Session 4b China Health Insurance Industry A Ever Changing Landscape. Davout Yean, FSA

Transcription

1 Session 4b China Health Insurance Industry A Ever Changing Landscape Davout Yean, FSA

2 China Health Insurance Industry - A Ever Changing Landscape DAVOUT YEAN FSA AIG Business Consulting(BJ), Chief Strategy Officer Sept 1, 2016

3 Summary Through analyze past experience of the most vibrant social health insurance program, Urban Employee-Based Basic Medical Insurance Scheme to formulate a 15 years projection model. Using the lesson learned in the process to establish a baseline to explore the possible future directions for China social health insurance programs. 2

4 Contents Frame work, assumptions, and the structure of the 15 years projection model for Urban Employee-Based Basic Medical Insurance Scheme The baseline and the lesson learned Overview of New Rural Cooperative Medical Care System & Urban Resident-based Basic Medical Insurance Scheme Possible future directions for China social health insurance programs 3

5 Frame work, assumptions, and the structure of the 15 years projection model for Urban Employee- Based Basic Medical Insurance Scheme 4

6 Current Landscape for Health Insurance 4 key elements for Health Insurance Ecosystem Medical Care Delivery System Tax policies Social Health Insurance Programs Role/structure of social programs Private/Commercial market Urban Employee-Based Basic Medical Insurance Scheme (Established in 1998) New Rural Cooperative Medical Care System (Established in 2003) Urban Resident-based Basic Medical Insurance Scheme (Established in 2007) Private/Commercial Health Insurance Individual Long Term Critical Illness Plan Individual Short term Medical Reimbursement, Income Supplement Plan Group Risk Based and ASO Plan Stop Loss for Social Health Insurance Programs 5

7 Social Health Insurance Programs MM Persons Urban Employee Urban Resident New Cooperative Total Insureds 6

8 24,000 20,000 16,000 12,000 8,000 4,000 0 Private/Commercial Health Insurance 8, % 2.1% -10.2% 3, % 8, % 16.7% 14.3% 2.4% 4, % 14.0% 5.8% 9, % 4, % 10,902 1,447 1,712 1,953 2, ,124 1, % 15.7% 21.5% 12.3% 14.1% 9.2% 5,519 13,242 2,432 2, % 6,199-20% -40% -60% -80% -100% * Non-life insurance premium excludes auto insurance premium. * Life and Non-life insurance premium exclude health insurance premium. * Based on our estimate, in Health insurance, the share of medical specific stop loss insurance is 7%; the share of short-term health insurance is 30% and the share of long-term health insurance is 63%. 60% 40% 20% 0% RMB 100MM Life Insurance Non-Life Insurance Health Insurance Auto Insurance Life Insurance growth ratio Non-Life Insurance growth ratio Health Insurance growth ratio Auto Insurance growth ratio 7

9 Why using Urban Employee-Based Basic Medical Insurance Scheme as the baseline? Stronger legal foundation and better support by tax policies. Most mature program Standard and well-structured eligibility roles, reliable source for funding, clearly defined comprehensive coverage A matured compulsory Plan, since 2010 the enrollee population almost becomes a closed population Available/Reliable experience data 8

10 Key Components for Projection Model Enrollee Demographic Structure Funding/Income/Premium Expense/Claim Cost Financial Positions in

11 Demographic Structure Use 2010 nationwide census results as a reference Age and education level two dimensional approach Assumptions: Average employment age at 18 Average retirement age at 58 Enrollee age distribution Enrollee education level distribution Progression Active Retiree New graduate (enter) Retired active enrollee(enter) New employment (enter) Death(exit) New unemployment (exit) Death(exit) 10

12 Enrollee - Age Distribution Assumption Enrollee/Total Population 45% 40% 35% 30% 25% 20% 15% 25% 17% 39% 23% 36% 22% 34% 26% 20% 21% 25% 23% 23% 22% 20% 21% 37% 21% 34% 23% 30% 25% 23% 21% 29% 22% 10% 5% 0%

