards to the People’s Republic’s notorious “One Child Policy,” stating that Chinese nationals, within China, are only allowed to conceive, and give birth to, one Child. By going overseas to deliver, the mother is able to escape the bounds of Chinese legislation, and potentially have an additional baby upon return to her home nation.
The second reason for going overseas to give birth is more to do with having a form of “insurance” against untoward changes within the People’s Republic of China. In the case of the USA, any child born within the bounds of America’s borders automatically becomes a Citizen of the USA under the 14th amendment. Once the child is 21 years of age, they are then a full citizen of the country, and are able to petition the government to allow their parents to join them as residents of the US.
In Hong Kong this situation is paralleled, mainland mothers giving birth within the HKSAR gain their child “Right of Abode,” and consequently Permanent Residency; in addition to being granted the privilege of living in one of China’s most prosperous cities as their child’s guardian. While technically a part of China, Hong Kong operates under the “One Country, Two Systems” principal, and immigration of PRC nationals to the city is tightly controlled. By having a child in Hong Kong, the families of these children are able to ensure that they will not be deported for illegal immigration or visa over-stay infringements.
However, Hong Kong, unlike the USA, has healthcare system which is predominately public in nature. While private healthcare services and hospitals do exist in the city, the majority of residents receive their medical treatment through low cost, government run healthcare facilities. With a large number of pregnant mainland mothers using the maternity facilities at public hospitals within Hong Kong there was a serious strain placed on the city’s healthcare services. In some cases Chinese mothers accounted for more than 30 per cent of all deliveries at certain hospitals within Hong Kong.
In fact, this situation progressed to such an extent in Hong Kong that in 2008 the city’s government passed legislation introducing mandatory pricing for non-resident mothers wishing to give birth in Hong Kong public hospitals. Non-resident mothers who have booked their delivery in a Hong Kong public hospital are now required to pay a minimum booking fee of HK$ 39,000 (US$ 5,005.82) for a three day, two night maternity package. Non-resident mothers who have not booked a hospital bed, in other words, walk-ins, are charged HK$ 48,000 (US$ 6,161.06). The costs here do not include any complications of pregnancy, but are only for a routine delivery, and even then represent the minimum amount that a non-resident mother can be expected to pay; for Chinese nationals this no mean sum, as the nation’s average annual income is a paltry US$4,520.
Further to this, the Hong Kong government has not made any specific legislation with regards to the city’s private maternity hospitals, where the average maternity costs for a routine delivery are in the US$ 8,500 range; a cesarean section, or c-section, at the same hospitals will typically be priced at US$ 12,838. In comparison, the USA federal average for a routine child delivery comes in at roughly US$ 7,600.
As can be seen from the costs involved, the women undertaking this Medical Maternity Tourism phenomenon are clearly not from the lowest strata of Chinese society. With Chinese companies offering one-stop maternity tourism services from between CNY 50,000 – 90,000 (US$ 7,623 – 13,721), it is evident that these women, and their families must be, at least, slightly well off.
This then poses the question of why, exactly, the rate at which Chinese mothers are traveling overseas to give birth is increasing.
In recent years the PRC’s Central Government has made extraordinary strides towards improving the standards of the nation’s healthcare system and services; going so far as to introduce a comprehensive private China health insurance system, and stepping up much needed overhauls of the country’s top hospitals. In many cases China is able to offer private medical services which are on-par with, if not exceeding, those of their western counterparts. Hospitals like Parkway Shanghai are able to deliver some of the highest standards of medical treatment within the People’s Republic of China, and while they mainly serve foreign national expatriates, do cater services to Chinese residents.
The reason for this development then cannot be the quality of care, or even the cost of treatment, as these are both adequately covered within the People’s Republic. Additionally, unlike the furor over “Anchor Babies” within the USA, the Chinese mothers in question often return home after giving birth, and are usually in possession of above average financial means.
The issue of Chinese mothers giving birth in the USA is baffling American immigration experts, who say that the women are not acting in violation of current American laws. However, as in Hong Kong, there is apparent anger towards the trend. From the New York Times story:
“These people aren’t doing anything in violation of our laws,” said Mark Krikorian, the executive director of the Center for Immigration Studies, which advocates tougher immigration controls. “But if anything, it is worse than illegal immigrants delivering a baby here. Those kids are socialized as Americans. This phenomenon of coming to the U.S. and then leaving with people who have unlimited access to come back is just ridiculous.”
