Financing the healthcare needs of the elderly in Asia and the Pacific

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Financing the health-care needs of the elderly in
Asia and the Pacific

• Srinivas Tata
• Health and Development Section, UNESCAP
• 27.7.2007

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Structure of Presentation

• Demographic and Epidemiological transition in the
  region
• What does it mean in terms of health care
  provision and expenditures?
• What are countries doing and how well are they
  prepared?
• The road ahead.

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Madrid International Plan of Action on
Ageing-Political Declaration

• Article 14
• We recognize the need to achieve progressively
  the full realization of the right of everyone to
  the enjoyment of the highest attainable standard
  of physical and mental health. We reaffirm that
  the attainment of the highest possible level of
  health is a most important worldwide social goal,
  the realization of which requires action of many
  other social and economic sectors in addition to
  the health sector. We commit ourselves to
  providing older persons with universal and equal
  access to health care and services, including
  physical and mental health services, and we
  recognize that the growing needs of an ageing
  population require additional policies, in
  particular care and treatment, the promotion of
  healthy lifestyles and supportive environments.
  We shall promote independence, accessibility and
  the empowerment of older persons to participate
  fully in all aspects of society. We recognize the
  contribution of older persons to development in
  their role as caregivers.

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Demographic transition in the region
Source PSIS
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Projected mortality by cause, all ages, in high-,
middle-and low-income countries in the ESCAP
region, 2005
Source WHO
6
Impact of Demographic change on Health
expenditures 2005-2025
Source Gottret and Schreiber, World Bank, 2006
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Key issues

• The elderly use health-care services with greater
  frequency and intensity than younger adults.
• Since the elderly do use more health services
  than the young, it has been concluded as a truism
  that ageing of populations will naturally
  increase cost and demand for health services- not
  the only cause!
• what are the other factors?

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Factors that influence impact of ageing on health
care spending

• Morbidity compression- increase in life
  expectancy also means that longer period without
  sickness.
• Concentration of expenditures in last year of
  life- 10-30 of Medicare expenditures occurred
  in last year of life.
• Changes in demand related to changes in access to
  health care- Developed countries spend more on
  health not because their populations are older
  but because they ensure universal access to young
  and old alike.
• Change in demand due to socio-cultural factors-
  each cohort of elderly is more educated than the
  previous one.

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Factors that influence impact of ageing on health
care spending

• The impact of technological changes on price of
  medical services- in most sectors technological
  change usually means cheaper ways of producing
  goods. In the health sector, introduction of new
  technologies may improve health outcomes at an
  increased price.
• Impact of price changes on costs of medical care-
  change in medical prices relative to other goods
  or services- medical price inflation
• Impact of change in government policies- more
  liberal reimbursement policies, price controls,
  patent laws etc.

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Per capita costs of treatment in Australia
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New Zealand- projected increase in health
expenditures for elderly
Source IMF
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Drivers of health expenditure in New Zealand.
Source IMF
13
(No Transcript)
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Impact on elderly in countries with high out of
pocket expenditure
Source Van Doorslaer et al
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Two groups of countries

• With Universal Coverage
• Japan, Republic of Korea, Singapore
• Malaysia, Thailand, Sri Lanka
• Without Universal Coverage
• China, India, Indonesia and other developing and
  least developed countries.

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Countries with Universal Coverage- issues

• Universal coverage achieved, but coverage of long
  term and rehabilitative care of elderly is the
  issue.
• Japan and RoK have addressed the issue to a
  certain extent but obstacles remain. Japan has
  introduced a long-term care insurance in April
  2000. This program unified public funding for
  long-term care, which had been divided between
  health insurance and social welfare, both at the
  central level and at the point of service
  delivery.
• Declining potential support ratios are an area of
  concern in Japan and RoK- Japan is short of
  health workers to provide long term care.
• In RoK, high co-payment rates for treatment of
  diseases affecting the elderly and for use of new
  technology may hinder access to health care.
• Malaysia and Sri Lanka have tax financed systems
  that work well, but as demand for health care
  increases due to ageing, the demand for more
  sophisticated services may increase leading to
  increased budgetary pressures.
• Thailand also has covered the elderly under its
  universal health care scheme, but sustainability
  issues facing the scheme may also affect more
  comprehensive health care delivery to the elderly
  population.

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Other countries- key issues

• 16 ESCAP countries have out-of-pocket
  expenditures exceeding 50 per cent of total
  health expenditures.
• The bulk of the people excluded from health care
  are the elderly in rural areas.
• The elderly are most hindered by physical as well
  as social and cultural barriers.
• This lack of access to basic health care
  translates into high rates of avoidable
  disability- example cataract blindness.

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Key issues- example of China

• Rural health care had collapsed- now a pilot NCMS
  is under implementation.
• Medical spending has increased fuelled by
  acquisition of technologies and increased
  networks of private hospitals.
• Large scale rural-urban migration of youth and
  middle aged persons.
• Potential support systems have been reduced.
• Unlike a few other countries, time is at a
  premium.

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Way ahead

• Two track approach
• Countries without universal health-care coverage
• Universal coverage of health care in countries in
  the region is the key- resist vertical
  approaches.
• Increase public spending on health as of GDP
  tax-based or SHI approaches.
• Can be integrated into a comprehensive social
  insurance package as the ultimate goal.
• Increased investment on health promotion.
• Ensure that existing health services are
  sensitive to needs of elderly population and
  expand geriatric services.

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Way ahead

• Countries with Universal Coverage
• Address factors which affect cost of providing
  health care for the elderly population.
• Address human resources affecting for provision
  of long-term care
• Promote community-based approaches to care and
  support preservation of family structures.
• Providing an enabling environment for empowering
  the elderly population to seek health care.

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• Thank you very much