Docstoc

Mutual insurance societies

Document Sample
Mutual insurance societies Powered By Docstoc
					MGEN, an Actor in the French Mutualist Movement
                                                 Isabelle RONDOT




                                                                   1
                    Isabelle RONDOT – May 2010
Healthcare expenditure in France




                                                      2
                     Isabelle RONDOT – October 2010
                                                Items of current healthcare expenditure in 2008


                  Current healthcare expenditure: €215 billion


                                       Prevention, research, training, etc.:
                                       €26.8 billion                                                      Healthcare services and goods: €170.5 billion
                                       (12%)
 Care for institutionalised
 older people:
 €6.4 billion (3%)

Per diem allowances:
€ 11.3 billion
(5%)




                                Healthcare services and
                                goods:
                                €170.5 billion (79%)



                                                      Total 100% = CHE                                                                            Total 100% = CHSG




        Source: National healthcare accounts, 2008
                                                                                                                                                           3
                                                                         Isabelle RONDOT – October 2010
France is in second place within the OECD in terms of total expenditure on healthcare.
                                                                               United States: 16% of GDP
          France                                                               France: 11% of GDP


        Germany


         Canada


         Portugal


        Denmark


          Iceland


         Sweden
                                                                                  Current expenditure
             Italy                                                                 Gross fixed capital formation


           Spain


          Finland                                                               Total healthcare expenditure (THE)

                                                                                DTS = CHE – per diem allowances –
         Slovakia
                                                                                part of prevention, research and
                                                                                training expenditure + capital
         Hungary                                                                expenditure for healthcare sector +
                                                                                expenditure for handicapped and
                                                                                dependent people
   Czech Republic


          Poland


          Turkey                                                                 Sources: Drees, OECD

                     0   2   4   6       8         10           12   14   16                                       4
                                     Isabelle RONDOT – May 2010
     The years when there was significant economic growth enabled a major increase in
                                 healthcare expenditure.
Growth rate of Consumption of Healthcare Services and Goods (CHSG) versus GDP


                  “The 30 glorious years”




                                                                                                 “The 30 glorious years”
                                                                                                 Period of strong economic growth between
                                                                                                 the end of the Second World War and the 1st “oil crisis”
                                                                                                 (1945-1974)




        Sources: Drees, Insee - Processing and analysis: MGEN
                                                                                                                                             5
                                                                Isabelle RONDOT – October 2010
The financing of healthcare expenditure in France




                                                      6
                     Isabelle RONDOT – October 2010
The health insurance system in France since1946




           Paid by households

                                                  Private financing
      OPTIONAL health insurance                   (voluntary contributions and direct
                                                  payments by households)

     (“complementary” insurance)




                                                  Public funding (social security
      COMPULSORY health insurance                 contributions, taxation)
         (Social security system)




                                                                                    7
                Isabelle RONDOT – October 2010
        Since the creation of the social security system, by far the largest proportion of healthcare
                                expenditure is financed by the public sector.
                                                                                                           Breakdown of healthcare expenditure, 2008
                                                                                                           (consumption of healthcare services and goods: €170.5 billion)

                                                          €39.5 billion
             Private funding
(households, “complementary” insurance)
                 23.1%
                                                                                                                                  Public funding
                                                                                                                       (Social security system, State, etc.)
                                                                                                                                      76.9%

                                                                                 €131 billion




  Public funding of CHSG v. total CHSG (as %)
                                                                                Proportion of publicly funded healthcare services and goods, 1950-2008
                                   “The 30 glorious years”




      Source: Insee, National healthcare accounts, 2008                                                                                                        8
                                                                          Isabelle RONDOT – October 2010
      The breakdown between fund providers varies depending on the nature of expenses.
                                                                   (Breakdown in %)
   Breakdown of healthcare expenditure between fund providers
   (in %)




                                                                                                 NB: To simplify the reading of the data, the item
                                                                                                 “patient transport” is not included in this
                                                                                                 breakdown. Given the small amount involved, this
                                                                                                 does not significantly change the analysis.




Source: National healthcare accounts, 2008

                                                                                                                                        9
                                                                Isabelle RONDOT – October 2010
  Some items are funded privately for the most part (i.e. under complementary schemes or
                   directly by households): optical care, dental care, etc.
    Breakdown of healthcare expenditure between fund providers
    (in %)




Source: National healthcare accounts, 2008

                                                                                              10
                                                             Isabelle RONDOT – October 2010
           In recent years, the rise in healthcare expenditure has been increasingly transferred to
                      the complementary insurance schemes and private households.

Breakdown of annual increase in consumption of healthcare services and goods between fund providers (in %)




                                                                                                             In 2008, more than 21.4% of the annual
                                                                                                             increase in healthcare expenditure was
                                                                                                             financed by households and 19.2% by
                                                                                                             the complementary insurance schemes…

                                                                                                             …i.e. more than 40% of the increase in
                                                                                                             expenditure was borne by the private
                                                                                                             sector (in comparison with 20% in 2000).




