Among our healthcare “system” choices are four major models: the Beveridge National Health Service Model, the Bismarck Model, the National Health Insurance Model, and the Out-of-Pocket Model (1)(2).
In this blog post, we are going to examine the third of the four models: the National Health Insurance Model.
The National Health Insurance Model: single-payer national health insurance
Examples: Canada, Taiwan, South Korea
Relevance to the U.S.: similar to Medicare
This system incorporates aspects of the two systems above. Like in the Beveridge Model, the government acts as the single party payor. As with the Bismarck Model, providers of healthcare are from the private sector. Unlike our For-Profit-Health Care Insurance Model, the National Health Insurance Model does not make a profit or deny claims. “The balance between public insurance and private practice allows hospitals to maintain independence while also reducing internal complications with insurance policies.” (3)
This system “strongly influences prices and therefore provider compensation.” In Canada, they manage costs with global budgets.
“If [the money is] gone, people wait for surgery,” says Michael Sherman, MD, MBA, Senior Vice President and Chief Medical Officer at Harvard Pilgrim Health Care, headquartered in Quincy, Massachusetts. “There’s no evidence Americans would stand for that.” (4).
About two-thirds of Canadians also buy private insurance to cover services such as dental care and prescription drugs. Most physicians are self-employed and receive fee-for-service payments, although some provinces are experimenting with alternative payment models.
Australia, meanwhile, has a hybrid system of public and private insurance, and revisits its budget annually. About half of Australians purchase private coverage to receive a better choice of providers and faster services. Indeed, the government encourages private coverage through tax breaks and penalizes higher-income.
The objectives of a Universal healthcare system include:
- Strong, efficient, well-run health system;
- System for financing health services;
- Access to essential medicines and technologies;
- Sufficient capacity of well-trained, motivated health workers (ACCESS).
“Universal healthcare is sometimes referred to as free healthcare (as in Canada). In the real world, there is nothing like free healthcare; somebody is always paying for it.” (5)
List of the POTENTIAL Pros of Universal Health Care
- It lowers the costs of health care for the economy.
a. government is able to leverage the medical market and negotiate better pricing
b. Lower cost of care as services and medication are less expensive
c. Doctors and the pharmaceutical industry receive less payment
d. Health care spending, as a portion of the GDP, goes down
- It reduces administrative costs for care access.
a. There are fewer/lower administrative costs
b. There is only one agency to bill
- It simplifies the rules process as there are no complicated rules for utilization and payment review.
- It removes the competition, removing the focus from those who can pay and less on those who cannot.
- It creates a workforce that is healthier.
a. In the United States, 46% of patients went to the emergency room for medical services
b. With universal health care, there is a greater emphasis placed on preventative care-the need for emergency interventions decreases
- It helps children when they are able to get the care they require for good health. (The so-called social determinants of health where children are less likely to get involved with crime, take advantage of welfare programs, or deal with chronic health issues as an adult).
List of the POTENTIAL Cons of Universal Health Care
- It requires people to pay for services they do not receive.
a. In the United States, about 5% of people consume about 50% of the health care costs which are generated each year.
b. The healthiest 50% of the population consumes just 3% of the health care costs
c. Universal health care- the healthy and wealthy are asked to pay for the care for those who are not
- It may stop people from being careful about their health.
a. Under a universal health care system, people tend to be non-compliant
b. No financial incentive for someone to stay healthy
- It may limit the accuracy of patient care as doctors are often assigned more patients than they can legitimately handle.
- It may have long wait times for elective procedures (some people waiting almost 9-12 months for elective procedures)
- It limits the payouts which doctors receive.
- It can limit new technologies when there is a goal to keep costs down.
- It requires significant budgeting skills as it can be as much as 40% of the government’s annual budget (at the provincial level in Canada for example).
- It may limit services due to cost-saving measures that may restrict access to certain procedures or medications if the chances of patient success are minimal.
a. Palliative care might take precedent over life-saving measures.
b. About 25% of the costs found in the Medicare budget each year are directed toward people in the last 6 years of their life
- It may offer multiple systems of coverage, which increase patient costs (6)
In my next blog post, I will discuss the Out-of-Pocket Model.
Keep an eye out for my soon to be published book: Earthquake: How America’s Ever-changing Healthcare System Victimizes Americans
(1) Chung, Mimi, “HEALTH CARE REFORM: LEARNING FROM OTHER MAJOR HEALTH CARE SYSTEMS,” 2 Dec. 2017, Princeton Public health Review, /pphr.princeton.edu/2017/12/02/unhealthy-health-care-a-cursory-overview-of-major-health-care-systems/
(2) Weisbart, ED MD, CPE, FAAFP, Chair, MO Chapter of Physicians for a National Health Program
(3) Chung, Mimi, “HEALTH CARE REFORM: LEARNING FROM OTHER MAJOR HEALTH CARE SYSTEMS,” 2 Dec. 2017, Princeton Public health Review, /pphr.princeton.edu/2017/12/02/unhealthy-health-care-a-cursory-overview-of-major-health-care-systems/
(4) Serafini, Marilyn, “Why Clinicians Support Single-Payer — and Who Will Win and Lose,” New England Journal of Medicine, Catalyst, 17 Jan. 2018, catalyst.nejm.org/clinicians-support-single-payer-win-lose/
(5) “Pros and Cons of Universal Health Care,” FormosaPost, 25 Nov. 2018, www.formosapost.com/pros-and-cons-of-universal-health-care/
(6) Ayers, Crystal, “17 Universal Health Care Pros and Cons,” Vittana Personal Finance Blog, vittana.org/17-universal-health-care-pros-and-cons