The Longer-Term Reform Agenda
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own financial management and auditing systems. Substantial cost savings could be achieved through consolidated management, which would also help pave the way for eventual merger. Fragmentation also makes it difficult to establish provider payment systems that impart consistent and coherent incentives. Providers may discover that more money is to be made in treating patients insured with, say, BMI than patients covered by NRCMS. The idea that providers might skim off BMI patients at the expense of less-lucrative NRCMS patients could result in patients with greater needs being sent to the end of the treatment queue. Finally, fragmentation may make it harder for a person to move from one job to another, or from one area of the country to another. Cumulatively, this may inhibit the labor market mobility that has benefited the country economically. Of course, the differences between the schemes could be narrowed. For example, a common benefit package could be adopted. Common provider payment methods and tariffs could eliminate the risk of providers favoring patients from one scheme over patients from others. Such steps would require that revenues be evened out among schemes. Similarly, taxfinanced subsidies could be increased and then targeted at those with relatively lower revenues and higher risks. A solidarity fund could be set up (along the lines of the Colombian model) in which BMI enrollees would pay a solidarity tax to help finance coverage (albeit less comprehensive than BMI’s) in NRCMS and the new urban scheme. Another option would be to pool the resources of the three schemes, with each receiving capitation payments per member weighted by age, gender, and factors such as location. Whichever option is chosen, consideration needs to be given to how fast the gaps would be closed. Would the narrowing be accomplished through a leveling-down of BMI benefits (perhaps with a complementary private scheme to restore decreased coverage), a levelingup of NRCMS benefits, or a combination of the two? The road toward harmonizing arrangements raises another question. Does it make sense to keep the schemes separate or to merge them? Some countries have multiple schemes that coexist without competition. They offer benefit packages that pay providers similarly and raise contributions according to similar rules, but they cater to different sections of the population as defined by occupation, geography, or some other factor. In general, the trend seems to be toward merger. In Korea, which achieved universal health insurance (UHI) in 1989, 350 separate insurance plans operated in the social health insurance system during 1989–2000. These were merged into a single scheme in 2000 (Kwon 2003a). In Japan, where