Intro:
Healthcare is a vital commodity in our modern world and its distribution remains one of the largest political issues in our legislative landscape. However, as an American who engages in political conversation with my peers, I often find that there is a perception that the United States exists as an exception to an otherwise homogeneous healthcare world. This perception is incorrect and oversimplifies the complex conversation that should be taking place in our nation and internationally around healthcare models. Therefore, the purpose of this web page is to provide a resource that compiles information and serves as a strong conversational backbone for research and discussion. This will be achieved not only by discussing the healthcare systems that exist globally, but also by examining the main critiques, strengths, and reform efforts of these systems focusing on the macro perspective.
Objectives of Healthcare Models:
Before explaining the individual models that exist it's important to nail down the explicit goals of these systems. The World Health Organization defines the qualities of an effective healthcare system as:
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Safe and effective: The care that is delivered takes into account individuals’ unique needs, preferences, and values.
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Timely: Wait times have been minimized to avoid potentially harmful delays in care.
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Equitable: All residents and citizens are able to access the care they need.
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Integrated: The full range of healthcare services are available throughout a person’s life.
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Efficient: Benefits have been maximized and waste has been minimized.
The Point of Health Insurance?
Why is health insurance an important issue, and what's the point of insurance? Insurance is a mechanism for dispersing risk onto many individuals, for example, if your home is located in a region that often is hit with potentially dangerous earthquakes you can mitigate the financial risk of your home being damaged by earthquakes by paying into an insurance plan which promises to pay you for repairs to your home in the event of an earthquake. The insurance company is able to do this in this instance because many individuals whose homes are at risk are also paying into the same plan, and the costs are spread out over the group. Similarly, health insurance is a way of dispersing the risk of unexpected medical expenses onto a larger group of people, which helps to protect individuals from the high costs of medical care. Without health insurance, individuals may avoid seeking medical attention or delay treatment due to concerns about cost,
Model Categories:
Although most countries tend to fall under one of the four basic healthcare system models, it's important to acknowledge that these models are not completely homogenous. Governments often create policies that align with these models, which may lead to some elements deviating from their definitions. As a result, any national healthcare system utilizing one of these models is likely to have some degree of variation from the standard definitions.
- Beveridge Model
The Beveridge model, named after Sir William Beveridge, was introduced with the creation of the British National Health Service (NHS). This model is characterized by a system that is funded by taxpayers and provided by the government. Under this system, the funds provided by taxpayers are directed to government-owned and operated healthcare facilities, such as hospitals and clinics, which are staffed by medical professionals who are also government employees. Some countries that use versions of the Beveridge model include the UK, Spain, Finland, and New Zealand.
- Criticism of the Beveridge Model
-Coping during a crisis
One of the main criticisms that "Beverage-type" healthcare structures or any structure where governments control or directly manage most or all healthcare service providers receive is regarding their ability to respond to crises or other factors that may lead to losses in government revenue. This can be problematic as it may result in a reduction in the budget of healthcare providers if the government is unable to fund them adequately. As a result, the quality of care provided by these providers may decrease, and there may be no barrier between government finance and the finances of these vital medical service providers. This issue can be particularly problematic during crises, but may also have broader implications outside of such situations.
- Overutilization
One common criticism of any type of taxpayer-funded healthcare system is that the removal of costs associated with healthcare services may lead to overutilization of those services. Some people are concerned about the potential for a system removed from market factors to mishandle medical resources, but more commonly, this concern arises from disgruntled taxpayers.
- Bismarck Model
The Bismarck health insurance model, named after German Emperor Otto von Bismarck, refers to healthcare systems where healthcare is provided and funded privately. In this model, employees and employers pay insurance companies which in turn pay healthcare providers. Often, governments regulate the way employers and employees pay into these companies through payroll deductions. Countries using the Bismarck model include Germany, France, South Korea, and Japan.
- Criticism of the Beveridge Bismarck
- Coverage
The main criticism of Bismarck model is that since coverage is provided by employers, those who are disenfranchised and impoverished may not have access to healthcare because there is no safety net available. While in some countries, it is possible to pay for limited coverage which only covers the essentials for a lower cost without the involvement of an employer, these options are often not available to the most vulnerable populations in Bismarck models.
- National Health Insurance Model
The National Health Insurance model combines elements of the Bismarck and Beveridge models. NHIMs provide coverage by funding healthcare services through taxes, similar to the Beveridge model. However, unlike the Beveridge model, healthcare services are provided by independent healthcare service providers, as in the Bismarck Model. Some positives of these types of systems are a standardization of medical care and equal use of resources, because NHIMs disconnect most conventional healthcare providers from monetary incentives the wealthy get the same service as the rest of the population. Another positive is the government as the lone customer gets to regulate standards and pricing for all providers, hopefully keeping the burden on the taxpayer at a minimum. Examples of NHIMs include Canada and Taiwan.
