HCA 547 Different Healthcare Models

each nation’s healthcare system is a reflection of its

• history

• politics

• economy

• national values

different health care models

• vary to some degree

• share common principles

• four basic models around the world

4 different healthcare models

1. the Bismarck model

2. the. Beveridge model

3. the National Health Insurance model

4. the Out-of-Pocket model

the Bismarck model

• Germany, Japan, France, Belgium, Switzerland, and several countries in Latin America

• names for Prussion chancellor Otto von Bismarck, father of the Welfare state

• characteristics

  • providers and payers are private

  • private insurance plans-financed jointly by employers and employees through payroll deduction

  • the plans cover everyone and do not make a profit

  • tight regulation of medical services and fees (cost control)

the Beveridge model

• Great Britain, Italy, Spain, Cuba, Chile (until 1973)

• names after William Beveridge- inspired Britain’s NHS

• characteristics:

  • healthcare is provided and financed by the state through tax payments

  • there are no medical bills

  • medical treatment is a public service

  • providers can be government employees

  • the government controls costs as the sole payer

the National Health Insurance model

• Canada, Taiwan, South Korea

• characteristics

  • providers are private

  • payer is a state-run insurance program that every citizen pays into

  • national insurance collects monthly premiums and pays medical bills

  • can control costs by limiting the medical services they will pay for or making patients wait to be treated

the Out-of-Pocket model

• rural regions of Africa, India, China, and some countries in South America

• characteristics

  • only the rich get medical care; the poor stay sick or receive minimal services by public and humanitarian institutions

  • most medical care is paid by the patient, out of pocket

  • no insurance or government plan

US health system costs

• largest spender on health care

  • 16% of GDP

  • 2.3 trillion in 2007

• why so high?

  • providers make more money

  • high malpractice insurance

  • the way we manage health insurance and the complexity of the system

• only country that relies on profit-making health insurance companies

• private insurance industry has the world’s highest administrative costs of any health care payer in the world

• most fragmented health care system in the world

Great Britain costs

• insured

  • 100% of population

• spending

  • 7.5% of GDP

• funding

  • single payer system funded by general revenues (NHS); operates on huge deficit

• private insurance

  • 10% of Britons have private health insurance

  • similar to coverage by NHS, but gives patients access to higher quality of care and reduce waiting times

• physician compensations

  • most providers are government employees, paid under salary and according to number of listed patients

Great Britain benefits

• physician choice

  • patients have very little provider choice

• copayment/deductibles

  • no deductibles

  • almost no copayments (prescription drugs)

• waiting times

  • huge problem

• benefits covered

  • offers comprehensive coverage

  • terminally ill patients may be denied treatment

Canada costs

• insured

  • single payer system-100% insured

  • each province must make insurance

    • universal

    • comprehensive

    • portable

    • accessible

• funding

  • federal government uses revenue to provide a block grant to the provinces (finances 16% of healthcare)

  • the remainder is funded by provincial taxes (personal and corporate income taxes)

• spending

  • 9% of GDP

• private insurance

  • at one time all private insurance was prohibited, changed in 2005

  • many private clinics now offer services

Canada benefits

• physician compensation

  • physicians work in private practice

  • paid on a fee for service basis

  • these fees are set by a centralized agency, makes wages fairly low

• physician choice

  • referrals are required for all specialist services

  • great difficulties for a family doctor

• copayment/deductibles

  • generally no copayments or deductibles

  • some provinces do charge insurance premiums

• waiting times

  • long wait times

  • many travel to the US for healthcare

France costs

• insured

  • about 99% of people

• cost

  • 3rd most expensive healthcare system

  • 11% of GDP

• funding

  • 13.55% payroll tax (employers pay 12.8, individuals pay 0.75)

  • 5.25% general social contribution tax on income

  • taxes on tobacco, alcohol, and pharmaceutical company revenue

• private insurance

  • more than 92% of French residents have complementary private insurance

  • these funds are loosely regulated, the only requirement is renewability

  • these benefits are not equally distributed (creates a two-tiered system)

France benefits

• physician compensation

  • providers paid by national health insurance system based on a centrally planned fee schedule-fees are based on an upfront treatment lump sum

  • however, doctors can charge whatever they want

  • the patient or the private insurance makes up the difference

  • medical school is free

• physician choice

  • fair amount of choice in the doctors they choose

• copayment/deductible

  • 10-40% copayments

• waiting times

  • very little waiting lists/times

• technology

  • government does not reimburse new technologies very generously

  • little incentive to make capital investments in medical technology

Germany costs

• insured

  • 99.6% of population-sickness funds

  • those with higher incomes can buy private insurance

  • the federal government decides the global budget and which procedures to include in the benefit package

• funding

  • sickness funds are finances through a payroll tax (~15% of income)

  • the tax is split between the employer and the employees

• private insurance

  • 9% of Germans have supplemental insurance, covers items not paid for by the sickness funds

  • only middle and upper class can opt out of sickness funds

• physician compensation

  • reimbursement set through regulation with the sickness funds

  • providers have little negotiating power

  • very low compensation

  • significant reimbursement caps and budget restrictions

Germany benefits

• copayments/deductibles

  • almost no copayments or deductibles

• waiting times

  • virtually unknown according to WHO

• benefits covered

  • there is an extensive benefit package which even includes sick pay (70-90% of pay) for up to 78 weeks

Japan costs

• insured

  • universal health insurance based around a mandatory, employment-based insurance

  • the “Employee Health Insurance Program” requires that all companies with 700 or more employees to provide workers with health insurance

  • small business workers join a government-run small business national health insurance plan

  • the self-employed and the retired are covered by Citizens Insurance Program administered by municipal governments

• costs

  • average household spends $2300 per year on out of pocket costs

  • Japanese have a healthy lifestyle-lower incidence of disease

• funding

  • 8.5% (large business) or an 8.2% (small business) payroll tax

  • payroll taxes are split almost evenly between employer and employee

  • those who are self-employed or retired must pay a self-employment tax

• private insurance

  • very rare

Japan benefits

• physician compensation

  • hospital physicians are salaried

  • non-hospital physicians are paid on a fee for service basis

  • hospitals and clinics are privately owned but the government sets the fee schedule

• physician choice

  • no restrictions on physician or hospital choice

  • no referral requirements

• copayment/deductibles

  • copayments are 10-30%

  • capped at $677 per month for the average family

• technology

  • high levels of technology, comparable to the USA

• waiting times

  • significant problem at the best hospitals because they cannot charge higher prices