**3. Testing the model**

The first step in validating a decision model is testing the model with either known or extreme alternatives. During the workshop, there was limited time for testing; therefore, we will present two high-level insurance policy options to compare using the resulting model from the workshop.

#### **3.1 Potential insurance scheme options**

A concern raised during the introduction was that the insurance funds allocated to medical savings accounts (MSAs) are not used efficiently. Therefore, a key component of health-care reform should include a more effective use of MSA funding.

The goals of a future reform would be to (1) increase the population solidarity and foster a more rational use of medical insurance premiums both from the perspective of the employee and the employer and thus (2) increase the efficiency of how the funds are utilized. In addition, the new policies should support key government (national) health-care policy priorities such as (3) a shift health-care utilization from tertiary to primary care services, and thus (4) incentivize earlier use of health-care services instead of delaying until more expensive inpatient services are required (timely interventions).

#### *3.1.1 Insurance model option 1*

The scope of payment for personal MSAs would be expanded to include additional services such as deductible (user fees) of hospitalization medical expenses, or for the medical expenses of other family members, paying the premiums of commercial medical insurance participation. Thus, insured employees would have more options for MSA spending and would still make individual decisions on when and how the money would be spent. This option would not provide an incentive to increase the use of outpatient care.

#### *3.1.2 Insurance model option 2*

A pooled outpatient funding system for the urban employees' medical insurance would be established, similar to how current inpatient service is funded. This would create a gradual transition of payments into the coordinated population fund instead of the MSA and ultimately absorb the remaining funds in current MSAs. In this option, the decision on funding allocation would be made by the insurance authority or government across the entire insured population for both outpatient and inpatient care. Proactive funding of outpatient care would be intended to decrease inpatient care down the road.
