Cai Jiangnan: The system also has important design flaws

Cai Jiangnan, Guest Professor of Economics, China Europe International Business School, Senior Researcher on Health Policy, Ministry of Health and Welfare, Massachusetts, USA.

After three years of medical reform efforts, the coverage and protection level of medical insurance has increased substantially, and even universal medical insurance has been initially implemented. However, the current situation of an embarrassing situation is that the system of protection against major diseases has not been established. Recently, "21st Century Business Herald" conducted an exclusive interview with Cai Jiangnan, director of the Center for Health Management Policy of China Europe International Business School, on issues related to the medical insurance system.

Reporter: We have seen two seemingly contradictory situations: one is that our country has initially entered the ranks of the nationwide medical insurance nation; the other is that cases that have encountered difficulties due to major illness have frequently entered the public view. Why does the rapid development of the medical insurance system not stop the illness from causing difficulties for ordinary people?

Cai Jiangnan: This is mainly due to the problems in the design of the medical insurance system.

In fact, medical insurance has an unshirkable responsibility for those diseases that have a low incidence, but affect the lives of patients, and medical expenses at the same time, such as childhood leukemia, kidney failure and other diseases. The current design of the medical insurance capping line has made this part of the patient's major medical expenses fall more on the patient's family.

China's current three major social and medical insurances have a capping line. For example, the maximum reimbursement rate for a patient's medical expenses must not exceed six times the average local income. Even if China's current per capita GDP is calculated to be 30,000 yuan, the maximum reimbursement for medical expenses cannot exceed 180,000 yuan. For seriously ill patients, this limit obviously cannot guarantee the risk of serious illness.

This is why we often see social media reports on fundraising. For some particularly rare diseases, the number of people suffering from these diseases is very small, and the medical expenses required are particularly huge. At this time, it is possible to play a social charity function. Although this is a kind of charity, it is not a good solution to the protection of the risk of such diseases.

The basic function of health insurance is to provide protection against major disease risks. In this sense, our current social health insurance still has important design flaws or deficiencies.

Reporter: Some people think that ensuring basic medical needs of patients should be the primary responsibility of their medical insurance. What do you think?

Cai Jiangnan: There are two orientations for the guiding ideology for the design of medical insurance, namely the pursuit of fair outcomes or the pursuit of fair opportunities.

If the outcome is fair, people will consider covering minor illnesses, common illnesses, and frequently-occurring illnesses, making it possible for most people to benefit in the short term and cover the major illness later.

Conversely, if the pursuit of fair opportunities is pursued, attention will be paid to the coverage of major illnesses. Although only a small proportion of patients with major illnesses have received large medical insurance compensation, many healthy people do not receive any benefits, but the opportunity for compensation is equal to everyone.

The idea of ​​pursuing equality of results is one of the important reasons why our current health insurance neglects the risk protection of major illnesses. From the perspective of encouraging people to treat minor illnesses in a timely manner and not dragging minor illnesses into serious illnesses, medical insurance also needs to provide certain reimbursement for minor illnesses, but it should not completely abandon the protection of major illnesses. In short, if the basic medical insurance design does not include protection against the risk of serious illness, relying solely on other channels cannot solve the problem fundamentally.

Reporter: We have seen that many commercial insurance organizations have developed insurance services for serious illnesses. Many people also think that commercial insurance may be the way to solve future illnesses. What do you think?

Cai Jiangnan: Commercial medical insurance and supplemental medical insurance are not suitable for solving the problem of major illness medical insurance, because medical insurance for major illnesses does not meet the profitability needs of commercial medical insurance. Because medical insurance is suitable for covering high-level, non-essential, comfort-oriented medical services, it is suitable for the needs of high-income people.

Moreover, commercial medical insurance has not developed in China, and it is mainly related to our current good faith environment. If the patient and the doctor cannot follow the basic rules of good faith, the survival of commercial health insurance cannot be guaranteed.

If the supplementary medical insurance is a voluntary medical insurance, it cannot afford the function of solving the medical insurance for serious illness. Since a few people with serious illnesses are few and healthy people do not participate in serious illness insurance, there is a problem of “reverse selection”. That is, when people become ill and buy supplemental health insurance, the cost of medical insurance will be too high to bear.

Reporter: The overall level of our medical insurance system is relatively low, especially in the face of serious illness and medical treatment. This problem is even more prominent. Can the addition of commercial health insurance solve this problem?

Cai Jiangnan: Commercial insurance and supplementary medical insurance and the existing basic medical insurance system can be linked at different levels of medical needs. The existing social health insurance is still a medical insurance plan that is based on administrative regions, which limits the use of people across regions. In the absence of regional protectionism, commercial health insurance may break through such regional restrictions.

If supplemental health insurance is a social health insurance, it is only possible to create a health insurance plan that is not geographically restricted when the central government’s fiscal expenditure is used as the main source of funds. From the management point of view, several competing health insurance plans can be made and no geographical restrictions will be imposed on the participants.

Commercial medical insurance and supplementary medical insurance can solve some of the problems that the existing social medical insurance cannot bring across regions. However, due to the different functions they undertake, cross-regional issues cannot be completely resolved.

Reporter: In the area of ​​pandemic relief, we see that the power from civil society organizations is also quite active. Does it help us solve the problem of illness?

Cai Jiangnan: The role of private charities in the rescue of the above-mentioned diseases is very limited, and some small water splashes are similar to the fire. The protection of serious illnesses still depends on the organizational model of medical insurance to be effectively resolved.