While there are many women from Asian nations participating in similar activities, such as South Korea, the Philippines, and India, it is Chinese mothers who are driving the trend. Not only are these mothers driving the trend, but their actions imply long term forethought towards the question of; where is it best to deliver my child overseas?
When looking at the American medical system the first thing which is immediately apparent is the need for some form of health insurance. Medical services within the USA can be prohibitively expensive, a much publicized and debated issue, necessitating some form of comprehensive health insurance coverage. However, it is important to realize that many insurers will impose a significant waiting periods on policy benefits such as maternity coverage. In some cases, the waiting period associated with maternity can be as long as 24 months from the start of a plan, although the norm would be closer to 12.
As such, it is obvious that these “Maternity Tourists” will have been planning their delivery trip for quite some time prior to departure. However, looking at the overall situation, it becomes much more complex than it can first seem.
Of those Chinese nationals and residents who do possess a health insurance policy, the type of policy prevalent within the population is “local health insurance.” These are medical insurance plans which are designed to work solely within a specific country, in this case China. These plans will not cover the policyholder overseas; while Hong Kong is considered to be a part of China, it is technically a separate national entity, so local China health insurance will not provide cover in the city, never mind the USA. However, in the case of Hong Kong, these maternity tourists tend to cover the costs related with the birth out-of-pocket.
American health insurance would then seem like an option; however, obtaining domestic USA health insurance to cover the costs associated with the birth is also a difficult proposition for foreign nationals, as an American residential address is typically required to access a plan. Looking at the waiting periods which will be involved, the logistics here would mean that the Chinese mother would have to be “resident” in the USA for a period which far exceeds the length of stay granted by her visa. As American immigration experts have cited the legality of this type of action, this is most likely not the case.
The last proposition for insurance coverage of the birth is with regards to international health insurance plans, which provide medical protection on a global basis. However, Chinese regulations, and the restrictions put in place by many of the major insurance providers operating on the mainland, mean that unless the Chinese citizen is an expatriate residing outside of their home country, they will be unable to obtain this type of policy. Due to the fact that American immigration experts cite the fact that many, if not all, of these mothers return to China after giving birth, having been abroad on temporary tourist visas, this is most likely not the case.
At the end of the day, it is extremely difficult for these mothers to fund their maternity tourism via insurance, which lends strong weight to the fact that they are paying for their maternity services out-of-pocket. If the USA is seeking options to resolve this potentially concerning issue, a price increase, or mandatory down payment such as that in place in Hong Kong may be a solution. In 2008, the year that “maternity tourism” began making headlines in Hong Kong, there were 7,462 babies born in the USA to foreign parents. Since then, the number of maternity tourists has only increased, and as China continues to generate more wealth, is likely to continue doing so.
Mar
29
China Pacific Delivers Good Results For 2010
Filed Under China, China insurance, Insurance Company, Life Insurance | Leave a Comment
China Pacific Insurance Group (CPIC Group), mainland China’s third-largest life insurer, has posted a 16.3 percent increase in net profit for last year, up to 8.557 billion yuan (US$1.3 billion) from 7.356 billion yuan (US$1.1 billion) in 2009, as premiums expanded.
CPIC Group’s Announcement of Audited Annual Results reported income from the insurance business in 2010 at 139.56 billion yuan (US$21.27 billion), an increase of 44.9% over the previous year, with earnings per share of one yuan. At year’s end 2010, CPIC Group’s share of the Chinese insurance market was 9.9%, a rise of 0.8 points since 2009. The company’s total investable assets are 433.4 billion yuan (US$66 billion), having risen 18.4% since last year. Shareholders received a cash dividend of 0.35 yuan (US$ 0.054) for each share held.
In 2010, CPIC prioritized underwriting profitability, the expansion and development of life insurance products and a renewed focus on standard premium businesses. Net investment income increased 33 percent to 16.95 billion yuan. This was attributable to a significant rise from both interest and dividend income. Premium income was boosted at a rate of 10 share points greater than industry average to consolidate the company’s existing market share.
Gross written premium revenue from life insurance, as a result, rose 41.7 % to 87.9 billion yuan (US$13.4 billion) and CPIC held a market share of 8.8% this past year. CPIC expects a more modest growth level of over 15% in the upcoming year. It is also possible that market demand for similar insurance products is gradually approaching a saturation point. The increased competition for customer resources within the industry fosters price wars and the high‐cost channel inputs are made increasingly more difficult to sustain due to the profitability pressure.
