i U NATIONAL HEALTH SYSTEMS IN EIGHT COUNTRIES U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE Social Security Administration Office of Research and Statistics ”NATIONAL HEALTH SYSTEMS IN EIGHT COUNTRIES by Joseph G.I£:S,imanis US. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE Social Security Administration Office of Research and Statistics DHEW Publication No. (SSA) 75-11924 5‘! fimstsx/ Library of Congress Catalog Card Number: ‘ 75—600mm '_ «J For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 - Price $1.80 Stock Number 017—070—00269—2 R A 411 y 355 FOREWORD PUBL Discussions in Congress and elsewhere of a national health nlan for the United States have stimulated requests for information on national health systems in other countries. Numerous proposals that have been introduced in Congress reveal many different approaches, especially in the financing and health-delivery mechanisms. Most of these aonroaches have been tried abroad with varying results. As background, this report describes the basic application of health care delivery systems in eioht countries. It extends a series of Office of Research and Statistics publications that analyze national health proposals introduced in the U.S. Congress. The most recent of these publications, entitled National Health Insurance Proposals, contains bills introduced as of July l974. Hith minor exceptions the same orqani- zational format is employed here. The report was nrenared by Joseph G. Simanis with significant contribu- tions from Leif Haanes-Olsen, Elizabeth K. Kirknatrick, and Martin B. Tracy. All four are members of the International Staff. They draw on a wide variety of published and unpublished data as well as firsthand information obtained from officials and medical authorities of the countries studied who have visited the United States in recent years. John J. Carroll, Assistant Commissioner for Research and Ftatistics. January l975. CONTENTS Page Forevlor(locotol00.000.00.000.I.IOOOIOOIOOICOIOOOOIOOOO.1.1.1 Introductionoooouto.noIII00..OIoonoooooo-Dollooooooooo v Tabu1ar summaries.coo-ooocnoooocoo-Cococtoooooooltoonc 1 Australia............................................. 9 Canada................................................ 23 Federal Republic of Germany........................... 35 France................................................ 45 Nether1andS.OOOOOOOOOUOIOOOCIOOOOODOOIIOOOOIOOOOOOOOCO 57 New Zea]and.0~o.ooooololoooooooooolol.OII'OIOOOOOCCOOO 69 swedenooo-onOOOQOQOOOOIOOOOIOOOOOOOCIOOOnQOOOIOIOOIo'I 79 United Kingdomoo0.0.0.000.000.IOOOOOOIODIIOOOOOI'OOOII 9] Primary sources.toto.000..90.0000.00.00Inotouoloooooon 103 iv INTRODUCTION This report analyzes the health care systems of Australia, Canada, Federal Republic of Germany, France, the Netherlands, New Zealand, Sweden, and the United Kingdom. The following format is generally used here to facilitate international comparisons: Background Organization of health care delivery Physicians 'General practitioners Specialists Hospital physicians Hospitals Coverage Compulsory Voluntary Other Benefits Medical Cash payments Maternity Procedures for obtaining care Role of private insurance Financing Contributions Role of government Cost sharing Reimbursement procedures General practitioners Specialists Hospitals Pharmaceuticals To facilitate a quick comparison with proposals for a U.S. national health plan, a series of tabular summaries are presented covering the following: General concept and approach; coverage of the population; benefit structure; administration; relationship to other government programs; financing; standards and controls; reimbursement of providers of services; and costs. In making international comparisons of health care systems, differences in terminology must be kept in mind. Proposed national health plans for the United States are often referred to as "health insurance," however, the insurance concept is not universally used abroad. In a number of countries, notably the United Kingdom, health care is provided directly by the national health service system. In many countries, health insurance also includes two kinds of cash benefits. One is a cash sickness benefit equivalent to sick pay. The other is a cash mater- nity benefit. A brief treatment of such benefits has been given for each country reviewed. Occasionally, there is some confusion regarding the concept of "benefits." To say that a given country provides a given package of benefits may imply that such services are free. This is usually not the case since all countries employ some amount of cost sharing in their programs. In this study, cost-sharing provisions in each country are discussed under "Financing." vi AUSTRALIA Subject Provi s ions General concept and approach. . . . . . . . . . . . . Voluntary nonprofit private hospital and medical insurance with Federal Government subsidies for medical benefits, hospital costs, and pharmaceuticals. Involves cost sharing by patient for medical services and prescription drugs. Coverage of the population............... All residents are eligible. Insurance fund membership necessary to obtain most Federal subsidies. At least 90 percent of population is covered by the program or other government arrangements. Benefit structure................. Comprehensive health benefits, drugs, and nursing-home care. Cost sharing required for most medical services. Most prescriptions filled for 81 fee. Basic hospital insur- ance generally covers all hospitalization charges. Low—income population eligible for subsidies toward insurance premiums. Administration...................... Insurance coverage administered by registered private carriers according to Federal regulations. Hospitals are administered by States through local semiautonomous boards. Relationship to other government programs The Pensioners Medical Service progam provides free health care to about 90 percent of the pensioners. Health services in the Northern Territory and Australian Capital Territory are operated outside private insurance system by Federal Government. Cash sickness benefits are payable to gainfully employed persons earning less than 837 a week (about a third of the average wage).l/ Medical and. hospital insurance is financed through voluntary tax deductible premiums (about 2 percent of the average wage). Insurance benefits combined with government contributions from general revenue and with cost sharing to pay providers. Local and central government funds required to support hospitals and pharmaceutical programs. Standards and controls................... Standards for public hospitals are established by States. Voluntary fee schedule for medical services is determined by Federal negotiations with medical profession. Reimbursement of providers of services... Physicians: Usually paid directly by patient who then applies for partial reimbursement from his insurance hind. After reimbursement patient's residual cost cannot exceed 85 unless bill is more than schedule fee. Forty—four percent of typical fee paid by Federal grant, 37 percent by insurance, and 19 percent by patient. Specialists receive higher fees for identical services. Hospitals: Same procedure as for physicians to obtain insurance payment. 82 government subsidy also paid hospital on a per capita basis. Staff physicians are salaried employees. Half of hospitals' budgets funded by State revenues. Costs State and Federal. revenues cover more than onrhalf of total national health expendi— tures (including public health provisions) and along with insurance benefits leave less than a. third to be paid by out-of—pocket payments of the patient. l/ 1 Australian dollar equals U.S. $1.32. Note: The Government has announced a new universal health care delivery system to be introduced in July 1975 which would provide free hospitalization and more of the cost of medical services. As of April 1975, many of the details were still not determined. CANADA Subject Provisions General concept and approach. . . . . . . . . . . . . Provincial hospitalization and medical care programs which vary somewhat according to Province. The national government sets minimum requirements for the plans and pro- vides grants to the Provinces for approximately 50 percent of the costs. Coverage of the population............... All residents are eligible. Coverage must be portable while temporarily out of the Province or country. 99 percent of population is covered. Benefit structure........................ Physicians: All medically required services rendered by a physician without dollar limit or exclusions. Some cost sharing may be involved. Hospital: All usual inpatient services and extensive outpatient services in a few Provinces. Nursing home and home care, dental and drugs: Optional at expense of Province, generally not provided ‘ Administration........................... Provincial public health departments or medical care insurance commissions and hospital commissions. Federal Department of National Health and Welfare administers grants to Provinces and offers consultative services. Relationship to other government programs Special national programs for needy persons, seamen, Indians, and Eskimos for services not otherwise covered. Unemployment benefits available if unable to work due to sickness, injury, or maternity. Financing..... Medical care: Federal Government contributes 50 percent of the national per capita cost of insured medical care services, multiplied by the average number of insured persons in the Province. Provinces finance the remaining 50 percent principally by general revenues, but a few also impose premiums. In Quebec, an income tax surcharge is used on employees with a. matching levy on employers. Hospital care: Federal grants to Provinces for approximately 50 percent of cost of operation (25 percent based on national per capita cost of covered services and 25 percent based on that Province's per capital cost). Provinces finance the remaining 50 percent mainly through general revenues with some Provinces raising a portion of needed funds through premiums. Standards and controls................... Set by Provinces. Federal Health and Welfare Ministry provides consultative services on request by the Province. Reimbursement of providers of services... Physicians: Direct billing to the provincial plans which usually have fee schedules. There are variations by Province. A doctor may bill the patient directly and the patient must then seek reimbursement. Provincial payments usually cover 85-90 percent of fee for service as stipulated in schedule. Any charges by physician exceeding this level must be paid by patient. Hospitals: Based on annual budgets for individual institutions negotiated with provincial boards. Semimonthly lump-sum payments to cover fixed costs plus a slight margin of excess. Additional payments, based on per diem rates, for sliyatly less than the variable costs. Capital expenditures or service on capital debt is not com- pensated. Costs Health planning and research: The Provinces have active groups, and the ability to con- trol hospital operating budgets and professional fee reimbursement. Construction: Federal and Provincial grants cover about 20 percent of cost of approved projects. Several Provinces have made provisions to assume the financial burden of, new and old construction totally. Local communities must finance the balance. Manpower training: Federal Government will pay up to 50 percent of approved projects to construct teaching and research facilities. Public funds account for nearly three-fourths of total national health expenditures. FEDERAL REPUBLIC OF GERMANY Subject Provisions General concept and approach. . . . . . . . . . . . . . Decentralized health insurance system under government regulation which covers virtually all medical expenses of covered population, as well as extensive income replacement during illness. Coverage of the population................ About 90 percent of population is covered. Membership is obligatory for all manual workers and for self-employed and white collar workers earning below a stipulated ceiling (DM 22,500 per year) y Benefit structure......................... Comprehensive medical and dental services including hospital care and drugs. Nominal cost—sharing element principally for prescriptions and dental work. Cash benefits amount to 75-85 percent of wages if illness extends beyond 6 weeks; before that time employer must pay full wages. Administration............................ General supervision by Ministry of Health. Administration of contributions and bene- fits by 1,900 sickness funds. Funds organized mainly on a geographical basis, managed by elected representatives of insured persons and employers, and united into State and national federations. Relationship to other government programs. No other significant program other than government arrangements for welfare recipients and war victims. Under regular program, old—age pensioners are assessed reduced premiums which are paid by the pension funds. Miners also receive special benefits. Financing................................. Both medical care and cash benefits under the system are financed by payroll contribu- tions averaging about 9 percent of wages (half is paid by employer and half by employee). Standards and controls............._....... Ministry of health sets standards for physicians and hospitals. Regional Physicians' ‘ Associations monitor their members for overcharging or overprescribing. Reimbursement of providers of service. . . . . Physicians: Physicians' payments derived from lump—sum fund negotiated on a quarterly basis between Regional Physicians' Associations and Sickness Funds. Each physician receives a varying share of lump sum, depending on services provided members, weighted according to national standard fee schedule guidelines. Hospitals: Hospitals are paid directly by Sickness Funds on flat rate per patient-day basis negotiated according to government guidelines. Hospital physicians are normally salaried employees. Costs In addition to cash benefits, the governmental health insurance system pays for virtually all of the real cost of members' medical care, or about 60 percent of the total national health bill. In addition, the Government, mainly through its public health efforts and hospital subsidies, pays for about a fourth of total national health expenditures. y Mark equals U.S. ho cents. FRANCE Subject Provisions General concept and approach. . . . . . . . . . . . . A national health insurance system, supervised by the Ministry of Public Health and Social Security and administered through local sickness funds. Coverage of the population............... Over 98 percent of the population is covered under the national health insurance system or other specialized governmental systems. Benefit structure........................ Medical and hospital benefits provide the individual with partial reimbursement of ordi- nary expenses (physicians' fees, hospital costs, dental care, and prescription drugs) and full coverage for the expenses of costly or prolonged illness. Cash sickness benefits are paid for up to 3 years and cash maternity benefits for up to 11; weeks. Some additional income maintenance comes from family allowances. / Administration........................... Registration of insured, payment of cash benefits, and reimbursement of medical expenses are primarily administered by 122 Primary (local) Sickness Insurance Funds, COOI‘diH- ' nated by 16 Regional Funds under a National Sickness Insurance Fund. Each level sub— ject to governing boards with representatives appointed from labor and management. Entire health care delivery is under the general supervision of the Ministry of Social Affairs. Relationship to other government programs Sizable special systems for agricultural employees, miners, and others with somewhat different financing and benefit levels. Additional income maintenance from family allowances which continue during illness. Costs are basically met through payroll contributions, which for the average worker total 3.5 percent of his earnings and. an additional 12.15 percent from his employer. These fimds not only support medical care and cash benefits but also disability bene- fits. In addition, social security covers health care expenses of pensioners who are exempt from contributions. System has often required transfers from other revenue sources to bring its operations into balance. Standards and controls................... Physicians are subject to standards established by professional associations. Private hospitals and pharmaceutical must meet prescribed standards set by the Government and insurance mechanisms to qualify for reimbursement of fees. Reimbursement of providers of services... Physicians: Both generalists and specialists, as well as dentists and pharmacists, are generally paid by the patient who then receives partial reimbursement from the insur— ance system according to a fee—for-service schedule or pharmaceutical reimbursement lists. Hospitals: Fees are usually composed of a basic daily rate approved by local authori— ties plus the charge for physicians' services as set down in the fee—for—service schedule. These fees are usually paid directly by the insurance system to the hospi— tal, except for the deductible which is paid in most cases by the patient. Most hospitals are public institutions but a number of privately owned hospitals also adhere to the agreed rate structure. Public hospital physicians are salaried. Those attached to private hospitals ordinarily receive payment directly on a fee-for- service basis. Costs The social security health insurance programs pay about 60 percent of the nation's total personal health care costs and the private individual pays about a third through cost sharing directly and through premiums to mutual societies. NEWS Subject Provisions General concept and approach. . . . . . . . . . . . . A governmental insurance plan designed to cover most of the population, except for higher income brackets. Parallel systems cover the whole population for catastrophic illness and all workers for cash siclmess benefits. Coverage of the population............... 70 percent of population is covered for ordinary medical care. On a compulsory basis membership includes workers earning below a stipulated ceiling and their families. Voluntary membership is open to self—employed and pensioners with income below the ceiling. Entire population covered for catastrophic costs and special medical care. Whole working population also covered for cash siclmess and maternity benefits. Benefit structure........... ..... Insured receives comprehensive medical and dental services including hospital care, nursing home care, and drugs. Whole population, in cases of catastrophic illness, is generally entitled to full cost of medical care after 1 year of illness and for certain types of institutional care before that time. Cash benefits amount to 80 percent replacement of earnings for an unlimited time. Administration. . . . . ..... . ...... . ..... . . . . Administered by about 90 private insurance funds under supervision of Government's Sickness Funds Council. Relationship to other government programs Special system for miners, railway employees, seamen, and public employees. Cash sick— ness pays for every incapacity during first year, including work—connected illness and those which elsewhere would be covered by disability pensions. Some additional income maintenance comes from family allowances. Financing ....... ..... Employers and the insured each contribute h.75 percent of earnings. An additional 2.6 percent is paid by employer for catastrophic coverage. These funds are essentially adequate to finance all medical care extended to the insured. Minor subsidies are paid by the Government to help defray the cost of medical care for pensioners and low—income groups. Cash benefits are financed by payroll contributions of 1 percent by employee and 6J4 percent by employer on earnings up to a stipulated ceiling. Standards and controls. . . . . .. rl'he siclmess funds keep statistics on prescription practices by the physicians and on referrals of patients to specialists. In cases where significantly abovehaverage frequencies or cost in either category can be attributed to a. physician's practice the funds' medical adviser may ask the practitioner for an explanation and, in some instances, funds may impose fines or suspensions. Medical complaints against physi— cians may be lodged with the Netherlands Medical Association. Although most hospitals are private their operations are subject to review by a. variety of governmental authorities; expansion is controlled by the central government. Reimbursement of providers of services... Reimbursement procedures for physicians cover a wide spectrum of methods: General prac— titioners are paid on a. capitation basis, while specialists are reimbursed by methods utilizing salary, fee—for—service, or case—payment approaches. Some of these proce- dures have been devised in an effort to discourage prolonged and unnecessary treatment of the patient.. The typical hosPital is a private institution paid directly by a sickness fund primarily utilizing a schedule of fees set by the Union of Hospital Associations under govern- ment guidelines, but also taking into account annual budget considerations of the specific hospital. Some hospitals bill separately for hospital physicians' services. Costs Virtually all of the nation's total medical costs are covered by health insurance expenditures, except for routine medical expenses of 30 percent of population not covered by system and small cost—sharing element. Government subsidies total about 13 percent of insurance expenditures and remainder comes from payroll contributions. In combination, public insurance and other public funds par for more than two-thirds of the nation's total health bill. Cash benefits are financed entirely from payroll contributions. NEWZEALAND Subject Provisions General concept and approach. . . . . . . . . . . . . The national health care system of New Zealand is based on a public hospital service and subsidized treatment by private medical practitioners. Coverage of the population............... All residents and their dependents are covered. Benefit structure........................ Medical benefits include physician care, hospital care, most prescription drugs, laboratory and X-ray work, and prosthetic devices. Dental care is provided to children under age 16. The patient, however, normally pays a significant part of the cost particularly for treatment by physicians who in most cases are private practitioners . Employed workers with limited income are eligible for cash sickness benefits which are administered by the Department of Social Welfare. A cash maternity benefit, which is also income—tested, is payable to employed women 3 months before and after confinement. Administration...................... The system is administered by the Department of Health and 30 elected hospital boards. Relationship to other government programs A nominal amount of hospital care covering work—connected illness is financed by the Worlcrnen's Compensation Board. Financing............. The government's health program is financed entirely out of general revenue. The total cost of those medical services paid directly by the patient is equal to slightly more than a fourth of the total amount spent by the nation on health. Standards and controls...._............... Department of Health carries out 1 percent postal check on physician claims. Medical health officers review physicians' practices to determine whether there are excessive consultations and overpresoribing. Reimbursement of providers of services... Physicians' fees are not controlled, but the flat—rate government payment toward each patient consultation is fixed. The general practitioner normally bills the Department of Health directly for this amount and the patient pars the difference. Most private specialists are paid in hill by their patients who then seek the fixed—government pay- ment from the Department of Health. Physicians employed by public hospitals are paid on a salaried basis. Over 80 percent of the hospital beds are in publicly owned institutions where both inpatient and outpatient care are provided free. Such hospitals receive budgetary allotments for current expenses and large capital expenses are met by government~ guaranteed public loans. Private hospitals receive various forms of public financial support, most notably a subsidy for each occupied bed, thereby reducing the amount that must be charged to the patient. Costs.................................... Estimated government expenditures pay for slightly less than three-fourths of the nation's total health costs. SWEDEN Subject Provisions General concept and approach. . . . . . . . . . . . . A modified health insurance system relying heavily upon facilities hmded and operated by various levels of government. The system provides nearly all necessary and medical services to the whole population, but involves a simificant degree of cost sharing by the patient for ambulatory care. Coverage of the population............... Health insurance is compulsory for all residents. Coverage for cash sickness benefits includes virtually all gainfully employed and, on a voluntary basis, most housewives and students. Benefit structure........................ All necessary medical and hospital services with a newly expanded dental care program. Includes nursing home coverage and a well-developed system of home nursing and home help arrangements. Cash sickness benefits of unlimited duration generally pay about 90 percent of earnings to the typical worker. Administration........................... Much of the administrative work connected with benefits and contributions is performed by about 600 government—operated local funds which are also active in other areas of social insurance. The local funds are supervised by 26 regional offices under a National Social Insurance Board and the Ministry of Health and Social Affairs. Opera- tion and fiscal management of health facilities are mainly by local county governments with planning shared with the central government. Relationship to other government programs Health insurance is administered as part of overall social insurance. Local governments are directly responsible for providing most health services. Financing”.............................. Compulsory contributions to health insurance by insured are paid along with income tax. Mproximately 2 percent of earnings from average worker and an additional 3.8 percent of earnings paid by his employer.) However, health insurance funds pay for only about 10 percent of the total national health bill. The rest comes primarily from general revenues and cost sharing. About 70 percent of health insurance funds are utilized to pay for cash benefits. Standards and controls............._...... Standards for health services provided by local govemments regulated by national statutes. National planning provides for norms and standards of new and expanded facilities. Patients may lodge complaints with Ombudsman who act as watchdog committee for Parliament. Reimbursement of providers of services... Physicians: Most physicians are salaried as public employees either in district medical offices principally in rural areas or as hospital staff. Patient pays 12 kronor for each visit and health insurance pays local government 148 kronor.l/ About a fourth of ambulatory care is provided by private physicians who are paid directly by patient who in turn receives partial reimbursement from the insurance system. Hospitals: Hospitals are financed by the county budgets. Inpatient hospital services are essentially free to the patient but the health insurance system pays 15 kronor per day on his behalf. Costs.................................... Health insurance funds play a relatively small role in meeting total national health costs. Local and central government funds pay for most of the remainder. Somewhat less than a fifth of the total is met by patient fees. y i krona equals U.S. 23 cents. UNITED KINGDOM Subject Provisions General concept and approach. . . . . . . . . . . . . . Universal health care delivery system through a national health service. Coverage of the population................ All residents are eligible. Visitors are also eligible in most instances. Benefit structure..................... Comprehensive medical care including drugs and dental care. Small amount of cost shar- ing for prescriptions and dental treatment. Extended—care facilities under expansion. Home nursing care services provided under public health features of program. Administration................... Overall supervision by Department of Health and Social Security. On April 1, 197k, a unified scheme replaced three separate jurisdictions for (1) physician and allied services, (2) hospital services (including specialist treatment), and (3) public health programs. Relationship to other government programs None for medical care. Public health features are more important than in most countries particularly with respect to home nursing. Cash benefit program is administered separately as part of overall pension branch of social security. (A typical worker making the)average wage is entitled to a benefit corresponding to about 70 percent of his wages. System is financed mainly by general revenue. Approximately 15 percent is financed by cost—sharing features and weekly payroll contributions. The small compulsory flat- rate contributions amount to 0.18 pound weekly for a male worker and about 0.08 pound from his employer (totaling less than 1 percent of the typical worker's wage).l/ Standards and controls.................... The Department of Health and Social Security supervises hospitals through Area Health Authorities. Physicians' standards are supervised by the Area Authorities and Family Practitioner Committees. Their prescribing procedures are subject to special scrutiny by Regional Medical Officers. Reimbursement of providers of services.... Physician receives payment on capitation basis with supplements. Specialists are normally salaried hospital employees. Hospitals are governmental institutions with budgets funded from government appropriations. Costs..................................... The National Health Service finances, including receipts from cost sharing, account for at least 90 percent of total national health care costs. There is still a small pri— vate medical sector which accounts for a large part of the remainder. y 1 pound equals 11.3. 82.32. AUSTRALIA Australia's health care system relies on voluntary insurance plans that are administered primarily by nonprofit carriers but heavily subsidized by government funds. All residents are eligible to enroll with a spec1- fic carrier for either medical or hospital insurance or both and pay premiums according to the coverage they elect. At least 90 percent of the population is covered by the system or other government arrangements for health care delivery, such as a Special free medical care program for pensioners. For the typical insured patient, medical benefits include the services of physicians, hospitals, and nursing homes but exclude normal dental care. The physician is usually paid directly by the patient‘who in turn receives partial reimbursement in the form of combined payments from his insurance and from the Federal Government through his medical benefit fund. These payments are based on schedules drawn up in each State according to the "most common fee." If the physician's charge does not exceed the schedule, the patient‘s net out-of—pocket payment averages less than 20 percent of the total fee and is subject to a ceiling of $5.1] Settlement of hospital charges follows the same pattern as that for physicians, except that the patient normally receives full reimbursement for his expenses according to contracted coverage. The Federal Government pays a separate subsidy per patient directly to the hospital. The whole cost of a means-tested cash sickness benefit program is borne by the Federal Government. The Federal Government also pays the insurance premiums of low-income groups. Hospitals and physicians providing services to the elderly under the special pensioners program receive reimbursement entirely from the Government, but at rates lower than those they receive for treating other patients. All Australian residents, whether or not insured, benefit from the subsidized pharmaceutical program under which prescriptions generally cost only $1. The Government has announced a new program to supplant the present scheme effective July 1975. In essence, the changes aim at providing free hospitalization and more of the cost of physician care. The new system depends on general revenue to provide more of the overall financing and Federal-State cost sharing to finance the hospitals. 