By Mimi Chung
With the United States Senate recently dismissing modified plans for health care in the US, different health care systems in other countries have gained considerable public interest. Health care in the United States can vary dramatically depending on an individual’s personal circumstances. Factors like employment, military service, and age can change what kind of insurance – if any – someone is able to obtain. Exploring the strengths and weakness of each may illuminate different options for modifying US healthcare policy.
There are four major models for health care systems: the Beveridge Model, the Bismarck model, the National Health Insurance model, and the out-of-pocket model. While in theory these categories have distinct policy separations, in reality most countries have a blend of these approaches, though they generally have a single health care system that is uniform for most citizens. These distinctions are effective at differentiating schools of thought on health care policy, but the policies of each country should be analyzed when determining potential improvements.
The Beveridge Model: single-payer national health service
Examples: the United Kingdom, Spain, New Zealand, Cuba
Relevance to the US: similar to the Veterans Health Administration
The Beveridge Model was first developed by Sir William Beveridge in 1948. Established in the United Kingdom and spreading throughout many areas of Northern Europe and the world, this system is often centralized through the establishment of a national health service. The government acts as the single-payer, eliminating competition in the market and generally keeping prices low. Funding health care through income taxes allows for health care to be free at the point of service – after an appointment or operation, the patient does not have to pay any out-of-pocket fees because of their contribution through taxes. Under this system, a large majority of health staff is composed of government employees. A central tenant of this model is health as a human right. Thus, universal coverage is guaranteed by the government and anyone who is a citizen has the same access to care.
With the government as the sole payer in this healthcare system, costs can be kept low and benefits are standardized across the country. However, a common criticism of this system is the tendency toward long waiting lists. Because everyone is guaranteed access to health services, over-utilization of the system may lead to increasing costs. There are fears that adoption of a single-payer national health service in the US would lead to an increase in demand for all procedures, even medically unnecessary ones because citizens would not pay upfront costs for these services. However, other analysts argue against this problem, stating that current American practices waste a similar amount of money covering the uninsured.
Another practical concern is the government response to crisis. In the case of a precarious national emergency, such as war or a health crisis, funding for health services may decline as public revenue decreases, exacerbating the financial burden inherent in a large influx of patients. Such a situation would require careful allocation of emergency funding before the crisis.
The Bismarck Model: social health insurance model
Examples: Germany, Belgium, Japan, Switzerland
Relevance to the US: similar to employer-based health care plans and some aspects of Medicaid
A more decentralized form of healthcare, the Bismarck model was created near the end of the 19th century by Otto von Bismarck. Employers and employees fund health insurance in this model – those who are employed have access to “sickness funds” created by compulsory payroll dedications. In addition, private insurance plans cover every employed person, regardless of pre-existing conditions.
Health providers are generally private institutions, though the Social Health Insurance funds are considered public. In some countries, there is a single insurer (France, Korea); other countries may have multiple, competing insurers (Germany, Czech Republic) or multiple, non-competing insurers (Japan). Regardless of the number of insurers, the government tightly controls prices while insurers do not make a profit. These measures allow for the government to exercise a similar amount of control over prices for health services seen in the Beveridge model.
The requirement of employment for health insurance provides benefits and causes problems. These measures ensure that employed people will have the healthcare needed to continue working and ensure a productive workforce. Because it was not initially established to provide universal health coverage, the Bismarck model focuses resources on those who can contribute financially. With a shift in mindset from health as a privilege for employed citizens to a right for all citizens, the model faces a number of concerns, such as how to care for those unable to work or those who may not be able to afford contributions. More immediate practical concerns include how to contend with aging populations, with an uneven number of retired citizens compared to employed citizens, and how to stay competitive in attracting international companies that may prefer locations without these required payroll dedications.
The National Health Insurance Model: single-payer national health insurance
Examples: Canada, Taiwan, South Korea
Relevance to the US: similar to Medicare
The National Health Insurance model incorporates aspects of both the Bismarck and Beveridge models. Like the Beveridge model, the government acts as the single payer for medical procedures, and like the Bismarck model, providers are private. The universal insurance does not make a profit or deny claims. There has been a tendency in recent years for countries with Beveridge-type health care systems to incorporate Bismarck characteristics or vice versa, leading to the health care policies in a number of countries like Hungary and Germany to trend towards the mixed model. In some countries like Canada, private insurance contracting is permitted for those who would prefer them.
The balance between public insurance and private practice allows hospitals to maintain independence while also reducing internal complications with insurance policies. Financial barriers to treatment are generally low, and patients usually are able to choose their healthcare providers.
Like the Beveridge model, this system covers most procedures regardless of income level. The model also may reduce the costs involved with administration of health insurance, as the government processes all claims and reduces the amount of duplication of services. Perhaps the largest complaint is that these systems can suffer from long waiting lists for treatment. Waitlists are not limited to elective surgeries or other non-emergency procedures, as patients waiting to be seen in some fields like neurosurgery often may face long delays until they can see a physician. In a study by Viberg et al. from 2013, a majority of countries, including Australia, Canada, and Italy, consider waiting times a serious health policy issue. Waiting times in Canada for hip replacements can be from 42 to 178 days, depending on the province. Aging population demographics and overutilization of health resources in non-urgent situation are also problems for the long-term stability of this model.
The Out-of-Pocket Model: market-driven health care
Examples: rural areas in India, China, Africa, South America
Relevance to the US: similar to treatment for uninsured or underinsured
In less developed areas with too few resources to create mass medical care, patients must pay for their procedures out-of-pocket. Without enough money, the poor are unable to afford appropriate health care. Unfortunately, this situation is common in most countries since only the wealthiest countries have robust health care systems. Disparities in wealth lead to disparities in health outcomes in these areas.
In the United States, many aspects of health care are driven by income-level. Adults in the US are less likely to see a regular physician and are more likely to have untreated conditions than adults in Canada, while at the same time rating their care as either extremely high or low in quality more often than Canadians, who are more moderate in their responses. Disparities in care due to socioeconomic status and ethnicity are found in all countries, but tend to be more pronounced in the United States than in areas like Canada. The percent uninsured ranges for different states, from as low as 3.6% in Massachusetts to as high as 20.6% in Texas. As of 2015, the percent of uninsured persons is 13.0% in the United States. The debate over increasing coverage and minimizing costs still rages in Congress – any developments may drastically change these numbers.
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Each country faces different concerns when attempting to construct a system for health care delivery. No health care system is completely alike, and none are completely free of problems; a method that works for one country is not likely to be completely transferrable to another due to different health concerns, priorities, and mindsets. Though complicated, considering the implications of various models is essential to implementing an American health care system that is fair and just to all citizens, not just the wealthiest. Its construction should emerge from the collaboration between policy experts, health providers, politicians, and other stakeholders to attempt to address the many complicated aspects of the health insurance market.