- Criticism of the National Health Insurance Model
- Wait Times
The NHI model offsets many of the risks associated with the Beveridge model but often is criticized for having long wait times because of the range of services able to be over-utilized by the covered.
- Non-Citizen Coverage
That is a valid concern with national health insurance models. Non-citizens, especially those without health insurance in other countries, can fall into a blind spot in the system. While some countries provide free care to non-citizens, others do not. This can leave undocumented immigrants and migrants in a difficult and costly medical position, as they may not have access to affordable healthcare or may fear seeking care due to their immigration status. It's important for countries to address this issue and ensure that everyone, regardless of citizenship status, has access to necessary medical care.
- Individual Responsibility
The greatest inherent criticism of NHIMs is the issue of personal responsibility because all individuals pay the same amount or percent of their tax dollars into the system regardless of their cost to the system. If I live my whole life as a smoker and therefore need more medical resources later in my life the burden of my poor decision is placed on the taxpayer. Some people think this is a criticism, while others think this is one of the largest positives of these types of systems, that they equally distribute resources to all individuals.
- Focusing of Resources
In single-payer models governments need to make decisions on where to send resources and where not to, the places that don't receive resources are the less pressing operations and treatments especially impacted are elected surgeries examples like joint replacements in the elderly, gender-affirming care for those going through gender dysphoria, checkups for low-risk individuals, dental cleanings and other types of manganite care. because it's the president of the politicians to keep spending as low as possible with as little impact on the healthcare for the sake of constituents and while elective surgeries might cost more in some models they are often much cheaper when combined with the non-government coverage.
- Opportunity Costs
National Health Insurance Models (NHIMs) can be a significant financial burden for governments, with some countries allocating over 40% of their revenue toward healthcare. While health is undoubtedly essential, governments must consider the opportunity costs of investing such a significant portion of their resources into healthcare. Other critical areas, such as national security, eliminating homelessness, and foreign aid, also require funding, so governments must prioritize projects that are most important to their citizens. Tough decisions must be made, and resources may need to be redirected from one area to another, depending on changing societal needs and priorities.
- Uninsured Model
Uninsured models are as hands-off as you can get basically the anti-model. Eventually, in an uninsured model, you pay for the healthcare you need out of pocket; if you can't afford it, you don't get it. Uninsured models only really exist in lower-income countries that don't have the resources to dedicate to interacting with healthcare systems. A possible upside is that because there are no insurers saturating the market with demand healthcare theoretically has a lower out-of-pocket cost but that is not often the case
- Criticism of the Uninsured Model
The easy criticism of uninsured models is that, if you can't afford healthcare you can’t get it which is negative for the reasons I went over in the Why is insurance important section.
National Examples:
The USA:
- Overview
In the United States, the healthcare system is a mixture of public and private models. However, unlike many other hybrid models, not all citizens have the opportunity to be publicly covered. Public coverage is distributed through two systems: Medicare and Medicaid. Medicaid is a government-run program that provides healthcare coverage for individuals and families with low incomes or disabilities. Medicare, on the other hand, provides coverage for individuals over the age of 65 or with certain disabilities. Private medical providers make up the majority of the healthcare industry in the US, with only about one-fifth of hospitals being run by the government. Pharmaceutical and medical device companies are also privately owned and are able to set their own prices, which has become a controversial issue in recent years. Overall, the healthcare system in the United States is a complex mix of public and private models that can be difficult for many individuals to navigate especially on the private and employer side where systems like open enrollment provide barriers to use and difficulty to understand.
- Uninsured
In 2022, approximately 8.3% of the United States population is uninsured, a significant decrease from the 16-18% of Americans who were uninsured a decade ago in 2010-2012. However, being uninsured in the United States can be particularly challenging due to the high out-of-pocket costs associated with medical care, which have become increasingly prevalent. Later, we'll discuss some of the reasons for this trend.
