FIAR 2022: The Health Insurance Conference

What can Romania learn from the European health models? What is the current situation of the health insurance market in Romania and which are the opportunities and challenges on this segment?

These are just a few of the themes analyzed during the Health Insurance Conference taking place at FIAR 2022 - The International Insurance-Reinsurance Forum.

The conference was supported by FUTURE HEALTHCARE, as Official Partner, as well as EUROINS Romania, as Main Partner. The event takes place with the support of Medical Check-In.

Main statements:

ATTILA LASZLO, Senator, Secretary of Health Committee, Senate of Romania:

- I am very glad that we finally can discuss an area that is extremely burning.
- Slowly, slowly we are moving towards that situation where generations of 400 - 500 thousand newborns, at that time, when they will no longer contribute to health or pension funds and at the same time will become beneficiaries of these services.
- Unfortunately, we are champions in missing deadlines for the adoption or modification of issues in the health sector and here I mean that, unfortunately, we will miss them again this year because a series of political decisions must be taken regarding the financing of the system, changes in the system and the political class does not have the courage. Since 2004 we have been postponing decisions. What's more, we've made commitments about how to reduce the number of beds, how to reduce the ratio of public funding to existing infrastructure and much more, and we've forgotten to put something in place.
- Right now, in the case of major public health diseases, we are best off with diabetes. Do you know how many diabetics we treat nationwide? 36% of the number of patients.
- If we had a system of prevention, of early detection, we would also reach those statistics that colleagues will show you from other countries. Most likely the treasury would be even emptier. Not to mention the demographic developments we are now facing.
- I hope that soon we will have the courage to take a series of measures which are necessary, and which will cost us a lot of money later on.
- In 1990, the political class managed to establish some directions in which we are heading, but health and education were not discussed then. We are in 2022 and we have not managed to sit around the table to see what we are going to do about health. The political class failed to agree.
- Such decisions (on the health law) are made at the beginning of a mandate. I don't expect them to be made now, but I am hopeful that we will get on with those legislative changes that will pave the way and can be implemented immediately at the start of the mandate in 2024. 
- I am very hopeful that in a few months we will have an updated health strategy 2023 - 2030, which has some very interesting chapters, including on financing.
- I have always believed that a little competition doesn't hurt, but it helps to make us more creative and competitive. Access of private insurers to the public system would, I believe, lead to an equalization or clarification of the real costs.

Mag Astrid KNITEL, Head of Health Insurance Department, VVO

- 70% of Austrian believe that the health insurance system works well, but 30% believe that is needs to be completely restructured; 86% are satisfied by the accessibility of the medical services;
- The Austrian Health Insurance System include the social/public insurance and the private health insurance
- Social Insurance in Austria: more than 99% of the Austrian population is covered by a system of compulsory health insurance (basic coverage). 5 public insurance institutions which cover this;
- The Private Health insurance is offered by 9 insurance companies;
- Social vs. private health insurance in Austria: social insurance is compulsory by law, while the private health insurance is voluntary, via application; The social health insurance covers over 99% of the population, while the Private Health Insurance covers an additional 38% of the population (of them, almost 24% are insured for hospital costs);
- Insurance cover starts immediately for social insurance, while for private insurance, there is a waiting period - insurance cover may start some month after signing the contract (3, 8 or 9 months waiting periods);
- There is no risk selection on social insurance, while private health insurance includes a health check upon entry;
- As far as financing is concerned, the social health system is a pay-as-you-go system, with an apportionment procedure financed through social security contributions, while the private health insurance is a capital funded system, with a risk-based premium;
- In Austria, the private health insurance is a life-long contract. The insurer is allowed to terminate a contract in the first three years. Due to life-long cover, the premiums are calculated with technical provisions (higher premiums when young and lower when old);
- The additional costs of privately insured (cost of single room in hospital, Doctor's fees_ are directly settled between hospitals and insurets via an electronic system. The insured does not have to pay amounts of money directly at once when leaving the hospital;
- In 2021, Austria reported a constant growth of health insurance, close to 4% y-o-y over last years. In 2021, premiums reached about 2.5 billion EUR (+3.7%), and benefits of about 1.44 billion EUR (+1.2%);

