Interpreting the Internal Logic of Health Insurance Reform: Why Change? How to change it?

Recently, many provinces across the country have implemented the reform of employee medical insurance, clearly carried out the overall planning of employee medical insurance clinics and simultaneously adjusted the methods for crediting employees' medical insurance personal accounts. After the implementation of the reform plan, many places ushered in "labor pain", "their own money has become less", "rights and interests have been damaged" and many other doubts have been heard endlessly.

So, why did this health insurance reform, involving 350 million employee participants, be the largest in more than 20 years? What has changed? In this reform, are the people suffering losses or profits?

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The basic logic of health insurance

To understand this reform, we must first understand the basic logic of medical insurance.

The basic principle of insurance is simple – turn uncertainty into a definite premium. For example, when we buy commercial insurance for motor vehicles, we must not buy it because we are sure that there will be a car accident in the future, but to convert this uncertain risk into a definite premium, and medical insurance is similar.

So, how did we mitigate our risks before the advent of modern insurance? For example, Lao Wang next door had a serious illness, and after recovery, the neighbors came to visit him and sent a red envelope to express his heart, so that the money for medical treatment was almost recovered. However, with the development of modern medicine, the probability of poverty due to illness has become higher and higher, and this traditional "afterthought" method will not work, because the ability to resist risks is not enough.

There is another problem with the traditional "pooling of elements" - it is voluntary, it gives if it wants, and does not give if it does not want to give, because of human nature. This also directly determines that all voluntary insurance or mutual aid schemes can only be used as supplementary systems, not as main systems.

Compared with the traditional "pooling of shares", the advanced nature of modern social insurance lies in the joint construction of mutual assistance and mutual assistance mechanisms before the risk occurs, compared with the voluntary participation of "pooled shares", social insurance is compulsory insurance. In this way, if Lao Wang next door has a disease that needs long-term treatment, even if no neighbor is willing to "make a contribution" for him, he can get effective treatment.

In addition, based on the basic principle of insurance, traditional commercial insurance is not insured against the situation of "certain insurance" (inclusive urban customized insurance can). For example, Lao Wang's physical examination found that many chronic diseases need lifelong treatment and medication, at this time, if he wants to buy commercial insurance, the probability is that he will spend a lot of money or even be refused insurance, because the insurance company will not do a business that determines the loss.

In essence, commercial insurance is mutual assistance between people with homogeneous risks, and high-risk people have to pay higher premiums, which is also the reason why commercial insurance will screen participants based on risk, and may even refuse insurance to high-risk groups.

But social insurance is different. Social insurance pursues solidarity, mutual assistance, fairness and fairness, even if the accumulation of chronic diseases is a large "certainty risk", social insurance must also be guaranteed. In terms of funding sources, it is also as different from commercial health insurance. Commercial insurance is priced premiums based on the health risks of the insured, while social insurance is based on mutual aid and risk sharing mechanisms: high-income earners pay more, low-income people pay less, and then distribute them according to needs - whoever needs to use resources, will use this money.

The mainland also has a special medical assistance system, which further implements a preferential guarantee policy for the recipients of assistance. On the cornerstone of the social insurance and assistance system, commercial insurance can supplement and meet the differentiated and personalized health needs of the insured. In contrast, in the United States, commercial insurance is the main system, and high-risk and low-income groups not covered by commercial insurance are covered by social insurance and assistance programs organized by the government.

Understanding this, we can better understand this health care reform.

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What has changed in this medical insurance reform?

The recent medical insurance reform plans in many places have two things in common:

First, there is a change in the amount of the employee's health insurance personal account.

For active employees: the part originally transferred by the unit's contribution is no longer transferred and is included in the pooled fund.

Taking Xiao Wang, an active employee, as an example, his monthly medical insurance premium is 2% of his gross monthly salary, and the company also has to pay about 7% (there are differences in different places, and the national average is about 9% for the company and individual contributions).

Before the reform: all 2% of his own payment was transferred to his personal account, and part of the 7% paid by the company would be transferred to Xiaowang's personal account (there are differences in different places, generally about 30%), which accumulated to about 4%;

After the reform: Xiao Wang's personal account can only transfer the 2% paid by himself, and all 7% of the company's contribution can be transferred to the overall account.

For retirees:

Before the reform: personal accounts are credited from the past linked to their own pensions, and the more pensions, the more money will be transferred;

After the reform: quota is included, that is, everyone takes the same amount. The fixed amount standard is linked to the per capita pension in the year of the overall regional reform.

Taking Wuhan as an example, before the reform, the elderly under the age of 70 were deducted 4.8% of the personal pension, and the 70-year-old and above were deducted 5.1% of the personal pension, with an average deduction of 2,988 yuan per person per year. After the reform, 2.5% of the average pension of retired employees in the city was deducted, and the amount was 996 yuan per person per year, a decrease of 1992 yuan.

Second, establish a general outpatient reimbursement mechanism for employee medical insurance.

What does that mean? When answering a reporter's question, the person in charge of the relevant department of the National Health Insurance Administration made a popular summary: the areas where the original employee medical insurance participants were not reimbursed for general outpatient visits can be reimbursed after the reform; In the areas where general outpatient clinics could be reimbursed, the reimbursement amount was further increased. Specifically:

1. In addition to the cost of medicines, expenses such as inspections, tests, and treatments that meet the regulations can also be reimbursed.

2. Some outpatient expenses for diseases with a long treatment period, great damage to health and heavy cost burden will be included in the reimbursement of general outpatient clinics, and enjoy a higher reimbursement rate and amount.

3. Medication guarantee services provided by eligible designated retail pharmacies are also included in the scope of outpatient reimbursement.