13 Enrollee - Education Level Distribution Assumption 35.0% 30.0% 26.7% 26.8% 25.0% 20.0% 20.7% 15.0% 10.0% 10.6% 12.6% 5.0% 1.3% 1.4% 0.0% No Formal Education Primary School Junior High School Senior High School Associate College College Graduate

14 Enrollment Rate by Education Level - Assumption 120.0% Enrollment rate of Active and Retiree by Education Level 100.0% 80.0% 85.0% 95.0% 100.0% 100.0% 98.0% 90.0% 95.0% 60.0% 50.0% 40.0% 38.0% 22.0% 20.0% 0.0% 7.6% 1.0% No Formal Education 2.4% Primary School 11.0% Junior High School Senior High School Associate College College Graduate+ Active Staff Retiree 13

15 Enrollee - Projection 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Enrollee Projections 10 Thousand Persons 37,526 25,564 11,962 Total Enrollee Active Staff Retiree 14

16 Active/Retiree Ratio - Projection

17 Funding/Income/Premium Average Wage Premium Contribution Base Contribution Rate 16

18 Premium Contribution Base, Average Wage 70,000 Premium Contribution Base, Average Wage (Per Capita) RMB Yuan 60,000 50,000 40,000 30,000 20,000 10, Premium Contribution Base Average Wage 17

19 Other Income 8.00% Fiscal Subsidy 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% * Since 2013 fiscal subsidy were drop below 1% 18

20 GDP, Average Wage, Premium Contribution Base Year China GDP (RMB 100MM) GDP Per Capita (RMB Yuan) GDP Per Capita Growth Rate Premium Contribution Base Growth Rate Premium Contribution Base /GDP Per Capita ,030 30, % 13.0% 79% ,301 36, % 12.5% 76% ,367 40, % 16.2% 80% ,244 43, % 10.4% 81% ,974 46, % 13.1% 86% ,506 49, % 11.9% 90% GDP Per Capita, Premium Contribution Base, Average Wage - Growth Rate 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 17.9% 16.2% 17.8% 13.5% 14.3% 13.1% 11.9% 12.1% 13.0% 12.5% 10.4% 10.1% 10.1% 7.6% 9.9% 9.6% 7.4% 6.1% GDP Per Capita Premium Contribution Base Average Wage 19

21 GDP Per Capita Assumption 160,000 GDP Per Capita and Growth Rate RMB Yuan 20.00% 140, % 139, % 120, ,000 99, % 14.00% 12.00% 80,000 60,000 40,000 20, % 9.61% 30,876 70, % 7.35% 7.35% 7.35% 7.35% 7.35% 7.00% 7.00% 7.00% 7.00% 6.65% 6.11% 49, % 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 20

22 Premium Contribution Base / GDP Per Capita Premium Contribution Base / GDP Per Capita 95% 90% 85% 80% 75% 70% 65% 90% 86% 79% 76% 80% 81% Premium Contribution Base / GDP Per Capita Assumption 95% 90% 85% 80% 75% 70% 65% 90% 90% 86% 79% 80% 81% 76%

23 Premium Contribution Base Projection Premium Contribution Base Projection RMB Yuan 140, , , ,000 89,670 80,000 63,518 60,000 44,762 40,000 20,

24 Average Contribution Rate Assumption Average Contribution Rate 9.30% 9.25% 9.20% 9.10% 9.07% 9.00% 8.90% 8.80% 8.70% 9.08% 8.79% 8.99% 8.99% 8.94% 8.60% 8.68% 8.50% 8.40% 8.30% Average Contribution Rate Average Contribution Rate Assumption 23

25 35,000 Income Projection RMB 100MM 30,000 30,393 25,000 20,000 20,455 15,000 10,000 14,040 5,000 9, ,955 Income Projection Actual Income 24

26 Expense/Claim cost Analyze Utilization by.. Two major demographic categories: Active, Retiree Three benefit categories: Hospital Inpatient, General & ER Office Visit, Office Visit(Specific Illness) Four different view on utilization: Episode, Admission, Day, Visit Analyze matching cost per unit 25