1/ 1 Australian dollar equals U.S. $1.32. BACKGROUND In the 1930's and early 1940's, expansion of the public role in the health care delivery system was impeded by constitutional limitations on Federal powers and the traditional resistance of medical practitioners to Govern- ment controls. As a result, until after World Mar 11, Federal involve- ment in health care was limited to such public health services as quaran- tine programs and the prevention of disease. In 1946, however, a consti- tutional amendment gave the Federal Government authority to legislate expenditures for social welfare and health care programs. The first subsequent legislative effort to provide comprehensive medical care on a national basis came under the 1948 National Health SerVices Bill. As enacted, the Bill gave the Federal Government authority to provide residents with medical services, to maintain and manage hospitals and other health facilities, and to subsidize a portion of physicians' fees. Most of these provisions were not implemented, largely because of resistance by a majority of physicians. Later, another significant pro- gram did obtain the support of the medical profession; this was the Pensioner Medical Service Plan implemented in 1951, which provides free medical services to pensioners whose income does not exceed a prescribed amount. To surmount opposition, the Government replaced the 1948 health plan with a series of substitute programs which it introduced gradually and then consolidated under the National Health Act of 1953. This legislation remains the country's basic health program despite a number of amendments. The 1953 Act reaffirmed the voluntary insurance approach to health care protection but extended the scope and duration of government financing by establishing a program of subsidization for insurance funds and hospi- tals. Under this approach, the Government paid a fixed amount for each medical service according to a fee schedule, benefit funds made a minimal matching payment, and the patient paid the residual, which was intended to be at least 10 percent of the total. The program also established a list of free "lifesaving" drugs (a 50-cent charge was introduced in 1960, raised to $1 in 1971). In 1963 a government subsidy was made available for patients in approved nursing homes. A number of important changes were made when the National Health Act was amended by the Health Benefits Plan of 1970. A new concept, the most common fee, was introduced as the basis for a revised fee schedule. Once again, however, the fee schedule was made voluntary and depended on the cooperation of the medical profession to make it workable. The new schedule provided for a fixed patient fee—for-service copayment. It was hoped that cost to the patient would be lowered as a result. Under the preVious arrangement, the out-of-pocket payment by the patient was averag- ing about a third of the total fee. The amendments also introduced a government program-~the Subsidized Health Benefit Plan--to pay the insurance 10 premiums for certain low-income families. Additional government regula- tions relating to more rigid registration were instituted under the plan to limit the expenditures for operating the health benefit funds. ORGANIZATION OF HEALTH CARE DELIVERY The delivery of institutional health care is primarily the administrative responsibility of each State. Functional operations of community health facilities and public hospitals are generally administered by State Ministries of Health, usually through a local board of directors. At the Federal level, the Department of Health has direct administrative responsibility for health care delivery in the sparsely populated Northern Territory. This department also administers the quarantine programs and health care delivery in the small Australian Capital Territory and in veterans' institutions. Before 1973, the Department of Health also administered the subsidy programs for medical and hospital benefits. It still retains jurisdiction over the pharmaceutical benefits program. Since l973, the Federal program of subsidization has been the responsi- bility of the Department of Social Security. Under this Department, the Health Insurance and Benefits Division establishes national standards for the State public health care facilities and the benefit funds; it also negotiates with representatives of the medical profession and Depart- ment of the Treasury to set the common fee for most medical services in each State. In negotiations with the voluntary insurance benefit funds, the Government establishes standards for health insurance plans applicable to each State. A benefit fund is required to register separately for each State in which it operates; and as part of the registration require- ments, each benefit fund must prove that it is financially sound and set premiums in accordance with its_financial status. Administrative problems in the delivery of health care in Australia are alleviated by the unusual concentration of the population in urban areas, where about 85 percent of the population and medical practitioners live. Over 40 percent of the total population of 12.7 million live in the Sydney and Melbourne areas alone. Remote rural areas are served by a network of medical practitioners who travel by air transport when emergen- Cies arise. Physicians Australia had l6,000 medical practitioners in 1972, or about l for every 800 people. General practitioners make up about 44 percent of this total, specialists 27 percent, and medical service officers 29 percent. Slightly more than two-thirds of the medical practitioners practice on a freelance baSis; these include almost all general practitioners and about 80 percent ll 579-431 0 - 75 - 2 of the specialists. Most of the salaried physicians are medical service officers, general practitioners, and specialists employed by public hospitals, veterans' facilities, local community health centers, and health-related facilities such as public parks and recreational areas. General Practitioners.--The percentage of physicians who are general ractitioners declined from 79 percent in l947 to 44 percent in 1965, largely because of the emphasis on specialization in medical schools and the higher earnings available to specialists. The generalist prov1des most of the initial health care and performs all normal duties required for general medical treatment, including surgery. However, only a small percentage of younger doctors perform major surgery. In l965, 70 percent of all subsidized medical services were still performed by general practi- tioners; but this proportion had declined to 58 percent by 1973. About 80 percent of generalists work in groups of three or four, and about 1,000 generalists practice in health centers which have been informally modeled after those in the United Kingdom, Canada, and Finland. These health centers provide the general practitioner with support from social workers, psychiatrists, and nurses. By l975, the proportion of physicians affiliated with such health centers is expected to increase to 28 percent of all general practitioners. Growth of health centers reflects govern- ment and Australian Medical Association policies favoring medical facili- ties which provide social and nursing services, to relieve the physician of work that does not require his skill. The health centers also meet with the approval of many physicians because they emphasize preventive health care at lower costs, provide more effective health care in rural areas, and present a possible alternative to any compulsory national health insurance system. Specialists.--The relative decline in general practitioners has been paralleled by an increase in specialists as the specialized needs of public hospitals have grown. Although a patient may consult a specialist without first seeing a general practitioner, in such cases he must ordi- narily pay a larger share of the specialist's fee himself. Without evi- dence of a formal referral, the government subsidy is limited to the level paid to general practitioners rather than that set under the higher special- ist fee schedule. Hbspitaz physicians.--Physlclans practicing in large hospitals are either specialists who are full-time, salaried medical service officers employed by the hospital or private practitioners who charge a fee—for-service for treatment they give to patients. Although all patients admitted to a public hospital must be under the supervisory care of a specialist, the patient may choose to be attended by his family doctor, who is normally a general practitioner. 12 Hospitals As of l97l, about 70 percent of the l,l00 approved hospital facilities in Australia and over 80 percent of the 78,000 beds were public. Public hospitals are administered and regulated by State governments through a semiautonomous local board of directors. Public hospital fac1l1ties normally include ward, semiprivate, and private accommodations. Some . States have combined wards and semiprivate accommodations under a Single “standard ward." The overall ratio of hospital beds to population is 6.1 beds per 1,000 people. Of these, public hospitals provide 5.1 beds per l,000. Nonprofit voluntary and private facilities, which make up the remaining 30 percent of hospitals, tend to be smaller than public hOSpitals. There are only 5 private h05pitals with more than 200 beds compared to 77 public facilities of that size. Recently, many private hospitals have concen- trated on treating the less seriously ill or have converted to nursing homes. Nursing Homes Nursing homes assume care of chronically ill and sick aged persons who do not need the intensive care provided by hospitals. Patients must be referred by a medical practitioner for admittance. About 80 percent of these patients are aged pensioners entitled under the Pensioner Medical Service. The number of public and private nursing-home beds in Australia increased from 16,500 in l959 to over 5l,000 by l972. Fifty- four percent of the nursing homes are private, 27 percent are run by religious and charitable institutions, and 19 percent are operated by State governments. COVERAGE Official estimates place the percentage of population covered by health insurance at 80 percent for medical benefits and at 79 percent for hospi- tal benefits. Excluding Queensland, the scope of medical and hospital insurance coverage is nearly uniform among the States with a range of 81 to 87 percent of the population covered. Since hospital treatment in public wards and outpatient clinics is free for all residents of Queens- land, the proportion of its population which has contracted for insurance is low, only 55 percent for hospitalization and 57 percent for medical benefits. Thus, hospital insurance coverage there generally applies only to private accommodations. If the portion of the population outside Queensland with insurance is added to those pensioners covered under a special program, far less than 10 percent of the population is left without coverage. However, these people are generally assumed to be the poor who cannot afford to meet medical care out of their savings. 13 Although membership in hospital and medical benefit funds is voluntary for all residents in Australia, coverage is a prerequisite for receiving - a government subsidy toward payment for medical service charges. An individual can insure with only one hospital and one medical benefit fund. Usually a single organization is registered to handle both types of insurance. A resident may enroll in any fund regardless of his history. Persons with a pre-existing, chronic, or long-term illness can obtain coverage under a government-subsidized program. Pensioners Persons receiving an old-age, invalidity, or widow's pension and meeting a means test are entitled to free medical treatment under the Pensioner Medical Service. Dependents of such pensioners are also covered under the program. Over 90 percent of pensioners are enrolled and with their dependents they comprise l0.3 percent of the total population. Expendi- tures for this program represent about 5 percent of the total national health expenditures, which include government subsidies for medical, hospital, nursing home, and pharmaceutical benefits. Low-Income Families The Subsidized Health Benefits Plan provides low-income families and social security beneficiaries receiving unemployment or sickness benefits with hospital and medical insurance coverage through a private benefit fund. The Government pays the full insurance premium for nonpensioner families whose income is below $60.50 a week (about two-thirds of the average industrial wage in l973). Partial premium payments were made on a graduated scale for families with incomes up to $69.50 a week. In late l972, about 29,000 families or about 2.7 percent of the total population received total or partial payments under this program. An estimated 250,000 families (about 23 percent of the population) would be entitled under the program if they applied. A wide-scale campaign has been launched to inform noninsured and underinsured families of their potential eligibility. BENEFITS Medical Medical benefits for insured persons include physician services, all surgical procedures, and some types of oral surgery. All services by general practitioners and specialists are covered. All Australian resi- dents, whether or not they are insured, can obtain pharmaceuticals which are on the approved list for a small cost-sharing fee. Generally all drugs regarded as essential for medical treatment are included on the list. l4 There is no general provision for medical appliances, but pensioners, widows, and disabled persons usually receive assistance under spec1al government arrangements. There has been a notable expansion of home care services since l969 when State programs in this regard became eligible for financial assistance from the Commonwealth on a matching basis. Under a separate program, the Pensioner Medical Service, comprehensive medical treatment is provided without charge to qualified pensioners and their dependents by general practitiOners under contract. Private specialist services are not included in the Pensioner Medical Service program but are available without charge on an inpatient basis in public hospitals. Free medical care is also provided to certain long-term or chronically ill patients. If the insurance liability ends because of a costly or prolonged illness, the Federal Government assumes responsibility for continued payment of the contracted benefits. Hospital Minimum hospital insurance coverage provides for comprehensive protection in public ward accommodations. However, patients can contract for private or semiprivate accommodations by paying a higher premium. Daily rates for public wards range from $l5 in New South Wales and Victoria to $20 for a standard ward in Western Australia. Services performed by staff physicians for public ward patients are provided without charge. In New South Wales and Victoria--the two most populous States--public wards are restricted to persons who meet a means test. Insured patients who do not meet this test are generally covered for semiprivate or private accommodations by their hospital insurance. In Queensland, public wards and related services are free for all residents of the State. In all States, pensioners entitled to the Pensioner Medical Service are treated in public wards without charge. Nursing Home All patients of an approved nursing home are entitled to a Federal subsidy of $3.50 a day for ordinary care and $6.50 a day for intensive care. Under the Pensioner Medical Service, elderly persons receive a Federal subsidy which pays the difference between a fixed copayment of $2.55 a day for both ordinary and intensive care and a set standard nursing- home fee established by the Government. The amount of the subsidy varies according to the level of fees applicable in each State. Since March 1973, a $2-a-day subsidy is also paid to persons who care for aged rela- tives in their own homes. 15 Rehabilitative treatment is provided for certain disabled persons who are receiving unemployment or sickness benefits, tuberculosis allowances, invalid benefits, or widows' pensions. The treatment may include the full cost of medical, dental, psychiatric, and hospital care, physiother- apy and occupational therapy, as well as vocational training. Cash Payments Cash sickness benefits are payable on a means-tested basis under the Social Services Act to gainfully employed breadwinners earning less than $37 a week (about one-third the average industrial wage in 1974). Lower earnings levels apply to single adults, workers over age l6, and families in which the wife works. Benefits in l974, payable after a 7-day wait- ing period, were $31 as a maximum plus supplements for dependents and rental allowances. Maternitv A woman who permanently resides in Australia receives a lump-sum grant of $30 upon giving birth to a child, if there are no other children under age 16 in the family. The grant rises to $32 when there are one or two other children, and to $35 when there are three or more children. The grant is increased by $l0 for each additional newborn child in case of multiple birth. Expectant or nursing mothers are entitled to free day-care services at infant welfare centers and baby clinics. A mother enrolled in a hospital insurance fund will normally be covered for private accommodations in a public hospital or a public outpatient clinic for her delivery. If she chooses a private hospital facility, she must pay for any cost of care above the normal hospital coverage for public accommodations in that State. The lump-sum maternity grant is not affected by her choice of accommoda- tions. PROCEDURES FOR OBTAINING CARE To receive government-subsidized medical and hospital care for himself and family, a person must be a member of a registered benefit fund. Any adult resident can apply for membership in an insurance fund of his choice. Once enrolled, the patient can make an unlimited number of visits to a physician of his choice. No registration is required for any one medical practitioner. A patient can also visit a self-employed specialist without a formal referral from a generalist but, in this case, additional subsidies for the higher specialist rates are not paid. Admission to a public hospital (including outpatient clinics) is usually based on a referral by a medical practitioner. Generally, patients 16 referred to a hospital are those suffering from acute conditions or are maternity cases. Persons with less serious illnesses are referred to nursing homes. Immigrants are considered as residents for purposes of hospitalization and are eligible for membership in a benefit fund. They are entitled to retroactive coverage for the period immediately after their arrival as long as they apply for membership within the first 2 months. ROLE OF PRIVATE INSURANCE Basically all health insurance in Australia is private. The nonprofit funds which operate in this field, however, must meet certain national standards and be registered with the Government. Federal regulations also control the amount of a benefit fund's financial reserves and operating expenses. The funds offer limited competition in the range of services and premium rates. 0f the 90 registered benefit funds, all provide hospitalization coverage and 81 provide medical insurance. More than two-thirds of the total membership is enrolled in five funds which provide both types of insurance. Although membership is generally nonrestrictive, 26 funds provide coverage only for persons employed in particular industries, trades, or professions. Thirty-six of the medical benefit funds and 34 hospital benefit funds provide coverage for persons eligible under the Subsidized Health Benefits Program. Eighty-five medical benefit funds and 70 hospital funds main- tain government-subsidized plans for long-term and chronic illnesses. FINANCING Contributions Medical or hospital insurance coverage is financed through tax deductible premiums made on a voluntary basis to one of the benefit funds. Payroll deductions for coverage with a benefit fund can be made if requested, or an individual may choose to make payments directly to a fund or pay the premium through a fund agent (often a pharmacist). Premiums are payable in advance on a monthly or quarterly basis. The combined premiums for family coverage under medical and hospital insurance are about 2 percent of the average industrial wage. For families in l973, the insurance premiums for medical benefits ranged from a flat rate of 50 to 84 cents a week and for minimum hospitalization coverage from 70 cents to $1.05 a week. As a rule, premiums for single persons are about half the family rates. In addition to marital status, the variation in premiums is often due to the scope of coverage and the State in which the coverage app 1es. l7 The Role of Government The latest available data show that in 1970 about 55 percent of the fund- ing for national health expenditures (excluding public health activities, research, and education) was met by public funds: Fede l (30 percent), State (24 percent), and local government (l percent). The remaining 45 percent of health care costs were funded by patients' fees (31 percent), insurance benefits (13 percent), and charity (1 percent). Preliminary data indicate that the combined public portion rose to nearly 60 percent in 1972. The increased share of government expenditures has been due primarily to the new program and procedures initiated under the 1970 amendments. As of 1974, the Federal Government provided 43.8 percent of the total cost of physician services, prepaid insurance benefits provided 36.7 percent, and insured patients' payments provided 19.5 percent (plus any portion which exceeds the most-common-fee schedule). By contrast, back in 1954, the first year of operation under the Health Benefits Plan, the payments were 31.4 percent by Federal subsidies, 31.7 percent by benefit funds, and 36.9 percent by patients. FederaZ.--Federa1 subsidization payments, designed to help provide low- cost health protection on a voluntary basis, are directed toward physician services, hospital treatment, and pharmaceuticals. For physicians' services, the subsidies are made to the medical benefit fund for payment to the patient. Subsidies for hospitalization are paid to the hospital on a per capita basis of $2 a day (80 cents a day for uninsured persons and $5 a day for pensioners entitled under the Pensioner Medical Service). Pharmaceutical benefits constitute 33 percent of the Commonwealth's health services expenditures. This is the most expensive category in the subsidi- zation program and covers 80 to 90 percent of all prescribed drugs. Oral contraceptives are the main exclusion from a national list of approved pharmaceutical items. State.--About 50 percent of all public hospital expenditures are funded by State revenues. (Federal subsidies comprise about 20 percent of the total costs, insurance benefits 21 percent, and patients' fees 8 percent.) Cost Sharing Out-of-pocket payments made by insured patients for medical treatment aver- age slightly less than 20 percent of the fee-for-service up to $40 but never more than $5 for any charge made within the cormon fee guidelines. The insured patient pays for any excess amount charged by the physician over the common fee. In 1973 the proportion of fees which exceeded common fee guidelines ranged from a high of 42 percent in Victoria to a low of 30 percent in Western Australia. 18 There is also a nominal copayment of $1 per item for approved prescrip- tion drugs. Low-income persons eligible under the Sub51dized Health Benefits Plan pay only 50 cents for each pharmaceutical item. Normally, insured hospital patients are either covered in full for hospitalization or are entitled to free public accommodations. If the insurance does not cover special accommodations where free facilities are. not available, a patient must make an out-of-pocket payment for such serv1ces. A fixed copayment of $2.55 a day is also made by insured persons and qualified pensioners admitted to nursing homes where rates are charged in compliance with a government-determined standard fee. REIMBURSEMENT PROCEDURES General Practitioners General practitioners usually receive payment for services directly from the patient. The patient ih turn files a claim for reimbursement from his insurance fund. The amount of benefits awarded by the carrier is determined by a schedule based on the most common fee charge for the State where the service was rendered. All carriers within the same State pay an equal amount of reimbursement for identical medical services but there are slight variations from State to State. The payment made by the fund to the patient includes a government subsidy which is determined by a separate Commonwealth-wide Schedule. If the patient is unable to pay the physician the full amount immediately, he may file a claim with the fund, which will forward a check in the physician's name to the patient for delivery. General practitioners and other providers of medical services who are under contract with the Government to treat members of the Pensioner Medical Service receive remuneration at a somewhat lower rate than is customary for other patients. For the general practitioners, until recently, the fee was $2.50 for each consultation and $3.60 for a home visit. In July of 1974, these rates were raised to $3.75 and $5.70, respectively. Specialists Specialists in private practice receive fee-for-service payments based on a schedule of the most common fee for services performed in a hospital or at their office. For approximately 300 services that could be performed either by a generalist or a specialist, the official schedules prescribe a higher fee to the specialist even though the actual treatment may be identical. 19 Hospitals Public hospitals are paid directly by the patient in 70 percent of the cases. The patient then files for reimbursement or requests the benefit fund to pay the hospital. The benefits paid by the fund vary with the amount of contracted insurance. Insurance payments generally meet total costs but cannot exceed actual charges made by the hospital. Payments for medical services in outpatient clinics are made the same way as for hospital inpatients. In Queensland and Tasmania outpatient serv- ices are free. The charges for any type of accommodation are standardized for all hospitals within each State and include physician services, unless a patient is attended by a private physician. The Federal subsidy is not a part of the insurance payment, but is paid directly to the hospital per patient per day. Federal subsidies paid to nursing homes are made in a similar manner. Pharmaceuticals When purchasing prescription drugs the patient pays a flat rate of $l per listed item to the pharmacist who receives payment for the remainder from the Federal Government. Reimbursement to the pharmacist includes his full costs together with markups for his services. The drug must be on the national list of approved drugs but the purchaser need not be a member of a benefit fund. 20 APPENDIX A new national health scheme, desionated as Wedibank, has been drawn up by the current Labor Government and on Auoust 8, l974 received Parliment- tary approval as the Health Insurance Act of 1973. As announced by the Government, the lenislation was to be implemented in July l97F. Follow- inn is a brief outline of major provisions which are subject to revision as a result of discussions which continue with factions desirino chances from the ranks of Parliament, the State Governments, and the health insurance industry. The new prooram provides (l) coveraoe for all residents, (2) a minimum of 85 percent of the averaoe cost for medical services to be paid by the Government (with a 35 maximum cost to the patient for any service charoe of $33 or more), and (3) free comprehensive hosnitalization in standard ward accommodations, financed by Federal-State cost sharino. The principal administrative chanae in the new proposal is the replace- ment of the voluntary benefit funds by a sinole oroanization under the direct supervision of the Department of Social Security. Private health insurers may offer supplemental coveraoe of health services for such items as more expensiVe acconmodations in public and private hospitals than provided under standard ward care and such services as physiotherapy and home-nursino care on a fee-for-service basis. Under the provision for sharinn hospital costs between State and Federal Governments, Federal subsidies are to be determined by neootiations with the States, and Federal payments are made on a per diem basis for up to 50 percent of the total cost. Currently, all States finance more than half the hospital costs. Hospital patients are entitled to free standard ward accommodations under the care of a staff physician. If they prefer, they may enqane private specialists on a fee-for-service basis. Those who wish to have private accommodations may either pay the extra charoe directly or insure with a private benefit fund. Medical care continues on a fee-for-service basis by a private physician of the patient's choice, but nreater adherence to a new schedule of fees is expected than prevails under the old system. 