Planning and financing healthcare is a challenging task for individuals, private insurance providers and governments. Public and private insurances must cater for a vast number of people ideally equally across all income classes. Indeed, increased healthcare spending can reduce inequalities in mortality between socioeconomic groups (Mackenbach, Hu et al. 2017). However, there can be an inherent conflict between the utility of public and private health insurance for all potential users with a bias towards the poor (Brown, Finkelstein 2008). In contrast, it has also been suggested that actual access to medical care, in particular specialist care, is biased towards wealthier patients (Elstad 2016, van Doorslaer, Masseria et al. 2006). In addition, specialist medical treatments or care as well as novel therapies are very expensive and may not be fully covered by any existing means.
Futures and community financing
Now it has been envisaged to fund the development of medical treatments partially using call options on futures contracts (Ferrante-Schepis 2018). Such futures would give potential patients the access right to cutting-edge therapies at affordable prices. Funding healthcare with alternative financing vehicles such as futures is effectively a form of community financing. The general idea has been around for some time in various forms, e.g. as user fees or community-based health insurance (Carrin, Waelkens et al. 2005).
Futures have historically been used by producers to lock in commodity prices, e.g. of corn or oil, to reduce price uncertainty and assure supply. However, nowadays this type of derivatives is also being used to trade intangible assets and even market volatility. Using futures in medical care is not a new idea. The proposal to incentivise transplant organ donations through futures contracts is at least 30 years old (Cohen 1989, Crespi 1994).
BROWN, J.R. and FINKELSTEIN, A., 2008. The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market. The American Economic Review, 98(3), pp. 1083–1102.
CARRIN, G., WAELKENS, M. and CRIEL, B., 2005. Community-based health insurance in developing countries: a study of its contribution to the performance of health financing systems. Tropical Medicine & International Health, 10(8), pp. 799–811.
COHEN, L.R., 1989. Increasing the supply of transplant organs: the virtues of a futures market. The George Washington law review, 58(1), pp. 1–51.
CRESPI, G.S., 1994. Overcoming the Legal Obstacles to the Creation of a Futures Market in Bodily Organs. Ohio State Law Journal, 55(1), pp. 1–77.
ELSTAD, J.I., 2016. Income inequality and foregone medical care in Europe during The Great Recession: multilevel analyses of EU-SILC surveys 2008–2013. International Journal for Equity in Health, 15, pp. n/a.
FERRANTE-SCHEPIS, M., 14 Dec 2018, 2018-last update, Cure ‘futures’ offer a way to pay for million-dollar medicines. Available: https://www.statnews.com/2018/12/14/cure-futures-offer-way-to-pay-for-million-dollar-medicines [16 Dec, 2018].
MACKENBACH, J.P., HU, Y., ARTNIK, B., BOPP, M., COSTA, G., KALEDIENE, R., MARTIKAINEN, P., MENVIELLE, G., STRAND, B.H., WOJTYNIAK, B. and NUSSELDER, W.J., 2017. Trends In Inequalities In Mortality Amenable To Health Care In 17 European Countries. Health affairs (Project Hope), 36(6), pp. 1110–1118.
VAN DOORSLAER, E., MASSERIA, C., KOOLMAN, X. and OECD HEALTH EQUITY RESEARCH GROUP, 2006. Inequalities in access to medical care by income in developed countries. CMAJ : Canadian Medical Association journal = journal de l’Association medicale canadienne, 174(2), pp. 177–183.