Health Care System in the Industrialised Countries and the Role of Private Insurance

1. Introduction

In the industrialised economies, health plays a central role in the individual scale of values. As a result of the advances in medicine that have generated new expectations in the fight against disease, the demand for quality of life has become part of our daily experience. Citizens no longer accept the inevitability of illness and absolutely reject sickness and pain.
Governments are faced with a new scenario: on the one hand, citizens are prioritizing the quality of health care services, on the other health costs are constantly on the rise, as a result of scientific and technological developments in medicine and an aging population. These are the main forces behind the demand for additional health care services, the increased cost of which is to be borne by the State.
Health is the most crucial issue when it comes to building political consensus. Policy-makers must strike a balance between the increasing expectations of people vis-à-vis health care and the constraints imposed by public expenditure, particularly in countries like Italy where, in spite of the improvement of the quality of service, people are rather dissatisfied with the national health care system.
The solutions applied so far share the aim of rationalizing the costs of both the supply of and demand for health services and of costs’ financing. The measures adopted have produced similar results in all countries: hospitalization time has been reduced, cost-control has improved, market mechanisms have been implemented to manage resources, citizens have become conscientious consumers, and the number of sources of financing has increased.
In spite of their impact on efficiency, reforms implemented thus far have not succeeded in stabilizing health care expenditure as a share of GDP; thus, health care remains one of the causes of public budget deficits and is likely to remain so in the future, as a continued increase in spending is anticipated.
Using sources of financing in addition or as an alternative to public sources is a prerequisite to solving the health issue. In a public system burdened by slowness and rigidity, and faced with the need to rationalize costs, private insurance becomes a key tool to give citizens freedom of choice and provide flexible and customized solutions. In addition, insurance can be used to meet the funding needs resulting from the increasing number of people who are not self-sufficient and whose health care costs can hardly be borne by individuals alone.
This study gives an outline of health care systems in the industrialised countries and aims at exploring future opportunities for private health insurance. The first part focuses on the health care systems of the main industrialised countries and their reforms aimed at improving efficiency. The second part deals with health care demand and spending trends. Finally, the role of private insurance in financing health care systems, the supply of services and the potential of private insurance to improve overall efficiency are examined.

Alfeo Zanette and Monica Ricatti: Ufficio Studi of the Assicurazioni Generali.

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