21 CANADA Canada's health care delivery system is based on federally subsidized hospitalization and health care programs. The programs are administered by the Provinces under the general supervision of the Federal Department of National Health and Welfare. About 99 percent of the population is covered. Benefits include hospitalization and most physician services. Dental work, pharmaceuticals, and nursing-home care are generally not included. A separate unemployment insurance program provides cash sickness and cash maternity benefits for covered workers. Federal grants to the Provinces meet about 50 percent of the cost of covered services. The remainder comes from provincial government revenues, some of whichareprovided in a few Provinces by special payroll taxes or flat-rate contributions from the insured. Although fee-for-service prevails as the method for reimbursing physicians, the Provinces may adopt any method for paying providers. A wide variety of experimental methods have been tried. The reimbursement procedures for physicians also vary but usually take the form of payments from the Provinces at 85 to 90 percent of a provincial schedule of fees. In most Provinces, physicians may charge more but, in the relatively few cases when they do, the patient must pay the difference and must be notified of the extra billing before treatmentc Other forms of cost sharing, if imposed, must not exceed guidelines designed to assure all persons reason- able access to insured services. Slightly more than half of the hospital accommodations are in nonprofit institutions which are privately owned. Virtually all hospitals, however, are funded by the Provinces after appropriate budget review. Nongovern- mental insurance organizations (carriers) have been designated as inter- mediaries in the past, but their role in most Provinces has receded to providing coverage for medical benefits not available under the govern- mental system. BACKGROUND The development of public medical and hospital insurance in Canada began in l914 when a rural municipality in Saskatchewan formed a tax-supported medical care insurance program. The action was soon followed by provin- cial legislation which granted authority to municipal governments to levy property taxes for the purpose of providing medical care. In l917 similar legislation was enacted to permit financing hospital care at the municipal 23 level. Shortly thereafter, other Provinces followed the Saskatchewan example but on a more limited scale. Although health care in the Provinces was limited by tradition to the initiative of local governments, provincial governments began to assist the municipalities in the l920's by financing certain health care costs for the indigent. This type of public assistance accelerated as popula- tion growth, rising medical costs, and the depression placed an increasing burden on the fiscal resources of local governments. The impact of the depression on the capability of local municipal and provincial governments to provide adequate health care also led to serious consideration of health insurance plans on a national scale. In 1935 a national program was enacted but was subsequently declared unconstitutional. The court decision, which reaffirmed limitations on the Federal role in health care, served to stimulate the development of a number of prepaid service plans and physician-sponsored medical care plans. In addition, a number of universal health insurance plans were proposed and legislated at the provincial level in the prewar period, but none were implemented largely because of changes in governments and opposition from medical providers. Proposals for a national health insurance program were discussed by Federal and Provincial representatives in l945 but agreement could not be reached on financing. Saskatchewan then established its own publicly financed program for universal hospital care in l947; British Columbia followed suit in l949 and Alberta in 1950 on a restricted basis. Despite the setbacks to earlier plans, the pattern for Federal participation was established in l948 under the National Health Grants Act which provided the Provinces with revenue for public health surveys and hospital construc- tion. When Newfoundland became a Province in l949 it brought another universal hospital program to the Commonwealth. Hospital Insurance In 1956 a national health insurance program for hospital coverage based on shared costs by the Federal and Provincial governments was enacted under the Hospital Insurance and Diagnostic Services Act. It was not until 196l, however, that all the Provinces had become participants. Under this approach, administrative autonomy remained with the Provinces and municipalities while Federal funds financed about half of the hospital expenditures. The program covered inpatient hospital expenses (including drugs administered) and only those physician expenses incurred when treatment was performed by salaried staff of the hospital. Medical Insurance Provision for public universal medical insurance was first initiated in the Province of Saskatchewan in 1962. From l963 to 1966, various forms of comprehensive public medical coverage plans were also adOpted in 24 Alberta, British Columbia, and Ontario. Moreover, by the end of 1966, 60 percent of all Canadians had some voluntary insurance coverage for physicians' services. The proportion of the population with some form of protection, private or public, was over 82 percent. Although coverage was widespread, increasing costs led to Federal enact- ment of the Medical Care Act of 1966. This Act provided the basis for a shared-cost program similar to the Federal-Provincial arrangements for hospital care; that is, Federal revenues finance about half the medical care expenditures of participating Provinces. Saskatchewan and British Columbia were the first to join in July l968, but Ouebec, Prince Edward Island, and New Brunswick did not become participants until 2-1/2 years later. All Provinces and Territories now participate in the program. ORGANIZATION OF HEALTH CARE DELIVERY The Department of National Health and Welfare, the chief Federal agency in the field of health, deals with many specialized health matters, particularly those concerning public health. The Health Programs Branch administers the Federal aspects of the shared-cost provincial hospital and medical care insurance programs and provides technical advisory services, manpower training assistance, and health research grants to provincial health departments, universities, and voluntary agencies. The Federal Government plays a limited role in actual health care delivery. The major governmental responsibility for health services for most of the population comes within the jurisdiction of the 10 Provinces.l/ These, in turn, may delegate certain health responsibilities, such as local public health functions, to regional or local municipal governments. Organization and administration vary from Province to Province. In some Provinces certain programs such as hospital insurance and medical care insurance are administered directly by provincial departments of health. In other Provinces the same programs may be the responsibility of separate public agencies directly accountable to a provincial minister. Physicians // General practitioners.--0ver recent decades, the number of general practitioners has steadily declined. By 197l, it is estimated that only 41 percent of active physicians were general practitioners. In small towns 1/ The two territorial governments in the sparsely populated northern areas of Canada also have jurisdiction over certain health services. 25 and rural areas, they often provide specialist services in addition to primary care. The future will probably reverse this decline of the generalist. Ouebec and Ontario are actively encouraging the training of general practitioners, and this attitude is reflected in the increased emphasis by most of the medical schools on preparation for family practice. Since the general practitioner performs many specialist services in rural areas, in some instances including surgery, he also provides a large part of hospital physician needs. But even in urban settings, where there is a greater density of physicians, the general practitioner participates more in hospital care than is the case in European countries. If the general practitioner has been appointed as a member of the active staff in a city hospital, he has the right to admit and treat patients for many types of illness. In the urban hospital setting it is not uncommon for him to perform normal obstetrical services and some minor surgical opera- tions. Most general practitioners tend to practice on a solo basis. But in recent years, particularly in the Nest, group practice has become increasingly important. Specialists.--In l97l approximately 40 percent of practicing physicians in Canada were specialists. However, many of the specialists provide primary care not only in their own specialties but also of the type ordinarily provided by generalists, particularly in rural areas where there is perhaps not enough work to keep a specialist occupied full time in his area of expertise. Specialists who practice as private practi- tioners also usually provide the bulk of inpatient hospital care. To be eligible for such work the specialist must, of course, be appointed to the hospital staff. Hospital physicians.--In l97l, approximately l8 percent of the practicing physicians in Canada were salaried personnel, most of them employed in hospitals as interns and residents. Hospital care, however, is also provided by private practitioners, both generalists and specialists. In recent years, the hospitals, through their outpatient services, have become increasingly important as sources of primary care, most of which is provided by the hospitals' regular staff. Hospitals Approximately 93 percent of the hospital beds in Canadian hospitals in l97l were in institutions called public hospitals. This category ex- cluded only those beds in Federal hospitals and in small private profit- making institutions. 0f the total number of beds in public hospitals, approximately l98,000 in 197l, or about 40 percent, were located in 26 municipal and provincial hospitals. The remainder were in private non- profit institutions; about 40 percent in the so-called lay 1nst1tutions and about 20 percent in those with religious affiliations. Although most of the public hospitals are privately operated, they receive funds from public sources and must submit their budgets for approval. COVERAGE Virtually all residents are entitled to medical and hospital care under Canadian Government programs. About 96 percent of wage and salary earners are also covered for cash sickness and maternity benefits under the Unemployment Insurance Act of l97l. Medical Care The Federal Medical Care Act requires that insured services must be avail- able with uniform terms and conditions to all residents of the Province regardless of age, ability to pay,'or other circumstances. Tourists and visitors are not eligible for coverage. Foreign students are eligible only in British Columbia and Nova Scotia if they are residents of the Province for more than l2 consecutive months. As of 1973, some 21.5 million people or 99 percent of the eligible popu- lation (those not covered by another government program such as for the Armed Forces and for war pensioners) in Canada were covered by the medi- cal care programs. In most Provinces, where no premiums are required, all residents are automatically insured. In the four premium-paying Provinces, practice varies. Coverage in Ontario is compulsory for employee groups of 15 or more persons, but is usually voluntary for others. British Columbia's plan is totally voluntary and access to benefits depends on the payment of premiums. In Alberta, this payment of premiums is compulsory but a resident may opt out of the medical health insurance plan for renewable periods of l2 months. In Quebec, premium payment is legally required but entitlement to benefits does not depend on it; a similar arrangement prevails in the Yukon Territory. Provisions governing the coverage of immigrants vary from Province to Province. Some provide coverage from the day of arrival, others require a 3-month waiting period from the first day of residency or registration. Canadian residents who move to another Province are covered for at least 2 months (subsequentl the individual qualifies for benefits in the new Province or territory . Generally, residents who emigrate from Canada are either automatically covered for 3 to l2 months or are able to pur- chase coverage for a specified period. Residents of Quebec, however, lose their coverage on the day of departure if they are permanently emigrating. 27 519.431 0 - '15 - 3 Hospital Care As far as population coverage is concerned, no significant differences remain between hospital insurance and that for physician care.§j In most Provinces, hospital insurance terminates when the resident emigrates; in a few Provinces residents can purchase hospital insurance for a limited time if they are leaving Canada permanently. Also, in British Columbia, coverage is automatic for hospital care insurance. BENEFITS Hospital and Medical All provinces and territories provide free hospitalization when required. Ward care is free, but the patient may choose private or semiprivate accommodations upon payment of a differential fee. Benefits also include most medically required services of physicians. Principal exclusions, which normally apply to all residents except those on welfare, are telephone advice, ambulance charges, eyeglasses, wigs, hearing aids, dentures, appliances, and prescription drugs except when dispensed as part of inpatient hospital treatment. Routine dental care is also not covered. Ouebec has passed legislation for dental services but the program has not yet been implemented. Since January l, 1974, Alberta has extended routine dental care and optical care to residents over age 65 and their dependents. In September l974, Saskatchewan began phasing in an insured dental service for children up to l2 years of age. Nursing-home care is also not ordinarily a benefit; Alberta and Manitoba are exceptions. Ontario is also an exception in this regard since it does extend such benefits when medically necessary. A daily copayment charge is, however, required of the patient. Provisions of such medical care benefits which are at the discretion of the Provinces do not ordinarily receive Federal matching subsidies. Included in this category are services of chiropractors, podiatrists, osteopaths, which a few Provinces make available as medical benefits, and services of optometrists which most Provinces provide. Several Provinces make special provision for the medical costs of the elderly. Manitoba and British Columbia, for instance, have programs to meet the cost of pharmaceuticals purchased by the aged. g] In Alberta, Manitoba, Nova Scotia, and Ontario, medical care and hospital insurance programs have been merged. 28 Private nonprofit health insurance plans, available in all of the Pro— vinces, provide benefits for noncovered services such as drugs, private nursing care, appliances, and ambulances. In Alberta, residents who are ineligible for group coverage and wish to subscribe to these private supplementary health insurance plans can have their premiums subsidized by the provincial medical care insurance program. Obstetrical services of a physician or an obstetrician as well as prenatal and postnatal visits are provided in all of the Provinces and Territories under the medical care insurance plans. All necessary hospital care with standard ward accommodations is provided under the Hospital Insurance Diagnostic Services Act. Cash Benefits Under the unemployment insurance program, cash benefits are payable to any worker incapacitated because of illness or maternity. The qualifying period is 20 weeks of employment during the 52 weeks preceding unemploy- ment. To be eligible for a maternity benefit a woman must also have been employed at least 10 of the 20 weeks prior to the 30th week before the expected date of confinement. The maternity benefit is two-thirds of weekly earnings and the cash sickness benefit three-fourths of weekly earnings, both with a minimum of $20 and a maximum of $l23 a week.§/ Both are payable for l5 weeks. However, the cash sickness benefit requires a 2-week waiting period. PROCEDURES FOR OBTAINING CARE The individual is free to consult any physician. For cost reasons, how- ever, the patient may prefer a participating physician to a nonpartici— pating physician. A nonparticipating physician is usually permitted to make an extra charge which is payable by the patient. Referrals to specialists are usually made by a general practitioner. Most Provinces will not make reimbursement at the higher specialist rate unless the patient is first referred by a general practitioner. a] l Canadian dollar equals U.S. $l.02. 29 In the hospital, the individual is free to receive care under the doctor of his choice, and most physicians have admitting privileges in at least one hospital. Some university hospitals, however, are closed to all physicians except those with teaching appointments. Although all residents in the nonpremium-paying Provinces are automatically eligible for benefits, they must generally register themselves and their dependents. In New Brunswick, however, registration is optional. In Newfoundland and Prince Edward Island there is a legal requirement to register but such registration is not considered to be a precondition for access to benefits. ROLE OF PRIVATE INSURANCE By the mid-l960's, 99 percent of the Canadian population was covered for hospital care benefits under the Federal-Provincial hospital insurance program. However, since such coverage did not ordinarily apply to physi- cians' care, even when administered on an inpatient basis, private insurance coverage for such medical care grew rapidly during this period. At the end of l966 about 60 percent of the Canadian population had basic coverage for physicians' services under private agencies and, including public programs, a total of about 82 percent of the population had some form of protection in this respect. Subsequently, as the Federal-Provincial public programs for physicians' care came into effect, much of the private insurance was phased out, or its administrative apparatus was absorbed by the Provincial public authorities. By the end of 1969, when pertinent public programs were operative in seven Provinces, total insurance coverage for physicians' services had expanded to include 89.7 percent of the population. But public plans accounted for 71.5 percent and private coverage remained operative for only l8.2 percent. For a time, in some Provinces, private entities, particularly the largest nonprofit health insurance societies, continued to function in the public system as nonprofit carriers; in British Columbia this function continues. Many private plans also continue to sell their own supplemental insurance pgliciis to protect against health care costs not_covered by the public p ans.__ Since most of the basic hospital and medical charges are now covered by the government plans, the supplemental private plans provide for a variety of miscellaneous costs not otherwise covered, such as dental care, hospital 3/ Precise figures on such supplemental coverage are not available. 30 accommodations beyond the basic level, prescription drugs, prosthetics, ambulance services, hearing aids, glasses, and private-duty nursing. In most Provinces, private insurance is also made available to new immigrants who are not eligible for public coverage until after 3 months' residency. All Provinces prohibit private insurance coverage for the cost of physi- cians' services provided under the public plan. In Alberta it is possible to opt out of the public plans.5/ Also, as in Alberta, Provinces may subsidize supplemental coveragej'reflected in the form of reduced rates for individuals who cannot join a group plan through an employer. Premiums through a private health service plan are counted as medical expenses for tax deduction purposes. FINANCING Contributions At the present time six of the ten Provinces do not require premiums or contributions from the insured for health insurance. In British Columbia, premiums amount to $5, $l0, and $12.50 a month for single persons, couples, and families of three or more, respectively. A family thus pays the equivalent of about 2 percent of the average indus- trial wage in l972. In Alberta, the normal premium is about the same, the equivalent of $5.75 a month for an individual and $ll.50 for families. Until recently, Manitoba and Saskatchewan also had premiums at a slightly lower level but these were eliminated in June 1973 and January l974, respectively. In Ontario, single individuals pay an $ll premium; families pay $22. In Quebec, a person contributes 0.8 percent of his net annual income above a certain amount which varies primarily according to marital status. The maximum contribution amounts to $l25 annually if tax-paying employees earn at least 75 percent of their incomes from wages and salaries. In other cases the ceiling in $200. Employers also contribute 0.8 percent of payroll. 5/ For all practical purposes such an option is rendered meaning- less By the nationwide ban on duplication of public coverage by private carriers. 31 The Provinces imposing premiums make provision for reducing or eliminat- ing them for low-income residents. In Alberta and Ontario, residents over age 65 do not have to pay premiums. Cash benefits are financed by employer and employee payroll contributions toward unemployment insurance. Role of Government Canada's health program is basically supported by government funds, either from Federal or Provincial sources. The Federal Government contributes approximately half the cost of the hospital and medical care programs in each Province. The medical care portion of Federal funds is financed by a 2-percent income tax surcharge with a maximum of $100. To avoid overpaying the Provinces, each year the Federal contribution is estimated in advance and then l0 percent is held back until a yearend settlement takes place. The provincial share of health expenditures is financed in most cases by general revenues. Some Provinces also impose premiums and a variety of special taxes have been employed by one Province or another over the years, such as a property tax in Alberta and sales taxes in British Columbia and Nova Scotia. Estimates made in the late l960's assumed that once all Provinces had joined the Federal health insurance plan, all items covered by govern- ment health schemes would account for about two-thirds of the total national health care costs. If other Government health expenditures (particularly in the field of public health) were included, a combined total of 80 percent was considered to be possible. More recent govern- ment estimates put the approximate share of the total national health bill met by government expenditures of all kinds at nearly three-fourths. Cost Sharing Cost sharing arrangements are discouraged to a certain extent by Federal policies. Although not precluded by Federal legislation, they must not impede access to medical care, particularly for the low-income groups. The Federal formula for reimbursing approximately 50 percent of medical and hospital costs also discourages cost sharing since no contribution is made toward that portion of costs paid directly by the patient. Only three Provinces--Alberta, British Columbia, and Saskatchewan--have ever employed cost sharing for hospitalization; of these only British Columbia still retains its fee, a $l-per-day charge. 32 Presently, there is no direct cost sharing levied by any of the Provinces for physicians' care. (Saskatchewan formerly imposed a charge of $l.50 per doctor's office consultation and $2 for a home call.) However, the practice of "extra-billing“ by physicians as described below introduces an element of cost sharing. In Ontario, the first Province to include nursing-home coverage as a medical benefit, cost sharing is imposed on the beneficiary. As of January l974, the patient paid $4.50 a day and the Government paid the balance. REIMBURSEMENT PROCEDURES General Practitioners Provincial fee schedules are drawn up by the provincial medical associa- tion and then negotiated with the provincial government. Medical practitioners are paid on a fee-for-service basis according to provincial rate schedules. In Alberta and Quebec, the doctor receives lOO percent of the fee schedule; but in most Provinces, participating doctors are required to accept a lower percentage of payment, usually between 85 and 90 percent of the schedule, as payment in full. In most Provinces, the physician may bill the patient for the difference between the benefit and the schedule after giving the patient prior notification. In some Provinces he must obtain the written consent of the patient in advance. In all Provinces, provision has been made for physicians to "opt out" of the medical care plan and to bill their patients directly rather than through the public authority. These doctors are required to inform their patients before billing them, and they usually charge more than the bene- fit payable by the provincial plan for the same services, a practice which is called “extra-billing": This means that patients are not usually reimbursed for the full amount when they submit their bills to the provincial medical care plan for payment. In Quebec, however, patients who use the services of opted-out physicians are not eligible for any government reimbursement. Specialists Reimbursement of specialists is similar to that of general practitioners. A number of Provinces, however, specify that nonreferred consultations_ with a specialist receive a benefit equal to that of the general practi- tioner rather than at the higher specialist rate; in such cases, the patient must pay the difference. 33 Hospitals Provinces are reimbursed by the Federal Government with respect to insured inpatient and outpatient services provided by their hospitals. The reimbursement amounts to approximately 50 percent of the costs of pro- viding these services. The exact fonnula used raises the Federal per- centage in those Provinces where the per capita cost of hospital care is lower than the national average and acts in the opposite way in those Provinces where per capita cost exceeds the national average. As a result, the Federal share ranges from 63 percent in Prince Edward Island to 47 percent in Ontario. Hospital expenses are covered by provincial appropriation and are deter- mined by annual budget review procedures. Many hospitals also derive some income from the differential charged the patient who chooses semi- private or private accommodations rather than free ward care. Newfound- land, Nova Scotia, and Saskatchewan permit their hospitals to retain 50 percent of this differential, but Prince Edward Island does not permit its hospitals to keep any part of the funds so obtained. Pharmaceuticals Pharmaceutical costs are not reimbursable to regular beneficiaries under the basic medical care insurance plans of any of the Provinces or Territories.6/ The cost of hospital-dispensed prescription drugs is absorbed intB'the overall budgets of the individual hospitals or institutions. g] Recipients of welfare benefits usually receive free prescription drugs. For the elderly, British Columbia has a program to provide free drug prescriptions and Manitoba has a cost-sharing program. 34 FEDERAL REPUBLIC OF GERMANY Health care delivery in the Federal Republic of Germany utilizes a decentralized health insurance approach. The system is administered by l,900 semiautonomous sick funds under the general supervision of the Ministry of Health. Approximately 90 percent of the population is covered. Insured members include primarily all wage earners as well as those salaried workers and the self-employed who earn less than a stipulated ceiling. Dependents are also covered for medical benefits‘ Benefits in kind cover all medical and dental expenses, but include a small cost-sharing element for prescription drugs, dentures, and prosthetic devices. A cash sickness benefit is paid to incapacitated workers; working women are entitled to cash maternity benefits. The insurance system is financed primarily by payroll contributions. Worker and employer each contribute 4 to 5.5 percent of covered earnings. Independent physicians, both general practitioners and specialists, are paid directly through a modified fee-for-service system with payment by sick funds channeled through regional physicians' associations. Hospitals are generally staffed by salaried physicians. Over half the hospitals are publicly owned. Daily hospital charges, which typically include physicians' services and medicines, are paid directly by the sickness funds on a flat-rate fee per patient-day negotiated with each hospital according to government guidelines. BACKGROUND When first established by Bismarck's Government in l883, health insurance in Germany covered only l5 percent of the population, essentially the poor industrial worker and his family. Originally, the program was aimed more at providing cash benefits (an insurance against loss of income) rather than medical care. Over the years, however, the emphasis has changed as expenditures for medical care have risen from less than 40 percent of total health insurance benefit expenditures in l885 to 80 percent in 1971. The scope of benefits in kind has also gradually widened. For instance, medical care was originally limited to 18 weeks but has gradually been extended to the point where it is virtually unlimited. Although almost all independent practitioners in Germany are now registered with the sickness funds, before 1960 the funds limited the number of doctors under contract with them. However, in l960 the nation's 35 Supreme Court declared that such restrictions infringe on the constitu- tional right of all citizens to select their profession and plaCe of work. Most recently, there has been a move toward extending medical care serv- ices to include preventive medicine. As of July l97l, health insurance has covered health examinations aimed at early detection of diseases in children up to age 4, and detection of signs of cancer in women over 29 and in men over 45. ORGANIZATION OF HEALTH CARE DELIVERY The public medical care system in Germany, although established by statute and subject to government regulation and supervision, is actually adminis- tered by l,900 sickness insurance funds (Krankenkassen). Negotiations are held with regional doctors' groups and hospitals to establish the fees and procedures involved in providing the minimum health care stipulated by law and such supplemental benefits as each fund agrees to provide its membership. The sickness funds administering the public health insurance system operate as autonomous organizations under public law. They may be divided into the following categories: Approximate percent Type of fund of insured workers enrolled Locality (Ortskrankenkassen)... 53 ‘Enterprise (Betriebskranken- kassen).IDOOOOODOOOOOOOOOOUOO 13 Guild (Innungskrankenkassen)... 5 Substitute (Ersatzkrankenkassen, predominantly white collar)... 24 Ordinarily, a worker joins the closest locality fund to establish his health insurance coverage. If the worker is engaged by a large business establishment that has its own funds or belongs to a guild that has a sick fund, he would join such a fund instead. The same holds true for those few occupations which have their own funds: miners, farmers, and seafarers. All funds provide for prescribed basic benefits but they differ somewhat in supplemental benefits offered and in contribution rates levied. The sickness insurance funds are combined into several regional associa- tions and, at the national level, are grouped into a joint committee with representative groupings of registered physicians. 36 Each fund has a board of directors, half of whom are elected by employers and half by workers. They report to various Land (State) governments which oversee their financial stability. Although each fund is financially autonomous, final supervisory authority for fiscal matters lies with the Ministry of Labor and Social Affairs and affiliated governmental agencies (the Land Insurance Offices and the Federal Insurance Office). Physicians In l968 there were about 9l,000 qualified physicians in Germany. About 55 percent were engaged in independant practice, about one-third employed in hospitals, and about one-tenth involved in administration or research activities. Practically all of the independent practitioners are regis- tered with the health insurance funds and are thus qualified to treat insured members and their dependents. They are organized on a regional basis into associations of health insurance doctors. General practitioners.