With that said, the effective demand for insurance business in China is still expected to increase rapidly. Total written premiums in China’s insurance market reached 1,452.8 billion yuan (US$221.4 billion) in 2010, a year on year increase of 30.4%.The acceleration of urbanization, increases in per capita income, an improved social security system, enhanced distribution reforms and service level optimization coupled with stronger insurance awareness, are all positive factors contributing to the brisk development of the domestic Chinese insurance industry. As interest rates rise, profitability for insurance companies will also be further improved.
2011 is the first year of the Chinese government’s twelfth Five‐Year Plan and the country has significant decisions to make with regard it’s future economic development. In the aftermath of the global financial crisis, China will continue to implement pragmatic fiscal and monetary policies in an attempt to accentuate steady and fast paced economic growth in the country. The insurance sector is looking to match the projected trend of social and economic development in China, with increased comprehensive insurance service capabilities. The Chinese market is pivotal for global insurers to gain access to, not just for its absolute size and growth potential but also the high savings rate of its citizenry coupled with a financial environment in which life insurance remains a particularly attractive investment opportunity.
The leaders in the Chinese life insurance industry are China Life, Ping An Life and China Pacific, with market shares of 29, 13 and 8 percent respectively. These established companies have extensive strength in terms of branding and infrastructure and operate on a tremendous scale even by the standards of multinational insurance companies originating from developed countries. There has been increased competition in recent years as local and multinational insurers attempt to strengthen their reach in the country. While China is technically open to foreign insurers, they are faced with more restrictions and a more active regulatory authority than in many other countries. Multinationals normally exist as joint venture partners with another Chinese organization and are often confined by their license to a particular territory or line of business.
Some major current multinational Chinese insurance company joint ventures include the Sun Life Everbright and the Aviva-Cofco partnership. Other notable foreign insurers with partnering agreements in China include Zurich and Generali, with associations involving both New China Life Insurance and China National Petroleum Corporation respectively.
Insurance Company Mentioned
China Pacific
China Pacific Insurance (Group) Co., Ltd. (CPIC) is a insurance company providing, through its subsidiaries, a range of life and property and insurance services and pension products to individual and corporate customers throughout the country. CPIC was founded on May 13, 1991, and is headquartered in Shanghai. The company was listed in Shanghai Stock Exchange on Dec. 25, 2007, with the stock code of 601601 and the stock name of “China Pacific”. The Company was listed in the Stock Exchange of Hong Kong Limited on Dec. 23, 2009, with the stock code “02601” and the stock name of “CPIC”.
Mar
28
India Waives 5% Service Tax on Private Healthcare
Filed Under Healthcare, International Healthcare | 3 Comments
Patients seeking private medical treatment in India will no longer be faced with an upcoming 5 percent service charge. India’s federal government last week announced the rollback of the planned tax on health-care services after encountering substantial pressure from opposition political parties, the healthcare industry as well as the general public.
Giving his general budget speech before Parliament, Finance Minister Pranab Mukherjee stated: “The proposed levy on healthcare has raised considerable anxiety in the House and outside. We have decided to exempt the new levy in its entirety; both in respect of services provided by hospitals as well as by way of diagnostic tests until the Goods and Services Tax comes into force.” The bill was later passed by the House.
The original proposal, prepared by Mukherjee on February 28th for the 2011 budget, introduced a tax on all medical services, including diagnoses, provided by air-conditioned hospitals with a capacity exceeding 25 beds. The move instantly evoked a strong reaction from the medical community with several distinguished doctors dubbing the scheme a ‘misery tax’. The proposal was in fact projected to increase the real cost of medical treatment for Indians by around 7 to 12 percent.
The move to withdraw the service tax has been welcomed by the healthcare industry in India. Shivinder Singh, Managing Director for Fortis Healthcare (India) said: “We welcome the finance minister’s decision to roll back the service tax proposed for the healthcare delivery sector. This positive step will benefit the common man, while providing a boost to the industry.”
Apollo Hospitals’ Executive Chairman Dr. Prathap C. Reddy explained the present situation: “Inflation in healthcare sector has been over 300 per cent in past decade. The industry has still tried to contain prices. Now, with the government relenting by taking back the proposed burden on the sector, it is good news not just for the industry but also for the people,” he added “I appreciate the rollback by the government. This new levy was like stretching pockets of over 85 per cent Indian patients.”
