This article appeared originally in Gulf News: link to original article
The UAE recently moved from operating a public health care system towards privatising it and subsidising health insurance premiums for its citizens. The government also made it mandatory for all employers to provide health insurance for their employees, covering in the process the rest of the population.
I focus in this article on what has changed for Emiratis as the country moved from a public to a semi-private health care system, together with the issues resulting from that, and how to resolve them.
A public health care system is one where the state provides free health care services, underwritten by revenues from exports of natural resources, or by taxation. The system, however, results in a few inefficiencies:
1. Excessive staff hiring, where standards may be lowered whenever the supply of health care providers is not catching up with demand;
2. Astronomical health care expenses because of less scrutiny of medical treatments and prescriptions;
3. Stretched waiting lists and lengthy waiting times; and
4. Limited capacity to provide all treatments.
The advantage of such a system is that you needn’t worry about cash payments, neither need to convince health insurance companies of the significance of your existence, which their approval of treatment/prescription would allow.
In a fully privatised health care system, a state’s role is limited to two main functions:
1. Deciding on what health insurance plan is best for its citizens, based on research of family history, current needs and future needs. With that understanding in mind, a state can decide on the level of coverage, geographical and medical, in addition to the level of subsidisation of health insurance premiums.
2. Regulating the health care sector, inclusive of health care and health insurance providers.
So, the UAE initiated the privatisation of its health care system, transferring funds from a bloated, public health care system to paying for health insurance premiums for Emiratis. Providers of health insurance, in return, pay for the provided medical treatments and prescriptions. Issues arose here as a result of the partial — rather than the full — privatisation of the health care system.
And that happened when the state shifted its role from owning and managing a public health care system, to owning and managing health insurance. Despite it, this was done in the good faith of preserving the level of health care services provided to Emiratis, through the retention of some state control. This led to two issues.
The first has to do with the geographical limitation of some of the health insurance plans provided, where all medical expenses incurred outside a certain geographical purview must be paid for in cash. Now that’s a problem because there’s a high probability of medical costs going through the roof for everyone, cash-paying individuals included.
The increase in medical bills in the US post-Obamacare is a case in point, with substantial empirical evidence supporting the same.
The second issue arising from the semi-privatisation of the health care system is having to grapple with one denied medical treatment or prescription after another. And most of that is because health insurance companies are looking for that one right word in the diagnosis that the health care provider, for one reason or another, failed to mention.
So, how can those issues be resolved? First and foremost, an emirate-provided or federal-provided health insurance plan must cover all of the UAE, and not be geographically limited, as was the case prior to initiating the privatisation process. Secondly, the market for health insurance must be open for market competition by renowned health insurance providers.
This will further expand the health care market, whilst ensuring improved health insurance plans at competitive prices.
The last thought that I want to leave you with: why not subsidise a basic health insurance plan, but also provide an array of upgrades that Emiratis can choose from and pay for?