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

2. Health care models

In the industrialised world, health care models have much in common but also feature a number of differences. In Europe, one of the most common characteristics is the universal concept of the right to health, and the State is the main player in meeting health care needs. Health is considered one of the fundamental rights of each individual, the system is based on solidarity, and financing depends on the income capacity of each person, regardless of his/her needs.
Since the Seventies, the number of citizens covered by state-run health care schemes has been gradually rising, as national States have tended to broaden social security to improve the quality of life of their citizens1. Across Western Europe, state coverage has reached 100% of the population, except for two important countries, notably Germany and the Netherlands, where a significant share is covered by private insurance programs.
In Germany, however, all citizens benefit from health care coverage, because everyone must be provided with coverage against the risk of disease, with the option — for citizens with a monthly income exceeding a given limit (EUR 3,862 in 2005) — to turn to private insurance (opting out).
Solidarity schemes also exist in the United States, where the poor and the elderly are covered by state-run schemes. However, the coverage offered is so limited that there are insurance plans available on the market, called Medigap, designed to cover all the costs that are not reimbursed by such schemes. Citizens who do not benefit from government-run schemes must provide for their own health care coverage. For those who are insured, health costs are based upon the principles of mutuality of risks or solidarity; however, a rather significant number of citizens has no health care coverage.
A common feature in industrialised countries is the decentralization of decisions to manage and allocate resources locally (regions or states), aimed at bringing the supply and demand of health services closer together in order to meet the population’s needs better, increasing system flexibility by avoiding slowness and rigidity and cutting costs though specific and targeted health care programs.
The Swiss health care system is a perfect example as it is organised according to a federal system. The Swiss confederation and cantons cooperate in developing national health care policies. However, though cantons still enjoy autonomy in health care planning, over the past few years the Confederation has taken on more responsibilities due to the extent and the importance of the issues to be tackled.
However, decentralization has a weak point. Indeed, coordination between national health care plans and local health care policies is difficult and may lead to inefficient allocation of resources.
In addition, some experts note that although decentralization is one of the components of more complex and structured political choices aimed at making the system more efficient, it is not a prerequisite to increasing the efficiency of the system (Bankauskait, et al. 2004). Innovative solutions — e.g. integration of public and private schemes — for the management of health care can be tested locally and then extended to the whole country.

1 In 1999, a law enacted in France extended the benefits of the state-run system to over a million people, thereby reaching an almost universal coverage of the population.

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