Financial resources
There are generally five primary methods of funding health systems:[9]
Most countries' systems feature a mix of all five models. One study[10] based on data from the OECD concluded that all types of health care finance "are compatible with" an efficient health system. The study also found no relationship between financing and cost control. Another study examining single payer and multi payer systems in OECD countries found that single payer systems have significantly less hospital beds per 100,000 people than in multi payer systems.[11]
The term health insurance is generally used to describe a form of insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a social insurance program, or from private insurance companies. It may be obtained on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers. In each case premiums or taxes protect the insured from high or unexpected health care expenses.
Through the calculation of the comprehensive cost of healthcare expenditures, it becomes feasible to construct a standard financial framework, which may involve mechanisms like monthly premiums or annual taxes. This ensures the availability of funds to cover the healthcare benefits delineated in the insurance agreement. Typically, the administration of these benefits is overseen by a government agency, a nonprofit health fund, or a commercial corporation.[12]
Many commercial health insurers control their costs by restricting the benefits provided, by such means as deductibles, copayments, co-insurance, policy exclusions, and total coverage limits. They will also severely restrict or refuse coverage of pre-existing conditions. Many government systems also have co-payment arrangements but express exclusions are rare or limited because of political pressure. The larger insurance systems may also negotiate fees with providers.
Many forms of social insurance systems control their costs by using the bargaining power of the community they are intended to serve to control costs in the health care delivery system. They may attempt to do so by, for example, negotiating drug prices directly with pharmaceutical companies, negotiating standard fees with the medical profession, or reducing unnecessary health care costs. Social systems sometimes feature contributions related to earnings as part of a system to deliver universal health care, which may or may not also involve the use of commercial and non-commercial insurers. Essentially the wealthier users pay proportionately more into the system to cover the needs of the poorer users who therefore contribute proportionately less. There are usually caps on the contributions of the wealthy and minimum payments that must be made by the insured (often in the form of a minimum contribution, similar to a deductible in commercial insurance models).
In addition to these traditional health care financing methods, some lower income countries and development partners are also implementing non-traditional or innovative financing mechanisms for scaling up delivery and sustainability of health care,[13] such as micro-contributions, public-private partnerships, and market-based financial transaction taxes. For example, as of June 2011, Unitaid had collected more than one billion dollars from 29 member countries, including several from Africa, through an air ticket solidarity levy to expand access to care and treatment for HIV/AIDS, tuberculosis and malaria in 94 countries.[14]
- 1) general taxation to the state, county or municipality
- 2) national health insurance
- 3) voluntary or private health insurance
- 4) out-of-pocket payments
- 5) donations to charities
Payment models
In most countries, wage costs for healthcare practitioners are estimated to represent between 65% and 80% of renewable health system expenditures.[15][16] There are three ways to pay medical practitioners: fee for service, capitation, and salary. There has been growing interest in blending elements of these systems.
Fee-for-service
Fee-for-service arrangements pay general practitioners (GPs) based on the service. They are even more widely used for specialists working in ambulatory care.
There are two ways to set fee levels:[17]
- By individual practitioners.