Ameera Patel, CEO and Executive Director of Metropolis Health Services, concurred that this was a positive development: “The new tax was a big drain on the pockets of patients, especially old people. It would have been a complete disaster,” she said.
The private healthcare sector is determined to support this initiative. Efforts to reduce their own costs will be given renewed impetus to boost the number of patients seeking preventative care and early diagnosis, helping to curb the rising prevalence of chronic diseases in India. During the past weeks budget discussions, almost all political parties had pressed the finance minister to remove the healthcare service duty. The announcement that the 5% service tax had been withdrawn was met with applause by members of Parliament.
The medical tourism industry in India is also relieved that the healthcare service tax has been waived by the Finance Minister. Concerns arose that making private treatment in India more expensive would put their healthcare facilities at a competitive disadvantage against other Asian markets that also cater to international clients.
A growing number of people from Western Europe, North America and Africa are visiting India every year for the sole purpose of receiving medical treatment. Patients are attracted by the lower costs and a high standard of private healthcare that remains comparable with the best in their home countries. The Indian medical tourism industry has been growing substantially and is projected to generate over $US2 billion a year in revenue by 2012. However, other Asian countries are also committed to taking advantage of this lucrative global market and are invested in building their own internationally-renowned healthcare facilities.
Companies Mentioned
Fortis Healthcare
Fortis Healthcare Limited, founded in 1999, is a leading healthcare provider with a network of 46 hospitals, satellite centers and heart command centers in India. The company also offers diagnostic, travel, IT and financial services through it’s’ wholly owned operation Religare Enterprises Limited.
Apollo Hospitals Group
Apollo Hospitals is the largest healthcare provider in Asia, third largest in the world. The company operates 53 hospitals, a total capacity of 8500 beds, across Asia. The company also offers medical consultancy and pharmacy services. Apollo Hospitals was founded in 1983 and is based in Chennai, India
Metropolis Health Services
Metropolis Health Services operate a chain of medical diagnostic and research facilities. The company has a worldwide network of operations. Metropolis was founded in 1981 and is based in Mumbai, India.
Mar
25
Mergers Expected in Thailand Healthcare Sector
Filed Under Healthcare, Hong Kong, International Healthcare | 1 Comment
Industry analysts are expecting the increase in merger and acquisition activity in Thailand’s healthcare sector to continue. Thai healthcare providers are determined to integrate more with one another to give them a national competitive advantage over the large foreign multinationals now entering the market.
Under the ASEAN Economic Community (AEC) agreements, by 2015 many industries will be increasingly liberalized across the continent, including the private healthcare sector. Regional market integration will theoretically expand the local healthcare market to over 580 million people.
Khazanah Nasional, Malaysia’s state investment branch, has identified Thailand in particular as a healthcare market with great growth potential and would be aggressively pursuing opportunities in the region.
Pongsak Viddayakorn, board member at Bangkok Dusit Medical Services (BGH), Thailand’s leading hospital operator, explained: “The cash-rich Malaysian state investment firm is in the process of pitching acquisition proposals to almost all Thai healthcare providers, leading local players to look for accelerated consolidation to curb what is feared will be a foreign invasion.”
In July 2010, Khazanah Nasional won a fierce bidding war with India’s Fortis Healthcare to acquire Asia’s largest hospital operator: Parkway Holdings Limited of Singapore.
Mr. Pongsak predicts similar activity in Thailand: “The remaining smaller-scale players failing to bond with the local giants may be forced to team up with one another or else eventually sell out to foreign investors.”
BGH, aware of impending foreign competition, is committed to protecting its market share. In December 2010, the group acquired both the Phyathai Hospital and Paolo Memorial Hospital chains, 8 medical facilities in total, from the Health Network Group for a total of 12.6 billion baht (US$ 315 million). The acquisition is expected to be completed by the second quarter of 2011 and will expand the BGH hospital network to 27 facilities, with an estimated 20,000 a-day outpatient capacity once the merger is completed. This achievement has turned Bangkok Dusit into the second largest hospital group in the Asia-Pacific region outside of Japan.
The most recent acquisition in Thailand was made last week by Bumrungrad Hospital Plc (BH), the country’s second largest listed hospital conglomerate. On March 19th, BH purchased a 24.99% stake in Bangkok Chain Hospital Plc (KH), chief operator of Kasemrad Hospital Group, from developer Land & Houses Plc for 3.53 billion baht (US$ 116.7 million) at a share price of 8.50 baht (US$ 0.28) per share. BH has been subject to its own shareholding change recently. Last month BGH purchased an 11% stake in BH.
