So last week we discussed the organization of the healthcare system in regards to providing patient care. Feel free to brush up by reading “So, What is Healthcare? Part 2: Public Health and Healthcare Tiers.” This week, we are going to break down healthcare systems by mode of business structure. Although there are hundreds of healthcare systems around the world, they all fall into the same basic 4 categories. Each system is tweaked to meet the needs and abilities of each individual country, but they all carry the same goals: to provide healthcare to people and to reduce costs. An ideal system keeps people healthy and prevents illness.
The Beveridge Model– In this system, health care is provided and financed by the government. The government funding is garnered through tax payments. The goal of this model is to provide universal, publicly financed health insurance as a means of providing access to healthcare. This model is commonly referred to as the “socialized medicine” model. Interestingly, this model came about through a report created by Sir William Bevridge in the United Kingdom in the 1940s, following a period of economic depression. The goal of the report was to improve the financial and business structure of the healthcare system because it is integral to the people’s capacity to join or continue their participation in the workforce. Overall health and preventing illness was not the primary focus of the report. The function of this model is largely through government avenues, however there is opportunity for privatization. Hospitals and clinics can be either government run or privately owned, just as physicians can either work as government employees or charge the government from their private practice. The foundation of this model still lies in that the government is the sole insurer and the only payer of insurance. This model of care is found in countries like Great Britain, Spain, parts of Scandinavia, and New Zealand.
The Bismarck Model– contribution-based, employment-related social security. This model is financed by both employers and employees through payroll deduction. The insurance plan does not generate profits and all people are covered by insurance.This model is found in Germany, France, Belgium, the Netherlands, Japan, and Switzerland.
The National Health Insurance Model-This system is a mix of the Beveridge and the Bismarck models. The physicians and healthcare providers are part of the private business sector, but they are paid through public funds. The government runs an insurance program that is funded by the people’s taxes. This insurance plan is what pays the doctors. This system also does not generate any profits. This is the system used in Canada.
The Out-of-Pocket Model– In countries that utilize this model, the people pay for insurance out of their own pocket , hence the name. Therefore, healthcare services are only accessible to those who can afford to pay for it and hence only a luxury of the financially well off. This system is used by most countries that are not highly developed because they lack the infrastructure and resources needed to maintain a national healthcare insurance system.
For further descriptions of the models above, please refer to the webpage hosted by Physicians for a National Health Program.
The model used by America contains elements of all of the systems outlined above.Our system utilizes a mixture of private insurance plans, out of pocket payments and federally funded programs to provide healthcare. Before 2010 there was no national insurance plan and the 3 systems in existence had a complex relationship with each other. As a result, the USA paid more for healthcare than any other nation, and the level of coverage varied considerably from one program to another. Inconsistencies in insurance coverage, costs of care, and payment methods. Physicians can work in a solo practice or group practice, and can charge fee for service or be employees of the government, businesses, or hospitals. Hospitals and clinics can be government owned, non-profit, or for-profit facilities. In this system, people can obtain insurance through their employers or directly buy insurance plans from insurance companies. People also have the option to utilize more than one insurance program. Additionally, enrollment in health insurance of any kind is optional. As a result of this structure, the system runs more like a business and has limited oversight and regulation by the state and federal governments. The amount and cost of coverage can vary widely from one plan to another.
This system underwent numerous changes with the enactment of the Affordable Care Act by the Obama administration in 2010. These changes, and the proposed changes by President Trump, will be addressed in the next edition of “So, What is Healthcare?”