Gorazd CIBEJ, Managing Director, Insurance Supervision Agency, Slovenia

- Types of insurance in Slovenia: 1) Compulsory insurance - organised through the Health Insurance Institute of Slovenia (ZZZS), 2) Supplementary health insurance (organised through private insurance undertaking but regulated by the law), 3) Health insurance (organised through private insurance undertakings);
- The compulsory health insurance in Slovenia is based on a conservative-health care model financed, through a mandatory insurance program, primarily organised through the Health Insurance Institute of Slovenia (ZZZS). The Slovenian healthcare system was ranked 21th among 35 countries in the Euro health consumer index 2018;
- With the health care legislation, passed in 1992, Slovenia introduced a system of health insurance, compulsory for all the citizens of the Republic of Slovenia having their residence in the territory of Slovenia. As part of the compulsory health insurance, the insured persons are guaranteed by the Law the following: a) the payment of health services, b) sick pay during temporary absence from work, c) the reimbursement of travel expenses tied to obtaining health services. The system of funding depends on the type of health care activities funded by the compulsory health insurance;
- The rights deriving from compulsory health insurance include: 1) specified by the Law on health care and health insurance and The Regulations on compulsory health insurance, i.e. the act adopted by the assembly of the Health Insurance Institute of Slovenia, 2) comprises insurance in the case of illness or injury outside work, and insurance in the case of injury at work and occupational diseases. The extent of rights to health care services is defined in percent share of the total service costs;
- Urgent medical treatment and urgent medical assistance are fully covered by compulsory health insurance and therefore require no additional payments. In addition to these services some others are fully covered by compulsory insurance;
- Other necessary services are only provided free of charge to a certain percentage, so that for some medical services the difference to the full price has to be paid which depends on individual cases and amounts to from 10 % to 90 % of the value of the medical service or appliance;
- Compulsory health insurance covers the insured persons, to the extent defined by statute: a) the right to health care services, and b) the right to financial compensation (in case of absence for work, for example);
- Each year, the representatives of the health care service providers (chambers, associations), of the Ministry of Health Care and of the Health Insurance Institute of Slovenia (Institute) take part in negotiations and agree upon the common scope of the programmes of health care services and the funds necessary to cover the programme, at the national level.
- In 2021, of the total compulsory health insurance budget, the Institute designated a sum of approximately 2,36 billion EUR for health care services, 412,9 million EUR for medication, 89,1 million EUR for medical devices, 8,29 million EUR for vaccines and 499,6 million EUR for various financial benefits.
- The contributions for compulsory health insurance are calculated as a percentage of the specified bases; there is a relation between the types of rights of different categories of insured persons and the corresponding contributions; the compulsory health insurance contributions depend on the salary or other income earned by the insured person;
- Thee challenges of compulsory health insurance in Slovenia include: 1) long waiting lists for medical services (specialists treatments, diagnostic treatments, surgeries), 2) lower standard of health services than expected, 3) limited scope of rights financed by the compulsory insurance (dental treatment, orthotics...), and 4) financial sustainability in general;
- The Supplementary health insurance is a voluntary insurance, which can be obtained by persons with compulsory health insurance at one of three Slovenian health insurance companies: Vzajemna, Triglav Health Insurance Company and Generali. This insurance covers the difference between the full price of healthcare service and the share, which is covered by the compulsory health;
- All insurance undertakings engaged in supplementary health insurance must be included in the equalisation schemes designed to equalize differences between insurance undertakings relating to the costs of health services arising from differences in the age structure and gender structure of portfolios of individual insurance undertakings pursuant to the Act governing health care and health insurance;
- Effects of the COVID-19 pandemic: In supplementary health insurance gross claims were lower; Access to health services was limited; therefore, the number of health services provided was lower than in the previous years; In accordance with the Act Determining Temporary Measures to Mitigate and Remedy the Consequences of COVID-19 (PKP5), the insurance companies will redirect the resulting surplus assets back to the health system;
- In the area of health insurance Solvency II directive introduced new terminology, namely health insurance not pursued on a similar technical basis to that of life insurance;
- The other health insurance products on the Slovenian market aim to provide: a) better access to private healthcare facilities; b) maintenance of higher level of sustainability of a public health system; c) easier and faster access to health services, but not equal access; d) they are accessible only to certain groups of the population (not everybody affords these products).
- Why is the market of other health insurance products not developed in Slovenia? Factors include: lack of tradition, the absence of tax relief, the extent of rights deriving from compulsory health insurance, high level of trust in the system of the compulsory health insurance, relatively undeveloped network of a private health service facilities;
- How can we improve this situation? Solutions include: 1) Defining the scale of rights and services, which are financed from the compulsory health insurance, 2) Clear national strategy of providing financial sustainability of a health system, 3) Encouragements from the state (tax relief), 4) Defining clear boundaries between public and private services and financing;