--Approximately 55 percent of the independent prac- ticing doctors are generalists, as are slightly less than 50 percent of those employed by hospitals. Indications are that the general practitioner in Germany engages in a considerable amount of treatment that could be considered specialist medicine elsewhere. The individual doctor decides whether to treat a certain type of illness or refer the patient elsewhere. The tariff schedules, issued by the Ministry of Health to serve as a guideline in establishing fees, do not, in fact, differentiate between specialists and general practitioners. The tariffs do, of course, exclude major surgical operations which can only be performed in hospitals. Otherwise, the size of payment depends on the form of treatment regardless of who administers it. Specialists.--Slightly more than half of the specialists are engaged in independent practice outside the hospitals. Along with general practi- tioners registered with sickness funds, they are organized into regional health insurance doctors' associations. Very little outpatient care takes place in the hospitals. Ordinarily, the patient‘s physician, whether general practitioner or specialist, is not permitted to continue treatment after the patient is admitted to a hospital. Treatment is conducted by the hospital staff in his stead. 37 Hbspital physicians.--Ab0ut a third of the country's qualified physicians are engaged in hospitals as employees. Slightly more than half are specialists who are almost exclusively committed to treating inpatients. Outpatient care at hospitals is not widespread. The senior physicians of the hospital specialist staff, the ”hospital chiefs," are allowed to participate in some outpatient care. However, there are not many who do so; only about 5 percent of the total number of physicians registered with sickness insurance funds are hospital specialists. Hospitals About 55 percent of hospital acconmodations are in publicly owned insti- tutions. Approximately another 35 percent are operated on a nonprofit basis by charitable organizations, usually with church affiliation. There are, in addition, a few private hospitals run for profit. The system of nursing homes is relatively undeveloped. However, the spa occupies a much more important place in the German medical care pattern than in most other countries. COVERAGE About 90 percent of the West German population is covered by public medical care insurance, either through direct membership or as dependents. Direct membership, totaling 30 million, is in three different categories: compulsory, the special care of pensioners, and voluntary. Compulsory Members include all manual workers and salaried workers earning less than DH 22,500 a year.l/ Most categories of self-employed workers earning below that ceiling also are compulsory members. These categories consti- tute about 59 percent of the enrollment in public medical care insurance (excluding dependents). Pensioners Pensioners belong in a separate category. For about 3 years they were obligated to pay a small premium from their pensions, but in 1970 this requirement was canceled. On their behalf, pension agencies now pay approximately two-thirds the regular combined employer-employee contri- butions paid for coverage of active workers. It is generally 1/ l mark equals U.S. 40 cents. 38 recognized that premiums at this level do not meet all the costs of health care for the elderly recipients involved. Thus, it is assumed that the contributions of younger members will be set at a level which adequately covers not only their own costs but also a portion of those incurred by pensioners. Voluntary Traditionally, membership in the health insurance system has been barred to salaried workers and the self-employed who earn more than the stipulated ceiling. Exceptions have been made for those who once established their membership at a lower level of earnings. In such cases the individual has been permitted to remain a member on a voluntary basis. In recent years, there has been a trend toward liberalizing the rules under which high-income workers can participate. In 197l, a 3-week open season was declared to allow all workers earning above the ceiling to join as voluntary members. Since then, any worker who enters the work force with earnings above the ceiling is given 3 months' grace to join if he so desires. In 1974 the ceiling was set at UM 22,500. BENEFITS Medical and Hospital Medical benefits cover the cost of all medical care which may appear necessary and effective for treatment and alleviation of an illness or injury, including referral to hospitals and specialists when necessary. Hospital care includes treatment, food, and third-class accommodations. Outside the hospital there are small cost-sharing arrangements for necessary prescription medicines and appliances. The insured person has free choice among the doctors registered with the sickness insurance funds. Dependents receive medical care on the same basis as insured persons. Home nursing and convalescent home treatment are standard in only a few Laender (States) but are provided on a discretionary basis by some insurance funds in other Laender. Treatment at one of West Germany's spas is also a part of standard coverage. Since 1971, a few preventive medicine services have been added to health insurance coverage, primarily physical checkups for children under age 4, women over 29, and men past 45. Although most dental care is covered in full, dentures are provided as an optional benefit. Whenever a sickness fund does provide such coverage, it makes only a partial payment toward the cost of dentures; this 39 generally amounts to a third of the total cost (insured pensioners receive an additional third from the pensions insurance institutions, so that this category of persons typically pays only a third of the total cost). Cash Benefits Cash benefits are paid only to directly insured members (but not their dependents) as active participants in the labor force when they become temporarily incapacitated by illness. However, during the first 6 weeks of an illness the employer is legally bound to pay full wages to the incapacitated worker. It is only after this initial period that the sickness fund assumes responsibility for paying the benefit. The benefit is set at 75 percent of the worker's wages (subject to the ceiling). There are also dependents' supplements amounting to 4 percent for the first dependent plus 3 percent for the second and third, up to a maximum total of 85 percent of wages. Benefits are payable for a maximum of 78 weeks within a 3-year period. As of l974, the health insurance funds have also paid wages for up to 5 working days a year if a parent must remain at home to care for a sick child under 8 years of age. Another new benefit provides for household help for a family with a young child if needed because a parent has been hospitalized. The health insurance system also provides a funeral grant upon the death of an insured worker or a pensioner. The exact amount varies from fund to fund, ranging from 20 to 40 times the basic daily wage (with a maximum of DM 800). Pensioners' families are usually awarded the equivalent of 3 months' pension upon death of the principal. Maternity Benefits In addition to medical care for childbirth, the insured working woman is entitled to 14 weeks of paid maternity leave (6 weeks before delivery and 8 weeks after). Nonworking women are not entitled to cash benefits. They are, however, entitled to a one-time grant that ranges from a minimum of DM 35 up to as high as DM l50, depending on the fund. PROCEDURES FOR OBTAINING CARE To receive medical care, the insured worker or his dependent obtains a certificate from the health insurance office and presents it to a doctor of his choice who is registered with his sickness insurance fund. 40 The treating practitioner is free to decide which services he wishes to render the patient or he can either send the patient to a specialist or have him undergo treatment at a hospital. The doctor makes a notation regarding treatment rendered on the patient's medical certificate and presents it to the Insurance Physicians' Association for reimbursement. Members of families (wife and children up to a certain age, provided they are not themselves compulsorily insurable) are included under the insur- ance without special registration or further contributions. In case of sickness they have the same rights to medical aid as the directly insured members of the insurance fund. The patient must submit a new medical certificate each quarter to his doctor and at the end of each quarter may change doctors if he wishes. If the patient is referred to a specialist, the general practitioner fills out a referral form on thestrengthof the certificate. The patient may also approach the specialist directly without referral and receive reimbursement from his insurance if he has not yet surrendered his certificate for the quarter to another doctor. ROLE OF PRIVATE INSURANCE Private insurance companies provide the primary health insurance coverage for about a tenth of the population--most of those not covered by public medical care insurance. In addition, they offer supplementary insurance for services not provided by public insurance (such as first- or second— class accommodations in hospitals). The number of persons who depend on private insurance for their primary health insurance coverage dropped from 6.3 million in 1967 to 5.4 million in l97l. Meanwhile, the number of insured with supplemental medical care coverage rose from 8.4 million to ll.7 million. An estimated l2 percent of doctors' visits are from private patients (either privately insured or uninsured). However, because of the higher fees charged private patients, about 20 percent of doctors' incomes come from this source. The substitute sickness insurance funds (Ersatzkrankenkassen) occupy a place somewhere between that of other public funds and private health insurance. Many of these funds, for instance, provide first- or second- class hospital accommodations to their members in contrast to the statutory third-class standard. The average income of their members is generally higher than that of many other funds. As a result, they can spend more per member on health care. FINANCING Public medical care insurance is financed primarily through payroll deductions. Government subsidies play a minor role in financing various phases of the system, and small cost-sharing features play a minimal role. 41 Contributions Levies on payrolls vary from one sickness fund to another. They generally range from 4 to 5.5 percent on both worker and employer of total wages below the ceiling. The average combined payment, which was 8.2 percent of covered wages in 1970, rose to 9.4 percent by January l974. In addi- tion to medical care expenses, these contributions finance sickness cash benefits. For very low earners, only the employer contributes. Pension funds pay the contributions for pensioners on a scale of approxi- mately two-thirds the rate paid for a member of the active work force. Generally, each fund is financed solely through contributions of members. There is no provision to build up a financially weak fund by sharing receipts with others and generally there is no money forthcoming from the Government. Role of Government Government subsidies play a small role in financing the public scheme for health insurance. The major categories of government contributions are as follows: 1. The Federal Government makes a refund to the sickness fund of DM 400 for every cash maternity allowance payment. 2. The Government provides a supplement to the miner's fund equal to 1 percent of the worker's insurable earnings. 3. For pensioners who are members of sickness funds, pension funds pay two-thirds of the standard contribution rate. In addition to these moneys, which go directly to the health insurance system, sizable government contributions to the health care delivery system are provided through payments to the hospitals and for public health programs. All told, government expenditures account for about a fourth of the total national health care costs. Public insurance expendi- tures account for about three-fifths. Cost Sharing Cost-sharing elements in the German system are rather limited in scope. The principal ones are as follows:§/ 2/ In addition, one can characterize as a kind of cost sharing the practice introduced in l97l, but subsequently abandoned, of granting rebates to each insured person (and dependents) who had not made any claims for physician or hospital services in a particular calendar quar- ter. The amount paid per person was DM l0 per quarter, with a maximum of DM 30 per year. 42 Pharmaceuticals.--Prescriptions are subject to a charge of 20 percent. However, the individual is never assessed more than a maximum of OH 2.50. Dentures, prosthetic devices, and miscellaneous items.--The individual ordinarily pays at least a third, the sickness fund pays a third. For pensioners the pension funds pay a third. REIMBURSEMENT PROCEDURES Payment for health services does not involve out-of-pocket payments by the individual except for the few cost-sharing situations described. Reimbursement is made directly to the providers of services. General Practitioners Every calendar quarter each Sickness Insurance Fund pays a lump sum to the local insurance practitioners' association to cover all medical care to be provided to insured members and dependents in that quarter. The overall amount is negotiated between the fund and the association and, on a per capita basis, varies from fund to fund. The individual practitioner is paid out of the lump sum by his associa- tion according to services rendered during the quarter. The data used in determining the fee-for-service amount are contained in a schedule prepared by the Government and updated at infrequent intervals. The practitioners' association monitors payments to ensure that the volume of claims and form of treatment and medicine prescribed meet established norms. Specialists Specialists who are engaged as independent practitioners are paid by the same method as general practitioners. The tariff schedule is usually detailed enough to list fees for various specialist-type treatments. Hospitals The sickness insurance funds pay a daily flat-rate amount to the hospitals per patient for third-class acconmodations, which also covers medical care and pharmaceuticals administered in the hospital. These standard rates may vary from hospital to hospital but they are subject to official price controls. The funds negotiate with the hospitals according to guidelines set down in the Federal Hospital Rates Order. The charges which hospitals are permitted to make generally do not cover all their costs. Deficits must be made up either by the Government or the chari- table organization which operates the institution. 43 579-431 0 - 75 - 4 Doctors are usually paid a salary by the hospital where they are employed. Senior doctors are permitted to have outpatients and are reimbursed by the sickness insurance funds for such treatment on a fee-for-service basis. For those cases where outside specialists are called in to treat hospital inpatients, they are paid by the sickness insurance fund directly. Pharmaceuticals Reimbursement of the pharmacist is made directly by the sickness insurance fund. Prices charged by manufacturers and wholesalers are uncontrolled but the markup of the retailer is limited by government regulations. He is reimbursed accordino to the total price less copayment fee and the small discount normally allotted to sickness insurance recipients. 44 FRANCE Over 98 percent of the population in France is covered under national health insurance. The system is supervised by the Ministry of Public Health and Social Security and administered through local sickness funds. Medical and hospital benefits provide the individual with partial reim- bursement of ordinary expenses and full coverage for the expenses of costly or prolonged illness. Cash sickness benefits are paid for up to 3 years and cash maternity benefits for l4 weeks. Costs are basically met through payroll contributions. These funds not only support medical care and cash benefits but also disability benefits. In addition, social security covers health care expenses of pensioners as well as some medical care costs usually financed by other branches of government in other countries, such as those for chronic care institutions. The system is designed to be self-supporting but in the past has often required transfers from other revenue sources to bring its operations into balance. Physicians, both specialists and generalists, as well as dentists, are generally paid by the patient who then receives partial reimbursement from the insurance system according to a fee-for-service schedule. Hospital fees are usually composed of a basic daily rate approved by local authorities plus the charge for physicians' services as set down in the fee-for-service schedule. These fees are usually paid directly by the insurance system to the hospital, except for the deductible paid by the patient. Most hospitals are public institutions but a number of privately owned hospitals also adhere to the agreed rate structure. Public hospital physicians are salaried. Those attached to private hospitals ordinarily receive payment directly on a fee-for-service basis. Private health insurance, operating mainly through mutual benefit soci- eties, remains important to the French health care delivery system, principally in covering the population for the significant cost sharing they incur. BACKGROUND As in other European countries, the development of health insurance in France can be traced back to the early days of industrialization when groups of workers in the growing urban centers established mutual aid societies for pooling of risks by their members. Mutual benefit soci- eties began to receive official encouragement in the late l9th century and by l898, they had not only obtained statutory recognition but also a subsidized status which permitted them to offer medical benefits for small fees. Many workers, however, could not afford even the low pre- miums required and benefits remained limited in scope. 45 These shortcomings generated pressure for a more comprehensive system of health insurance especially after Horld Har I as an indirect result of the postwar territorial changes. The incorporation of the Prov1nces of Alsace and Lorraine brought into France a population which had acgUired a government health insurance program under Germany. This situation served to bolster efforts in the rest of France by proponents of health insurance to extend coverage throughout the whole country. In 1928, a bill was passed by Parliament providing for an omnibus package to meet major risks, including medical care, cash sickness benefits, maternity benefits, and invalidity pensions. Both the worker and his dependents were to be covered. However, the law never came into effect mainly because of widespread opposition--especially from the medical profession. Following a series of compromises a new act was again passed in 1930. As a result, the State increased its subsidies and smaller con- tributions were required of the insured member. The physicians won a concession which they considered crucial. Instead of being paid directly by the insurance mechanism, as earlier proposed, they would continue to receive payments from the patient who would then seek reimbursement from the insurance system. Coverage under the compulsory statutory program was originally limited to wage earners with earnings below a stipulated ceiling. In l945, the exclusion of persons earning over the ceiling was eliminated, thus open- ing the system to all employed persons regardless of earnings. Gradually, coverage was extended to students in l948, to self-employed farmers in l96l, and to other categories of the self-employed in 1966. Under the program, the insured person was entitled to hospitalization, prescription drugs, and physician treatment. But he was responsible for paying a deductible that varied according to the service, averaging about 25 percent of the total cost. Not only was the doctor entitled to seek payment from the patient directly, but also, in many cases, he could charge more than the standard price as set down in the schedule of fees. The patient was thus not reimbursed for the equivalent of the fee minus the deductible as the system envisaged, but for somewhat less. Since, in theory, the new health insurance program covered only three- fourths of the average medical bill and, in practice, fell short even of that goal, the mutual societies remained important as providers of supplemental coverage. Although the system has been revised many times since l930, it remains essentially the same in basic outline. The ordinances of l945 incorpo- rated health insurance within a unified administration for all branches of social security which were to be administered by a single network of office, each responsible for a given area, and governed by elected boards. The system was to be financed by contributions from employers and employees, calculated in percentages of wages and salaries up to certain ceilings. 45 To insure the independence of the system, State financial participation was in theory prohibited, but subsequent deficits were to require some relaxation of this principle. In 1967, the administration of sickness insurance was separated from that of family allowances and old-age pensions and placed under its own net- work of funds (caisses), which also administer benefits in the field of disability, survivors, and work injuries. ORGANIZATION OF HEALTH CARE DELIVERY On the local level, l22 primary sickness insurance funds are responsible for the registration of the insured for payment of cash benefits and for refunds of medical expenses. They are subject to appointed bipartite governing boards, representing management and labor. The primary funds are supervised and coordinated by l6 regional sickness insurance funds under a National Sickness Insurance Fund. The national fund nominally has the power to change the rate of the insurance premium paid into the fund and can propose to the Government changes in benefits necessary to keep financial equilibrium. At the apex of the system is the Office of Sickness Insurance and Social Security Funds which, under the Ministry of Social Affairs, directs the system. It is mainly through this office of the Ministry that the Government exerts considerable con- trol over the system, despite the administrative autonomy of funds at the local and regional level. Physicians General practitioners.--In 1973, there were approximately 77,000 qualified medical doctors in France. About 55,000 were in private practice and the rest were occupied in industrial pursuits, social security, hospital services, and miscellaneous activities. Slightly less than half of the doctors in private practice are general practitioners and about 40 percent of the private practitioners, most of them specialist, also work part time in hospitals, clinics, or dispensaries. Specialists.--The number of specialists has been growing rapidly in recent years. About a third of the physicians were specialists in l966, but by 1973 their number had risen to 43 percent of the total. Specialists must usually be so designated by a Special registry under the control of local doctors' associations. A specialist is usually allowed twice the fee allotted to the general practitioner under health insurance for the same service, and a distinguished specialist may legally charge more than the fee designated in the schedule. The general practitioner cannot normally 47 follow his patient into the hospital; even for routine X-rays or for laboratory services (particularly in urban areas), he must refer the patient to a specialist. Hospital physicians.--Although before World War II, French public hospitals were staffed almost entirely by part-time specialists who donated their services for nominal remuneration, an increasing number of doctors now practice full time in public hospitals and other medical establishments. As of 1970, they numbered more than 10,000, about 15 percent of the whole profession, compared with 8 percent 15 years earlier. This trend is expected to accelerate as a result of recent reforms in hospital organi- zation and medical education designed to provide full-time medical staff with civil service status-in hospitals and similar institutions. Traditionally, doctors in public hospitals, both full time and part time, have been salaried. The hospitals themselves, however, are reimbursed according to a tariff for the doctors' services by the individual or by the health insurance system. Many of the specialists work in the hospitals only for a few hours a week but are officially on a salary basis for this part-time work. In addition to a definite salary, they receive a few other benefits of formal employment such as annual leave. When they are not in the hospital, they work for private fees in private practice. The number of doctors employed on a part-time basis who are officially salaried has dropped somewhat in recent years, from 9,000 in 1965 to slightly over 8,800 in 1971. On the other hand, a new category of part- time doctors, the "attache," has grown considerably from 3,288 in 1965, to 8,217 in 1971. These doctors have no formal salaried status but simply devote part of a day or more per week to hospital work in return for a modest remuneration. The number of full-time doctors in public hospitals in the meantime has grown from 1,836 to 5,102.1] Hospitals In 1974, approximately 240,000 beds were in public general hospitals; private hospitals had approximately 123,000. Private hospitals, about half of which are nonprofit institutions, usually admit short-stay patients; thus the actual number of persons admitted during a year is higher in these hospitals than those in public hospitals. The private hospitals must adhere to certain standards laid down by the Government if the patients admitted to them are to be eligible for reimbursement of hospital costs. About 80 percent of the private hospitals are owned totally or partially by doctors. 1] Figures are unavailable on the number of doctors providing medical care in private hospitals (which account for approximately a third of general hospital beds). 48 Public hospitals are usually establishments of the local commune, run by a board of governors of which the mayor of the commune is normally the chairman. Since public hospitals are unevenly distributed throughout the country and have not been growing fast enough in bed capacity to meet the country's needs, private hospitals have been growing rapidly in recent years to fill the gap. Over the last 50 years, the public hospitals, many of which are connected with university medical schools, have become increasingly important as major centers of teaching and research. Recent reforms have also placed the hospital and university center at the top of the hospital structure in each of the country‘s 23 administrative regions. These centers link the university faculty with the hospital, or group of hospitals, in the area to help coordinate treatment, teaching, and research. COVERAGE Coverage by governmental health schemes is now almost universal. In addi- tion to the general system to which most of the population belongs, there are several special systems--notably for farmers, seamen, and miners.g/ As of l969, almost 80 percent of total health care expenditures by social security were made through the general system. This percentage is now probably somewhat higher. Virtually every economically active person in the country must belong to the health insurance system, regardless of the income he receives. His dependents are also automatically covered. Presently, there are essentially no voluntary members. Coverage was originally extended to the self-employed on a voluntary basis and virtually all categories became eligible by l967. Since l969 coverage has been compulsory for these categories also. Pensioners are qualified for health insurance automatically. They do not pay for this coverage. Medical To be eligible for medical benefits the insured worker must have worked in covered employment a requisite period of time (200 hours in the pre- vious 3 months, or l20 hours in the last month). The insured person is g] Although the separate schemes differ from one another with regard to benefits and financing, this analysis has, for the sake of brevity, restricted itself largely to the predominant general system. 49 entitled to receive all the usual types of medical care and hospitali- zation with the cost-sharing features described later. Dental care and prescribed pharmaceuticals are included. Cash After a 3-day waiting period and 200 hours of employed coverage in the last 3 months, a worker who becomes ill is entitled to receive a cash benefit as partial replacement for earnings lost during his illness. Payment is at the rate of 50 percent of covered earnings for the first month, rising to two-thirds of earnings after 30 days if the worker has three or more children. The cash benefit is normally paid for a maximum of l2 months and, in special cases, it can be prolonged for as long as 3 years if the patient is likely to recover from the illness. If the illness seems to be one from which the patient will not recuperate, he is normally transferred to the disability rolls and receives a disability penSion. The French system of sizable family allowances also provides some degree of income maintenance during illnesses of workers with dependent children. Maternity A working woman is entitled to cash maternity payments during her period of confinement. She receives 90 percent of earnings for 14 weeks-~6 weeks before and 8 weeks after the confinement. The maximum amount provided under this program was 54.9 francs a day as of l973.§/ In addition, all women, whether or not they are in the labor force, are entitled to a monthly allowance in the fonn of nursing benefits and milk coupons for a period of 4 months. Also, under the family allowance system, French families are entitled to sizable prenatal allowances and birth grants. PROCEDURES FOR OBTAINING CARE The insured patient is free to choose his doctor, pharmacist, or supplier of surgical and orthopedic appliances. He may also change doctors during the course of an illness or consult several doctors simultaneously. If he wishes to consult a specialist, he may do so without prior referral by a general practitioner. The patient usually makes direct payment to the doctor, pharmacist, or hospital. He then seeks reimbursement for that portion of the cost he is entitled to have refunded. He may seek at least partial refund of expenses in any public or private hospital a] l franc equals U.S. 2l cents. which has sinned contracts with the sickness insurance system. For extremely exnensive items or extended medical care, the natient need not pay the total cost first. He can choose to pay only that oortion for which he himself is liable and the hosnital then seeks navment from the sickness funds for the remainder. ROLE OF DDIV/\TE INSURANCE Accordino to recent estimates, more than 60 oercent of the French nooulation is insured under private arranoements, mainly with the mutual societies for health insurance. Such coveraoe is nonular because it helps to nay for the laroe nortion of the nonulation's health costs which are not reimbursed by the health insurance nrooram. Statutorily, however, these nrivate insurance arrannenents are not nermitted to cover all costs. At least 5 oercent of the total bill is left for the individual to nay himself. Private health insurance also provides sunolemental coverane to defray exoenses not covered by social insurance, such as private hosnital charoes. A recent French study shows that about 5 percent of total national health expenditures were met throuoh orivate health insurance exnenditures.fl/ FINANCING Contributions Every worker enrolled in health insurance in France nays 2.5 oercent of his earninos up to a ceilino which is 2,750 francs a month in 197r. In addition, he pays another l nercent of earninos which is not subject to any ceilino. The emnloyer also rays contributions but at a sionificantly hioher rate. He oays l0.45 oercent of his emrlovee's earninns no to the 2,750 francs-ner-month ceilino and, in addition, oays 2 nercent of total earninos. Thus, the combined employer-emnloyee contributions for the averaoe worker total about 16 nercent of his earninos. Contributions, however, no not only to oav for cost of health care but also for cash sickness and maternity benefits and for disability and death benefits. Only about four-fifths of total exnenditures are actually snent on medical care; the remainder is used for the various cash benefits. Proratino the combined emnloyer-emnloyee contributions accordino to funds exnended would thus allot four-fifths of the full l6 nercent to health care, or about 12.8 oercent. 