Financing Health Care

Financing Health Care

Introduction

In most developed countries, health care is paid for largely by the government or an organization associated with it, using taxes collected from citizens. The United Kingdom, for example, has a “single-payer” system in which the government pays directly for care; in France and Germany, the government collects taxes to fund part of the government health care system, and employers and individuals pay for the remainder of the costs directly (Thorpe, 2007).

Discussion

Different Approaches to Health Care

In market-based systems, care is generally delivered by private organizations and individuals and all parts of the system are subject to some level of competition. There are many different payers, providers and suppliers, and people with insurance can choose which ones serve their needs best. Doctors may have the benefit of best-practice guidelines that indicate when and for whom different treatments should be used, but they're free to make care decisions on a case-by-case basis, considering the needs of each individual. One disadvantage of a system where physicians and patients have free choice is that coordination of care can be challenging and some duplication of services can occur.

Most government-financed systems tend to provide everyone living in the country with coverage that offers access to some basic level of care. Most people pay for these systems through taxes and other charges. In government-financed health care, the government may deliver the care itself, as in the United Kingdom, or they may contract with other providers to do so, as in the German or Japanese systems or in the U. S. government-financed programs, Medicare and Medicaid (Thorpe, 2007).

Managing Health Care Costs

Both market-based and government-financed health care systems strive to manage overall health care costs. The difference lies in the way they approach the task. Market-based health care relies primarily on the force of companies ...