Publicly funded medical savings accounts: expenditure and distributional impacts in Ontario, Canada

Abstract

This paper presents the findings from simulations of the introduction of publicly funded medical savings accounts (MSAs) in the province of Ontario, Canada. The analysis exploits a unique data set linking population-based health survey information with individual-level information on all physician services and hospital services utilization over a four-year period. The analysis provides greater detail along three dimensions than have previous analyses: (1) the distributional impacts of publicly funded MSAs across individuals of differing health statuses, incomes, ages, and current expenditures; (2) the impact of differing degrees of risk adjustment for MSA contributions; and (3) the impact of MSA funding over multiple years, incorporating year-to-year variation in spending at the individual level. In addition, it analyses more plausible designs for publicly funded MSAs than the existing studies. Government uses information available from year t - 1 to allocate its budget for year t in a manner that is ex ante fiscally neutral for the public sector: the government first withholds funds equal to expected catastrophic insurance payments under the MSA plan, and then allocates only the balance to individual MSA accounts. The government captures the savings associated with reduced health-care utilization under MSAs and we examine deductibles that vary by income rather than by current health-care expenditures. The impacts on public expenditures under these designs are more modest than in the previous studies and under plausible assumptions MSAs are predicted to decrease public expenditures. MSAs, however, are also predicted to have unavoidable negative distributional consequences with respect to both public expenditures and out-of-pocket spending.

Insights on multimorbidity and associated health service use and costs from three population-based studies of older adults in Ontario with diabetes, dementia and stroke

“…Most of the literature on the burden and complexity of comorbidity in the context of an index condition is published in specialty-specific journals that are typically not easily synthesized across specialties. Drawing general inferences from multimorbidity literature is further complicated by the use of different study designs, multimoribidty definitions, and data sources [18]. In this paper we draw general insights about multimorbidity by observing patterns of comorbidity and associated health care utilization and costs from three community-based cohorts with three distinct index conditions [15–17].…”

“…The original studies were conducted on populations residing in Ontario, Canada’s most populous province with approximately 13 million residents. The provincial government is the sole insurer for medically necessary physician and hospital services through the provincial health insurance plan (OHIP), with over 98% of all physician expenditures and over 93% of all hospital expenditures being publicly financed [18]. As such the majority of health services used by Ontarians are captured in administrative data holdings.…”

Modeling individual health care expenditures in China: Evidence to assist payment reform in public insurance

“…The empirical literature has shown that a range of factors influences health care spending (Di Matteo & Di Matteo, 1998;Ellis et al, 2013;Hurley et al, 2008;Shang & Goldman, 2008). Age and gender are the most commonly used characteristics in payment models.…”

“…Existing empirical literature has shown that a range of factors influence health care spending (Di Matteo & Di Matteo, 1998;Ellis, Fiebig, Johar, Jones, & Savage, 2013;Hurley, Guindon, Rynard, & Morgan, 2008;Shang & Goldman, 2008). As our model would be applied to risk-adjusted capitation design, we follow the risk adjustment literature to use age, gender, and diagnostic information as main predicting factors.…”

Medical savings accounts - in search of an alternative method of health care financing in European countries

“…In Europe the MSA concept has also been considered from a scientific approach (Henke and Borchardt, 2003), as well as from a practical perspective (Dixon, 2002;Johannssen, 2003;Kiszka and Sowada, 2007). Consequently, there are positive and negative findings about possible effects of implementing this form of financing into the contemporary health care systems (Saltman, 1998;Hurley at al., 2008;Kiszka and Sowada, 2007;Borda, 2009). The purpose of the paper is to present the idea of Medical Savings Accounts and to examine the possibilities of MSAs incorporation into health care systems in European countries.…”