- Medicaid
Medicaid is a joint federal and state program that provides health coverage to low-income individuals and families and people with disabilities. It covers a wide range of healthcare services, including hospitalization, doctor visits, prescription drugs, and long-term care. Eligibility for Medicaid is determined by income and other factors, such as age, disability, and pregnancy status. The Affordable Care Act (ACA) expanded Medicaid eligibility to include all individuals with incomes up to 138% of the federal poverty level in states that opted to expand the program. As of 2022, 39 states, including Washington D.C., have chosen to expand Medicaid, covering millions of previously uninsured individuals. Medicaid is funded jointly by the federal government and states, with the federal government covering a majority of the costs. Still, some states are more generous than others often depending on their location on the political spectrum with right-leaning states more likely to make Medicaid eligibility and coverage less accessible to all but the highly impoverished. Still, the program has been a lifeline for many low-income Americans, providing access to essential healthcare services that they would not be able to afford otherwise, in 2022 Medicaid cost the American government $867 billion dollars
It should be noted that within this model a single parent with a child making minimum wage is above the federal poverty level and could be ineligible for Medicaid in some states
- Medicare
About 15% of Americans are covered by Medicare. The Americans who qualify for Medicare need to be above the age of 65, disabled, or suffering from End Stage Renal Disease (ESRD). Dialysis is covered by Medicare under a 1972 amendment to the Social Security Act to ensure coverage for people suffering from ESRD, which often requires multiple costly treatments per week until a kidney transplant is available, which often can take many years. The reason why ESRD treatment is covered when other conditions aren't is a good question to ask your congressman. Medicare is a national federal coverage model and is similar to single-payer systems and is divided into two categories. Medicare Part A covers Medicare recipients during hospitalization and is completely free for those who can receive Medicare. Medicare Part B covers outpatient services, which are treatments that do not require overnight hospitalization, like diagnostic care. Medicare Part B is often deferred by Medicare-eligible individuals who have better coverage through their employment. Medicare Part B also has low deductibles, which can be positive for individuals who anticipate high healthcare costs, and coinsurance of 20%. In addition, there is a third non-government Medicare plan called Medicare Part C or Medicare Advantage plans, in which private insurers offer Medicare-comparable benefits for individuals and are paid a rate by the government to do so. If they can succeed with lower costs, they can keep the profits. Medicare Part D is a sort of offshoot which covers prescription drug plans which are paid for and regulated by the government but provided by private insurers. It's important to note that while Medicare is a comprehensive program, it may not cover all
healthcare costs, and individuals may still have to pay for certain services out of pocket or purchase additional private insurance to supplement their coverage. Medicare cost the American government 755 billion dollars in 2022.
- Employer/Privately Insured
About 60% of Americans are covered by private insurance plans, which are typically partially funded by the insurer and partially funded by the employee through payroll deductions. These plans often do not take into account pre-existing conditions, which are medical conditions that existed before the individual enrolled in the plan and could potentially increase the cost of coverage for the insurer. Private insurance plans typically cover preventative and reactive care, prescription drugs, and sometimes vision and hearing care, although these may not always be included.
Private insurance in the US is similar to employer insurance but without the involvement of an employer. Individuals who may choose private insurance include those whose employer does not offer satisfactory coverage, the unemployed, and small business owners. However, those with pre-existing conditions may face higher premiums or may even be denied coverage altogether.
Navigating corporate coverage in the US can be incredibly complex, as it involves a network of providers and drugs that may or may not be covered by different plans. This complexity is difficult to explain in its entirety, but there are resources available to help individuals navigate this topic: https://www.youtube.com/watch?v=-wpHszfnJns.
- Research Spending
The United States accounted for 28% of global health R&D spending in 2020 or 679 billion dollars, around half of which was provided by the private sector. It's able to do that because it's not spending so much of its budget on providing the option of coverage to all its citizens.
- Criticism
- Bankruptcy as a result of healthcare cost
In the US out-of-pocket, healthcare costs can be outrageous, this is because insurance companies demand better rates than individuals so providers raise rates for both insurers and out-of-pocket payers. Many Americans feel like this system is unfair because providers need to maintain high rates so insurers will keep them in network leaving the uninsured or uncovered out to dry.
- Veterans Affairs
Another criticism of the American system is tri care and the Veterans Health associations operations, I won't go into the issue because it's extremely complex but some people believe Tricare which functions like private insurance provided by the government has sometimes history let down this country's veterans along with the wider Veterans Association (VA) system.
- Attempts to reform
The US healthcare system is a constantly evolving topic, and one of the biggest reform efforts is the proposal to expand Medicare coverage to all American citizens while still allowing them the option to use private coverage. This is a contentious political issue that has garnered significant attention from the media, politicians, and analysts. Many proponents of this reform argue that it will provide universal coverage and reduce the number of uninsured individuals in the country, while opponents argue that it will lead to increased taxes and decreased quality of care. This topic is extensively discussed in political science and healthcare administration classes throughout the nation, as well as in mainstream news media and political materials from politicians across the country.
Canada:
- Overview
The best way to describe Canada from an American perspective is with a term you might have heard before: “Medicare for all”. In Canada, the national government funds health insurance, which covers most of the services patients would receive from a hospital or general practitioner (GP) office. This creates a "single-payer" system that is illegal for private insurance to cover services already covered by the government. The Canadian healthcare system was established by the Canada Health Act of 1984.
