Cyprus Mail
Cyprus Health

Troika overriding lack of political will over NHS

By Angelos Anastasiou

The universal healthcare coverage debate in the US has been raging for decades. It sparked the first major crisis in Bill Clinton’s first term in office in 1994 and 16 years later almost wreaked havoc on Barack Obama’s administration before progress was made. Cyprus can hardly claim such a breakthrough.

The more I delved into the workings of our controversial National Health Scheme, the more I realised that money, and possibly even lives, have been – and are still being – lost for no good reason.

A labyrinthine bureaucracy was designed to overhaul the current mess, in hopes of saving money, eliminating patient waiting periods and increasing the quality of healthcare, but Cyprus still remains the only EU country without a National Health Scheme.

Back in 2001 a legislative framework was passed, creating the Health Insurance Organisation (HIO) and tasking it with implementing, administering and regulating the NHS. That it took five years for the HIO to become operational should have clued even the naive in on what was to follow, but the political arena isn’t particularly conducive to honest introspective admissions.

Eight years and two governments later, the NHS is still a plan on paper. Many reasons can be cited to explain the delay, and most will be valid to some extent or other. But none will weigh more than that elusive white whale – political will.

The NHS is a beast of a scheme that threatens to resolve age-old inefficiencies by creating new ones, and governments have variously succumbed to the fear of political backlash from angering trade unions, imposing additional taxation to fund the scheme, and assuming the risk of doing some actual governing.

Under normal circumstances there may have been little reason to believe that the current government would be any different, were it not for an indomitable catalyst: the troika is now in the house and excuses, fears and preferences have all taken a back seat to the dire need for action. For better or worse, the sorry current state of affairs will soon be a thing of the past, starting mid-2015.

The immediate goal is to ensure that the new arrangement is, at the very least, not worse than the old one – though it seems difficult to imagine how it could be.

The NHS blueprint can be reduced to a few explanatory, if overly simplistic, provisions. The status quo – two independent healthcare schemes, one private and one public – is plainly economically unsustainable.

Eight out of ten Cypriot citizens are entitled to either free or discounted public healthcare, the capacity of which can only sustain about half the total demand even though less than half choose it over the private sector.

Inelastic rising healthcare expenditure, inefficiencies stemming from the existence of several facilities (like an excessive number of MRI scanners), and a lack of quality control in the healthcare sector, mean that pooling resources, regulating and allocating them as needed is an economic imperative.

The NHS plan is to bring everything healthcare-related, whether public or private – hospitals, doctors, pharmacies, and yes, patients – under the administration of a single body, the HIO, that will be responsible for the funding and smooth operation of the entire scheme while providing universal health coverage.

A family doctor, the primary point of contact assigned to individual patients in need of care, will examine visiting patients and either offer a diagnosis or refer patients to specialist doctors.

The HIO will have an annual budget, meaning a set amount of cash it can dole out to doctors, hospitals, pharmacies and other participants, with no options of deviating from it.

The scheme will be funded by a tripartite earnings-tied contribution base – the working population (salaried or self-employed), employers and the government. Beneficiaries of the scheme will enjoy exactly the same individual rights to healthcare, irrespective of the extent of their contribution, with no opt-out clauses.

Medical services not covered by the NHS will require either co-payments – partial payment of the procedure’s cost – or full payment by the patient.

A key feature of the plan is its funding mechanism. The current state of affairs can be safely deemed a black hole, in that public medical services absorb funds from the government’s general budget and private ones operate under the rules of a free market.

Given the health industry’s inelastic demand curve – i.e. demand for healthcare is less price-sensitive than other sectors – there is little incentive for anyone to reduce cost and increase quality and the patients are burdened with the inefficiency in the form of higher medical bills. The NHS will have a fixed global budget and no deviation mechanisms – no government money and no borrowed money.

Translation: regardless of total patient visits or procedures performed, any given group of doctors within the NHS will be allocated a predetermined amount as wages.

Private insurance companies, who have long been claiming a role in the NHS as service providers, will not be part of the scheme. They will still be able to offer health insurance, and will likely find a role offering complementary services – for example, covering medical services without the NHS’ scope – but their proposed participation in the NHS as competitive alternatives to the HIO has been met with little support within the EU and the troika.

According to the NHS provisions, the choice of doctor and hospital lies with the patient. The rational expectation would be that well-organised hospitals will attract more patients, and inefficient ones will flounder.

One might expect public healthcare facilities to be the most likely to struggle since they are notorious for their lack of fiscal discipline. The government’s efforts to reform them and make them autonomous – meaning economically self-sufficient – notwithstanding, the obvious risk is that they might not cope in a competitive environment and be forced to close down.

But this is merely a theoretical risk. In practice, public healthcare provides nationwide reach – not the case with the private sector – and offer specialised services that cannot be found in the private sector.

Plus, the above-mentioned principles of the global budget mean that, like doctor groups, hospitals will be allocated pre-agreed funds, with which they will have to make do, thus forcing them to streamlining themselves with a view to surviving or even making a potential profit.

The concept of the family doctor is also an important innovation that is expected to facilitate efficiency greatly. Thus far, citizens have taken it upon themselves to decide what kind of doctor to visit based on the perceived nature of their ailment – a kind of self-diagnosis.

The introduction of the family doctor seeks to correct this distortion by taking the initial diagnosis out of the patient’s hands and into those of a qualified physician. Also, the long-term monitoring of patients by the same doctor offers obvious benefits.

Several objections to various provisions of the NHS have been raised over the years, some largely warranted and others more facile than legitimate.

But this time no contesting party has been strong enough to impact the overarching need for urgent action, and a finalised roadmap for implementation will be submitted to the troika by the end of April, while relevant legislation will be submitted to the House by June.

The good ship NHS has sailed and questions of whether it should be implemented or whether it could have been designed better have been replaced by the challenge of making it work as efficiently as possible.

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