How health care system works


The health care system

here are generally five primary methodsstandardised and mandatory health
of funding health care systemsinsurance is in place, meant to
1. direct or out-of-pocket payments,encourage competition between healthcare
2. general taxation,providers and insurers. The insurance
3. social health insurance,policies are paid for through a system
4. voluntary or private healthof levies and subsidies as well as a
insurance, andpremium paid by the insured, from which
5. donations or community healthchildren under 18 are exempt.
insurance.In New Zealand hospitals are public and
Although some view health care from antreat citizens or permanent residents
economic perspective as being nofree of charge and are managed by
different from other products orDistrict Health Boards. Under the
services, others believe it has manycurrent Labour coalition governments,
characteristics that encourage1999 - present, there are plans to make
government intervention or regulation:primary health care available free of
The provision of critical health carecharge. At present government subsidies
treatment is often regarded as a basicexist in health care. This system is
human right, regardless of whether thefunded by taxes. The New Zealand
individual has the means to pay—somegovernment agency PHARMAC subsides
treatments cost more than a typicalcertain pharmaceuticals depending upon
family's life savings.their category. Co-payments exist
Health care professionals are bound byhowever these are ignored if the user
law and their oaths of service tohas a community health services card or
provide lifesaving treatment.high user health card.
People often lack the information orIn South Africa, parallel private and
understanding to be able to choosepublic systems exist. The public system
rationally between competing health careserves the vast majority of the
providers when they need treatment,population, but is chronically
particularly in the event of the need ofunderfunded and understaffed. The
urgent or emergency treatment.wealthiest 20% of the population uses
Health care systems modelsthe private system and are far better
Purely private enterprise health careserved.
systems are comparatively rare. WhereIn Sweden, the publicly funded medical
they exist, it is usually for asystem is comprehensive and compulsory.
comparatively well-off subpopulation inPhysician and hospital services take a
a poorer country with a poorer standardsmall patient fee, but their services
of health care–for instance, privateare funded through the taxation scheme
clinics for a small, wealthy expatriateof the County Councils of Sweden.
population in an otherwise poor country.In 1948, the United Kingdom passed the
But there are countries with aNational Health Service Act that
majority-private health care system withprovided free physician and hospital
residual public serviceservices to all people resident in the
The other major models are publicUnited Kingdom. Hospital staff are
insurance systems:salaried employees according to
Social security health care model, wherenationally agreed contracts, whilst
workers and their families are insuredprimary care is largely provided by
by the State.independent practices, who are paid,
Publicly funded health care model, whereagain via a nationally agreed contract,
the residents of the country are insuredaccording to the number of patients
by the State.registered with them and the range of
Social health insurance, where the wholeadditional services offered. The
population or most of the population isNational Health Service has been amended
a member of a sickness insurancefrom time to time, but is largely
company.intact. Around 86% of prescriptions are
In almost every country with aprovided free. Prescriptions are
government health care system a parallelprovided free to people who satisfy
private system is allowed to operate.certain criteria such as low income or
This is sometimes referred to aspermanent disabilities. People that pay
two-tier health care. The scale, extent,for prescriptions do not pay the full
and funding of these private systems iscost. For example, in 2004 most people
very variable.in will pay a flat fee of £6.40
Examples(€9.64, US$11.76) for a single drug
In Australia the current system, knownprescription regardless of the cost
as Medicare, was instituted in 1984. It(average cost to the health service was
coexists with a private health system.£11.10--about €16.70, US$20.40--in
Medicare is funded partly by a 1.5%2002). (Charges are lower in Wales, and
income tax levy (with exceptions forthe administration there is committed to
low-income earners), but mostly out oftheir eventual elimination.) Funding
general revenue. An additional levy ofcomes from a hypothecated health
1% is imposed on high-income earnersinsurance tax and from general taxation.
without private health insurance. AsPrivate health services are also
well as Medicare, there is a separateavailable. Private health care continued
Pharmaceutical Benefits Scheme thatparallel to the NHS, paid for largely by
heavily subsidises prescriptionprivate insurance, but it is used only
medications.by a small percentage of the population,
Canada has a federally sponsored,and generally as a top-up to NHS
publicly funded Medicare system. Eachservices.
province may opt out, though noneThe United States is alone among
currently do. Canada's system is knowndeveloped nations with the absence of a
as a single payer system, where basicuniversal healthcare system. The U.S.
services are provided by privatehealth system does, however, have
doctors, with the entire fee paid for bysignificant publicly funded components.
the government at the same rate. TheseMedicare for the elderly and disabled
rates are negotiated between thewith a historical work record, and