5/ Foulon, A., Evolution de la Consummation Médicale en 1969, Centre de Recherches et de Documentation sur La Consommation (CREDOC), December l972, no. 7-8. 51 Role of Government Traditionally, the social security system for health care in France has run a deficit. The deficit has been made up in the past by drawing on funds from other areas of social security income such as those for family allowances, from a surtax on automobile insurance premiums and from an alcohol tax. General revenue is also used to supplement the funds of some of the specialized schemes. In 1969 social security expenditures covered slightly more than 60 percent of total national personal health costs. The Government probably contributed an estimated 6 percent of health care funds expended under social security and spent about 6 percent on health outside social security. All expenditures of the social security system for health care, however, are not restricted to paying costs incurred by contribution-paying workers and their dependents. The system also finances much of the health care for pensioners and welfare recipients, neither of whom pay contributions. Also institutions of chronic care, such as for mental illness, are largely funded by social security. Cost Sharing The patient, according to official blueprints set up for the health care service, is expected to pay between 20 and 25 percent on the average for his health care services. Historically, this proportion has been much higher, mainly because the fees of a physician who is not under contract with the system have been reimbursed at a lower rate. Also, if a doctor charges abOve the schedule, no matter how high his fee may be, the patient is still reimbursed at only 75 percent of what the fee schedule allows. Although some improvement has reportedly been made in recent years to reduce the patient‘s out-of-pocket portion, as recently as l969 he was still paying about 25 percent of the country's total medical care bill directly through cost sharing and another 5 percent through mutual societies. Reforms instituted in l97l have somewhat lessened this amount. The latest agreement between the social security system and the physicians covers charges for the delivery of medical care. Signed in l97l and binding until 1975, it applies on a nationwide basis to all practitioners except those who have elected to be excluded. Physicians who choose to be excluded must inform the social security fund of their decision. Provision is made for an open season midway through the period covered, at which time doctors who have initially withdrawn from the system may rejoin or those who no longer wish to participate may withdraw. More than 95 percent of the nation's physicians were registered as participants in l972, compared to the 88 percent in 197l registered in regional accords which prevailed at that time. 52 The prevailing rates under the agreement may be exceeded on an authorized basis only by certain highly specialized or outstanding doctors who are so designated by the regional medical association. The agreement also introduced the concept of self-discipline by the medical profession with respect to fees. In this connection, the funds publish quarterly statis- tical tables called "medical profiles" to show average fees which are compared with the charges made by each doctor for different categories of approved treatment. The purpose of the medical profile is to inform physicians of the average cost of drugs and medical care in their district and to serve as the basis for identifying doctors whose charges are excessive compared with the average charges of colleagues. The following tabulation shows the amount of reimbursement the patient receives for various types of medical care treatment: Type of service Percent reimbursed Costly care, treatment, or therapy. lOO Prolonged treatment................ l00 Major surgery (e.g. appendectomy).. lOO Necessary costly medicine.......... 90 Medical fees and laboratory costs in hospital....................... 80 Hospitalization: First 30 daySUOOCOOOIIOOOODOOUODQO 80 Over 30 days...................... lOO Medical fees for consultation and visits............................ 75 Laboratory tests, medication, and dental care....................... 70 REIMBURSEMENT PROCEDURES General Practitioners Nearly all of the general practitioners in France are now under contract to the National Health Insurance network and are committed to charge fees according to an official schedule established by negotiations between the physicians' association and the social security system, with the maximum stipulated by government authority. The general practitioner charges the patient first; the patient then seeks reimbursement from his local fund. \ eimbursement rates vary according to the service but should on the aver- age leave about 25 percent as the portion to be paid by the patient him- self. If the patient consults a doctor who has not signed an agreement 53 with social insurance, the reimbursement rate is lower. There is no cost sharing required of the patient for costly treatment or for pro- longed illness. Specialists Specialists are paid by essentially the same system as general practi- tioners. However, the schedule of fees has usually allowed them to charge a higher amount than is permitted general practitioners. Special- ists who are attached as hospital physicians in private hospitals are also usually paid according to a schedule of fees for the medical treat- ment they provide inpatients. In the case of public hospitals, the doctor has traditionally been paid on a salary basis according to the time he has allotted to the institution. In recent years, the full-time salaried physician has become prevalent in French hospitals. This staff- ing pattern may become the norm in the near future. Hospitals Hospitals receive basic reimbursement according to a schedule usually worked out with local government officials and based primarily on the cost of operating the hospital per patient per day. Thirty percent of capital expenses are provided by the social security system via the regional funds, another 40 percent by the State, and about 30 percent from local communities. The hospitals are paid for medical services rendered to the patient on a fee-for-service basis according to a fee schedule. In private hospitals these fees are passed on to the hospital physician; in public hospitals they usually are not since the doctor is paid a salary by the hospital either full time or part time, depending on the number of hours he devotes to the hospital per week. In addition to salaries, the medical staff of public hospitals receive a portion of their income by sharing a part of receipts from fees. In dividing these funds some weight is given to the rank of the individual doctor. The hospitals also are usually paid directly by the funds. In those cases where a patient must also pay a portion, he pays only that part for which he is liable and the institution recovers the rest from the funds. This practice holds true for public and private hospitals that have signed an agreement with the insurance authorities. Among the remaining private hosnitals are many that have been approved for reimbursement without having signed an agreement. Insured patients in these hospitals must pay the whole bill and then seek partial reimbursement which is usually at a lower rate. 54 Pharmaceuticals Price controls on pharmaceuticals, in effect since l94l, are exerted at two different points in marketing a product. First, there is the action ' of an interministerial committee in connection with licensing and second, there is control by the Department of Health and Social Security in approving the drug for a list of reimbursable items. In both cases, provision is made for judging both the price and therapeutic value of the product. About 97 percent of prescription drugs on the market in France are included in the list. Specific profit margins for the producer, wholesaler, and retailer are stipulated by the Government. In another effort to control cost, the Government seeks to limit the number of reimbursable drugs. Despite all these efforts most commenta- tors do not consider the system to be especially effective in holding down national drug costs. Indications are that nearly two-thirds of the pharmaceuticals purchased without prescriptions would probably have been reimbursable had the patient consulted a doctor to obtain a written prescription. Aside from medication for chronic diseases, which is covered in full by health insurance, the pharmacist charges the patient the full price for drugs. The patient then seeks reimbursement of 70 to 90 percent of the costs he has incurred from the health insurance system upon presentation of the proper forms stamped by the pharmacist. 55 NETHERLANDS Health care delivery in the Netherlands is based on an insurance system administered by private sickness funds under the supervision of the Government. Seventy percent of the population is covered for general medical care. About half of the total population is covered on a compulsory basis. Another 15 percent of the population has-voluntary coverage. There is a third coverage group, about 5 percent of the population, made up pri- marily of pensioners. Although the higher income groups are excluded from the government scheme for general sickness, the entire population is covered under a special program for catastrophic illness. And the whole working population is covered under still another program for cash sickness and maternity benefits. Medical benefits include complete coverage of necessary medical care and basic hospital care (including nursing-home services) with elements of cost sharing for a few types of medical services. The whole population, in cases of catastrophic illness, is generally entitled to the full cost of medical care after 1 year of illness and to certain types of institu- tional care before that time. Cash sickness benefits for the wage earner continue for an unlimited time and are normally set at 80 percent of earnings before the onset of illness. Cash maternity benefits are paid under the same program that provides cash sickness benefits. Under compulsory membership the employer and the insured each pay 4.75 percent of earnings up to the ceiling. The employer pays an additional 2.6 percent for catastrophic illness. Minor subsidies are paid to the sickness insurance system by the Government to help defray the cost of medical care for pensioners and low-income groups. Reimbursement procedures for physicians cover a wide spectrum of methods: General practitioners are paid on a capitation basis, while specialists are reimbursed through salary, fee-for-service, or case-payment approaches. The typical hospital is a private institution paid directly by a sick fund primarily utilizing a schedule of fees set by the Union of Hospital Associations under government guidelines, but also taking into account annual budget considerations of the specific hospital. Some hospitals bill separately for hospital physicians' services. BACKGROUND National health insurance came to the Netherlands at a later date than to most other West European countries. Although a number of national cash sickness plans were formulated in the early 20th century and a bill 57 was actually passed to this effect by Parliament in l9l3, the legislation was never implemented because of a change in governments. In 1929 another program was approved by Parliament which went into effect in l930, introducing compulsory coverage for cash sickness benefits. This legis- lation also gave impetus to expansion of private insurance coverage for health care since it stipulated that a worker, to be eligible for cash benefits, had to demonstrate that he had provided for coverage of medical care costs in case of illness. By l94l when compulsory health care insurance went into effect, approxi- mately 4 million people, or about 50 percent of the population, were covered for medical care under private insurance arrangements. The l94l scheme provided general practitioner care, surgical and specialist treat- ment, and 42 days of hospitalization along with limited dental care and partial payment for care in tuberculosis sanitariums. Generally, those workers earning above a stated figure were ineligible to join either program, for cash sickness benefits or health care. Such ineligibility based on earnings considerations has remained a feature of health insurance to the present time. In 1967 another law was passed introducing a program to meet special sick- ness costs and expenses incurred by extended illness. This catastrophic illness program covers the whole population, including the 30 percent excluded under the general sickness insurance program. ORGANIZATION OF HEALTH CARE DELIVERY The Ministry of Social Affairs and Public Health is the central authority responsible for health services. It not only exercises general super- vision and control but also operates a few hospitals under its own juris- diction. At a lower level, the municipalities also exercise certain controls over the health care delivery system. However, voluntary organizations play a much larger part in this respect, particularly in the operation of hospitals and in the provision of such services as home nursing. Presently, about 90 sickness funds administer health care insurance for the insured population. Most of them are organized along geographical lines and are managed by delegates chosen by the members. Some also have directors chosen by medical professions. The insured persons usually are free to choose any fund which operates in their area unless they are employed by a firm which has its own fund. Any ordinary sick- ness fund may refuse to accept an insured person who is eligible for an enterprise fund or one of the other funds organized to appeal to special groups . 58 The sickness funds are grouped into several national associations of which the largest is the Federation of Sickness Funds. The associations in turn are grouped together in a Joint Association of Sickness Fund Organi— zations which negotiates physicians' fees with the Netherlands Medical Association. General supervision over operation of the sickness fund system is exer- cised by the Sickness Fund Council, which is responsible to the Minister of Social Affairs and Public Health. The Council includes representa- tives of the sickness funds, the government, the medical profession, and employers and employees. It can regulate the administration of sick- ness insurance and also distributes the contributions for compulsory in- surance to the individual sickness funds. It also advises the Minister on all problems concerning sickness insurance. The Sickness Funds Council also exercises supervision over the casta- strophic insurance program and the relevant finances from which the sick- ness funds and private insurance companies obtain reimbursement for expenditures under that program. Cash payments during incapacity for work are administered by occupational associations which also dispense family and unemployment benefits. Physicians General practitioners.--0f approximately ll,000 qualified physicians practicing in l970 in the Netherlands, 40 percent were general practi- tioners. The general practitioner is usually self-employed, operating from his own office. He ordinarily does not work in the hospital and has admitting privileges only for maternity cases, although he can visit his patients who have been admitted by specialists. The sickness funds keep statistics on prescription practices by the physicians and on referrals of patients to specialists. When higher- than—average referrals or cost can be attributed to a physician's prac— tice, the funds‘ medical adviser may ask the practitioner for an explana- tion. Some of the large funds utilize special committees to impose fines and suspend practitioners for insurance practices which the funds find objectionable. Specialists.—-Slightly under 6,500 practicing physicians in the Nether- lands, or approximately 60 percent of the total, are specialists. Like the general practitioner the specialist is usually self—employed. How— ever, he invariably has an affiliation with a hospital. He receives remuneration from the hospital or through the sickness fund for inpatient care. At the same time, he usually uses hospital facilities for out- patient care which he administers on a free-agent basis and is reimbursed through channels that are entirely separate from those of the hospital. 59 579—431 0 - 75 - 5 Normally the specialist chooses to operate through hospital facilities because of the small charge for utilizing these facilities and the ex- cellent range of equipment provided. ' Hospitals Most hospitals in the Netherlands are private institutions run by reli- gious communities or charitable organizations, but about 20 percent are public institutions controlled by local authorities. Virtually all hospitals allow only specialists to treat inpatients, except in the case of obstetrics, and most hospitals exclude any physi- cian who is not a member of the staff. Institutions which exclude out- side specialists are called ”closed” hospitals while those without such restrictions are ”open" hospitals. Many hospitals also have a number of trainee specialists who come under the direction of chief specialists; these trainees are usually reimbursed on a salary basis by the hospital. In recent years, nursing homes for prolonged care have become more and more important in the overall structure of health care in the country. As of l970, there were approximately 23,000 beds in nursing homes com- pared to 66,000 beds in general hOSpitals (as opposed to psychiatric and other special-purpose institutions). Each nursing home ordinarily has a full—time physician, usually a general practitioner. Nursing care is provided by the approximate equivalent of practical nurses under the jurisdiction of one or more registered nurses. There are usually facilities for physiotherapy and occupational therapy. A social worker is also usually assigned to the nursing home. COVERAGE In discussing coverage of population for the government-sponsored health insurance in the Netherlands, it is necessary to distinguish between general insurance for routine health care and the National Exceptional Medical Expenses Insurance Program designed to meet the cost involved in catastrophic illness or long-term institutional care. Exceptional Medical Insurance covers the entire population. However, only 70 per- cent of the population is covered by the general sickness insurance program for ordinary medical care, broken down as follows. Compulsory All wage and salary workers with earnings below a stipulated ceiling (l7,680 florins in l973 or slightly less than l-l/2 times the average 60 wage in manufacturing) must join the system.l/ About 50 percent of the population including dependents is in this category. Voluntary Approximately l5 percent of the population is covered by this category that includes primarily the self-employed earning below the ceiling of l7,680 florins per year and their dependents. Pensioners Slightly over 5 percent of the population is covered in this group which is open to people over age 65 who have incomes of less than l3,82l florins per year. BENEFITS Medical Under the general sickness insurance scheme an insured person generally receives free care for any medical service needed. Dental treatment is also provided free of charge, except for fillings required by those who have failed to have a checkup in the previous 6 months. There is also a provision for cost sharing with regard to dentures and in a few other situations. Most childbirth confinements take place at home with the services of a midwife covered by health insurance. If complications necessitate a physician's services or hospitalization, such treatment is also covered. Hospitalization for routine childbirth is covered but involves some cost sharing. The provisions of the Exceptional Sickness Insurance Program usually apply when a person is hospitalized for more than l year, in which case the program pays for his institutional expenses beyond that point. It also pays for nursing-home care as well as confinement in homes for the handicapped or the mentally retarded--even when required before the lapse of l year. As a result, many health care services are provided under this program which in most other countries would be provided Ly governmental institutions funded by general revenue, in many instances, as a form of public assistance. 1/ l florin equals U.S. 39 cents. 61 Cash Benefits A worker who is incapacitated receives a benefit equal to 80 percent of his average earnings over the 3 months preceding commencement of the incapacity. No benefit is paid for the first 2 days of incapacity and also no benefit is paid on that portion of the wages which are not in- sured (above l32 florins per day as of January l, l973). The benefit is paid for l year at which time it is normally replaced by a disability pension-~also equal to 80 percent of prior earnings. Cash sickness benefits are funded and administered separately from medical care insurance. In l973 they were financed by payroll contributions of l percent of the employee's wages and 6.4 percent by his employer on wages up to l7,680 florins per year. The whole working population is covered for cash sickness benefits, regardless of income. All workers with children are also entitled to sizable family allowances which con- tinue during illness. Maternity Maternity benefits are payable to an expectant mother who has been an active member of the labor force. The allowance is normally paid for l2 weeks and begins 6 weeks before the expected date of delivery. The benefit corresponds to 100 percent of the mother's daily wage up to a maximum of l32 florins per day as of January l, l973. If the insured woman remains incapacitated because of the confinement after this 12- week period, she can continue to receive benefits equal to l00 percent of her daily wage, up to a maximum of 52 weeks. PROCEDURES FOR OBTAINING CARE To be eligible for medical treatment by a general practitioner, the insured person and his family must be registered with a physician who has signed a contract with the sickness fund to which they belong. The same procedure applies in obtaining pharmacist and dentist services. The insured person may change general practitioners at frequent intervals. If the general practitioner decides that the services of a specialist are necessary, he issues a referral card to his patient. The patient may not consult a specialist directly. Admission to a hospital normally depends on the decision of the specialist that such care is necessary and takes place after he has prepared the necessary papers. The hospi- talization decision is subject to review and final approval by a con- trolling doctor of the relevant sickness fund. 62 ROLE OF PRIVATE INSURANCE Private insurance in the Netherlands plays a rather important role in financing overall health care. Perhaps as much as 95 percent of the population covered by governmental health insurance also contracts for supplemental insurance. The original reason for such widespread insur- ance under private auspices was to assure financial help in case of prolonged hospitalization, an important consideration before l965 when QOVernmental health insurance only covered hospitalization for 70 days. However, since then, even with virtually unlimited hospitalization pro- vided by the governmental scheme, private insurance of this type has not receded significantly. Most of the population continues to contract for such coverage, ostensibly to provide for better accommodations than are provided under the regular scheme. Most hospitals have at least three different classes of accommodations for patients and many subdivide the second-class into two subcategories, thus in effect creating four classes. Social insurance covers expenses only in the lowest, or third class. Not only do room rates rise for higher class accommodations but physicians' fees are also usually in- creased. Hearly all of the population not covered by the governmental scheme depend on private health insurance for their primary coverage of health care. Approximately l40 insurance companies are involved in private health insurance. Essentially, there are three types of insurance com- panies which participate--commercial insurance companies, cooperative insurance associations, and associations involved only in the coverage of hospital care expenses. The private insurance companies have played a role in administering the Exceptional Sickness Insurance Program since its inception in l968. For those individuals who have their primary insurance with a private company rather than a sickness fund, the private company is responsible for initiating action for transfer of payment from one source to the other. Physicians—-particularly specialists--derive a large share of their income from their private patients. The fees permitted for physician care of private patients in third-class hospital accommodations are three times those for sickness fund cases. In certain types of second-class accommodations they are six times as high, and medical treatment for first-class patients is probably even higher. 63 FINANCING gpntributions Compulsory.--Persons who earn a wage of no more than 17,680 florins per year are compulsorily insured. The contribution for sickness fund insur- ance is in the form of a payroll tax and totals 9-1/2 percent of the work— er's wage up to 68 florins per day. The employer and the employee each pay half. Vquntary.—-The contributions paid by voluntarily insured persons vary from fund to fund and must be paid for each adult covered. Children under age 16 are automatically covered without extra charge. In 1971, the con- tributions averaged 48 florins a month for each adult or 96 florins for a family of two adults. (Under compulsory insurance the family with one working adult making the average wage in manufacturing would have paid about 82 florins a month.) Old peoples' insurance.--People over age 65 whose income does not exceed 13,821 florins per year can join the governmental health insurance scheme on a voluntary basis. Weekly contributions as of January 1973 ranged from 6.30 florins on annual incomes below 9,996 florins up to 22.05 florins on annual incomes between 11,964 and 13,821 florins. For the upper ranges of this salary scale the contributions correspond to about 9.5 percent of income or the combined employer-employee payment for worker coverage under compulsory insurance. However, rates are lower for the pensioner on a percentage basis where incomes are smaller. The payments are family contributons; the wife and children (below age 16) are also covered. Exceptional Medical Expenses Program.--The whole population is compul- sorily insured under the Exceptional Medical Expenses Act. Contributions are payable entirely by the employer (or the self-employed) and amount to 2.6 percent of earnings up to a maximum of 24,300 florins a year. Pen- sioners are exempt from paying a contribution for this type of coverage. Role of Government Total government contributions to the cost of health care in the Nether- lands are modest. The Government takes no part in the routine financing of compulsory sickness insurance, which is basically supported by contri- butions and some cost sharing. There are some minor exceptions. The Government subsidizes sickness insurance for students, disabled children, and other groups that pay small premiums. The elderly have part of their sickness insurance premium paid from a special fund which the Government and the compulsory insurance system jointly support. In 1972, the Govern— ment contributed 303 million florins or about 7.5 percent of total expen- ditures of the Sickness Fund system for general medical care. 64 As of l972 the National Insurance Scheme for Exceptional Medical Care received a contribution from the Government of 583 million florins a year. This contribution, stipulated by law, corresponded to nearly 30 percent of total expenditures under the program in 1972. In l967, the Government's share of total sickness insurance expenditures was still only about 5 percent. It has béen rising slowly each year since and reached about l3 percent in l972 for both schemes. Cost Sharing Medical care in Holland is virtually free of charge to the patient with the following exceptions: (a) The patient usually must pay part of the cost of dental care if he has not undergone a regular checkup in the pre- vious 6 months. (b) A stay in a tuberculosis sanitarium involves payment of 25 percent of the costs by the patient. (c) After 6 months in a hospital or other medical institutions, an unmarried patient must pay part of the costs involved if his monthly income exceeds 162 florins (324 florins for a married couple if both are hospitalized). This means that pensioners often must also forfeit part of their old-age pension if they are hospitalized for an extended period and there is no spouse maintaining a separate household. REIMBURSEMENT PROCEDURES General Practitioners The general practitioner is paid on a capitation basis. For the first l,800 patients registered with the family doctor, the payment by the sickness fund in 1971 was 42.27 florins per person registered. Above l,800 patients, the payment dropped to 29.22 florins for each registered patient. The size of a general practice in the Netherlands averages about 3,000 patients, of which approximately 2,100 are members of govern- ment-sponsored insurance. For the 30 percent of the population not covered by governmental insurance, payment is usually made by the patient himself or by private insurance companies. Such patients are billed on the basis of a fee for each con— sultation subject to government price control. The average doctor re- ceives about 40 percent of his total receipts for patient care from his private practice. 65 §pecialist§ Specialists are paid for their services in a number of different ways, depending on the context in which treatment is rendered. Hospital specialists(inpatient care).