27 Changes in Expense/Claim Cost 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Expense/Claim Cost Growth Rate 42% 21% 20% 15% 12% 8% ) Not includes administration cost 2 ) Since 2012 downward trend for growth rate 26

28 Hospital Inpatient Admission Rate Assumption 15.00% Hospital Inpatient Admission Rate Projection vs Actual For Active Staff 10.00% 5.00% 0.00% Projection Actual 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Hospital Inpatient Admission Rate Projection vs Actual For Retiree Projection Actual 27

29 General & ER Office Visit Rate - Assumption Active Staff Retiree 28

30 Specific Illness Office Visit Rate - Assumption Active Staff Retiree 29

31 Cost Per Unit 30

32 Hospital Inpatient Cost Per Admission - Assumption 25,000 RMB Yuan 19,837 20,000 17,051 15,000 11,015 10,000 9,468 5,000 0 Active Staff Retiree 31

33 Hospital Inpatient Cost Per Admission Inflation Rate Assumption Year Hospital Inpatient Cost Per Admission Outcomes of Model Fitting Selected Rates Active Staff Retiree Active Staff Retiree % 3.2% 6.2% 3.2% % 6.2% 6.1% 6.2% % 3.7% 4.4% 3.7% % 4.0% 4.2% 4.0% % 2.6% 3.6% 2.6% % 4.3% 4.0% 4.0% % 3.5% 4.0% 4.0% % 3.4% 4.0% 4.0% % 3.3% 4.0% 4.0% % 3.2% 4.0% 4.0% % 3.1% 4.0% 4.0% % 3.0% 4.0% 4.0% % 2.9% 4.0% 4.0% % 2.8% 4.0% 4.0% % 2.7% 4.0% 4.0% % 2.7% 4.0% 4.0% % 2.6% 4.0% 4.0% % 2.5% 4.0% 4.0% % 2.5% 4.0% 4.0% % 2.4% 4.0% 4.0% 32

34 General &ER, Specific Illness Cost Per Visit - Assumption General & ER Cost Per Visit - Assumption RMB Yuan Active Staff Retiree 1,200 1, Specific Illness Cost Per Visit - Assumption RMB Yuan 1, Active Staff Retiree 33

35 Reimbursement Rate for General & ER Office Visit Year Total Cost of General &ER Office Visit Total Fund expenditure (social pooling account + personal account) Fund expenditure for Hospital Inpatient Personal Account Expenditure (non-medical use) Fund expenditure for General &ER Office Visit Reimbursement rate for General & ER Office Visit(Fund expenditure/total Cost) , , % , ,004 1, % , ,420 1,306 1, % , ,834 1,564 1, % , ,212 1,839 1, % , ,612 2,089 1, % RMB 100MM Assuming 30 percent of personal account expenditure is for eligible benefit 34

36 General & ER & Specific Illness Cost Per Visit Inflation Rate Assumption Year Outcomes of Model Fitting General & ER Cost Per Visit Active Retiree Staff Specific Illness Cost Per Visit Active Retiree Staff % 7.6% 7.8% 7.8% % 7.7% 5.2% 0.2% % 2.4% 9.4% 4.6% % 3.5% 1.6% 0.2% % 2.8% -2.3% 2.6% % 5.5% 8.7% 3.3% % 3.8% 3.9% 2.4% % 3.7% 3.7% 2.4% % 3.6% 3.6% 2.3% % 3.5% 3.5% 2.3% % 3.3% 3.4% 2.2% % 3.2% 3.2% 2.2% % 3.1% 3.1% 2.1% % 3.0% 3.0% 2.1% % 2.9% 3.0% 2.0% % 2.9% 2.9% 2.0% % 2.8% 2.8% 2.0% % 2.7% 2.7% 1.9% % 2.6% 2.6% 1.9% % 2.6% 2.6% 1.9% Year General & ER Cost Per Visit Active Retiree Staff Selected Rates Specific Illness Cost Per Visit Active Retiree Staff % 7.6% 7.8% 7.8% % 7.7% 5.2% 0.2% % 2.4% 9.4% 4.6% % 3.5% 1.6% 0.2% % 2.8% -2.3% 2.6% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% % 5.0% 5.0% 5.0% 35