provincial governments and theMedicaid for indigents, provides
province's medical associations, usuallytaxation-financed coverage. This care is
on an annual basis. A physician cannotgenerally provided by privately owned
charge a fee for a service that ishospitals or physicians in private
higher than the negotiated rate - evenpractice, but public hospitals are
to patients who are not covered by thecommon in older cities. Medicare is a
publicly funded system - unless he optsfederal government program providing
out of billing the publicly fundedcoverage to people age 65 or older.
system altogether. Other areas of healthMedicaid is a federal and state program
care, such as dentistry and optometry,providing coverage to low-income and
are wholly private.disabled persons. The Department of
Cuba has a wholly government-controlledVeterans Affairs directly provides
system that consumes a large proportionhealth care to injured U.S. military
of the nation's GDP. The system doesveterans and current servicemen and
work on a for profit basis in treatingwomen through a nationwide network of
patients from abroad. Cuba attractsgovernment hospitals (non-injured
patients mostly from Latin America andveterans are often not covered). A
Eastern Europe by offering care ofsignificant and growing number of people
comparable quality to a developed nationcannot obtain health insurance through
but at much lower prices. While thetheir employer, or are unable to afford
government system is free to all,individual coverage. Currently, it is
patients frequently pay out-of-pocketestimated that 17% of the U.S.
for drugs that are in short supply inpopulation is uninsured. This number is
the public system.growing rapidly as increasing numbers of
In Finland, the publicly funded medicalemployers cannot afford the ever-growing
system is funded by taxation and everycosts of the insurance. For those that
citizen has state-funded healthcontinue to provide employer-based
insurance. The system is comprehensiveprograms, the employee percentage share
and compulsory, like in Sweden, and ais increasing year by year. The cost of
small patient fee is also taken.medicines is frequently not covered by
In France, most doctors remain ininsurances and it is common for U.S.
private practice; there are both privatecitizens to travel to Canada and Mexico
and public hospitals. Social Securityfor drug purchases at prices far below
consists of several publicthose in their home areas. A few states
organizations, distinct from the statehave taken serious steps toward
government, with separate budgets thatuniversal health care coverage, most
refunds patients for care in bothnotably Minnesota and Massachusetts,
private and public facilities. Itwith a recent example being the
generally refunds patients 70% of mostMassachusetts 2006 Health Reform
health care costs, and 100% in case ofStatute. Other states, while not
costly or long-term ailments.attempting to insure all of their
Supplemental coverage may be bought fromresidents, cover large numbers of people
private insurers, most of themby reimbursing hospitals and other
nonprofit, mutual insurers. Untilhealth-care providers using what is
recently, social security coverage wasgenerally characterized as a charity
restricted to those who contributed tocare scheme; New Jersey is perhaps the
social security (generally, workers orbest example of a state that employs the
retirees), excluding some poor segmentslatter strategy. It is typical for most
of the population; the government offorms of general liability insurance
Lionel Jospin put into place thesold in the U.S., such as home,
"universal health coverage". In someautomobile, or business insurance to
systems, patients can also take privatehave a significant premium allocation
health insurance, but choose to receivefor medical damages. The U. S. legal
care at public hospitals, if allowed bysystem, which has the highest number of
the private insurer.attorneys per 100,000 population of any
Germany has a universal multi-payercountry in the world, is available to
system with two main types of healthassist in proving liability and
insurance: "Compulsory health insurance"collecting the money for medical bills
(Gesetzlich) and "Private" (Privat).from such insurances.
In Ghana, most health care is providedThe Indian Health Service provides
by the government, but hospitals andpublic funded care for indigenous
clinics run by religious groups alsopeoples. Employer benefit based health
play an important role. Some for profitinsurance remains quite common with
clinics exist, but they provide lesslarger employers. Workers injured on the
than 2% of health services. Health carejob are covered by government mandated
is very variable through the country.worker compensation insurance and wage
The major urban centres are well served,replacement benefits. These benefits
but rural areas often have no modernvary considerably state-to-state and
health care. Patients in these areasemployers bear the cost of this
either rely on traditional medicine orinsurance. Businesses with considerable
travel great distances for care.risks, such as bridge-building, mining,
In Hong Kong, both private and publicor meat processing face far higher
clinics are common, while publicworker compensation insurance costs than
hospitals account for the majority ofdo office based clerical businesses.
the market.In Italy the public system has the
In Israel, the publicly funded medicalunique feature of paying its doctors a
system is universal and compulsory.fee per capita per year, a salary
Payment for the services are shared bysystem, that does not reward repeat
labor unions and the government.visits, testing, and referrals
In the Netherlands, a system of



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