           Source: National healthcare accounts, Insee - Analysis: MGEN

                                                                                                                                           11
                                                                            Isabelle RONDOT – October 2010
Mutual insurance societies




                                                      12
                     Isabelle RONDOT – October 2010
        Of the three types of private operators present in the are of social protection in France,
       mutual insurance societies are the specialists in health insurance and the leaders of the
Complementary insurance market share
        Leadership                               sector.




                                                                                                                                             Mutual insurance societies
                                                                                                                                              Market share: 58%
                                                                                                                                              Healthcare turnover: 75%




                                    Insurance companies
                                       Market share: 25%
                                       Healthcare turnover: 4%
                                                                                                Social welfare institutions
                                                                                                 Market share: 17%
                                                                                                 Healthcare turnover: 42%




                                                                                                                       Share of health insurance in turnover

                                                                                                                     Specialisation in healthcare
  Source: ACAM , Report of Budget Ministry to Parliament 2009 - Processing and analysis: MGEN
                                                                                                                                                                  13
                                                                         Isabelle RONDOT – October 2010
      Since their origin, mutual insurance societies have covered a large proportion of private
                                            expenditure.
 Benefits paid by different private fund providers (in millions of current euros)


                       Before 1995, national accounts did not distinguish between benefits financed
                        by insurance companies or social welfare institutions, on the one hand, and
                                                   those paid directly by households, on the other.




                                                                                                              40%




                                                                                                              35%




                                                                                                                                            33,8%
                                                                                                              30%




                                                                                                              25%




                                                                                                              20%




                                                                                                              15%




                                                                                                                    15,7%
                                                                                                              10%




                                                                                                                     Share of mutual insurance
                                                                                                              5%
                                                                                                                     societies
                                                                                                                     In private funding
                                                                                                               0%




Source: Insee, National healthcare accounts, 2008 - Processing and analysis: MGEN

                                                                                                                                           14
                                                                             Isabelle RONDOT – October 2010
                                                    What is a mutual insurance society?




•    Voluntary membership

•    Solidarity and social development

•    Non-profit oriented: the mission of the leadership of a mutual insurance society is
     both to ensure long-term financial equilibrium and to uphold the interests of the
     members of the association.




                                     Leadership                                    Owner                                                Client


    Stock companies                  Directors                                  Shareholders                                     Insured persons




     Mutual insurance           Elected members                                                  Members / Insured persons
     societies

                        Source: Adapted from “On the convergence of insurance and finance research”, Clifford W. Smith – Journal of Risk and Insurance (1986)


                                                                                                                                                                15
                                                                      Isabelle RONDOT – October 2010
                 The three founding principles of mutual insurance societies



• Not-for-profit

• Solidarity

• Shared responsibility




     In France, the creation and functioning of mutual insurance societies are governed by specific
          legislation, namely the “Code de la Mutualité” (Code of mutual insurance societies).



                                                                                                      16
                                         Isabelle RONDOT – October 2010
                 Origin in the 17th century, development starting in the 19th century




•   In 1823, 148 mutual aid societies existed in France.


•   By 1898, there were 11 355 mutual aid societies providing insurance for persons (particularly death
    insurance).


•   By the end of 2008, there were 527 mutual insurance societies active in the healthcare sector (i.e.
    associations which bear the insurance risk themselves).


•   The largest mutual insurance society is the MGEN, which caters for 3.4 million people.




                                                                                                          17
                                             Isabelle RONDOT – October 2010
    Mutual insurance societies have been helping France over the years to meet major challenges
  Key
                             in the social welfare and healthcare sector.
                                                                                                                                                  Dependence
            Major national challenges
                                                                                                                                       Ageing of population
            Positioning of mutual insurance societies
                                                                                                                                      Retirement age raised

                                                                     Reconstruction                                               Technological advances
                                                          Founding of Social security system:
                                                                        1946                                                     Growing welfare demands
                                                               Development of health system
                                                                                                                                          ------------------

                                                                                                                                  State withdraws financial
                                                                                        Health                                          commitment

                                                                                                                                      Slow-down of economy
                    Era of industrialisation and
                                                                                        Retirement                                             …
                          mechanisation

                              Incapacity for work/
                                  Disabilities



  Increased hardship for families
     when head of family dies


                Death
                                                                                                                                                                temps


1850                                                    1946    1950           1960              1970       1980         1990           2000           2010

Share of healthcare expenditure in household
                                                                                 5.6%             8%         9.7%        11.7%           12.6%         13.9% (2005)
consumption

Life expectancy at birth (men)                                   63.4 years    67 years        68.4 years   70.2 years   72.8 years     75.3 years 77.6 years (2007

Number of employed workers paying contributions per                14.3                                        4                          2.3
retired person
                                                                                                                                                               18
                                                                     Isabelle RONDOT – October 2010
      Mutual insurance societies bear an increasing share of private expenditure on healthcare,
     thus extending the principle of collective solidarity to part of the risks faced by households.


