TNAG-0531-FCO40-626-Application-of-International-Labour-Convention-to-Hong-Kong-1975 — Page 40

18

Medical care organisation under social security

42. As already indicated, a number of countries have a national health service under which fairly complete free medical and dental care is provided by the State as a public service for everybody. It has been observed in many developing countries having this type of service that only a relatively small portion of the population can seek and receive medical care, because of insufficient numbers of medical personnel and facilities, uneven distribution of these throughout the country, shortage of equipment and medicines and above all the limit imposed on the national expenditures for this purpose.

It is often observed that even such fortunate people cannot always receive adequate treatment in the crowded hospitals and clinics. It may be clear that until a sufficient number of medical personnel and facilities are secured, the completion of adequate medical services for the entire population cannot be realised. Thus questions have often been asked: If a country cannot provide medical care to the whole population should it do nothing in this field? Or, should it not give the wage earners and salaried employees in areas where some medical personnel and facilities are available, an opportunity to participate in prepaid schemes, such as voluntary, group or compulsory insurance, so that they will have ready access to medical care when they need it?

43. People may be encouraged to take voluntary insurance for medical care, from private organisations, whether profit making or note. In a few countries this approach has been said to be a success. Voluntary insurance provides the individual with the freedom of choice to purchase or not to purchase as he sees fit. The fact that there are many different plans (or

insurance policies) provides valuable experimentation to determine the better side of protection. Voluntary insurance preserves the traditional relationship between doctor and patient. These advantages of voluntary insurance may be balanced against the fact that it does not solve the problem of medical protection for the aged and the poor. The benefit coverage of voluntary insurance cannot be comprehensive, there being important exclusions, for example, in respect of heart diseases, cancer, mental

Since many wealthy people do not bother to take out voluntary insurance, the risks must be spread among fewer people at higher costs. Under voluntary insurance which does not relate the rate of premium to the income of the insured person, the poor people paying a larger percentage of their income than are the wealthy.

diseases, etc.

are

44. The national legislation may require employers to take out a group insurance from private insurance companies. Even if as might sometimes occur an insurance company were so efficiently managed in comparison with a social security scheme that after takings its profit it would contract to provide the same protection for a lower premium, one would still hesitate to use it for social security operation s. Private insurance companies compete with one another for the favour of the customer, and each tries to offer him as good a bargain as it safely The best bargain will be obtained by the best "risk", that is the individual (or a group of individuals) whose age, health and job render him (or them) least likely to obtain a benefit.1

can.

45. On both historical and logical grounds compulsory health insurance may be considered as the primary branch of social insurance. In its simplest form it is easy to organise in any locality where a few hundred persons can be grouped together in a society and the services of a medical practitioner can be engaged. In addition to the payment of cash benefits to cover income loss due to sickness or maternity, it provides medical and maternity services to the insured persons and their dependants. There are the following three major methods whereby social insurance provides such care and services: (a) limited refund of medical expenses incurred by the persons protected; (b) direct provision of care by a salaried medical staff in facilities run by the scheme; and (c) direct payment by the scheme to providers of medical care for the persons protected.

1 It cannot be underrated, however, that insurance companies have a very

important role to play in supplementing the protection afforded by social security, the benefits of which often appear meagre to the more prosperous sections of the population. Recourse is had to their services, especially for the purpose of additional pensions. Insurance companies can take over from employers' pension plans previously run by the latter, putting them on a financially sounder footing. There have been growing trends towards expansion and prolification of such employer pension plans, many of which are the results of collective bargaining between labour and management. In some countries, they have now become an important element in the over-all protection of workers in the case of major contingencies.

E-1195-28:5