But in this regard, there is no lack of skeptical voices in the society: major illnesses are hospitalized, outpatient clinics are minor diseases, and ordinary outpatient clinics are included in medical insurance, is it really necessary?

In fact, with the advancement of medical technology, the health needs of the insured are also constantly changing, chronic diseases have become the main disease threatening the health of the population, the main needs of patients in the non-acute stage of the disease are regular outpatient services and continuous disease management services (including professional medical services and self-management), the current medical and health service model can not fully meet the relevant health needs, medical security strictly distinguish the scene-based form of protection can not adapt to the system goals of protecting the health of the population.

Moreover, outpatient services are not equal to the diagnosis and treatment of minor diseases, one of the trends of medical development is the outpatient operation of surgery, some developed countries day surgery accounts for 80%-90% of elective surgery, while the mainland accounts for only more than 10%, medical insurance payment policy is one of many influencing factors. The hospitalization-centric coverage of the past is clearly no longer adequate to meet our requirements for medical technological advances and service model changes. Therefore, it is imperative to improve the outpatient protection capacity.

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Why was it changed this way?

The previous medical insurance design believed that outpatient is a minor illness, hospitalization is a major illness, and outpatient minor illness does not need to share the burden through insurance, and you can use personal accounts. However, with the development of medical treatment and changes in the disease spectrum, many chronic non-communicable diseases have also become important health threats, which is why many places have newly established coordinated insurance clinics for chronic diseases and special diseases, and such diseases will bring a definite economic burden, that is, the continuous expenditure of medical insurance funds.

So contradictions arise. It is naturally good that the medical insurance reform has added general outpatient treatment that was not available before, but outpatient reimbursement also requires money, where does the money come from?

Industry experts generally agree that there are two solutions:

1. Increase premiums: If you pay more, you can naturally enjoy better protection treatment;

2. Reform personal accounts: take part of the money that was originally to be transferred to personal accounts and use them for outpatient coordination.

Speaking of which, the answer is already obvious. While increasing premiums, it will also increase the burden on individuals and enterprises, affecting the competitiveness of market players, and reducing unnecessary large balances in personal accounts is a better solution for structural adjustment.

But there will still be many people who have questions, can I solve such a big problem if I am less than tens or hundreds of dollars a month in my personal account?

The answer is: really.

Don't underestimate this "little" money in your personal account. According to the National Health Insurance Administration's 2021 Statistical Communiqué on the Development of National Medical Security, in 2021, the cumulative balance of the basic medical insurance pooling fund for employees was 1.768574 billion yuan, and the cumulative balance of personal accounts was 1.175398 billion yuan. The accumulated balance of the personal account has accounted for 39.93% of the total accumulated balance.

So how did the personal account accumulate such a huge balance?

Because the people generally feel that as long as the money is transferred to the personal account, it is their own "savings", and when seeing a doctor, they should "spend as little of their own money" as possible, and choose to use more pooled funds for reimbursement. As a result, personal account cashing, minor illness treatment, bed hanging hospitalization and other situations have appeared repeatedly. Including in the early years, some people set up stalls to "collect medicines", which is the product of some people using the medical insurance pooling fund to prescribe drugs and then realize them.

But even if the money in the personal account does have a certain saving nature, it is not savings after all - it cannot be withdrawn as cash, nor can it be used to buy any goods, but can only be used to purchase drugs or outpatient settlement and other related medical insurance expenses to pay, so it is more accurate to understand it as a kind of compulsory insurance in the nature of savings. According to this logic, the above-mentioned behaviors such as cashing out and receiving drugs cannot be simply understood as "spending their own money", but should be regarded as insurance fraud, which is undoubtedly a huge obstacle to the improvement of the efficiency of medical insurance funds and the ability to protect them.

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Do ordinary people suffer or benefit?

The money in the personal account has decreased, but the protection treatment has been improved, is this a loss or a benefit? For the 350 million employee participants, can it be generalized?

The most direct beneficiaries of this reform are the elderly and high-risk groups with many diseases.

First of all, talking about the older people, combing through the reimbursement policies in various places, there is a clear common point: compared with the working employees, retirees have a lower reimbursement "starting line", a higher reimbursement ratio, and a higher reimbursement "ceiling line" in general outpatient clinics.

For people with many diseases, before the reform, outpatient visits were mainly guaranteed by personal accounts, which also caused the situation that healthy people could not be used up and sick groups were not enough. After the establishment of outpatient pooled reimbursement, the medical insurance fund will be used more for people with more diseases.

As a result, some young, healthy people may feel that they have "suffered". Young people feel that their health is better, and the medical insurance fees paid are used by the elderly, and their hearts are unbalanced, but this also reflects the essence of mutual assistance and risk sharing of medical insurance. From another point of view, the premiums paid by young people are actually provided for their families, after all, their parents will also benefit from it.

Another group that feels "at a loss" is the high-income population. When they were employed, the company's health insurance paid in proportion to their income was no longer transferred to the personal account; After retirement, because the medical insurance personal account becomes a fixed amount, even if you have a higher pension, you can only get the same money as everyone else.

This involves the difference in fairness between pension insurance and medical insurance. Pension is fairness and efficiency, that is, efforts are more rewarded, which is also based on the underlying logic of the modern market economy mechanism; The medical field should pursue equal opportunities, because everyone is equal in front of life, and life and health are bottom-line fairness, that is, equal opportunities to see a doctor.

The practice in some parts of China has shown that the use of personal accounts by families and the improvement of outpatient security treatment will replace some unnecessary inpatient services, thereby improving the efficiency of fund allocation. Under the framework of strategic medical insurance purchase, optimizing outpatient protection treatment is a structural adjustment and a necessary option to make the system more fair, efficient and sustainable.

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