--Many specialists in hospitals are paid on a salary basis particularly in so-called "all-in” hospitals. (See discussion on Hospitals, p.67) The same is true even in the ”all- out" hospitals where the lower ranking staff physicians are paid on a salary basis while the higher ranking specialists are paid directly on a fee-for-service basis and then reimburse the hospital for part of the services used of the lower ranking staff. The fee-for-service approach is used mainly for surgical specialties, and the actual level of the fees is based largely on the time assumed to be involved in each procedure. The case-payment approach is also widely used and is employed in those cases where specialists must continue, on a relatively long—term basis, to check patients on a daily basis or more frequently. In such situations the doctor is paid on a per-day basis according to the type of illness but the daily rate drops sharply after the first few days. When negotia- ting committees fix the ratios and the monetary values, they take into account what a typical practice will return to the physician financially and assure that the income derived is adequate. As a result, surgeons are paid according to an elaborate schedule of fees for the specific operation performed unless, of course, they are attached to hospitals which reimburse on a salary basis. If the patient receives care under an all-out situation the sickness fund pays the case-payment directly to the specialist but also pays laboratory doctors on a fee-for-service basis according to the schedule. Hospital specialists (outpatient cane).--Specialists in this category are usually the same doctors who also provide treatment to inpatients. However, there are slight variations in the reimbursement procedures. Those working in all-in hospitals are paid on a salary basis like the doctors treating inpatients. A fee-for-service approach is used mainly for technical specialists while the case—payment method is often utilized in other instances. The doctor is paid according to a schedule of fees on a monthly basis and the fee varies according to the illness and the specialty. If renewal cards become too numerous in any specialty, the rate decreases or rises more slowly for that specialty in the following year. Fee-for-service payments are at a higher rate for private patients and apply not only to uninsured patients but also to those who ask for higher than third-class accommodations. Specialists (f?eeZance).--Freelance specialists are paid either on a fee-for-service basis according to a schedule or on a case-payment basis, usually on a monthly scale, just as in the case of hospital specialists doing outpatient work. Freelance specialists are also entitled to fee- for-service payments at a higher rate for private patients than for others. 66 Although the patient must have a referral card from a general practitioner to inititate consultation with a specialist, the specialist himself can issue renewal certificates for additional visits. Subsequent treatments of the same patient, however, are reimbursed at a lower rate. The assump- tion behind this approach is that the specialist will try to complete his diagnosis and treatment as quickly as possible so that he will have time to accept other patients on a first-time basis and receive a greater pro- portion of higher rates in his overall schedule. Hospitals Hospitals in the Netherlands use several different approaches toward billing for physician's care and for other medical care such as the cost of nursing. Approximately 30 percent of the hospital days accounted for in the Netherlands are subject to billing practices which include costs of both physician and other medical care in the daily charges, which in such cases are called "all-in" rates. Most of the hospital days are covered by hospitals which bill only for hospital costs other than medi- cal care, a practice which is called "all-out." In all-out hospitals, the higher ranking specialist receives direct payment for his services; he then reimburses the hospital for about 80 percent of the salary of the staff needed to assist him in the treatment. HOSpitals base their charges on a schedule negotiated with the Council for Hospital Tariffs. The Council is an official body composed of repre- sentatives of the sickness funds and insurance companies on the one hand and representatives of the national hospital council on the other. The costs which hospitals are allowed to charge are largely based on each institution's annual budget. The more modern hospitals are usually more expensive to operate and are accordingly permitted to charge higher rates. Hospitals that bill on an all-out basis receive some income by charging rent to doctors who treat patients, both private and insured, on an out- patient basis. The charges that hospitals are permitted to make do not allow for profit but are aimed at adequately covering all costs, including depreciation. Pharmaceuticals An insured person must have prescriptions filled at a pharmacy with which he is registered. There is no charge for the drug prescription that he presents to his pharmacist. Each pharmacist is paid on an average capitation fee per year. Fees are negotiated annually. The pharmacist is reimbursed for the cost of the drug plus a service charge for each item. 67 Approximately a third of the prescriptions in the country are dispensed by doctors themselves, usually in rural areas where pharmacists are scarce. Such dispensing doctors receive an additional capitation fee for each patient and roughly the same payment the pharmacist would receive per prescription. ‘ Dentists Most dental work is free of charge to the patient provided he has con- sulted his dentist in the previous 6 months and has a valid treatment certificate, obtainable every 6 months from his sickness fund at a cost of 5.75 florins. Children under age 4 receive all types of treatment free. Patients ordinarily must pay about 60 percent of the cost of dentures. There are also cost—sharing fees for other items. The dentist is entitled to payment for the treatment he gives according to a tariff of fees drawn up between the dental association and the sick- ness fund. With regard to private patients, dentists apply tariffs which are similar to those applied by specialists. 68 NEW ZEALAND National health care in New Zealand is based primarily on a public hospital service and subsidized treatment by private medical practi- tioners. The system is administered by the Department of Health and district hospital boards. All residents of the country and their depen- dents are covered for medical benefits. Employed workers with limited income are eligible for cash sickness benefits administered by the Department of Social Welfare. A cash maternity benefit, which is income- tested, is payable to employed women. Medical benefits include all necessary medical and hospital care, most prescription drugs, laboratory and X-ray work, and prosthetic devices. Dental care is provided to children under age l6. The patient, however, normally pays a significant part of the cost of most benefits, particu- larly for treatment by private physicians. The Government's share of health expenditUres is financed entirely from general revenues. The private share of the total cost of medical services is slightly more than a fourth of the total amount spent by the nation on health. Fees charged by private physicians are not regulated by the government but the flat-rate government payment for each patient consultation is fixed. The general practitioner normally bills the Department of Health directly for this amount and the patient pays the difference. Most pri- vate specialists are paid in full by their patients who then seek the fixed government payment from the Department of Health. Physicians employed by public hospitals are paid on a salaried basis. Over 80 percent of the hospital beds are in publicly owned institutions. Both inpatient and outpatient care are provided free of charge. Private hospitals receive various forms of public financial support--notably a subsidy for each occupied bed, thereby reducing the amount that the patient must pay. BACKGROUND The financing of medical care in New Zealand can be divided into two periods--before and after the passage of the Social Security Act of 1938. Before 1938, there was no national plan for prepaying or reimbursing health services. Hospital care in public institutions was priced accord— ing to the patient‘s ability to pay and, by statutory provision, fees were reduced or waived for the needy and indigent. Doctors' services were largely donated in public hospitals, which were used primarily by the poor. Those who could pay for health care services chose private 69 hospitals, even though they might not be so well equipped as government facilities. Private health insurance was provided by Friendly Societies and other voluntary groups which paid benefits to cover all or part of the cost of private medical care and hospitalization for their members. A basic national health program was advocated by the Labor Party during the economic depression of the early l930's; and in 1938 a Labor Govern- ment issued a White Paper which proposed (l) universal and free general practitioner service to all, (2) free care in hospitals and mental insti- tutions, (3) free prescription drugs, and (4) complete maternity care. At a later date other services were to be included such as physical ther- apy, dental and optical treatment, and home nursing care. The Social Security Act of l938 introduced the principle of free medical care for all. It also abolished the existing social security tax and substituted financing of benefits and related health services through general revenue. Implementation of health insurance was gradual. Free hospital service, free medicines, and a maternity benefit scheme commenced in l939, but it was not until 194l that a reimbursement formula could be devised for physician services that was acceptable to the medical profes- sion. The general medical services scheme, introduced in that year, adopted a ”fee-for-service” approach which still prevails. Under this system there is no contract between doctor and patient or doctor and State. Patients select their own private practitioner and receive partial reimbursement of the fee in a flat-rate government payment. Changes and modifications to the system have been minor since l94l. All services proposed in the 1938 White Paper have been added with the excep— tion of dental benefits for adults and optical benefits. Administrative changes were made to provide more efficient use of hospital facilities and medical personnel. ORGANIZATION OF HEALTH CARE DELIVERY The Department of Health's responsibility for overall administration includes payments to private practitioners, private hospitals, and insti- tutions. In the delivery of health care by private physicians, the Department's role is essentially limited to the payment of the flat-rate government subsidy. Changes in the payment amount are legislated by Parliament. Patients' complaints on the quality of physician care or the amount of the fee are handled by committees of medical practitioners. The public hospital system, subject to the overall supervision of the Department of Health, is directly administered by 30 district hospital boards; these boards are autonomous. Each board consists of 8 to l4 members elected every third year at local elections. District hospital boards are legally responsible for the staffing, planning, and budgeting 7O of hospitals in their area. Their finances, however, are provided by the Department of Health which (l) is responsible for the efficiency of the hospitals; (2) exercises control over new buildings and extensions; and (3) sets the requirements for senior medical, nursing, and specialist services staffs. The range of medical services varies according to size of hospital. Some larger institutions not only provide a complete service for their own population but also specialized services for other neighborhoods, such as cardiac surgery, neurosurgery, and dialysis. Physicians In l970 there were 4,574 registered medical practitioners; not all, how- ever, were in active practice.l/ The population per active medical practitioner for that year was estimated to be 863. In 197l, the number of doctors providing specialist and generalist services on a fee-for- service basis was 2,075. General practitioners.——Smooth functioning of the New Zealand health system depends heavily on the private practitioner, who is the patient's first point of entry into the medical care system. He dispenses approxi- mately 75 percent of the physician care in the country. Most general practitioners are in private practice although some are employed on a salaried basis in public institutions or industrial plants. Specialists.—-An estimated one-half of the specialists are under full-time salaried contract to a public medical institution; but many combine a pri- vate medical practice with part—time salaried work in a public hospital. A few are involved exclusively in private practice. The time given by specialists to private practice varies among hospital districts. Where public hospitals cover outpatient as well as inpatient services fairly completely, the patient can obtain specialist consultation and treatment free of charge at the public hospital. Consequently in such areas there is relatively little private practice by the specialist. Public hospital sta{fe.--In 1970 there were 1,947 physicians, generally specialists, in pub ic hospitals and other institutions controlled by the district hospital boards. Yet many work less than full time and carry on at least a few hours of private practice each week. The full—time equivalent was probably about 1,300 physicians. Larger hospital district boards have had no trouble filling staff vacan- cies. Some of the smaller boards, however, which do not provide the full range of medical services and have resisted amalgamation, have had serious staffing difficulties. 1/ In 1968, 42 percent of the 3,200 active physicians were in general practice, 5l percent were specialists, and 7 percent were in- volved in administration or education. 7l Hospitals In 1972 there were 17,024 available beds in public hospitals. Most of them were in general hospitals with the remainder in maternity hospitals. An additional 1,176 nonhospital beds were in psychiatric institutions and old people's homes. The ratio of hospital beds to population in 1972 was 7.2 per 1,000. Excluding private hospital beds, public hospitals provide 5.9 beds per thousand population. In 1972 there were 3,920 available beds in the 152 licensed private institutions. The establishment of private licensed hospitals by chari- table organizations has been encouraged through government subsidy. Pri- vate hospitals carry out all routine medical and surgical treatment as well as some major surgery. Many hospitals operate outpatient clinics but some restrict access to them by requiring patients to be referred by a general practitioner or the hospital visiting staff. Nursing homes and geriatric hospitals are maintained by the Government as well as by welfare and religious organizations. Hospital boards main- tain slightly more than 1,000 beds in old people's homes. Approximately 4,300 of their regular hospital beds are utilized for the care of the elderly sick, either on a short-stay or long-term basis. Private groups provide another 6,300 home and hospital beds for the elderly. COVERAGE Health benefits, both hospital and medical, are available to persons who have resided in New Zealand for at least 1 year, citizens of the United Kingdom, and visitors who intend to remain for 2 years. Free dental treatment and immunizations are available to children up to age 16. Cash sickness benefits are available to members of the labor force who have limited income. BENEFITS Medical Free medical services include not only inpatient care in public hospitals but also outpatient services where they are available. Public hospital care includes treatment, food, and accommodations. Although patients are usually given ward accommodations, private and semiprivate rooms are available for the seriously ill. Most prescription drugs are free al- though there may be a ”part-charge” if the drug has become unduly expen- sive or the physician prescribes a nongeneric drug. 72 Laboratory and X-ray work are also provided free of charge as well as such equipment as hearing aids, artificial limbs, and manually operated wheelchairs. Normally, physician treatment is provided by private practitioners. Such care involves cost sharing on the part of the patient. If the patient chooses a private hospital, an out-of-pocket payment is again required, although the Government pays part of the fees. Through the schools, routine dental care is provided free to preschool and primary school children at 6—month intervals. Dental care for secon- dary school age children (ages l4 and l5) is provided at 6-month inter- vals by private dentists, who are reimbursed on a fee-for-service basis. Eligibility for secondary school age children depends on regular dental care within 3 months of the time of application, either at a school dental clinic or from a private dental practitioner. Free dental care is in the process of being extended to dependent children between ages 16 and 8. Free home nursing services are provided by public health nurses and district nurses on a limited basis. Cash Sickness Cash sickness benefits are paid to members of the labor force who are at least l5 years old, who have lived in New Zealand continuously for 12 months, and who have a loss of salary, wages, or other earnings through temporary sickness or accident. A medical certificate from a physician is necessary to verify the illness. The cash sickness benefit, which is income-tested, is payable (as of June 6, l973) up to a maximum of $22.50 a week'for a single adult.g/ This sum corresponds to about a third of the average wage in manufactur— ing. The benefit is $37.50 a week for a married couple, with an addi- tional benefit payable for each dependent child. A married, employed woman can receive a sickness benefit only if the Department of Social Welfare is satisfied that her husband is unable to provide for her. The cash sickness benefit is payable for the duration of the incapacity. If the illness lasts less than 3 weeks, the first 7 days are not com- pensable. 2/ l New Zealand dollar equals U.S. $1.32. 73 Maternity Free medical care for childbirth is provided in public hospitals and public maternity homes. Licensed private maternity hospitals receive $9 a day from the day of birth of the child and for up to 14 days in case of complications. In maternity cases, a private physician and general practitioner receive the same government payment. Approved midwives and maternity nurses who are in attendance when confinement takes place at home receive a govern- ment payment of $8 for the day or days of labor and $5.40 a day for up to 14 days succeeding the birth of the child. For a visiting obstetric nurse $l.60 a day is paid. An income-tested cash maternity benefit is payable by the Department of Social Welfare to working women whose husbands cannot support them during confinement. The benefit, fixed at the same rate as the cash sickness benefit, is paid 3 months before and after confinement unless it is ex- tended for medical reasons. PROCEDURES FOR OBTAINING CARE The individual may consult any general practitioner. Since the fee charged for services varies among physicians, the size of the potential copayment could affect the choice of doctor. Referrals to specialists are made by the general practitioner. There is a restriction on interspecialist referrals: the general practitioner who makes the initial referral must be consulted before subsequent re- ferrals can be made from one specialist to another. Without referral, the specialist receives only the government flat-rate payment for con- sultation or treatment rather than the higher specialist rate. In public hospitals, both inpatient and outpatient departments, the individual does not have a choice of doctors, and in certain rural areas there may be only one doctor whose practice is subsidized by the State. Prescription drugs are usually obtained from privately operated pharma- cies but may be available at outpatient departments of larger hospitals. In some isolated areas, drugs are dispensed by the medical practitioner. Certain drugs, either because of their high cost or because they are still in the experimental stage, are distributed only by the hospitals. ROLE OF PRIVATE INSURANCE Private insurance companies provide supplementary health insurance to individuals who want protection against expenses not covered by the 74 national health program—-primarily to defray the cost of private physi- cians and private hospitals. Employers may pay all or part of the private health insurance premiums of their employees. Before the l960's, there was no private health insurance in New Zealand except for a minimal amount provided by Friendly Societies. In l961, one nonprofit organization, registered under the Friendly Societies Act of l909, began offering insurance against surgical and hospital expenses. Since then the number of individuals covered by registered Friendly Societies has grown to an estimated l50,000 in l973.§/ Although the flat-rate government payment to private practitioners, known as the General Medical Services Benefit, was originally intended to serve as full payment for the doctor's fee, it has not kept up with the increases in such fees.fi/ Since the portion of the fee which the patient must pay out of his own resources can often be substantial, many individuals have contracted for private health insurance to help meet these expenses. Private health insurance has also made the use of private hospitals financially feasible for many. Private hospitals have always been popu— lar among patients who prefer more personalized attention and private accommodations as well as treatment by private specialists who do not have access to public hospitals. In addition, elective surgery can be performed more quickly in private hospitals than in public hospitals where there are often long waiting lists for these services. FINANCING The national health program is financed primarily by allocating a speci- fied proportion of general revenue to the Department of Health to be spent on medical services. There is a cost-sharing feature for using private practitioners and private hospitals. General revenues also finance cash sickness benefits, but the allocation of these funds is made by the Department of Social Welfare. g] The number of members covered by nonregistered societies is not known . 3/ In 1969, a higher subsidy became payable to private practitioners for the treatment of social security beneficiaries and their dependents. In addition, a special higher rate was introduced for a one—time referred consultation with a specialist. In l972, all rates were increased-~the first rate increase since the program began in l94l. Immediately before the Government raised its payment in 1972 for an ordinary physician's visit (from 75 cents to $1.25) the out-of-pocket payment by the patient constituted at least two-thirds of his total doctor bill. 75 579—431 0 - 75 - 6 Contributions No health insurance contributions are required for benefits under the public program. 391g_gf Government Basically all medical services in the country are financed by the Govern- ment except for certain cost-sharing elements and part of the cost of maintaining a relatively small private sector. General revenue financing accounts for an estimated three-fourths of the total national expenditures for health. The amount to be spent for the national health care program, which is determined by vote in Parliament, is based on the Department of Health's cost estimates and the advice of the Treasury Department. During fiscal year l973, the national health care program cost the New Zealand Government $343.1 million and represented l5.5 percent of all government spending. The corresponding figure for fiscal l974 was $388.2 million--an increase of l3 percent from the previous fiscal year. A .breakdown of the Government's health expenditures (excluding cash sick- ness benefits) for fiscal l97l follows: Expenditures Percent Public hospitals....- ................. 7O Pharmaceuticals ...................... l5 Medical and maternity benefits ....... 7 Supplementary benefits ............... 5 Private hospitals .................... 3 Government subsidies to the private sector play a small but important role. Among these are building loans to approved private hospital pro- jects at less than the prevailing conmercial rate. (Some of the interest may be suspended or canceled if the hospital continues in operation for more than l0 years.) Cash subsidies are also extended to religious and welfare organizations to build and maintain private geriatric hospitals and nursing homes. Cost Sharing The most important cost-sharing features arise when an individual uses private physicians and private hospitals. In addition, there may be a cost-sharing element for a few prescription drugs (see Reimbursement Procedures).‘ 76 REIMBURSEMENT PROCEDURES Government reimbursement of health services is generally made directly to the provider of services. The major exception involves the reimburse- ment of private specialists. General Practitioners General practitioners receive a government payment of $l.25 for each private treatment plus 75 cents for each treatment outside normal office hours (night, Sunday, or holidays). An additional 75 cents is paid for every 15 minutes of treatment over the first half-hour. If the patient is a social security beneficiary, his dependent, or a child under age l0, the government payment is $2. In addition, the physician receives a sum based on the mileage he has traveled. In the 23 designated rural areas, general practitioners receive a Rural Practice Bonus-—l0 percent of their General Medical Services claims and 25 percent of their mileage claims. The Department of Health also pays 50 percent of the salary of registered nurses employed by general practi- tioners in rural areas, plus 75 cents for each home visit by the nurse, and a mileage supplement. The government payment is claimed either directly by the physician or by the patient himself as a refund. Over 90 percent of the general practi— tioners claim the flat-rate payment directly from the Government using the "schedule system.” Under the schedule system the doctor keeps a daily list of services performed and returns this list weekly or monthly to the Department of Health in support of his claim for payment. The Department verifies the accuracy of the schedule by carrying out a l- percent postal check of patients. A few general practitioners require direct payment from their patients. The patient then claims a refund of the government's flat-rate payment from the Department of Health. Specialists For a one-time referred consultation, private specialists receive a pay- ment of either $3.50 or $5 depending on their specialty. Subsequent visits, as well as operations, however, draw the regular payment received by general practitioners. The specialist is not entitled to the extra fee for extended time over the first one-half hour to which the general practitioner is entitled. Nonreferred consultation is reimbursed at the same rate as the general practitioner payment. 77 Private specialists usually operate under the refund system: The patient pays his bill in full and then receives a refund from the Department of Health equal to the government's flat-rate payment. Hospitals Public hospitals, which are free, receive all of their funds from the Government. Estimated operating funds, based on the previous year's experience, are forwarded to the public hospitals by the Department of Health. These funds are administered by the district hospital boards themselves (see earlier section on hospitals). The Department of Health maintains a contingency fund to cover unexpected cost increases arising from newly negotiated wages and salaries, minor construction, and equip- ment purchases. Major construction (costing over $20,000) is financed by loans with the interest and principal repayments being met by govern- ment grants. Private hospitals receive $9 a day from the Department of Health for each bed occupied for surgical treatment (if occupied for a minimum of 2 days) and $5.50 a day for each bed occupied for medical treatment, including psychiatric care. Pharmaceuticals fl, Pharmacists and hospital dispensaries are reimbursed directly by the Department of Health. The pharmacist is reimbursed according to the wholesale price of the drug plus a markup for overhead and profit. The Drug Tariff, a list of prescription drugs which patients receive free of charge, is determined by the Pharmacology and Therapeutics Commit- tee which meets three times a year.§/ Prices charged by manufacturers and wholesalers for prescription drugs are uncontrolled but subject to negotiation. If the Pharmacology and Therapeutics Committee believes that the wholesale price of a drug is high and the manufacturer is un- Willing to accept a lower price, the committee can remove the drug from the Tariff or can add an extra charge which becomes payable by the patient. Either action serves to lessen the drug's appeal to the public. 5/ The chairman of the committee is the Director of Clinical Services of the Department of Health and some members are specialists in private practice. 78 SWEDEN Sweden has a national health insurance program supervised by the Nation 1 Government, with compulsory membership for all residents. Local author; ties are responsible for providing health care facilities. Most of the funds necessary for financing health care are collected through local income taxes imposed by the counties. In relying on general revenue financing for support of the system, the health care delivery pattern is more like a national health service than a self-supporting health insurance program. A small part of the health care funds does, however, come from the health insurance mechanism, principally as reim- bursement to the counties for part of the cost of hospital treatment and ambulatory care. Medical benefits include physician care, hospitalization, prescription drugs, and dental care (recently extended to adults). Cost-sharing elements are significant, but expensive pharmaceuticals are free. The patient pays a fixed fee for publicly provided ambulatory care; he pays somewhat more when he consults a private physician. Hospital in- patient treatment is free; but if the patient is receiving a cash sickness benefit, he must usually relinquish part as payment toward his hospitali- zation. Such cash sickness benefits, amounting to 90 percent of earnings for the typical worker, are paid for an unlimited time. Cash maternity benefits replace 90 percent of earnings but are limited to l80 days. Nonemployed women also receive a maternity cash benefit at a minimum of 6 kronor a day.l/ In addition to cost sharing, the employed must pay a premium for national health insurance. The premium corresponds to 2 percent of the average industrial wage. The employer pays 3.8 percent of earnings, and the National Government contributes about one-third of national health insur- ance receipts. All inpatient care and much of the ambulatory care are provided by hospital physicians who are salaried. A large part of ambulatory care, particularly in rural areas, is also provided by salaried physicians at publicly financed district medical offices. In addition, a significant amount of ambulatory care is still provided by private physicians who are paid in full by the patient who then seeks partial reimbursement from the sickness funds according to a fixed schedule. 1/ l krona equals U.S. 23 cents. 