Global Methods of Healthcare Financing By Sumukh Paspuleti
Healthcare financing is the process through which medical facilities receive funding from their patients to facilitate treatment options. The method through which this is done varies from country to country and is divided into three categories; private, public, and out-of-pocket (Note that situations, where two or more are used simultaneously, can occur). Healthcare financing through public insurance organizations and government programs is the most effective because of the negotiated low prices making treatments affordable, regulation creating widespread coverage, and can save more American citizens.
Healthcare financing through public insurance organizations and government programs is the most effective because of the negotiated low prices making treatments affordable. The primary healthcare financing of the United States is private healthcare. Likewise, the organization Brookings wrote an article claiming, “estimates from the Health Care Cost Institute show that the price for a blood test ranges from $22 (10th percentile) to $37 (90th percentile) in Baltimore, Maryland, but in El Paso, Texas, the same range is $144 to $952.” This price variability is found in private insurance systems because governments cannot regulate the prices of medical treatments and in turn their healthcare financing methods. The variability of prices makes medical expenses harder to pay. This makes people avoid taking medical treatment when needed leading to larger medical bills making it more difficult to pay for medical treatments leading to further inefficiencies. On the other hand, Japan’s government healthcare system regulates prices. In an article by the organization, Japan Health Policy NOW, the author clarifies, “Fees for medical services, products, and pharmaceuticals delivered by almost all providers are dictated by a national fee schedule.” This shows how fees are regulated by the government which gives medical treatments at fixed prices. These fixed prices, a key part of their healthcare financing system, create price stability which encourages people to get treatment as soon as possible thus making Japan’s healthcare efficient in keeping its population healthy. This leads to smaller medical fees making paying for medical treatment easier while keeping the high-paying salaries of medical professionals being paid mostly by taxes.
The use of regulations for healthcare financing to create widespread coverage by public insurance organizations and government programs makes them easier to pay for treatment than their private insurance counterparts. In an article by The Commonwealth Fund, Thorlby the Assistant Director of The Health Foundation writes, “All English residents are automatically entitled to free public health care through the National Health Service, including hospital, physician, and mental health care.” The universal coverage by the NHS or the National Healthcare Service, the primary British government healthcare program, ensures that everyone has access to medical care either for free or with low fees. Consequently, this means that early treatment along with collective negotiating with healthcare companies drives down the cost of treatment and keeps the entire population healthy. In keeping costs low and relying on taxes to fund programs through their healthcare financing system, these public insurance organizations subsidize the medical industry while keeping the monetary burden off the people. This makes the government healthcare system very efficient in fighting pandemics and other diseases which is only possible through widespread coverage. In contrast, the US private insurance system faces the problems of under coverage. An article by the Commonwealth Fund describes, “In the first half of 2020, 43.4 percent of U.S. adults ages 19 to 64 were inadequately insured.” This under coverage from an inadequate healthcare financing system means many patients have trouble paying medical bills. This leads to preventable deaths and injuries as patients try to self-medicate themselves. This makes the private insurance system extremely ineffective in keeping its population healthy and makes healthcare financing even more ineffective.
Since public healthcare insurance systems save more American citizens through better healthcare financing, public healthcare insurance systems are more effective. Likewise, an article by Scotland’s National Healthcare Service reasoned, “The NHS in Scotland is managed by the Scottish Government and the majority of NHS Scotland provision is paid for through taxation.” The taxes collected by the Scottish parliament is used to fund the government healthcare insurance program thus providing consistent pay to medical professionals while giving consistently good quality of care. The consistency of the system gives confidence to the general population who then access more medical treatment thus more people are saved. The connection between healthcare financing through taxes like in a public insurance program and more lives saved needs to be implemented. The healthier population is much more productive thus inducing growth in the economy. On the other hand, the privately run insurance system in Nigeria has a different problem. An article by CNBC highlights, “According to a recent report from real estate consultancy Knight Frank, Nigeria would require 386,000 additional beds and $82 billion of investment in health-care real estate assets to reach the global average of 2.7 beds per thousand people.” The lack of government investment in primarily private insurance led to treatment inconsistencies because the healthcare financing depends on profitability which is impractical for a low-income nation like Nigeria. This leads to the opposite effect as the inconsistency in treatment leads to more people dying creating a cycle of dying patients leading to a loss of trust between patients and doctors leading to more deaths. The inefficiency of the healthcare financing of private healthcare systems makes their healthcare system inefficient.
Some people may argue that public health insurance systems sacrifice quality for a lower cost, but that is not true. An example of this would be Japan’s public healthcare system which ranked 10th place in the world according to the World Trade Organization while spending a “very healthy 8.2% of its GDP.” Japan’s public healthcare system is both cost-effective and delivers quality treatment proving this claim inaccurate. Additionally, Japan’s healthcare system is specifically able to do because it is a public insurance company. Its use of pricing regulations along with extensive planning of medical expenses ensures that medical treatments are profitable while implementing an efficient healthcare financing system. Another misinformed assumption is that government-run public healthcare programs have healthcare financing that is less accountable to the public. To prove otherwise, an article by the National Center for Biotechnology Information revealed some methods to ensure accountability which includes “regulatory, legal, accreditation or certification, and pay-for-performance models, eligibility for funding based on past performance.” These procedures are put in place in many government-run public healthcare programs to ensure that medical professionals are accountable. This increased accountability helps improve the quality of care resulting in fewer deaths and fewer cases of medical malpractice lowering the use of state funds. The result is a more effective healthcare system that can keep their patients both happy and healthy without wasting taxpayer dollars and with a functional healthcare financing system.
The negotiated low prices make treatments affordable and regulation creating widespread coverage making the public healthcare system more effective in the private healthcare system. Thus, a country with a primary government-provided or subsidized healthcare system generally is better at keeping its population healthy which leads to more productivity and thus a larger economy and a happier population.
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