37 Reimbursement Rate for Hospital Inpatient Cost - Assumption 82.0% 80.0% 80.0% 78.0% 76.0% 74.0% 72.0% 72.8% 75.0% Actual Rate 70.0% 68.0% 66.0%

38 Reimbursement rate for General & ER Office Visit -Projection 100.0% 90.0% 80.0% 70.0% 60.0% 59.4% 62.5% 65.9% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 37

39 Baseline and the lesson learned 38

40 Baseline 35,000 30,000 Fund Income and Expenditure Projection RMB 100MM 32,576 30,393 25,000 20,000 15,000 10,000 3,955 3,272 5,000 9,084 7,532 14,040 12,684 20,717 20,455 0 Fund Expenditure Projection Fund Income Projection RMB 100MM Actual Reserve 10,997 12,648 14,297 15,926 17,524 18,880 19,843 20,503 20,805 20,824 20,562 19,898 18,722 17,362 15,436 13,253 39

41 Lesson Learned Critical year for Pay as You Go model: Overall break even year at 2024, reserve maintain on + position For many poor performer Individual fund/plan, break even year & 0 reserve year will arrive earlier Management/control on Individual Account needs more attention Premium increase shouldn't be/will not be the life saver Saving from different type of reimbursement method is a double edges saw, need to balance the over and the under utilization issues Wellness, preventive, basic, chronicle, severe illness what should be the core (or priority) coverage? Need further realignment on deductible, co-insurance, benefit max, Out of pock max, specific stop loss protection? 40

42 Overview of New Rural Cooperative Medical Care System and Urban Resident-based Basic Medical Insurance Scheme 41

43 7,000 5,000 3,000 New Rural Cooperative Medical Care System % Income and Payment 38.5% 28.7% 56.5% 44.0% 40.8% 21.3% 20.5% 19.6% 1.8% RMB 100MM 8.6% -0.4% 3.6% 3,287 2, % 60% 40% 20% 0% -20% Per Capita Funding % % % % MM Persons 140% 120% 100% 80% 60% 40% 20% 0% -20% RMB Yuan % 11% Insureds Growth 70% 60% 50% 40% 30% 19% 20% 1,000-40% 1,308 1,188-60% Funding Payment Funding Growth Payment Growth Per Capital Funding Growth 10% 0% 42 FORINTERNALPURPOSESONLY

44 Urban Resident-based Basic Medical Insurance Scheme Historical Data 100MM Persons 176% % % % % % 23% 9% 50% 20% 6% 0% Enrollee Distribution Minors 32.0% College 6.1% Adults 61.9% Urban Residents Growth Year Total Adults Minors College Students % 46% 45% 9% % 49% 42% 9% % 54% 38% 8% % 56% 37% 7% % 58% 35% 7% % 62% 32% 6% CAGR 14.1% 21.1% 6.5% 5.5% 43 FORINTERNALPURPOSESONLY

45 Urban Resident-based Basic Medical Insurance Scheme Per Capita Funding ,500 2,000 1,500 1, RMB Yuan 50% % % 15% 54 14% 26% Per Capita Subsidy Per Capita Premiums Growth Income and Payment RMB 100MM 2, % 1, % 1, % 18.2% 1,437 1, % 15.6% Income Payment Balance% 60% 50% 40% 30% 20% 10% 0% 35% 30% 25% 20% 15% 10% 5% 0% 44 FORINTERNALPURPOSESONLY