79 BACKGROUND A considerable number of private, voluntary health insurance funds in Sweden were already in operation by 1850, and coverage during the latter half of the century grew rapidly. In 1891, the Government provided for the registration of all health insurance funds and also established a small subsidy toward their administration. Public supervision of the funds was introduced in l9l0. A series of legislative changes were sub- sequently made over the years until the voluntary program was replaced by the present universal compulsory system. By 1935, the voluntary program was open to anyone in good health between the ages of l5 and 50; but under group coverage the age stipulation was waived. Medical benefits reimbursed the patient for two-thirds of physicians' fees (according to a fixed schedule) and the whole cost of ward care in the hospital. However, since hospitals were basically financed by general revenue, fees were set at a nominal level. Small cash benefits as well as a maternity grant were also standard. Benefits to help defray the cost of pharmaceuticals were provided by some sickness funds on an optional basis. Until l944, persons with incomes above a stipulated ceiling were ineligible for medical care coverage but could insure for cash benefits. The program was mainly financed by annual gremiums from the worker. There were no employer contributions required, ut 20 percent of the cost was met by the Government. The compulsory universal health insurance plan introduced in January 1955 resulted from discussions that spanned several decades. At that time, approximately 70 percent of the population was voluntarily insured with sickness insurance funds, of which there were about 1,000. In introduc- ing the new program the funds were absorbed into the national system. The l955 plan was initiated by the National Health Insurance Act of l953 which was superseded by the National Insurance Act on January 1, l963. The standard fee, now set at l2 kronor, which is paid by the patient as his share of the cost of ambulatory physicians‘care and is provided through public auspices, dates back to l970 when it was introduced as part of the "Seven- Kronor Reform." At the same time, publicly employed physicians were placed entirely on a regular salary basis, thus eliminating the opportunities for fee-for-service arrangements by individual physicians which existed earlier. ORGANIZATION OF HEALTH CARE DELIVERY The national insurance system, which not only includes health insurance but also has jurisdiction over old-age and disability pensions, is now administered by about 600 local funds supervised by 26 regional insurance offices with geographical jurisdictions corresponding to those of the 80 county councils.g/ Managing committees are made up of representatives appointed by various levels of government. Although the regional insur- ance offices are independent entities, they are subject to supervision at the national level by the National Social Insurance Board. Basically, the Board monitors the performance of regional offices. It is also a forum for grievances of the general public. The National Board of Health and Welfare is the principal governmental institution for supervising and promoting health and medical care through- out the country. A component of the cabinet-level Ministry of Health and Social Affairs, the Board supervises and plans for training of medical personnel and the location and construction of hOSpitals. It is generally responsible for the scope and direction of national health policies. Although all medical care in Sweden is now controlled by the national government, direct responsibility for most medical care delivery rests primarily with the counties through the county councils. The county council is selected for a period of 3 years in elections coin- ciding with municipal and general elections. The number of council members varies from 33 to l49, according to size of population in the area. Among the boards and committees which the council chooses to carry out day-to-day functions is a Medical Service Board which is in charge of medical care in that county. Each county council can tax and set its own rates. These taxes are com- bined with communal taxes into a total local income tax payable with the national income taxes once a year. The average county council tax rate has increased yearly over the past two decades and in l972 reached 9.27 percent, twice the l96l level. In l970, the county councils received 54 percent of their income from local taxes and another l9 percent from the National Government. 0f their total expenditures 78 percent was allotted to medical care. Among current trends in Swedish health care is a decision to create county—operated health centers similar to the group-practice concept in the United States, presumably to bring health care closer to the people and take some of the pressure off the hospital outpatient clinics. Physicians According to plans, the number of physicians in Sweden, which totaled about ll,000 in l970, will increase to an estimated 20,000 by 1980 mainly as a result of an increase in medical school graduates. Historically, the 2/” There are 23 county councils, with the 3 largest cities (Stock- holm, Goteborg, Malmo) constituting administrative units of their own, for a total of 26 administrative units. 81 physician-population ratio has been relatively low but has been rising rapidly in recent years. In 1969 it reached l30 per l00,000 population or roughly the same as in the United Kingdom. By l980, if present pro- jections hold true, the ratio will nearly double to about 240 per l00,000, about the same ratio now prevailing in the USSR. An estimated l0 to l4 percent of all physicians were in private practice as of 1970 but nearly a third were over 65 and many worked only part time. Perhaps as many as another tenth of the nation's physicians worked a few hours per week on a private basis outside their regular working hours as hospital staff. An unspecified number of physicians are, in addition, employed in the medical units of large enterprises. The rest are salaried employees of county councils, employed as either district medical officers or hospital physicians. The latter provide most of the primary health care in urban areas. In 1968, 850 district medical offices, operated by county councils, pro- vided nearly all medical services available in rural and outlying areas. Their services are augmented by public health nurses who provide a con- siderable amount of primary care that would ordinarily be dispensed by a physician. In 1970, the number of ambulatory visits to physicians in district medical offices (5,400,000) was almost matched by those to public health nurses (5,300,000). Recently, there has been a trend toward consolidating district offices to permit two or more doctors to work together and thus provide a wider range of services. By l970 this movement had brought about 250 special- ists into the district offices, raising the total number of physicians to l,250. The number of offices during the same time decreased to 750. Although the district medical office has traditionally been a rural in- stitution, in recent years similar centers for health care delivery have been opened in urban areas. Some of these urban-based centers are designed to provide a wide range of specialist services and limited in- patient care in addition to the traditional generalist treatment. The purpose is to relieve the pressure in hospital outpatient clinics by providing a wider range of medical services closer to the patient's home. General practitioners.——There were l,200 general practitioners in Sweden in l969--400 in private practice and 800 district medical officers. As in many other countries, increased specialization in medicine has brought about a corresponding decline in the number of general practitioners. Indications are that there are now only about a third of the number that prevailed 15 years ago. Although the hospital physicians are usually considered to be specialists, most of the primary general and specialist care in urban areas is provided in the outpatient departments of hospitals by these same physicians. 82 Specialists.--In 1969, specialists accounted for 88 percent of all doctors, and their relative numbers are probably continuing to increase slowly. Among government-employed doctors, 90 percent are specialists; in private practice, 66 percent are specialists. Many specialists who might other- wise choose private practice are deterred because staff privileges are denied private physicians in hospitals operated by public authorities. As a result, there are almost no surgeons in private practice. Also because of his limited hospital privileges, the private doctor loses contact with his patient as treatment is taken over by hospital staff. Statistics indicate that the private practitioner's caseload is accord- ingly heavily weighted toward treating the less serious ambulatory cases. Private practitioners make up a small proportion of all physicians in Sweden but they account for the treatment of 26 percent of all ambulatory cases. In the three largest cities they account for an even larger per- cenfiageg 30 percent in Goteborg, 40 percent in Stockholm, and 50 percent in a m . Hospital physicians.—-Ab0ut 75 percent of the physicians in Sweden are public employees in hospitals, nursing homes for the chronically ill, and other long—care institutions supervised by county councils. Many of them practice in hospital outpatient clinics where most primary care in urban areas is provided and, on a national basis, about 50 percent of all ambu- latory cases are treated. All hospital-employed doctors are considered specialists. Those employed in teaching hospitals--large regional hos- pitals affiliated with medical schools—-are engaged in teaching and re— search. In the future, it is expected that hospital staffs will include an increased proportion of general practitioners, principally for out- patient work. As the supply of hospital doctors increases, the waiting time for admis- sion to hospitals for elective surgery is expected to decrease. The cur- rent ratio of hospital beds to population (l8 per l,000), the highest in the world, is adequate to accommodate a considerable increase in admis- Sions. Hospitals About 90 percent of hospital beds are owned and operated by local county councils. Privately operated hospitals and rest homes for the long-term and incurably ill account for about 5 percent of available hospital beds in Sweden. Institutions controlled by the national government (primarily teaching hospitals) account for the remaining 5 percent. Although operation of public hospitals and their role in the delivery of health care in Sweden are primarily concerns of the county councils, most of the planning for health care occurs on a national level. Priorities with respect to hospital construction and the supply of physicians, for instance, are detennined jointly by the Ministry of Health and the Na- tional Board of Health and Welfare. The implementation of these plans \ 83 is then based on cooperation between the Board and the county councils. For example, the county council normally takes part in determining the exact location of a new hospital. Over a period of time, the country has developed a planned, pyramidal pattern of hospitals: from many small institutions at the local level to a few large regional hospitals at the top. The district hospital, designed for a population of about 90,000, is the base unit in the health care delivery pyramid with at least four speci- alty departments for internal medicine, general surgery, radiology, and anesthesia. A hospital of 300 beds with l0 to 12 specialty departments is considered optimal size. Nursing homes and homes for incurables are often attached to the district hospitals. Current plans also call for converting outmoded district hospitals into health centers or nursing homes for chronic care. The next step up from district hospitals is the county general hospital, serving a population of about a quarter of a million. The general hospi- tal serves both as the local hospital in the area where it is located and as a special hospital for the county as a whole. The typical general hospital has 800 to 1,000 beds and up to 20 departments for medical, sur- gical, and laboratory specialties in addition to a large outpatient facility, rehabilitation center, family planning and advisory center, mother-and—child services, and dental services. Seven regional hospitals are at the top of the pyramid, each serving several counties with a combined population of about 1 million, each with facilities for all specialties. Medical cases that cannot be treated at the district and central hospitals are admitted here. Five of the re- gional hospitals have medical and nursing schools and serve as teaching hospitals. There is only one class of accommodation in Swedish public hospitals, generally four patients to a room. COVERAGE Nonpensioners Medical benefits are available to all residents. Full cash benefits under both sickness and maternity programs, stated as a percentage of income, are paid to those in gainful employment. However, a small cash benefit is also usually paid to persons who are not employed, such as housewives. Hospital care is free; but during hospitalization, the local sickness in- surance fund reduces the cash benefit by a nominal amount, an adjustment called the "hospital deduction.” 84 Pensioners Pensioners are entitled to medical care, and if employed, to cash benefits as well. There is, however, a time limit (180 days) on cash payments and free hospitalization. For hospitalization in excess of 180 days, the pensioner pays l0 kronor per day. BENEFITS Medical Medical benefits cover all necessary physician and hospital care, both on an inpatient and outpatient basis. Some cost Sharing by the patient is required, however. Benefits also include most prescription drugs on a cost-sharing basis, but drugs for over 20 medical conditions are free: insulin (for diabetes), digitalis (for heart failure), and anticonvulsants (for epilepsy) are among these. Ambulance service is free. Most expenses for taxi trips to obtain medical care are paid under the health insurance program. Air travel in remote areas is also reimbursed. Care in nursing homes and homes for the incurables is provided. In areas where there is a district nurse, services in the home are free. Recently, home-nursing grants have been made available in cases where the chroni- cally ill require care by relatives. The need for such care must be certified by county medical authorities and the care offered must be of the same standard offered by a nursing home. Other types of home-help service are also provided free, subject to a means test. A dental insurance program for those aged 20 and older was introduced January l, l974, with cost-sharing features. Preventive dental care is covered as well. Previously, dental care on a regular basis was provided free of charge for youths through school age. This service, expanded to include everyone through age l9, is still in effect. Cash Sickness Full cash sickness benefits are paid to all employees aged l6 or older earning at least l,800 kronor a year. Housewives who are not employed are entitled to minimal benefits but they often take out voluntary insur- ance which entitles them to larger payments. Students may also contract for insurance which provides substantial cash benefits. Beginning January 1, l974, cash benefits were increased by about l0 percent to 90 percent of income for workers in the most common income brackets with a decreasing percentage of earnings replacement for higher income brackets. These benefits were also made taxable at the same time. 85 Cash benefits are payable from the day after the onset of illness, on a 7-day-a-week basis. There is no time limit on payments, except that pensioners with an income from gainful employment are limited to l80 days. There is also no qualifying period; coverage starts with the first day of insurance. Maternity Beginning January l, 1974, the maternity benefit program was replaced by a parent insurance program. During the first 6 months after the child's birth either parent is eligible for cash support while at home caring for the newborn. The parents decide whether the mother or the father will stay at home. In addition, a working parent is eligible for cash sickness benefits (up to 10 days per year) while caring for a sick child at home. Also, a father qualifies for this benefit while caring for the children during his wife‘s confinement. The maternity benefit is only available when both parents are working. Nonetheless, every woman giving birth receives a maternity grant of 1,080 kronor (plus 540 kronor for each additional child in multiple births). Part of the grant (300 kronor) may be made up to 4 months in advance of the expected birth. PROCEDURES FOR OBTAINING CARE The usual channels for receiving primary medical care in an urban setting are at outpatient clinics of the hospitals or from a private physician. The rural population nonmally turns to the local district medical office for primary care. In the hospital outpatient clinic the doctor, who is a hospital employee, determines the course of treatment: hospitalization, referral to a specialist, or diagnostic treatment, any one of which is free to the patient. (Subsequent visits to a specialist after the initial referral, however, do require the usual copayment of l2 kronor per visit.) The patient may consult a private physician, either generalist or special- ist, if he is prepared to pay a higher fee than in public facilities. However, he must subsequently contact the local social security office to obtain the partial refund to which he is entitled. The patient may consult a private specialist without referral by a general practitioner. The curb on free choice of a doctor in the hospital-based system of treat- ment is a primary reason why many patients turn to private doctors in the major metropolitan areas. 86 ROLE OF PRIVATE INSURANCE Private health insurance in Sweden, almost entirely limited to cash bene- fits, is essentially an adjunct of labor-management collective agreements but is also available by individual contract. Daily cash benefits are now normally a flat rate of 3 kronor per day; but in the past, these collective agreements, aimed at providing cash benefits to supplement those received from the national health insurance program, varied accord- ing to the level of earnings. The cash benefit, along with the benefit under the national program, was designed to replace 90 percent of the worker's former earnings. The first relevant agreement (in l960) included white-collar personnel only, and entitled the employee to a cash benefit from the first day of illness. In 1973, blue-collar workers also acquired coverage,for a cash benefit plan patterned after that for white-collar workers, although bene- fits became available only after a 30-day waiting period. Recent figures reflecting the exact participation in these group programs are not available. Indications are that they included 600,000 persons in 1973 and that their numbers are growing rapidly. There was an increase of l45 percent, for instance, between l965 and l973. The number of people insured individually (mostly housewives) increased only slightly during the 1960's and is presumed to be less than 200,000 at present. FINANCING In discussing the financing of health care in Sweden, it is necessary to distinguish between expenditures for the health insurance program and those for total health care delivery. Estimates over the past decade have tended to assume that about one-tenth of total national health care expenditures have been met by health insurance funds, three—fourths by national and local governments (including subsidies to health insurance), and one—fifth by cost sharing. As a result of a health insurance reform in 1973, the cost-sharing segment has probably decreased slightly. The health insurance program thus has a relatively modest role in the finances of the total health care system. Most of its resources are concentrated on the cash sickness benefit program which absorbs 70 percent of overall expenditures. Since the l973 reform, the national government has doubled its share in the support of the health insurance program and now contributes a third of its costs. The remaining two-thirds is funded primarily by contributions from employers and employees. 87 antributions Contributions toward health insurance cover both health care and cash benefits. Presently, the insured (employees and the self-employed) con- tribute a flat 300 kronor per year, plus l.3 percent of income below a stipulated ceiling (60,750 kronor per year in l974). This contribution, equivalent to about 2 percent of the average industrial wage, is usually collected along with the national income taxes on a pay-as-you-go basis through payroll deductions made by the employer on behalf of the employee. The employer also pays 3.8 percent of each worker's earnings up to the same ceiling. Nonworking pensioners are not required to contribute. Cost Sharing Health care delivery in Sweden is partially financed by direct payments from the patient. First of all, there is the standard l2-kronor fee for a routine ambulatory consultation with a doctor in public facilities (plus an additional 48—kronor per visit paid by the health insurance system to the county). The corresponding charge for a home visit is 20 kronor. For consultation with a private doctor, the patient must initially pay the entire fee and then seek partial reimbursement from the local sick- ness fund at the rate of 75 percent of a standard fee schedule reflect- ing the type of service performed. The physician may charge more than the designated fee in the schedule, but in such cases the patient is still entitled to be reimbursed no more than 75 percent of the schedule rate. Indications are that, in practice, it has not been uncommon for the patient to pay about three-fourths of a standard fee of about 50 to 80 kronor. The pensioner receives free hospital care for 1 year. After that, he must contribute lO kronor per day. Pharmaceuticals for chronic illnesses are free. The cost of other medi- cines is reduced by half where the charge is between 5 and 25 kronor, and by 100 percent where it exceeds 25 kronor. The pharmacy, in turn, re- ceives an amount equal to the discount from the sickness insurance fund. Transportation expenses to the doctor or hospital are reimbursed in their entirety by the sickness insurance fund (including the cost of a taxi when the need is established), as is the cost of the return trip in excess of 6 kronor. The dental program pays one-half of travel expenses in excess of TS kronor. This program also pays 50 percent of dental fees up to l,000 kronor, and 75 percent of costs after that amount. 88 Role of Government As the operator of most hospitals and other facilities where inpatient and ambulatory care are offered, and as the principal employer of physi- cians, local government plays a leading part in Sweden's health care delivery system. The role of the National Government is relatively minor in comparison, limited mainly to subsidizing the health insurance program. In combination, however, the two levels of government contribute about 75 percent of the nation's health care costs. REIMBURSEMENT 0F PROVIDERS Physicians Most physician care is provided by hospital staff, and in rural areas by district medical officers, who are salaried employees of the county coun- c1 5. Before l970, hospital doctors (staff chiefs as well as junior physicians) had the option of treating private patients along with their regular "service" patients in the hospital outpatient clinics. Patients covered by medical insurance were charged according to a fee schedule, but the doctor could fix his own charge for private patients. This privilege was withdrawn with the introduction of the 1970 reform placing all hospital physicians on a straight salary schedule. The private doctor continues to be paid directly by his patient, who in turn receives partial reimbursement of 75 percent of a fee schedule from the local fund. Private specialists are remunerated according to a higher schedule and the patient normally pays half of the overall fee. In the latter half of 1974, the Government modified reimbursement of private physicians. Now the patient pays a flat fee of 20 kronor per visit (com- pared to l2 kronor for a visit to a goVernment doctor). Social insurance pays the rest to the doctor directly according to a fee schedule. The dentist works as a private practitioner according to a fee—for-service schedule. He bills his patient for one-half the fee and is reimbursed by the local health insurance office for the remainder. For dental costs over l,000 kronor, the patient receives reimbursement of 75 percent of the fee schedule. Children through age l6 receive free dental care. Hospitals All funds except a small portion for inpatient care come from the local authorities who own and operate the hosoitals. The health insurance program reimburses the county council l5 kronor per patie day. The patient himself must pay 12 kronor for each visit to the hOSpl r ambulatory care. The health insurance fund adds another 48 kronor for a total of 60 kronor. \ \ 89 Pharmaceuticals The sickness insurance funds reimburse the pharmacies for that part of the cost of medicine dispensed that is not covered by a patient's coin— surance payment. The retail price of pharmaceuticals is predetermined and includes the purchase price to the pharmacy as set by the Ministry of Health and Social Affairs, plus a markup of 25 percent and a fixed fee-for-service charge (l.l0 kronor in l968). In l97l, the nation's pharmacies were placed under the ownership and management of a State-controlled monopoly which negotiates drug prices with the pharmaceutical industry. 90 UNITED KINGDOM The United Kingdom has a universal health care delivery system, the National Health Service, under which all residents are eligible for virtually free medical services. On April l, l974, a unified health service was introduced with consider- able decentralization in planning and operations on regional and area levels. The new structure replaces the former three-way division in the National Health Service with separate jurisdictions for general practi- tioners, hospitals, and public health services. Benefits under the National Health Service include comprehensive medical coverage. Cash sickness and maternity benefits are also included. Gen- erally there is a nominal charge for prescriptions and dental services. Earnings-related contributions are made by employers and employees to cover about a tenth of the cost of medical care provided by the National Health Service; general revenue covers 85 percent; and a small portion is financed by cost sharing. Cash benefits are principally covered by payroll contributions from both employer and employee. General practitioners are paid directly by the National Health Service through a capitation system. Payments are modified to the extent that each physician is eligible for supplemental payments for such considera- tions as treating patients over age 65 and for participating in group- practice arrangements. Dentists, however, are paid on a fee-for-service basis. Hospitals are government-owned and financed by general revenue. Specialists are ordinarily hospital staff members; they are paid on a salary basis for both inpatient and outpatient treatment. BACKGROUND Government health insurance was first introduced in the United Kingdom by the National Health Insurance Act of l9l2. To a great extent, it was modeled after the sickness insurance program enacted in Germany nearly three decades before. In both countries, the primary emphasis was initially directed more toward providing modest cash benefits to workers as partial compensation for wages lost during illness than toward providing medical care. In this connection, authorized voluntary nonprofit insurance bodies, desig- nated as "approved societies," collected premiums from the compulsorily insured workers and paid benefits to them. These insurers included 91 579-431 0 - 75 - 7 friendly societies, industrial assurance companies, and trade union bene- fit funds, all of which had a history of providing sickness benefits on a private basis to the working population. The limited medical benefits were largely restricted to treatment by general practitioners and provision of free prescription drugs. Physi- cians who joined the system were reimbursed on a capitation basis and pharmacists were paid according to agreed prices of drugs. Medical bene- fits generally did not cover the costs of specialist treatment and hospitalization. At the beginning of the 20th century, however, hospitals were generally still operated as charitable institutions directed toward free care of the poverty-stricken. The prospect of meeting hospital bills was not a major problem in the country at that time. At the outset, approximately a third of the population was covered by the public insurance system, essentially restricted to working persons. It did not extend to dependents. White-collar workers with earnings above a certain ceiling were also excluded. The system was financed by small flat-rate contributions assessed on a tripartite basis at fourpence a week from the worker, threepence from his employer, and twopence from the State. Later, voluntary arrangements were developed to cover hospitalization or medical care costs of dependents of those workers already covered by the public scheme. Voluntary insurance under the public scheme was also available to a small portion of the population excluded from compulsory coverage. In the opinion of many, however, progress was too slow in expanding health insurance coverage and in improving the range and caliber of health services. By the time of World War II, there was widespread belief that once again a radically new approach was necessary. This sentiment culminated in the proposals of the Beveridge Report of l942 which recommended a com- prehensive public medical service with universal coverage. These payments had the support of the wartime coalition of all parties; but it was not until 1948 that the old health insurance system was actually replaced by a new program--the present National Health Service. Under this new program, coverage for medical care costs was expanded from approximately 40 percent of the population to the whole resident population. It also extended benefit coverage to hospital care and most other forms of medical treatment. The National Health Service was divided into three functional branches which covered El) hospital and specialist services, (2) local authority services, and 3) general practitioner services. In the process, the private hospitals, with a few exceptions, were taken over and placed under Regional Hospital Boards, of which there were l4 in England. 