Interactive Panel - The future Romanian health insurance system under debate

Zahal LEVY, President, MediHelp International

- The customer has to know in advance what is not included in the health insurance policy - this is the first element underlined during the sale of our health insurance policies;
- In a country like Austria, the standard of healthcare is very high. So why is the health insurance segment growing? The explanation might be that people live longer, technology is much more expensive and countries under-budget the sums for the public health system. Thus, it becomes difficult to get medical care;
- The responsibility of the health of the individual belongs to himself - in Romania, many of us believe that the State should give us medical care. But the State doesn't have enough money to support the Romanians' growing demands for good medical care;
- The responsibility belongs to the individual, not the State. The State can support this through fiscal tax reductions; 
- If you encourage the transfer of responsibility of the public for healthcare to themselves, more money will be available for the development of health insurance; The private sector should agree to move away from the 'subscription' system and allow private health insurance to grow;

Calin GRIGOROVICI, Director Sales & Marketing, EUROINS Romania

- It is obvious that we do not lack ideas when it comes to developing the health system in Romania, but we do lack the courage to make decisions;
- We have models close to us in Europe from which we can draw inspiration. We lack the political class needed to make these decisions;
- The basic package is an essential chapter and a legislative priority for the medical healthcare system in Romania. I think it would help a lot in our area of voluntary health insurance if we had this basic package;

Roxana BALUTA - Programs Coordinator Life and Health Insurance Specialist, UNSAR

- From the perspective of the models presented (health insurance systems in Slovenia, Austria), it is best to look at what we want to borrow, at best practices, and adapt what can be viable for the Romanian system. We need to look at the specifics in Romania and build on that.
- In the last 5 years, since tax deductibles were granted, the insurance industry has paid out around 1 billion lei in gross compensation. 1 billion lei that came to finance the state budget through voluntary health insurance. What we have seen at European level tells us that, in fact, voluntary health insurance is a viable and vital solution in the sustainability of any health system.
- We need a new, modern, flexible legislative framework, which is tailored to the requirements and needs of patients - the people of Romania.
- We see a growing need for health services.
- We have identified a few areas where we can do something: a new law for voluntary health insurance; to look at optimizing deductibility; a legal framework that allows us to access public hospitals and take over medical expenses through voluntary health insurance.
- The important thing is to sit down and talk.

Cristina LIPOVANU, Manager New Business Health Insurance, ALLIANZ-TIRIAC Asigurari:

- A legislative framework that regulates more precisely, correctly and concretely the role of insurers in the voluntary health insurance segment must be a priority. This is because insurers are real and reliable partners of the private health care providers. Every bill we pay for our policyholders to receive health services in the private system represents a financing that insurers make. We also want to accelerate the financing of the state insurance system. We need a legislative framework. We have ideas and solutions. We are ready to change things.
- Insurers contribute to the health of Romanians because every beneficiary of private health insurance has access to more than they would have without such a benefit. 
- We need both systems. Insurers and private medical providers have been working together for many years. Insurers are funders. Our role is to provide financial support for access to private healthcare. The ultimate benefit to the patient/insured is to get the best of both systems. Here, in addition to our intention - insurers and private medical providers - to have a real and sustainable collaboration, the state must also be a player, legislatively speaking, to be all in the same context.
- Romanians are willing to pay for private medical services.

