Ethical value and challenges of long-term care insurance

Value and significance of the policy from a philosophical perspective

In public health ethics, the primary issue to be addressed is to determine whether and how much the government is responsible for maintaining public health. ¹¹ If the citizens’ right to life and health is recognized, it should be regarded as a social responsibility of the government, that is, the government has certain positive obligations in maintaining the health of citizens. This shows that the citizens’ right to life and health is a combination of positive freedom and negative freedom at different levels. In positive freedom, the individual is his own master and has the freedom and right to do something. ¹² In the context of long-term care, it means that individuals have the right to decide what to do with their health, including hoping to receive care or treatment to ensure their health condition does not deteriorate. However, only positive freedom at the individual level is not adequate to safeguard the right to life and health. If there is no corresponding system or law at the national level to provide objective protection for the life and health of individuals, they still cannot fulfill their right to those. Such “systems” and “laws” are the embodiment of a type of negative freedom, which sets a limit for the “capability” of individual behavior. The infringement that threatens the right to life and health, and situations that are not conducive to the maintenance of the right to life and health should be disallowed. This negative freedom can only exist when the government undertakes certain positive obligations. If the government does not provide LTCI as an objective institutional guarantee, disabled individuals who have the right to life and health will have nowhere to practice their freedom. Thus, these rights will continue to be threatened. In short, the LTCI policy is of great significance because of the following reasons: At the individual level, disabled individuals still have the right to life and health that they hope for, to reduce pain and maintain their physical condition from deteriorating. At the national level, the government is obliged to provide health support to individuals whose right to life and health is being threatened.

Social aging and even global aging force the state to change the original allocation mode of medical and health resources ¹³ and to increase financial expenditure to maintain the health of older adult population. The significance of LTCI in social benefits and economic rationality is highlighted in such situations. The traditional commercial health insurance demand model holds that people’s preference for insurance is based on the Expected Utility Theory. As the occurrence of future risks is uncertain, people are generally willing to pay the price for certainty in exchange for the promise of compensation when such uncertain losses occur. ¹⁴ LTCI is necessary in the case of highly uncertain events or situations associated with significant expenditure potentials, such as geriatric diseases and disability. The follow-up evaluation of the implementation effect of China’s LTCI shows that outpatient expenses, visits, and hospitalization expenses of older people in pilot cities have been reduced by varying degrees, thus effectively reducing the expenditure of the medical insurance fund. ¹⁵ The cost of building a long-term care system may be far less than that needed to be paid by medical security after the onset of disability in older persons; thus, the benefits of the policy outweigh the expenses. Therefore, as a social system to protect the disabled, LTCI should not only alleviate the existing social pressure but also prevent future uncertainty. It is an effective transfer tool to manage the risk of care needs for older people, thereby constituting an important part of China’s social security system.

Additionally, public health policies should yield benefits in ensuring the effective utilization of medical and health resources and enhancing the market vitality of the health industry. ¹⁶ The calculation based on Dynamic Network Data Envelopment Analysis (DNDEA) reveals that the public health system often has errors in the use of funds for social health security projects and the allocation of care-management services. ¹⁷ On the surface, the demand for nursing resources far exceeds the supply, and social health insurance faces the dilemma of lacking resources to provide nursing services for policyholders. ¹⁸ Nevertheless, nursing facilities and operating budgets are not fully utilized in some public hospitals at the county and district levels, resulting in considerable resource vacancy and waste. Therefore, the integration, optimization, and reconfiguration of resources related to treatment and preventive-care services in the existing public health system with the implementation of the LTCI policy as a link are necessary to maximize resource utilization and promote the development of the long-term care market.

Policy benefits from the perspective of ethical principles

According to Yaari and bar Hillel, ¹⁹ maximizing subjective and objective benefits on the basis of nonmaleficence based on the principle of utilitarianism is most widely accepted in public health policy-making. Any demonstration of the rationality and feasibility of the policy must be based on the assessment of the risk-benefit ratio of the action to be taken. The feasibility of the policy can be defended when the benefits outweigh the risks. Therefore, LTCI should not only yield a path of sustainable development for the construction of the national public medical service system and fund utilization from a macro perspective but also improve the physical and mental health, quality of life, and living environment of the recipients of care from a micro perspective. According to the evaluation of the effectiveness of China’s LTCI policy practice in various pilot projects since the establishment of the system in some pilot studies in 2012, after several years of practice, the policy has basically constructed a new service system combining medical care and daily nursing and effectively reduced the living burden among individuals with disabilities resulting from diseases. ²⁰ In terms of specific indicators such as “improving the quality of life of the disabled older persons” and “improving the health status of the disabled older persons,” the results obtained using the Fuzzy Comprehensive Evaluation Method have confirmed that policy implementation was conducive to ensuring the basic life and medical rights of the target groups and was based on feedback from the recipients of care in Changchun. While the state of disability is irreversible, the main desired health outcome is that the physical condition is maintained and does not deteriorate. ²¹ Generally speaking, China’s LTCI system can be considered to be implemented to meet the requirements of the principle of utilitarianism, thereby helping disabled individuals gain support for their illnesses in their old age.