KH operates a health network of six hospitals under the Kasemrad brand, with approximately 1,240 beds and an operational capacity of 9,400 outpatients a day. Bumrungrad’s acquisition will expand their coverage and give it greater penetration into the growing Thai middle class market through the new locations in KH’s multi-facility network.
BH is now committed to extensive investments both in and outside of Thailand as part of their revised expansion strategy. Bumrungrad International was established in 2005 as a subsidiary to focus on advancing acquisition, development and management of medical delivery services throughout Asia and the Middle East. The firm has partnered with strategic international investors including Bangkok Bank plc, Hong Kong listed Asia Financial Holdings Ltd., Singapore’s Temasek Holdings and Istithmar World of Dubai. BH is currently working in conjunction with Asia Financial to develop a 500 bed private hospital in Hong Kong at a cost of US$ 300 million. The Hong Kong government is auctioning off four land plots for potential private hospital development. If their bid is approved, the project is expected to commence next year.
In Thailand, BH has outlined increased spending to increase the capacity of their medical facilities. 1.4 billion baht (US$ 46.3 million) has been earmarked for domestic infrastructure spending on top of the roughly 600 million baht (US$ 19.8 million) in annual costs attributed to equipment and facility upgrades. Through its international investment branch, the firm now operates 104 clinics and hospitals in 8 different markets.
The industry outlook for the Asia-Pacific region is good. The lucrative private healthcare market in Asia has become an increasingly important engine for growth. India, Singapore, Malaysia and Thailand have emerged as key medical tourism destinations for international clients. In addition to this, the rising level of disposable income among the native Asian populace has increased awareness of better quality of healthcare available through privately run medical sources as well as supplementary health insurance options. The low interest rate environment and improved knowledge of investment products are concurrently driving up demand for investment-linked insurance products, which are providing insurers in emerging markets in Asia with a significant scope for new written premiums.
Companies Mentioned:
Bangkok Dusit Medical Services
Bangkok Dusit Medical Services, together with its subsidiaries, operates a private hospital network in Bangkok, other Thai provinces and in Cambodia. The company was founded in 1969 and the first Bangkok hospital commenced operations in 1972. Private healthcare facilities include Samitivej hospital and BNH hospital.
Bumrungrad International
Bumrungrad Hospital Public Company Limited was founded in 1980 and is based in Bangkok, Thailand. The company’s primary activities are owning and managing hospitals. Its flagship facility, Bumrungrad International hospital, is a prominent medical centre attracting over a million patients annually and has been nominated as one of the world’s top ten international hospitals by Newsweek International.
Parkway Holdings
Parkway Holdings Limited is one of Asia-Pacific’s leading providers of healthcare services. Parkway operates a provider network of 16 hospitals with more than 3,400 beds throughout Asia, including Singapore, Malaysia, Brunei, India, China and the UAE. Parkway was first listed on the Singapore stock exchange in 1975.
Fortis Healthcare
Fortis Healthcare Limited, founded in 1999, is a leading healthcare provider with a network of 46 hospitals, satellite centers and heart command centers in India. The company also offers diagnostic, travel, IT and financial services through it’s’ wholly owned operation Religare Enterprises Limited.
Khazanah Nasional
Khazanah Nasional is the investment holding arm of the Government of Malaysia. The company acts as strategic investor in new industries and markets and manages these investments on behalf of the Malaysian government. The company became incorporated as a public limited company in September 1993 and began operations the following year. Khazanah holds investments in more than 50 companies, who are involved in many diverse industries including: banking, electronics, healthcare, manufacturing, and telecommunications.
Mar
24
Korean insurers going global, introducing domestic earthquake coverage.
Filed Under Insurance Company, Life Insurance | 3 Comments
South Korea currently boasts one of the ten largest insurance markets in the world with a particularly high-penetration rate in regards to life insurance. While the country’s insurance sector is made available to foreign multinationals, both the life and non-life segments continue to be dominated by large domestic companies.
In order to maintain their growth, Korean insurance firms are now looking to expand into international markets. Domestic analysts fear that the alarmingly low birth rate and rapidly aging populace will curtail momentum in the local insurance sector. At present, one in 10 Koreans is aged 65 or older, but the ratio is expected to rise to over 14 percent by 2018.
