ADVANTAGES AND DISADVANTAGES OF PRIVATIZATION OF …

[Pages:36]ADVANTAGES AND DISADVANTAGES OF PRIVATIZATION OF HEALTH INSURANCE

by Ievgen Zvieriev

LL.M. SHORT THESIS COURSE: Comparative Social Protection PROFESSOR: Csilla Kollonay-Lehoczky Central European University 1051 Budapest, Nador utca 9. Hungary

? Central European University March 30, 2009

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Abstract ................................................................................................................................ ii Introduction ...........................................................................................................................1 1. Overview of different health insurance patterns.................................................................3

1.1. Health insurance in the United States of America .......................................................3 1.2. Health insurance in Germany .....................................................................................7 1.3. Health insurance in Ukraine ........................................................................................9 1.4. Health insurance in Belarus......................................................................................11 2. Right to health ...............................................................................................................13 2.1. Right to health: human right or contractual right?....................................................13 2.2. Debate: medical treatment or medical services ........................................................18 3. Private health insurance vs. state health insurance (and state funded health care) ............20 3.1. Advantages and disadvantages of private health insurance. Good and bad risks debate ........................................................................................................................................20 3.2. Advantages and disadvantages of state health insurance (and state funded health care). Quality vs. Availability debate .........................................................................................24 3.3. Prof. Janos Kornai's co-existence proposition. Minimal level debate .......................27 Conclusion ..........................................................................................................................30 Bibliography........................................................................................................................32

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Abstract

The following thesis is aimed to research the issue of advantages and disadvantages of privatization of health insurance. The following topic is highly debated nowadays in most countries, and each one of them has its own pattern of health care and health insurance. This paper goes over 4 existing health insurance patterns (the ones in United States of America, Germany, Ukraine and Belarus). These countries are chosen for clear distinction their systems have. The paper points out its advantages and disadvantages. Further it draws the attention of the reader to some significant debates in health insurance and health care spheres. These are debate on whether right to health is contractual or human right, debate on the distinction between terms 'medical treatment' and 'medical service'. It also points out the problem of state health insurance (or state funded health care) vs. private health insurance. There the problems of Quality vs. Availability and Good and Bad Risks are raised. The paper also significantly points out the recommendations made by Professor Janos Kornai for Hungarian health care reform. The author makes analysis of these recommendations and provides his own thoughts concerning the issue stating that only co-existence of private health insurance and state health insurance (or even state health care) can be considered optimal and acceptable for all. However, a clear distinction between basic treatment and auxiliary medical services has to be made. That way a balanced system would be formed.

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Introduction

Health insurance did not appear yesterday. As sources say, "health insurance existed in Ancient Greece and Rome. It was administered by special assistance organizations attached to professional unions which conducted all collection and distribution of the costs in cases of injury, long term disease etc. Health insurance also existed in Middle Ages, and was one of the concerns or trade unions and the church. However clearly health insurance organizations were formed in 19th century in European countries when special hospital pay-offices1 were formed."2 That was the start of its development. Later on health insurance developed both in a profitable business and a social issue. It is being debated in most countries of the world. Many politicians got to power due to their health insurance reforms attempts (the most recent example is U.S. President Barack Obama). However, the world still suffers from diseases. People suffer either from poor quality of health care treatment or inability to get expensive health care services in countries where private health care is on the peak of its development. No acceptable solution is proposed nowadays. Most usually these solutions are not accepted for political reasons, however. This paper will try to examine the existing patterns of health care and specifically health insurance regulations in the United States of America, Federal Republic of Germany, Ukraine and The Republic of Belarus. It will examine advantages and disadvantages of each one of them. These countries are chosen because of significant differences they have in their health care and health insurance policy, and their comparison would most certainly bring some result in this research. It will also go over some recent debates on the issues connected to health insurance, and at the end it will try to develop its own optimal health insurance system, and offer it to public debate should one arise.

1 My translation of Russian "" [kassa] 2 Tatyana A. Fedorova, Strahovanie (Insurance) 416 (Magistr 2008)

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Health insurance is very important component of the existence of each society. It is important for the state not only to realize the consequences of its policy in this sphere. The society and all of its members need to be acquainted with it, and feel themselves secure. However what is the best condition for that: private health insurance, state health insurance or state health care system their advantages and disadvantages ? that is what the paper is about.

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