Dov Chernichovsky

Health System Reforms in Industrialized Democracies: An Emerging Paradigm

Despite the wide variety of health care systems in industrialized democracies, a universal paradigm for financing, organization, and macromanagement has been emerging through reforms of the past decade. The policies within this paradigm attempt to promote equity, social efficiency, and consumer satisfaction by combining the advantages of public finance principles--universal access and control of spending--with the advantages of competitive market principles--consumer satisfaction and internal efficiency. This paradigm is characterized by three systemic functions: (1) financing of care, based on public finance principles, not necessarily carried out by government; (2) organization and management of publicly funded care consumption by either competing nongovernmental entities or noncompeting public administrations; and (3) provision of care based on competitive market principles. The institutional arrangement of these functions lends itself to the creation of two internal markets for consumer choice and, of the three, the second function is a key component of the emerging paradigm.

Risk adjustment and risk sharing: the Israeli experience

Israel, like several other countries, introduced a national risk adjusted capitation system during the 1990s. However, the Israeli move was drastic, implementing from the beginning a fully prospective risk adjustment scheme based on age, supplemented by a 100% five condition-specific risk sharing. That scheme, together with open enrollment (periodic switching options), was intended to transform an unregulated competitive health insurance market, characterized by adverse selection and preferred risk selection, into managed competition assuring quality of care, efficiency and fairness. This paper presents the Israeli experience during the first 6 years of the reformed system, focusing on issues related to the risk adjustment and risk sharing arrangements.

The Choice of Diet for Young Children and Its Relation to Children's Growth

In this paper we analyze the choice of diet for young children in low income families in the United States and its relation to the childrens growth. Our most important finding is that the education and income levels in low income households are generally sufficient for the provision of adequate diets for children in the household. This conclusion is based on empirical results which show that low income parents have pushed the growth of their children through choice of diet nearly as much as possible, and which also show that mothers education and family income are insignificant determinants of the nutrient intakes of children in low income households.

Health system reform under the Russian health insurance legislation

The Russian (1993 amended) health insurance legislation initiated a far-reaching reform in the financing, organization and management of the Russian health system. However, the implementation of the legislation has been slow and unstructured due to a lack of appropriate administrative and financial mechanisms: these concern entitlement, private-public mix, financial responsibilities of government at all levels, investment instruments, reimbursement and compensation systems, and a well-defined role of government. These issues are discussed in this article in the context of the Russian economy, the state of the health system, and the reform effort in the system.

Reforms are needed to increase public funding and curb demand for private care in Israel's health system.

Historically, the Israeli health care system has been considered a high-performance system, providing universal, affordable, high-quality care to all residents. However, a decline in the ratio of physicians to population that reached a modern low in 2006, an approximate ten-percentage-point decline in the share of publicly financed health care between 1995 and 2009, and legislative mandates that favored private insurance have altered Israels health care system for the worse. Many Israelis now purchase private health insurance to supplement the state-sponsored universal care coverage, and they end up spending more out of pocket even for services covered by the entitlement. Additionally, many publicly paid physicians moonlight at private facilities to earn more money. In this article I recommend that Israel increase public funding for health care and adopt reforms to address the rising demand for privately funded care and the problem of publicly paid physicians who moonlight at private facilities.

Cost recovery and the true cost-effectiveness of contraceptive provision.

The decline in financial support for family planning programs in recent years has prompted donors and program managers to become more attentive to issues of program cost recovery and cost-effectiveness. Couple-years of protection (CYP) per dollar spent are typically used to determine the protective impact and cost-effectiveness of individual contraceptive methods. This measure however inadequately assesses the level of protection offered by each method. The authors therefore propose adjusted CYPs which take into account the relative risk of pregnancy among users of each method. The general methodology for establishing true cost-effectiveness ratios for family planning methods and operations is outlined with the methodology presented for computing the adjusted total CYP taking into account subsidies and the varying risks of pregnancy for users of different ages. The approach is then applied to Profamilia data from Colombia. Calculations demonstrate how recovering costs and investing the proceeds from family planning programs lead to the cross-subsidization of methods. Of particular interest it is found that more subsidized contraceptive methods tend to be supported by less subsidized methods. The data further indicate that because of the differences in the relative risk of pregnancy of women of different ages sterilization the most effective contraceptive methods is not necessarily the most cost-effective method in terms of the number of CYPs it offers per unit cost.

Demand-side strategies to deal with moral hazard in public insurance for long-term care

Moral hazard in public insurance for long-term care may be counteracted by strategies influencing supply or demand. Demand-side strategies may target the patient or the insurer. Various demand-side strategies and how they are implemented in four European countries (Germany, Belgium, Switzerland and the Netherlands) are described, highlighting the pros and cons of each strategy. Patient-oriented strategies to counteract moral hazard are used in all four countries but their impact on efficiency is unclear and crucially depends on their design. Strategies targeted at insurers are much less popular: Belgium and Switzerland have introduced elements of managed competition for some types of long-term care, as has the Netherlands in 2015. As only some elements of managed competition have been introduced, it is unclear whether it improves efficiency. Its effect will depend on the feasibility of setting appropriate financial incentives for insurers using risk equalization and the willingness of governments to provide insurers with instruments to manage long-term care.

Impact of desertification and land degradation on Colombian children

ObjectivesDesertification affected more than 24% of Colombia’s land mass in 2012. The study aims to establish the singular impact of desertification on under-five mortality in Colombia.MethodsDescriptive statistics and multivariate logit regressions are applied to the population of live births and under-five deaths in Colombia 2008–2011.ResultsChildren have a higher probability to die in rural communities and among mothers with low education who also have inferior health insurance. Controlling for those, desertification below about 50% of the land, lowers child mortality and increases it after that percentage. The impact of extraction of hydrocarbons is 12.45, metals 5.73 and others 4.91 times higher in municipalities with more than 50% of desertification territory. Rural areas with high desertification have 2.25 times higher risk of mortality due to malnutrition.ConclusionsIn the short term, when mines have less or no effect on desertification, living conditions may improve and reduce child mortality. In the long term, however, as desertification intensifies affecting the ecosystem, child mortality increases. More research is needed, and policy formulated accordingly.

Israeli Health Care: The Author Replies

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