Korea Life Insurance, established in 1946 as the country’s first insurance company, has had to continue to innovate in order to maintain its market position amongst the local industry heavyweights. In March last year, it became the first Korean insurance company to go public. Now Korea Life is looking to strengthen its presence in global markets. The company is determined to maintain itself at the forefront of Korean insurance firms as they expand internationally.
Korea Life CEO and Vice Chairman Shin Eun-Chul emphasized this sentiment: “The local insurance market is becoming saturated, so advancement overseas is a must.”
Korea Life Insurance has already demonstrated it has the capacity to handle international operations. The company was the first Korean life-insurance firm to enter the Vietnamese insurance market in April 2009, and they have already achieved desirable results. In their first year of operating abroad, Korea Life took 1.8 percent of the Vietnamese market in terms of new sales. The total number of new sales in the first year amounted to 10,000 policyholders, and the insurance premium income was $3.3 million, a rise of 67 percent on the previous year.
Korea Life has enjoyed its success in Vietnam and is looking to further grow its business in the country. Operations began in the Southeast Asian country with a staff of 450 financial planners working out of three separate branches, one in Hanoi and two in Ho Chi Minh City. Today there are over 3500 employee,s and 10 local offices that include Dak Lak, Khanh Hoa and Dong Nai.
“The insurance industry in Vietnam is growing at an annual average of 10 percent. And 60 percent of the population is under 30, so the potential for growth is very large,” a Korea Life official said.
Korea Life hopes to match this projected growth in Vietnam through further expansion of their network to a workforce of 9,000 with 22 branches by 2013. The company is targeting a 7 percent market share for new life-insurance sales in Vietnam.
“Just as we have led the life insurance industry in Korea for the past 65 years, we will continue to write the history of the Great Challenge in Vietnam by offering the best products and customer services and helping the local insurance industry grow,” a Korea Life spokesman said.
After investing and officially starting operations in the Vietnamese market, the next destination for Korea Life Insurance will be China.
In December 2009, Korea Life Insurance signed a cooperation agreement with China-based Zhejiang International Business Group to partner together and invest 45 billion Korean won (about $40 million) in establishing a joint venture operation. The new Chinese venture would be headquartered in Hangzhou. It is seen as an important step in establishing a presence in Zhejiang Province, one of the higher-income regions of China.
Korea Life Insurance has become South Korea’s first insurer to establish a successful subsidiary in a foreign country. The relative ease to which they’ve transitioned into the Chinese and Vietnamese markets has enabled the company to consider further inroads into other emerging markets in the Asia Pacific region.
Meanwhile, in South Korea, the devastating aftermath of the record-setting earthquake and tsunami on Japan has led to calls from Korean analysts and companies in the insurance industry for the government to help development of an insurance system that covers damage dealt by earthquakes.
In the wake of Japan’s disaster, many Koreans are wondering whether they are, in fact, protected from a similar catastrophic occurrence. At present, local non-life insurers do not provide stand-alone insurance products covering earthquakes. , However, companies offering insurance policies against other natural disasters such as heavy rainfall, floods, typhoons and hurricanes do share compensation with the state.
Some industry officials want to extend a similar cost-sharing arrangement for earthquakes: “After the Japanese earthquake, the non-life insurance sector has naturally turned its attention to earthquake insurance, and there has been talk in some quarters of suggesting state-supported earthquake insurance to the administration” an executive from the Korea Non-life Insurance Association said.
Japan’s disaster insurance scheme is seen as a potential model to emulate. Through their system the national government shares over 90 percent of the payouts, and the private market deal with the remainder using reinsurance and retrocession. One industry officer concurred, “Korea needs to introduce insurance policies that compensate for losses, as Japan did.”
The insurance companies want the government to share the burden of compensation for these new policies given the significant unpredictability of natural disasters. There is also a proposal to place earthquake coverage under the state-regulated natural disaster insurance scheme.
“When potential volcanic activity of Mt. Baekdu became a sensitive issue in Korea, the government started to push for earthquakes to be included in insurance policies amid growing concerns that a volcano eruption-sparked quake could hit the nation hard,” said a representative from the National Emergency Management Agency.
Criticism has been levied at the proposed scheme, maintaining that an earthquake insurance policy will not be marketable due to the generally-held public belief that the Korean Peninsula is safe from a sizeable seismic threat.
“With low recognition of earthquakes in Korea, it is questionable if local consumers will sign up for the insurance,” observed one market analyst. “It appears to be premature to launch earthquake insurance although it needs to be considered over the medium or long term.”