46 Possible future directions for China social health insurance programs 45 FORINTERNALPURPOSESONLY

47 中共中央总书记 国家主席 中央军委主席 中央全面深化改革领导小组组长习近平 2015 年 12 月 9 日主持中央全面深化改革领导小组第十九次会议重要讲话 会议指出, 整合城镇居民基本医疗保险和新型农村合作医疗两项制度, 建立统一的城乡居民基本医疗保险制度, 是推进医疗卫生体制改革 实现城乡居民公平享有基本医疗保险权益 促进社会公平正义 增进人民福祉的重大举措 要按照统一制度 整合政策 均衡水平 完善机制 提升服务的总体思路, 从统一覆盖范围 统一筹资政策 统一保障待遇 统一医保目录 统一定点管理 统一基金管理等方面进行整合, 积极构建保障更加公平 管理服务更加规范 医疗资源利用更加有效的城乡居民医保制度 要推动实现医疗 医保 医药 三医联动, 推动基本医保 大病保险 医疗救助 商业健康保险 社会慈善等衔接配合, 努力构建多层次的医疗保障体系 The Key Words.. Mission: Promote healthcare reform, social equality and people s welfare Goal: Build a multi-layered medical security system Next Step: Integration of Urban Residents Basic Medical Insurance and New Rural Cooperative System Key Focus: Unified coverage, funding, benefits, medicine catalogues, site management and fund management. The Take Away. Integrate Urban Residents Basic Medical Insurance and New Rural Cooperative System to promote social equality and people s welfare. 3 key ingredients for the integration: Unified coverage, funding, administration support 46

48 Health Expenditure RMB 100MM Total Health Expenditure 40,588 35,379 31,662 Government 12,533 10,591 9,521 Social 15,891 13,043 11,413 Three Social Health Insurance Programs Expenditure 12,781 / 80.4% 11,024 / 84.5% 9,355 / 81.2% Personal 12,164 11,745 10,727 47

49 Social Health Insurance Programs Expenditure 70.0% 60.0% 50.0% 40.0% 58.3% 34.0% 50.5% 51.8% 51.0% 41.2% 36.8% 35.5% 49.0% 47.0% 34.1% 35.0% 30.0% 20.0% 10.0% 7.7% 8.3% 11.4% 13.5% 16.9% 18.0% 0.0% Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme New Rural Cooperative Medical Care System 48

50 Integration Scenario Stay the Same Project all 3 programs to 2030, based on current coverage level. Cost per capita at 2030 (RMB Yuan) Urban Employee-Based Basic Medical Insurance Scheme 8,681 Urban Resident-based Basic Medical Insurance Scheme 1,875 New Rural Cooperative Medical Care System 1,742 Unified Coverage Project all 3 programs to 2030, based on the same coverage level with Urban Employee-based Basic Medical Insurance Scheme Cost per capita at 2030 (RMB Yuan) Urban Employee-Based Basic Medical Insurance Scheme 8,681 Urban Resident-based Basic Medical Insurance Scheme 8,681 New Rural Cooperative Medical Care System 8,681 49

51 Expenditure Growth Rate Projection - Stay the same Scenario Year Urban Employee-Based Urban Resident-based New Rural Cooperative % 54.7% 72.5% % 63.4% 6.3% % 43.9% 17.4% % 48.0% 13.2% % 23.9% 20.0% % 20.0% 15.6% % 23.2% 10.7% % 13.6% 9.7% % 12.1% 8.8% % 10.9% 8.1% % 9.9% 7.5% % 9.1% 7.0% % 8.4% 6.5% % 7.8% 6.1% % 7.3% 5.8% % 6.8% 5.5% % 6.4% 5.2% % 6.1% 4.9% % 5.7% 4.7% % 5.4% 4.5% 50

52 Big Pictures Social Health Insurance Programs Expenditure at 2030 (RMB 100MM) Urban Employee- Based Urban Resident- Based New Rural Cooperative Total Total Expenditure/ GDP at 2030 Stay the same Unified Coverage 32,576 7,501 10,019 50, % 15.0% 20.0% 100.0% 32,576 34,724 49, , % 29.6% 42.6% 100.0% 2.8% 6.6% 51

53 Thank You!