PART II

Alexander DENTON, Partnerships Development Manager EMEA, AXA Life & Health Reinsurance Solutions

- The Private Health Insurance Eco-System includes: the insured, the insurance companies, the medical services providers
- Key drivers of stakeholders - for insured, these are: Out of Pocket Expenses, Hospital Waiting Times, Deterioration of State Funded Healthcare (Covid-19, Immigration/Refugees), Choice of Service (people want to choose the services and the medical providers);
- Key drivers of stakeholders - for insurance companies, these are: Risk Management, Cost Management (profit, but also offering good services for insureds), Compliance, Fraud Prevention, Customer Service (service that supports the clients), Hospital Network;
- Key drivers of stakeholders - for the medical providers, these are: Medical Treatments, Patient Welfare (the best of service delivered to patients), Quality Medical Service, Medical Innovation; 
- As health insurance companies, we look at: 1) the product design (In-Patient/Out-Patient, Cash Plan, Critical Illness), 2) the cost management (Managing claims from both sides Insured/Medical Provider), 3) compliance regulations (GDPR, Local Country Regulations - some countries have very specific regulations for health insurers), 4) Customer Service (delivering quality, 24/7 provision, digital access), 5) Fraud Prevention (On-going risk management, digital exposure); 
- People live longer, chronic diseases are manageable with treatments; 
- The disruptors of the private health insurance eco-system: wearables (having wearable data available, we can become more insurable), artificial intelligence (AI is getting more and more used in healthcare provision; there are some platforms that give automatic answers to the insured; AI will improve things for the customer), DNA (more and more techniques to manage DNA and take away illnesses), Amazon and other IT Giants (they see it as a market which offers an opportunity) 


Interactive Panel - Technology in support of quality servicing provided to health insurance customers

Alexander DENTON, Partnerships Development Manager EMEA, AXA Life & Health Reinsurance Solutions

- We are going to see the speed of digital transformation; 
- When looking for new products, we are looking at health tech companies and we are trying to see how we can make their products insurable;
- It's a critical moment from the pandemic on how digital transformation can go forward;
- It isn't a consistency across the market, people can't move between different insurers. However, we are starting to see progress in some countries regarding the use of online platforms, the goal being a unified platform sharing data;
- The trouble with health insurance is that it is complex; We could create a collaboration between the existing platforms and combine the information they have;
- Companies are reluctant to share data and use a unique online platform with data;. Each company is using their own platform; 
- Technology will be the success drivers - people want to move that way (Millennials get bored easy, if they can't get medical services in one or two touches, they won't be interested in private health insurance). We are still dinosaurs, we have lots of legacy, we need to see how to make technology work on the private health insurance segment; 

Ciprian BUJOR - Chief Strategy Officer, TELIOS Care

- The pandemic has led to an increase in the use of remote healthcare services, and this trend will continue, because we have seen a change in consumer behavior, who have adapted to new technologies and have become fans of them.
- There was a lack of confidence in remote healthcare at the beginning, but it has been overcome, because people have seen that there is quality that can still be delivered.
- The telemedicine market, which is valued at several tens of billions, is expected to grow significantly in the coming years.
- In communities where you have one doctor to hundreds of patients, you can provide access to medical services through remote medicine in real time.
- We are working to launch so-called Points of Care - points, in dispensaries, at the employer, etc. - where trained medical staff can use the medical devices we provide and connect with a specialist doctor.
- For doctors in the clinic, telemedicine also helps to clear the schedules of those doctors who have more time for more remote consultations. 
- 82% of referred medical cases did not require a physical presence in the medical clinic afterwards.
 
Sorin MITITELU, Country Manager, FUTURE HEALTH CARE:

- For insurers, technology means more than telemedicine.
- The big issue for insurers is how to manage this ecosystem.
- When building electronic systems, it is preferable to learn from other markets. These systems should be used by several operators and they should integrate all players in the market. In Austria settlement is done through a secure electronic system. I think we are not moving in the right direction, because we have different systems. Outsourcing is a normal and beneficial solution.
- Behind these systems there is a lot of automation and Artificial Intelligence. These systems help to optimise costs and is a financial benefit for the insurer.
- FUTURE HEALTH CARE has such a system, which integrates all parties, has multiple capabilities and which can provide portfolio management services for the insurer, access and service management services from medical networks, related services.
- Technology helps you do things more efficiently.
- Our private health insurance in Romania is a small one compared to more mature markets, a 100 million euro market. Many structural changes are needed. However, the market shows a very big effort done by distributors, which is to be appreciated.

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