According to a recent report issued by the Korea Insurance Research Institute, local awareness about the risks posed by earthquakes has remained low despite a rising frequency of earthquakes occurring in Korea.
The report goes on: “Although the number of earthquakes in Korea has continually increased, all economic units have underestimated the risk of earthquakes and do not consider them a subject for risk management because no large disasters have been caused by earthquakes.”
The Korea Insurance Development Institute offers supporting evidence; out of 1.57 million active fire insurance policies in 2008, less than half a percent were then registered for optional earthquake coverage. In housing statistics, only 266 out of 122,737 homes with a fire insurance policy were also covered against earthquakes.
Insurance Companies Mentioned:
Korea Life Insurance Co Ltd: 
Korea Life Insurance is an insurance company specialized in providing life insurance business. The company offers a wide range of insurance products including whole life/term insurance, survival insurance, death insurance, group insurance, annuity insurance and many other services for both individual and corporate customers. Substantial loan services, credit options, fund products and risk management services are also offered. Korea Life Insurance was founded as Daehan Life Insurance in 1946. The company is headquartered in Seoul, South Korea with additional offices in Ho Chi Minh City and Hanoi, Vietnam.
Mar
23
Qatar to introduce National Insurance Scheme in 3 years
Filed Under Expat Insurance, Health Insurance, Healthcare, Middle East, UAE Insurance | 1 Comment
A senior advisor from Qatar’s top health advisory body, the Supreme Council of Health, has announced that a broad national health insurance system with universal access for both citizens and visitors will be operable within the next 3 to 4 years.
Qatar’s Supreme Council of Health (SCH) was established by an Emir decree in 2005. The Council replaced both the former National Health Authority and Ministry of Public Health of Qatar. Although the state of healthcare provision in Qatar is currently very good, there are substantial problems on the horizon. The continued evolution of hi-tech medical technology and pharmaceutical innovations coupled with increasing expectations from patients for new treatments all coupled with a growing population are putting serious stress on the financial resources and infrastructure capacity of the state’s health care sector. Currently bed occupancy rates are above average and many patients surveyed complain about waiting lines for treatment.
Assistant Secretary General for Policy, Dr Faleh Mohamed Hussain Ali, spoke to the media at the SCH headquarters on Monday:“We are drawing closer to getting the national health insurance scheme up and running and we are presently developing a plan which will lay down the upcoming implementation process in discreet and incremental stages.”
When asked whether this significant measure was introduced to close the healthcare funding gap, Dr. Faleh Ali responded: “Our aim is to present this scheme as a tool for guaranteeing quality healthcare services and not as a means only to generate revenue as there will be competitiveness between service providers to the benefits of the users.”
The status of the comprehensive health insurance legislation is progressing quickly though its formative stages. Dr. Faleh Ali added: “The draft law is ready. There are some gaps in the draft law that need to be filled, after which it will be forwarded to the Cabinet for approval.”
In accordance with the original draft law, a national statutory health insurance association will be established within the next 12 months. This body will be tasked with overseeing the compulsory health insurance scheme, collaborating closely with existing insurance companies in Qatar, handling disputes between parties, and ensuring compliance with current health promotion and policy goals. After successfully registering and maintaining accreditation with the new government body, health providers would have access to both the public and private patient networks. Exactly how this will manifest itself is yet to be worked out. Both the healthcare practices in public and private sectors as well as insurance companies’ input and co-operation will be sought out in this exchange. The SCH will continue to regulate the health system and, according to the draft law, manage the new funds allocated towards the compulsory health insurance proposal.
The new healthcare scheme will offer a minimum service package at a pre-determined affordable premium. Standards regarding quality and cost of treatment will be reviewed and made abundantly clear to both providers and patients in the public system. Certain elective procedures, such as cosmetic surgery, are not currently planned to be covered or subsidized through the new scheme. Medical fees in the private sector are also thought to be under review prior to the execution of the national insurance scheme.
The full implementation of the national health insurance scheme is projected to take three to four years. Once completed, the public insurance structure will cover all nationals and expatriates as well as visitors to Qatar. Dr. Faleh Ali explained the reason for this: “Health insurance is a social scheme, so we are going to provide minimum package to cover healthcare costs of everybody including visitors and we will ensure that the premium is also affordable.”
Dr. Faleh Ali updated the media on the direction the project was going, saying: “We have just concluded the phase one of the scheme’s time-line and plan, which included selecting the best insurance option for the country by researching the best known international and regional practices as well as held an extensive stakeholders consultation.” He then added: “We are expecting to implement the first phase of the mandatory health insurance scheme by the end of next year. It will be a pilot project, targeting particular segments of the population, which is yet to be decided.”
