The Benefits of Insurance

The FINANCIAL — From our most recent personal health survey, Georgian Opinion Research Business International has discovered the obvious: the uninsured pay more per-visit for health care.

What’s surprising, however, is that those with private health insurance seem to be paying more on average than those on national plans.  In this article we’ll discuss the possible reasons for this result, and see who’s insured.

All data that will be discussed in this article come from a recent survey called HITT – Health in Times of Transition. GORBI was responsible for collecting data in ex-soviet countries in Eastern Europe, East Central Asia, and the Caucasus.  Among a variety of public health related questions in the poll, we asked respondents what sort of insurance they carried.  Those who had recently received healthcare services were asked to estimate how much they paid.  Included in the expenses that were tracked were transportation, consultation, treatment, and consumables (drugs). 

Unfortunately for this discussion, much of the data related specifically to costs and insurance are difficult to analyze by country. This survey collected information on a wide variety of topics related to healthcare, so was unable to look too closely at any one.  For example, the number of Georgian respondents on national health care with recent health troubles who visited the doctor is only a handful, leading to standard deviations and margins of error that are so large as to make the mean cost useless in analysis. While this means that we cannot take the cost data too seriously on a country by country basis, we can make some inferences looking at all the countries together. 

The one country-level variable we can discuss with reasonable certainty is insurance coverage. When we asked respondents whether they carried any kind of health insurance, most people in most countries had none.  The two exceptions to this rule are Moldova and Russia, who each have a universal health care system.

Georgians are the most privately insured of anyone, with 22% sporting private insurance, most of which is employer-provided (only 4% of the country pays for their insurance out-of-pocket). 3.6% are using national health care, available only to the youngest, oldest, and poorest of Georgians.  Very low numbers of Armenians or Ukrainians claimed to have health care of any kind.

You’ll notice that no one in Belarus said they had public insurance, but this is certainly a misunderstanding of the definition, considering the fact that Belarus has state run healthcare. The official Belarusian statistics for private insurance (7%) falls within the margin of error of our data, 9.4%.

Personal Costs — We discussed last week that universal coverage in Moldova and Russia had some inconsistent effects on health care costs; Russian costs are among the cheapest of the countries surveyed, and Moldovans the most expensive (especially compared to their GDP).   This is only on a country level, however.

On an individual level, as you would expect, any kind of insurance drastically lowers costs.  As you might not expect, though, private insurance is linked to higher out-of-pocket expenses.  The uninsured paid on average $126 per visit, while privately insured paid $92 and those with state insurance paid $65.   Those with national health insurance that supplemented with private paid the least, a mere $52 per visit. 

This disparity between public and private insurance could be explained by the correlation between private insurance and wealth; the privately insured are wealthier in general and so are more willing to pay higher costs.  Alternatively, it could be that the national health insurance schemes of these countries are indeed quite comprehensive.  Whatever the case, if you really want to decrease your costs, having both is the way to go.

Finally, it’s important to remember the weaknesses in this data, lest we make too strong a declaration: sample sizes are small with large margins of error (4.5% at 95% confidence for total costs, 2.5% for insurance coverage), and there are some apparent misconceptions in Belarus as to what is meant by “public health insurance.”  This skew from Belarus’ “uninsured” doesn’t affect the cost per-visit too much, though, as only 16 respondents in Belarus had received health care in the month prior to the survey.

What we can note with some confidence is that those with private insurance seem to be paying far more per visit than the nationally insured. 

All costs were recorded in respondents’ own currency, and converted after the fact into US dollars using exchange rates from the time of fieldwork.