92 Thirty-five teaching hospitals were granted wide autonomy within this arrangement and each had its own Board of Governors. At a subsidiary level, 280 Hospital Management Committees became responsible for the day-to-day operation of each hospital in the country. Much of this structure, however, was changed as a result of the reorganization which took effect on April 1, l974, as discussed below. ORGANIZATION OF HEALTH CARE DELIVERY Reorganization of the National Health Service became effective April l, l974. As a result, England and Wales have a single structure encompass- ing hospital specialist services, general practitioner services, and those community health services which were formerly provided by the local authorities. Health services in Scotland and Northern Ireland were reorganized by separate legislation. The National Health Service in England is administered at the central government level by the Department of Health and Social Security, headed by the Secretary of State for Social Services. Corresponding ministerial responsibility for health services varies somewhat in other parts of the United Kingdom. The Secretaries of State for Scotland, Wales, and Northern Ireland have the responsibility in those jurisdictions . Al- though there are separate systems for Scotland and Northern Ireland, the general organization and function of the health services are broadly similar throughout the United Kingdom. In England, 14 Regional Health Authorities have the responsibility for determining_area plans, allocating resources to subsidiary authorities, and monitoring their performance--including the design and construction of new buildings. The Regional Health Authorities are subdivided into 90 Area Health Authorities. The larger areas have been subdivided into two or more Districts for a total of about 205 Districts. Area Health Authorities are responsible for assessing needs in the area and for planning, organizing, and administering health services to meet them. All levels will have responsibilities in planning, but day-to-day opera- tions will be supervised primarily on the District level. Members of each Regional Health Authority are appointed by the Secretary [of State after consultation with universities, local authorities, and representatives of the medical profession and other interested groups. such as the voluntary associations, employers, and trade unions. The term of office is 4 years. Half of the members retire every 2 years, but are eligible for reappointment. In establishing the new system many of the institutions previously active in administering the National Health Service were abolished, including regional hospital boards, hospital management committees, executive 93 councils, and boards of governors of teaching hospitals. Most of the functions of the ll9 executive councils, which formerly admihistered all problems concerning general practitioner services and other forms of primary care, have been assumed by newly designated bodies called Family Practitioner Committees. Boards of governors at certain specialized postgraduate teaching hospitals will be temporarily maintained. Local authorities have also surrendered their National Health Service and school health responsibilities. In the reorganized National Health Service, provision has also been made for representation of the public's point of view regarding the structure and effectiveness of the health care delivery system. Community Health Councils were established for each District. At least half the members are appointed by the relevant local government authorities, and at least a third by voluntary bodies with a strong interest in the health services of the district. The remainder are appointed by the Regional Health Author- ity after consultations with the local government authorities and others. The Councils have the power to secure desired information and to visit hospitals and other institutions as part of their efforts in factfinding. The reorganization should enable the central government to be more responsive to local needs than under previous patterns of control. It is also assumed that the new organization will place greater emphasis on facilities for care of the chronically ill and on community health serv1ces. Physicians General practitionere.--At present, the United Kingdom has approximately 60,000 medical doctors. About 40 percent are general practitioners, another 45 percent hospital staff are engaged in medical care of a spee cialist nature, and approximately l5 percent are occupied with miscella- neous duties such as administrative functions and public health. Although the percentage of general practitioners in the country has actually declined in recent decades, the general practitioner remains the all-important link in making the National Health Service function successfully. Except for emergencies, the individual person does not have access to most National Health Service facilities unless he is referred by a general practitioner. This applies to such basic medical requirements as admittance to a hospi- tal or referral to a specialist. The general practitioner is free to reject or accept patients who seek admission to the list of patients for whose primary medical care he is responsible; he is also allowed to have private patients alongside his National Health Service practice. Although the general practitioner is usually the first contact in any illness and helps coordinate complex cases, he is generally barred from inpatient treatment in hospitals 94 except in a few rural areas and some special situations. Consequently he loses contact with his registered patients during periods of extended hospital confinement when they are cared for by the hospital staff. Indications are that the situation may be gradually changing. Approxi- mately a fourth of the general practitioners now work part time in hospi- tals where some contact can be maintained with their patients. Another departure from traditional patterns of medical care can be ob- served in the changeover to group practice, a trend which benefits from financial incentives. About l0 percent of the general practitioners also work in health centers which are generally group-practice arrangements on a somewhat larger scale than average but involve the support of nurses and social workers. It is h0ped that such centers can assume some of the outpatient services of hospitals. Solo practitioners and most of those in group practice still depend heavily on hospital outpatient departments to provide their patients with diagnostic and X-ray services. Problems related to general practitioner services, as well as services of dentists, pharmacists, and Opticians, are handled by Family Practitioner Committees. They also investigate complaints against practitioners. Each committee has 30 members who serve voluntarily-—l5 are appointed by groups representing local doctors, dentists, Opticians, and pharmacists,, 4 by the local authority, and ll by the Area Health Authority. The chairman is elected from the members. In directing general medical ser- vices in the area the committee consults professional groups to obtain their views. Although procedures exist for review of a physician's professional con- duct and possible removal from the Medical Register, formal review of his professional activity in the National Health Service is largely restricted to his record in cost of medicines prescribed. If a physi- cian's prescription costs substantially exceed the average in his area, he may be asked for an explanation by an official representative of the Department of Health, known as the Regional Medical Officer. Specialists.-—Most specialist care in the United Kingdom is conducted by the medical staff of hospitals where they usually see patients only on referral from general practitioners. The highest ranking doctor in the hospital hierarchy—-the consultant--is directly responsible for the care of all patients in his unit. Hospital staff doctors on a lower level are now chiefly designated as medical assistants. Until recently, most ‘hospitals also had numerous doctors with the rank of senior hospital medical officers, which was approximately at the same level. Phasing- out of this category, however, is near completion. 579-431 0 - 75 - B 95 Below this intermediate grade are a large pool of doctors (about 60 per- cent of those in the hospitals) who are considered to be in training. They are divided into several levels: senior registrars, registrars, and house officers. These training posts are full time, and no other medical work is permitted. The consultant, however, may work on a part-time basis and spend 2 or 3 half-days a week in a private office caring for private patients in addi- tion to his National Health Service commitments. The consultant is en- titled to a special merit award to supplement his salary if he is desig- nated as an outstanding practitioner in his field. Hospitals Over 95 percent of the hospitals in the United Kingdom are government- owned. They are supervised on behalf of the Area Health Authorities by members of District Management Teams. Since nearly all inpatient care and specialist outpatient care are centered in the hospitals, they pro- vide the greater part of the country's health care, as measured by the share of funds allotted. Slightly less than two-thirds of all National Health Service expenditures have in recent years been allotted to hospi- tal services, with the remainder being divided between the general prac- titioner and the local authority services. Until April 1974, the hospitals of England were under the jurisdiction of 14 Regional Hospital Boards. In the reorganized National Health Ser- vice the Boards have been dissolved and their duties subsumed by Regional Health Authorities. The boundaries of the Regional Health Authorities correspond roughly to those of the Regional Hospital Boards, but minor adjustments have been made to make them coincide with those of the constituent Area Health Authorities which are normally coterminous with new counties or metro- politan districts of local government. The hospital structure has been changing rapidly in other ways in recent years. Although there has been considerable emphasis on updating exist- ing facilities and on new construction, the total number of 426,365 beds in England in 1971 represented a nominal decline over the number exist- ing 10 years before, as obsolete installations have been retired. Mean- while, the number of patients treated has risen by about 30 percent. There have also been sweeping changes in the field of mental care. The number of beds in English mental institutions has fallen from 156,000 in 1953 to 124,000 in 1970. While patients admitted have risen from . 67,000 to 173,500, discharges are taking place more rapidly. The soc1al services departments of the local authority are expected to provide re- habilitative support to discharged patients. 96 In addition to the hospitals administered by National Health Service, the country still has a sizable network of small private hospitals usually called ”nursing homes." In 1972, England had 24,778 beds in these hospi- tals or slightly less than 6 percent of those in general-purpose hospitals run by the National Health Service. Under the reorganization of the National Health Service, each of the 205 Health Districts is intended to have only one large general hospital or equivalent facility. In addition, they are ultimately expected to have several 50- to lSO—bed community hospitals with extended-care facilities and medical services provided by general practitioners. Local Authorities Before the April l974 reorganization, there were l74 local authorities (county councils, county borough councils, London borough councils, and the Common Council of the City of London), which were responsible for such personal health services as midwifery, health visiting, home nursing, vaccination and immunization as well as preventive medicine and various school health services. Under the reorganized National Health Service these services were trans- ferred to the Area Health Authorities along with other medical care. Deputizing Services An interesting form of recent private initiative in health care delivery in the United Kingdom involves late night calls by physicians to homes of patients. Ordinarily, the general practitioner or family doctor with whom a patient has registered is responsible for making all house calls on a round-the-clock basis as necessary. However, a number of commercial firms now provide a substitute for doctors who are prepared to pay a set fee for these night calls. The fee charged is usually less than the current 3 pounds paid to the family doctor by the National Health Service for a late call, so that substitute services do not incur an out-of-poc- ket expense for him. The commercial firms obtain their substitute doctors from the lower spec1alist categories in the hospitals. Commercial firms also supply extra nursing services to hospitals that need such help on a temporary basis. COVERAGE All residents of the United Kingdom are eligible for health care under the National Health Service whether or not they contribute as active members of the labor force. Visitors to the country are also generally 97 eligible except that those who have arrived there solely to obtain medical services are expected to pay as private patients for their full treatment. Members of the labor force are eligible for cash benefits if they meet the required period of prior insured work history. BENEFITS Medical A resident is entitled to any medical service needed. He receives gen- eral practitioner care upon registration with the physici—an of his choice and, upon referral by his general practitioner, may consult a specialist when advisable. He is also entitled to free hospital ward care. With a small element of cost sharing, pharmaceuticals and most forms of dental care are included. Some home nursing and home help are also available. Public health care aspects of preventive medicine, such as vaccinations and inoculations, are also under the jurisdiction of the Area Health Authorities. Individual practitioners are free to conduct any preventive checkups they consider necessary. But, with minor exceptions, few incen- tives have been devised to promote mass screening on a wide scale. Cash Sickness The working person who becomes ill is entitled to cash benefits under British social security through a program administered and financed apart from the National Health Service. To be eligible the worker must have at least 26 weeks of coverage. For full benefits he must have had 50 weeks of coverage in the past year. The benefit in l974 was 8.60 pounds a week for a single person and l3. 90 pounds for a couple. 1/ Additional amounts are provided when there are dependent children. There is also a graduated earnings-related supplement which amounts to a third of any earnings between l0 and 42 pounds a week. Normally a 3- -day wait- ing period is required after the onset of illness before payment of the flat rate begins, and a 12-day waiting period for the earnings-related supplement. For the average industrial wage earner with a nonworking wife and two children, the l974 benefit replaced about 70 percent of his earnings. After 168 days of payment, sickness benefits are supplanted by an inva- lidity benefit which, since October l973, has been paid at a higher rate than the sickness benefit. It is not payable if the worker has contributed 1/ l pound equals U.S. $2.32. 98 for fewer than 156 weeks, in which case payment of the cash sickness bene- fit can continue for another 6 months. Invalidity benefits can continue as long as the sickness lasts. Earnings-related supplements are payable up to 6 months for any period of sickness. The national insurance system also pays a funeral grant upon the death of the insured or an eligible dependent. The standard rate is normally 30 pounds for an adult. Maternity Maternity benefits are paid to working women. The benefit period runs ll weeks before and 7 weeks after confinement. The benefits provide a basic 8.60 pounds a week and additional amounts for dependents. ,In addition, a lump-sum grant of 25 pounds is paid to wives of insured workers as well as working women for each childbirth. PROCEDURES FOR OBTAINING CARE To obtain medical services, the British resident must normally be regis- tered with a general practitioner. The general practitioner will not only provide him with treatment within his competency, but will also refer him for inpatient or outpatient treatment in a hospital. Virtually all specialist care is performed by hospital staff doctors on an outpatient basis. To obtain dental services, the patient need not be registered with a dentist. He need only make an appointment With a dentist of his choice to obtain the services needed. PRIVATE HEALTH INSURANCE In the United Kingdom, a small number of people contraCt for private health insurance coverage. Although in general the population seems to be content with the quantity and quality of services provided under the National Health Service, the extremely long delay sometimes required for admission to a hospital for elective surgery causes dissatisfaction to many citizens. Arrangements exist for more timely service in private hospitals, and a small number of beds in some public hospitals may be used by paying patients. Approximately 2.1 million people, or slightly less than 4 percent of the total population, are covered by private insurance. Official British estimates place expenditures on health care financed through private health insurance at the equivalent of about l percent of National Health Service expenditures. Private health expenditures made directly by individuals probably account for slightly more. 99 Another type of private insurance provides small cash benefits in case of illness. The usually modest benefit provided by such plans often in- cludes a small amount of assistance toward meeting the costs of home help where needed, contributions toward the expense of eyeglasses, and costs of care in convalescent homes operated by some of the societies. FINANCING Contributions Payroll deductions account for about a tenth of the financing of National Health Service (0.184 pound a week by each male employee, 0.l54 pound by each female worker, and 0.083 pound by the employer). In recent years, the combined contributions have not exceeded l percent of the earnings of the average industrial worker. The self-employed pay slightly less than the corresponding combined employer-employee amount; pensioners and the unemployed are exempt from payments. Financing of cash sickness benefits and maternity benefits also involves payroll deductions, along with Government contributions. These cash payments are not financed through the National Health Service, but are part of the same scheme which includes old-age pensions, unemployment insurance, and survivor benefits. Role of Government The Government finances about 85 percent of the cost of health care delivery provided by the National Health Service from general revenues. It also contributes more than a fourth of the cost incurred by the com— bined social security programs which encompass cash sickness benefits, unemployment benefits, old-age pensions, and survivor benefits. Cost Sharing A small cost-sharing element required of the patient has been incorporated into the National Health Service, which contributes about 5 percent of total health care costs in the United Kingdom. Small fees are assessed for eyeglasses and dentures. Normally the patient pays half the cost of dental work but not more than a maximum of lo pounds for any course of treatment. Also a fee of 0.20 pound must be paid to the pharmacist for each prescription filled. Certain categories of persons are exempt from all National Health Service charges. These include expectant and nursing mothers and children under age 16. In addition, prescription charges do not apply to the elderly, the disabled, and people receiving means-tested benefits. 100 REIWBURSEMENT PROCEDURES General Practitioners Since the inception of the National Health Service the basic form of remuneration of general practitioners has been a capitation approach. However, in 1966 a number of modifications were made and, as a result, the doctor now receives supplements and allowances in addition to the capitation payment. They include a basic practice allowance and supple- ment that vary according to the shortage of physicians in an area. There are additional payments for participating in a group practice, for seni- ority, and for undergoing training to improve qualifications. Night calls to patients also command special remuneration. Specialists Specialists are generally salaried hospital employees. Those who are in the highest category (consultants) are also eligible for a merit award which varies in value but in a few cases doubles their salaries. Approx- imately a third of the consultants are annually recommended for awards by the special advisory committees nominated by professional groups and medical schools of the universities. Consultants also have the option of working less than full time in a hospital, thus‘enabling them to engage in private practice. Hospitals Hospitals are usually part of the National Health Service and, as govern- ment institutions, are basically supported by general revenue. Services, whether diagnostic or for inpatient or outpatient treatment, are free to the recipient. When medicines, dentures, eyeglasses and appliances are dispensed in hospitals to outpatients, a charge is made when appropriate on the same basis as in general medicine. However, the funds so acquired are transmitted to the National Health Service and are not available for hospital budgets. A minor source of income is the funds received by the hospital from patients who pay for private or semiprivate accommodation. This income is also not retained by the hospital but is passed on to the Exchequer. Most patients are accommodated in general wards, but some hospitals have beds in single rooms or small wards Which, if not required for patients needing privacy on medical grounds, may be made available to other pa- tients desiring them. In such cases the hospital makes a charge. In l973 the charges established by regulation in England and Males were 0.2 pound a day for a single room and 0.l pound a day for beds in small wards. lOl At some hospitals a few beds may be used by patients who prefer to make private arrangements for treatment by a consultant outside the National Health Service. Such patients pay a separate fee for the accommodation and services provided as well as for the fee of the consultant treating them. A few hospitals also have outpatient facilities for private patients. Pharmaceuticals Most drugs are dispensed by pharmacists to patients upon receipt of a prescription from their doctor. Unless the patient is in an exempted category, he pays the pharmacist the small prescription charge. The phar- macist receives the remainder from the National Health Service when he submits vouchers at the end of the month noting the prescriptions dis- pensed. His reimbursement is calculated in accordance with the provisions of the Drug Tariff and is based on current wholesale prices agreed upon by the Department of Health and Social Security and the Central National Health Service (Chemist Contractors) Committee, national representatives for the pharmacists. Various markups are added to the basic cost of the ingredients which principally take the form of a percentage on cost, a container allowance, and a professional fee. A small discount is applied to monthly prescription volumes in excess of l,500. In a few cases, parti- cularly in isolated rural areas, provisions are made for doctors to dispense their own drugs. In such instances, remuneration procedures . utilize capitation approaches or the Drug Tariff as a basis for determin- ing the amount to be paid. The Department monitors pricing by manufacturers, along with their finan- cial statement. It also has the authority to direct price changes if it considers producers' profits to be excessive. Dentists Dental care involves considerably more cost sharing on the part of the patient than is true for general medical care. With regard to remunera- tion itself dentists are paid on a fee-for-service basis according to a prescribed scale of fees. Payment is partially covered by direct charges to patients and the remainder is received from the National Health Ser- vice after appropriate vouchers have been reviewed by a Dental Estimates Board. 102 PRIMARY'SOURCES Much of the information and data used in preparing this study was drawn from annual reports of the ministries of health and social security of the relevant countries, as well as statistical yearbooks and official brochures and pamphlets. Considerable use was also made of various articles which have appeared in the Social Security Bulletin in recent years. The files of the International Staff of the Office of Research and Statistics con- tained much helpful material, particularly in the form of airqrams and re— ports from U.S. Foreign Service posts abroad as well as material from scholars and memoranda of conversation with knowledgeable visitors from foreign countries. Special mention should be made of the helpful background provided by Christa Altenstetter on Germany, Norman Warner on the United Kingdom, Alan Maynard on the Netherlands, and Francois Lacronique on France. After review of preliminary drafts on these respective countries, useful sugges- tions were also made by S. Sandier of France's CREDOC, and E.N.H. Shepard and his staff at the United Kingdom's Department of Health and Social Security. Following are the principal published sources used. Numerous other publi- cations also provided valuable material. 103 CROSS-NATIONAL STUDIES Abel -Smi th, B, An International Study of Health Expenditures, and Its Relevance for Health Planning, Public Health Paper No. 32, World Health Organization, Geneva, 1967. Anderson, Odin, Health Care, Can There Be Equity? The United States, Sweden, and Englandg John Wiley and Sons, New York, 1972. Charron, K.C., Health Services, Health Insurance, and Their Inter-Relation— ship-~A Study of Selected Countries, Department of National Health and Welfare, Ottawa, 1963. Fry, John and Farndale, W.A.J., International Medical Care, Washington Square East, Wallianord, Pa., 1972. Fry, John, Medicine in Three Societies-—Comparison of Medical Care in the USSR, USA and UK, American Elsevier Pub. Co., Inc., New York, 1970. Fulcher, Derick H. , A Study of Some Aspects of Medical Care Systems in Industrialised Countries, International Labour Office, Geneva, 1973. Glaser, W.A., Paying the Doctor, Johns Hopkins Press, Baltimore, 1970. Health Services Financing, British Medical Association, 1970. Hogarth, J., The Payment of the Physician. Macmillan Company, New York, 1963. Langendonck, J. van, De harmonisering van de sociale verzekering voor gezondheidszorgen in de E.E.G., Catholic University of Leuven, 1971. National Health Insurance Resource Book, Part III, Health Financing and Delivery Systems of Selected Foreign Nations, U.S. Govt. Print. Off. , Washington, 1974, pp. 275-428. Public Health Reports, Health Insurance Programs and Plans of Western Europe, Govt. Print. 0ff., Washington, vol. 62, No. 11, Mar. 14, 1947. _. _, Volmtary Health Insurance in Western Europe, Govt. Print. 0ff., Washington, vol. 62, No. 21, May 23, 1947. Roemer, 14.1., The Organization of Medical Care Under Social Security, International Labour Office, Geneva, 1969. Schoeck, H. (ed.), Financing Medical Care, Caxton Printers, Ltd., Caldwell, Idaho, 1962. 104 World Health Organization, Regional Office of Europe, Health Services in Europe, Copenhagen, 1965. AUSTRALIA Dewdney, J.C.H., Australian Health Services, John Wiley and Sons, New York, 1973. ”Health Insurance--P1anning Committee Report," Australian Government Publishing Service, Canberra, 1973. Kewley, T.H., Social Security in Australia, Sydney University Press, 1965. Ryan, J.G.P., “General Practice in Australia,” International Journal of Health Services, vol. 2, N0. 2, 1972, pp. 273-284. CANADA Detweiler, I.F., Health Care Through Government, Office of Health Care Finance, Sydney, N.Sw., Australia, 1972. Fisher, Peter, Prescription for National Health Insurance, North River Press, Inc., Croton-on-Hudson, 1973. Hastings, J.E.F., Monograph on the Organization of Medical Care Within the Framework oj’Social Security, International Labour Office, Geneva, 1968. _._ , "Federal-Provincial Insurance for Hospital and Physician's Care in Canada," International Journal of Health Services, vol. 1, No. 4, 1971, pp. 398-414. Health and Welfare Canada, National Health Expenditures in Canada, 1960— 1971 With Comparative Data for the United States, Ottawa, 1973. McWhinney, I.R., "Genera1 Practice in Canada," International Journal of Health Services, V01. 2, No. 2, 1972, pp. 229-237. Taylor, Malcolm, ”The Canadian Health Insurance Program," Public Adminis- tration Review, January-February 1974 p. 36. 105 FRANCE Bridgman, R.F., ”Medical Care Under Social Security in France,” Interna- tional Journal of Health Services, November 1971, p. 334. Foulon, A., Comptes Nationaux de la Santé, CREDOC, Paris, 1972. Ministiere de m Sante/ Publique, Tableaux-Sante/ et Securite/Sociale, Paris (editions for selected years). Rogch, G., et al., Elements db Economique Meaicale, Flammarion Medecine- Sciences, Paris, 1973. FEDERAL REPUBLIC OF GERMANY Kastner, F., Monograph on the Organization of Medical Care Within the Framework of'Social Security, International Labour Office, Geneva, 1968. Pflanz, M., ”German Health Insurance: The Evolution and Current Problems of the Pioneer System,” International Journal of Health Services, November 1971. Sozialbericht, Annual report by the Bundesiminister far Arbeit and Sozial Ordnung, Bonn (for various years). NETHERLANDS Kapteijn, J.C.O., et al., ”The General Practitioner in the Netherlands-- General Outlines of Health Care,” International Journal of Health Services, V01. 2, N0. 2, 1972, pp. 263-271. Stolte, J.B., “Health Services in the Netherlands," world Hospitals, vol. VI, No. 3, July 1970, pp. 147-156. NEW ZEALAND Bernstein, Arthur H., ”No-Fault Compensation for Personal Injury in New Zealand,” Report of the Secretary’s Commission on Medical Malpractice, Appendix, U.S. Department of Health, Education, and Welfare, 1973, pp. 836-853. 106 ”Socia1 Security in New Zea1and,” Report of the Royal Commission of Inquiry, Ne11inqton, 1972. Ward, J.T., and Tatche11, P.M., "Hea1th Expenditure in New Zea1and," Economic Record, v01, 48, No. 124, December 1972, pp. 500-516. SWEDEN Andrews, Joseph L., "Medica1 Care in Sweden-—Lessons for America,” Journal a. of American Medical Association, v01. 223, N0. 12, Mar. 19, 1973, pp. 1367-75. _.. , "Primary Medica1 Care in Sweden," Rhode Island Medical Journal, v01. 55, No. 5, May 1972, pp. 152-172. Sosial Sikkerheit i de Nordiske Land, Grondah1 and Son, 0510 (anna1 reports of various years). Swedish Health Services System, Lectures from the A.C.H.A.'s Twenty- Second Fe11ows Seminar, Stockho1m, 1969. American Co11ege of Hospita1 Administrators, Chicago, 1971. Nerkg, Lars, ”Swedish Medica1 Care in Transition,” The New England Journal of medicine, Feb. 18, 1971, pp. 360-366. UNITED KINGDOM Battiste11a, Roger M., and Chester, Theodore E., ”The 1974 Reorganization of the British Nationa1 Hea1th Service--Aims and Issues,” The New c, England Journal of'Medicine, v01. 289, N0. 12, Sept. 20, 1973, pp. 610-615. Danie1s, Roberts 3., ”The British Nationa1 hea1th Service,” Hospitals, v01. 45, June 16, 1971, pp. 39-44. ILO Socia1 Security Branch, monograph on the Organization of Medical Care Within the Framework of Social Security, Internationa1 Labour Office, Geneva, 1967. Mechanic, David, “Genera1 Medica1 Practice in Eng1and and Na1es," New England Journal of’Medicine, v01. 279, No. 13, Sept. 26, 1968, pp. 680-688. ‘ . Mencher, Samue1, British Private Medical Practice and the National Health Service, University of Pittsburqh Press, 1968. I 107 US GOVERNMENT PRINTING OFFICE : 1975 0—579—431 Iiil'iiiiiiill CDEGSLBULS ORS RESEARCH REPORTS Monographs in this series may be purchased at the price indicated from the Superintendent of Documents, U.S. Government Printing Office, Wash- ington, 0.0. 20402. (Check, money order, or Superintendent of Documents coupons on1y.) Number 46 The 1967 National Survey of Institutionalized Adults-~Residents of Long-term Medical Care Institutions, by Phi11'p Fr0h1ich, et al. 194 pp. $1.95 March 1974. 45 Demographic and Economic Characteristics of the Aged--1.968 Social Security Survey, by Lenore E. Bixby, et al. 197 pp. $2.60 Ju1y 1974. 44 Social Security Programs Throughout the World 1973, by Internationa1 Staff. 280 pp. $4.20 December 1973. 43 International Social Security Agreements, by Wi11iam M. Yoffee: 166 pp. $1.25 October 1973. 42 Women and Social Security: Law and Policy in Five Countries, by Da1mer Hoskins and Lenore E. 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