If the “social value” of individuals is defined by engaging in labor and social production, aging not only defines the decline of physiological functions but also redefines the social status and identity of older persons. As the influence of population aging on social ideology, the discrimination towards older people undermines the individual autonomy of the older adult population ²² and the equal right to enjoy social resources. ²³ The resource-allocation model for maximizing benefits tends to give priority to meeting the needs of youth groups because the labor capacity and remaining lifespan of youth groups are considered to show potential and help create greater social values. It is conceivable that the loss of self-care and self-determination ability caused by disease and disability will only worsen the situation. While their dependence on family increases, older people may also be regarded as a burden. ²⁴ Therefore, the traditional concept of “respecting older people” in Chinese society can only be regarded as meeting formal equality but is not enough to substantively improve the social situation of the disabled older persons. Buchanan ²⁵ believes that public health policies should seek to expand individual autonomy from an ethical perspective. Under the influence of diseases, including disability, the ability of individuals to live independently is gradually lost. Health technology and health policies can maintain health and promote individual autonomy through the “control” of diseases.^26,27 Therefore, it is necessary to provide additional care and protection to safeguard the interests of the disabled older adult population, which constitutes a social vulnerable group whose physical and psychological abilities are significantly lower than those of the younger population. The ethical value of the LTCI policy is in ensuring their quality of life and dignity in their later years through professional care and to improve the status quo of their impaired autonomy to a certain extent. This is also essential for “healthy longevity” in China to move from formal equality to substantive equality.

Conflict on whether urban and rural residents should be equally included in the coverage group

In the literature review on the allocation of long-term care resources worldwide, several studies reporting the contradictions between different social groups focus on the age limit and policy settings. For example, financing of long-term care insurance and the reasonable age division of security groups has been discussed by referencing the Japanese model; ³⁰ the urgency of the demand for LTCI for different age groups and care products provided has been investigated by focusing on a supply-demand relationship. ³¹ However, the conflicts between urban and rural residents regarding the need for long-term care services caused by differences in their household registration and the patterns of engaging in labor productivity have received very little attention. At this stage, whether rural residents and urban workers should be equally included in the coverage of LTCI is an urgent social issue that should be addressed in China.

Xiao, Deng, and Liu ³² have made persistent observations on the differences in population-aging levels between urban and rural areas, and in the proportion of people with disabilities to the total population in the rural and urban areas of China since 2000. They found that in terms of both the degree of aging and the proportion of disability, rural China was more affected than urban China and that this trend was expected to grow in the following years. ³³ In cities such as Qingdao, which have a large disparity in the levels of urban and rural development, the proportion of older people with disabilities in rural areas may even increase to twice that in urban areas. ³⁴ The resource-endowment gap between the disabled older adult population in urban and rural areas is significant, especially when considering the level of infrastructure completion, support from community and nongovernmental organizations, accessibility to medical service resources, and care-resource distribution in these areas. As older adults from urban and rural areas had different occupations before retirement, in general, older adults from rural areas have poorer economic status and lack formal occupational protection. Moreover, the population distribution in rural areas is fragmented. The situation of children relocating outside the region for work is more common, and the support that the traditional family-care model can provide is poor. ³⁵ Caregivers of the rural disabled older people face more challenges and the stress of having to sacrifice their jobs to care for them. ³⁶ Overall, the increase in demand for long-term care for the disabled older people in rural areas is considerably higher than that in urban areas, whereas the existing rehabilitation, medical, and nursing facilities in China are mostly distributed in urban areas. ³⁷ The resulting conflict between the potential need and actual supply is thought-provoking.

Conflicts in guaranteeing internal equality within the policyholder group

Social equality has a rich connotation. In China, the demand for the inclusion of urban and rural residents and urban workers jointly in the coverage reflects the expectation of fairness in the opportunity to participate in insurance. The issue of equality in the allocation of resources within the policyholder group relates to the justice in the disability-assessment process of LTCI. This may also be referred to as procedural justice and outcome equality in the delivery phase of treatment.

Ensuring procedural justice is essential to substantial equality. Currently, the objectivity of the disability-assessment stage in the long-term care security system and unsatisfactory implementation of the public supervision stage of the assessment results show that the construction of China’s LTCI system has not achieved procedural justice yet. Considering the size of supply and demand and the rational allocation of regional resources and budget saving, most pilot cities of LTCI in China choose to outsource disability assessments of specific regions to a single third-party organization, and every individual assessment is completed by only one expert and one assessment worker. Although leaving the authority of evaluation and the final interpretation of evaluation results to a single institution can relatively ensure the unity of evaluation indicators and standards and improve the efficiency of system operation, the centralized model may weaken the credibility of the operation process of the system and possibly lead to corruption. Problems such as insufficient information disclosure and a lack of public participation also exist while implementing China’s LTCI. ³⁸ Most of the information that is publicly disclosed in the pilot is very general, and it is rarely possible to disclose the basis of policy formulation, basic information of the insured, collection and expenditure of premiums, assessment and qualification of the insured, treatment payment, and other information to enable citizens to participate in the entire process of policy implementation to perform supervisory functions and offer suggestions.