                                                                Share of mutual insurance societies in private expenditure on healthcare services
                                                                and goods – 1950-2008

Funding by mutual insurance societies v. private funding – Consumption of healthcare services and goods (in %)


    40%                          “The 30 glorious years”

    35%
                                                                                                                                   33,8%

    30%

    25%

    20%

    15%
            15,7%
    10%

     5%

     0%
       50

       52

       54

       56

       58

       60

       62

       64

       66

       68

       70

       72

       74

       76

       78

       80

       82

       84

       86

       88

       90

       92

       94

       96

       98

       00

       02

       04

       06

       08
     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     19

     20

     20

     20

     20

     20
    Source: Insee, National healthcare accounts, 2008




                                                                                                                                        19
                                                                    Isabelle RONDOT – October 2010
                                A balance sheet




• Today, close to three in four people in France are
  covered by this type of solidarity-based health
  insurance (and over 92% of the population has
  health insurance).




          In France, joining an optional health insurance plan reduces
         by half the incidence of patients failing to seek appropriate care.
                                                                               20
                                Isabelle RONDOT – October 2010
The economic models of mutual insurance societies




                                                         21
                        Isabelle RONDOT – October 2010
     The fundamental principles of mutual aid underlie the adopted economic models, making
    it possible to adapt health insurance coverage to the evolution of social needs in the long-
                                               term.




•   To adapt the services/benefits and level of redistribution


•   To reduce costs, to direct the economic results towards the goal of
    maximising the benefits to members in the long term


•   To enable a good balance between the administrators and the association’s
    managers and professional experts.




                                                                                              22
                                         Isabelle RONDOT – October 2010
             The absence of shareholders enables mutual insurance societies to provide more
                   services and benefits to their members than insurance companies.

                                                                                 Costs of insurance services & benefits in 2007 (health insurance)




Source: ACAM, report of the Budget Ministry to Parliament 2009

                                                                                                                                         23
                                                                 Isabelle RONDOT – October 2010
        Although rigorous comparisons are difficult (since sometimes different scopes of activity
        are involved), the available studies indicate that mutual insurance societies have lower
             management costs than insurance companies and the Social security system.
 Share of management costs in insurance policies                    Comparison of management costs of health insurers and the
 covering bodily injuries in 2007                                   compulsory health insurance scheme (with scope adjusted)

                                                                               Ratio between       With actual        Based on            Ratio between
                                                                               management                                                 management
                                                                                                   data provided      simulation of
                                                                               costs and                                                  costs and
                                                                               services/benefits   by health          services and        services/benefits
                                                                               provided by         insurers           benefits under      provided under
                                                                               health insurers                        compulsory          compulsory
                                                                                                                                          health insurance
                                                                                                                      health
                                                                                                                                          scheme
                                                                                                                      insurance
                                                                                                                      scheme


                                                                               Administration           7%                 1.5%



                                                                               Management               7%                 1.9%
                                                                               of losses

                                                                               Other technical
                                                                               costs of
                                                                               services/benefits       3.3%                0.7%



                                                                               Total                  17.3%                 4%            4% to 5.5%

                                                                    Depending on whether or not we take into account the financial costs generated by the deficit
                                                                    of the general healthcare regime under the Social security system (financial costs of the
                                                                    CADES, i.e. the government agency that pays off France's social security deficit).

Source: ACAM, Report of Budget Ministry to Parliament 2009                    Source: BIPE

                                                                                                                                                         24
                                                             Isabelle RONDOT – October 2010
   Some examples of solidarity in the guaranteed services and benefits provided by mutual
                                     insurance societies



• Absence of selection based on medical check-up


• No exclusions (lifetime guarantees)


• The amount of the contribution is not linked to the level of risk.


• Mutualisation of risks




                                                                                        25
                                     Isabelle RONDOT – October 2010
Expenses reimbursed by mutual insurance societies




                                                         26
                        Isabelle RONDOT – October 2010
 Breakdown of expenditure of mutual insurance societies in comparison with public sector
                                             (Consumption of healthcare services and goods – 2008)




                          Social security system + State                                        Mutual insurance societies




Source: National healthcare accounts, 2008




                                                                                                                             27
                                                            Isabelle RONDOT – October 2010
       Detailed breakdown of amounts reimbursed by mutual insurance societies in 2008




Source: National healthcare accounts, 2008
                                                                                        28
                                             Isabelle RONDOT – October 2010

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:0
posted:5/17/2013
language:English
pages:28
yaofenji yaofenji
About