- Criticism
In American conversations, Canada often serves as the face of single-payer and universal insurance models and an easy comparison to the united states if it adopted a similar model because of Canada's proximity, quality of care, size, cultural similarities, and many other factors, and many political entities feel that if they can show the Canadian model doesn't work the movement in the united states will give up so our friendly northern neighbors are often critiqued fiercely, sometimes deservedly sometimes not so deservedly.
- Wait times
Going back to the goals of healthcare outlined by the WHO, timeliness is critical because often speed saves lives when it comes to medical services; this is the reason wait times when cited as critical for the Canadian system, are such powerful emotional tools. Canadians do have worse wait times to receive healthcare services than Americans do absolutely one example would be that according to a 2021 report by the Fraser Institute, the median wait time for a referral from a general practitioner to a specialist in Canada was 23.6 weeks, compared to the United States where the median wait time for was 4.3 weeks. The thing is though this doesn't mean the united states are treating more people faster it means more Americans are going untreated, in the same way, Canadians are more likely to die in a hospital than Americans not because American hospitals are better but because Americans often can't afford to die in hospitals.
Taiwan:
- Overview
Taiwan's healthcare system has undergone an impressive transformation in just the past three decades. In 1995, the Taiwanese government enlisted the help of Harvard Professor of Economics, William Hsiao, to lead the transition from a fragmented and deregulated private healthcare system to a single-payer system. Similar to Canada's healthcare system or Medicare, Taiwan's system maintains private practitioners but takes on the burden of paying those practitioners on behalf of taxpayers. Initially, the transition was difficult due to the lack of infrastructure and resources to meet the increased demand, but public support for the new system was positive. Today, Taiwan provides comprehensive universal coverage to all citizens, including dental, vision, over-the-counter drugs, traditional Chinese spiritual and ritual medicines, and access to almost any provider without worrying about coverage. Patients can directly seek specialty care without referral from a general practitioner, and wait times are short with medical resources scaled to meet demand. Healthcare is funded through income taxes that are scaled based on income, with the lowest earners paying very little for care. Despite spending less of its GDP on healthcare compared to countries like the United States, with only 6.2% spent in 2014, Taiwan's healthcare system provides excellent access and coverage for its citizens. The reason I think the Taiwan example is so important is because of the swiftness and success of the change in insurance policy and whether or not you believe in Taiwan's particular model you can realize that it's an example of the possibility of change.
- Criticism
- Leveraging of Position
As with many countries, healthcare costs in Taiwan have risen faster than inflation, particularly due to the country's aging population. In the early 2000s, Taiwan responded by reducing its healthcare expenditures, which it can do by leveraging its position as the only payer. With the power to regulate prices, the government can negotiate lower rates with medical professionals. However, being a medical professional is a challenging job that often leads to mental and physical health issues. Doctors spend years training and are twice as likely to take their own lives as the general public. Due to the immense strain, doctors want to be well compensated for their hard work. When a government is the only payer it's more likely it will squeeze healthcare providers than the constituents who put it in power.
- Aging Population
Like Europe and East Asia, Taiwan has an aging population, with more and more elderly people and fewer and fewer young people which has the opportunity to stress healthcare systems. As Taiwan's population ages, there will be an increased demand for healthcare services and resources. This presents a challenge, as it will need to adapt and scale to meet the growing needs of its aging population while drawing resources from a smaller and smaller population of taxpayers and skilled workers.
Sources:
https://www.who.int/health-topics/quality-of-care#tab=tab_1
https://www.goodrx.com/hcp/providers/healthcare-system-designs
https://today.uconn.edu/2017/04/health-insurance-plans-complicated-understand/#
https://www.census.gov/library/publications/2022/demo/p60-278.html#:~:text=Of%20the%20subtypes%20of%20health,percent)%2C%20and%20VA%20and%20CHAMPVA
https://www.statista.com/chart/8441/number-of-americans-without-healthcare-insurance/
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3378609/
https://www.ehealthinsurance.com/resources/affordable-care-act/understanding-obamacare
https://www.youtube.com/user/thehealthcaretriage
https://www.census.gov/library/publications/2022/demo/p60-278.html#:~:text=Of%20the%20subtypes%20of%20health,percent)%2C%20and%20VA%20and%20CHAMPVA
https://www.npr.org/2023/03/29/1166873700/whats-the-cure-for-americas-doctor-shortage
https://www.fraserinstitute.org/studies/waiting-your-turn-wait-times-for-health-care-in-canada-2022