The pilot program will enable the SCH to micro-manage a small proportion of the potential public healthcare base, allowing them to troubleshoot any problems for the main compulsory health insurance scheme that arise.
Dr. Faleh Ali confirmed that the Supreme Council of Health is already planning further ahead: “We are in the second phase of preparations for the project which includes establishment of the Statutory Health Insurance Body” and that “[i]ntensive work in establishing all other required infrastructure and prerequisites such as quality, cost and access standards, a common coding scheme, business and IT system and communication and public relations programme of dissemination of the scheme, will soon get under way”
The Assistant Secretary General further remarked: “In three to four years we should have a scheme offering universal coverage that others will aspire to replicate.”
Mar
22
Britain seeks to prevent abuse of NHS
Filed Under Healthcare, United Kingdom | 1 Comment
A series of new reports issued by both the UK Border Authority and the Department of Health outline plans the British government will take to ban foreigners from entry to Britain if they have previously amassed debts of £1,000 or more with NHS run hospitals.
The measures are designed to reduce the £10 million in revenue thought to be lost each year through deliberate temporary migration to and access of another state’s subsidized medical services without payment, also known as ‘health tourism.’
NHS healthcare is currently free at point of access for residents of the United Kingdom as well as members of other EU nations who qualify through reciprocal agreements. British GPs may elect to register any person as an NHS patient, leading many visitors to receive free primary care including licensed prescriptions. Access to secondary and more advanced care is supposedly subject to more screening and rules of entry, but in practice few are denied care or charged. Overall the NHS is seen as a more accommodating health service than many other countries, including accident & emergency treatment and full healthcare exemptions for overseas students and employees. The new health report concurs: “entitlement to free healthcare is considerably more generous to visitors and short-term residents than is reciprocated for UK citizens seeking treatment in other countries.”
While the Department of Health acknowledges the humanitarian duties the NHS must uphold in meeting the immediate medical needs of any person, they acknowledge that “there is also an obligation to the public purse to protect the NHS’s finite resources.” As a result of the current system only £40 million a year is recovered from “visitors”, with “at least a further 25 per cent (over £10m) of charges raised are not recovered and written off each year.”
To close this funding gap, The Department of Health and UK Border Authority have both carried out separate consultations and now agree that tougher rules for foreigners seeking medical treatment in the United Kingdom must be implemented.
As a result of these consultations, the UK Border Agency has decided to implement a change to immigration rules. Starting in October 2011, those who fail to settle debts to the NHS of £1,000 or more will “normally be refused permission to enter or remain in the UK.” Non payments above £1000 currently represent 94% of all outstanding costs to the NHS.
The Department of Health has stipulated that failed asylum seekers (who comply with Home Office support schemes), unaccompanied non-resident children and persons involved in the 2012 London Olympics and Paralympics will not be subject to charge for healthcare.
In order to implement this new health care cost-recovery policy, NHS Trusts will record details about patients from outside Europe and communicate more closely with immigration services to identify debtors when they make their application to return or stay in the UK. Personal medical records, however, will not be shared.
Immigration Minister Damian Green pledged: “The NHS is a national health service not an international one. If someone does not pay for their treatment we will not let them back into the country.”
A further comprehensive review of the current health system will analyze whether treatment costs could be covered through extending user fees to primary care services or whether to introduce a health insurance requirement for non-EU visitors. Additional reforms considered include an increase in time UK residents can spend abroad without losing their free healthcare entitlement, up from three to six months.
The Department of Health concludes that: “while the immediate actions to introduce immigration sanctions for debtors seeking to return to the UK will help to reduce levels of unrecovered debt, wider ranging actions are needed.”
While the NHS looks to cut down on abusive foreign patients, the growth of a global network of high quality medical services is legitimate. The substantial development of the global economy coupled with the falling costs of travel and communication has enabled world class medical practices to establish themselves all around the world. International clients seeking alternative healthcare solutions to their home countries at competitive prices now are presented with many opportunities.
Popular locations for medical travel include countries in South East Asia and Latin America, where many surgery procedures, including transplants, cost a fraction of the price they would do in North America or Western Europe and usually offer shorter waiting lists for treatment. The convenience and efficiency of pursuing international healthcare options is something to be considered for patients seeking to fully evaluate their future health procedures.
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