The equality regarding outcomes should consider both financing and treatment payment. The premium paid should be commensurate with the service received, and individuals with the same disability level should be treated with an equal level of service. In terms of financing, by researching the financing structure in a small number of pilot cities that cover urban and rural residents in China, it was found that in Nantong, Jingmen, and Suzhou, the vertical fairness of payment obligation and receipt of treatment were violated. ³⁹ The payment rate and actual burden of rural residents are significantly higher than those of urban workers. In terms of treatment payment, urban workers in Shihezi pay more than 2.5 times the premiums paid by rural residents while receiving uniform treatment of nursing services. ⁴⁰

Meanwhile, in China, the current situation that the basis for evaluation and identification of disability is not unified also aggravated the unfair treatment of nursing services in pilot cities. Different service treatments may be provided for the same disability level, depending on where the disability is located. Generally, the evaluation of long-term care service needs is based on the biological function reflecting the Activity of Daily Living (ADL), frailty reflecting the overall health state, and the dependency affecting care burden. ⁴¹ Currently, the evaluation tools used by pilot cities in China can be broadly divided into two types, namely, tools that simply evaluate physiological autonomy and tools that focus on reflecting the degree and dimension of demand for nursing services. However, it is up to each pilot to define the scales that can accurately reflect and measure these indicators. The lack of a unified disability evaluation standard may lead to slight deviations in the feature positioning of the protected population, which may result in different investment directions for follow-up nursing resources. Consequently, individuals with the same disability level may be treated with different care measures.

Expanding universality of the system and promoting service accessibility

Although measures such as setting up long-term care service stations in remote areas of China may violate the efficiency requirements of resource allocation in the short term, they are helpful in expanding LTCI coverage, narrowing the gap between urban and rural areas, achieving a balance between resource supply and demand, and maximizing resource utilization in the long-term. However, in China, only a few pilots are aware of these factors and input efforts to achieve full coverage of LTCI in their implementation document. ⁴² Justice can be determined based on how a society treats the poorest groups. It is inevitable for long-term care systems to define a direction to meet the requirements of distributive justice to make the public medical security system include the interests of more people into the scope of protection and to pay special attention to groups that fall into the dilemma of “double vulnerability” (disability + no formal occupational medical insurance), similar to the disabled older adults in rural areas. It is also a realistic requirement to promote the steady development of China’s pension cause and social harmony and stability. A few pilot areas, such as Qingdao and Jinjiang, took the lead in implementing the initiative of the simultaneous participation of urban and rural residents in LTCI. This provides a reference experience for other pilot areas and has important practical significance for promoting the construction of social long-term care security systems.

Improving the assessment and supervision system for the construction of procedural democracy

Implementing feedback from the public after the formulation, introduction, and implementation of policies should be a continuous, dynamic, and interactive process. Policy formulation should be aimed at better meeting people’s livelihoods and must prioritize their “sense of gain.” Only by opening the authority, mutual restriction, and supervision in the assessment of LTCI can the impact of human intervention factors on the operation efficiency of the system be considerably reduced. The most real experience of service from the masses to further improve policies can only be learned when the relevant government information is open and transparent and is tested by the people. Moreover, procedural democracy is also the basis of decision-making legitimacy and guaranteeing rationality. Democratic and open methods can be diversified by holding symposiums and hearings by including individuals representing the public, legislation, executive, academic experts, and families of the disabled to discuss and analyze the formulation and planning of policies, and by integrating the concerns and demands of various interest groups to ensure fairness and impartiality of policy positioning. Many pilots in China are also actively promoting and making efforts to this end.

Unifying assessment criterion and standardizing treatment quality

China’s long-term care security benefits are mainly provided through nursing services rather than cost subsidies. However, irrespective of the security method that is adopted, a set of disability-assessment criteria that can accurately reflect the disability level and care needs of older people is an important basis to ensure the correct investment direction of the funding of long-term care insurance and proving the legitimacy of the treatment received. Fragmented and decentralized standards may lead to the lack of general criteria for social insurance agencies in arranging corresponding nursing services; thus, it is impossible to improve the overall pattern of the care service for older persons through feedback obtained from the phased practice of the system. As China’s LTCI system is still in its infancy, most of the existing evaluation tools are borrowed from the practical experience of foreign countries. These countries chose evaluation tools based on their system characteristics, service supply, and treatment payment levels. Different national conditions have determined that China cannot simply introduce existing tools, but should rather extract its essence and remove its dross, think independently, and create and gradually improve the unified disability-assessment system that matches its own national standards, thus achieving an effective convergence between nursing needs and service guarantee.