PART 2: HEALTHCARE MODELS
Healthcare systems tend to follow general patterns. “In some models, the government is both the provider and the payor for healthcare. In others, doctors and hospitals are private but the government pays the bills. In still other countries both the providers and payors are private. There are 4 basic arrangements”.
THE BISMARK MODEL
Otto von Bismarck
This is named for Otto von Bismarck, the Prussian Chancellor who invented the welfare state as part of Germany’s reunification in 1871. In Bismarck countries, both healthcare providers and payers are private entities. Private health insurance plans are used and usually financed jointly by employers and employees through payroll deductions. But unlike the USA, these plans cover everyone and are not for profit.
Sir William Beveridge
This model is named for William Beveridge social reformer who inspired Britain’s National Health Service. There are no medical bills as medical treatment is a public service. This differs little from the police and fire departments in America. In this model, many hospitals and clinics are owned by the government. Some of the doctors work directly for the government while many are private but collect fees from the government. Great Britain, Italy, Spain and most of Scandinavia use the Beveridge Model. “Hong Kong still has its own version of Beveridge-style national healthcare, because the populace simple refused to give it up when the Chinese took over …. in 1997”. Most Americans would consider this to be socialized medicine. According to Reid, the purest examples of the Beveridge Model are both found in the western hemisphere: Cuba and the U.S. Department of Veterans Affairs.
NATIONAL HEALTH INSURANCE MODEL
In this system the providers are private, but the payor is a government-run insurance program that every citizen pays into. “The national, or provincial, insurance plan collects monthly premiums and pays medical bills. Since there’s no need for marketing, no expensive underwriting offices to deny claims, and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style private insurance”. Canada is the obvious example of the national health insurance model. Taiwan has adopted variations on the NHI model and will be discussed more in detail in a later post.
Reid noted that only about 40 of the world’s 200 countries have an established healthcare system! “Most of the nations are too poor or too disorganized to provide any mass medical care.” The brutal truth is that in these countries, the rich get care and the poor stay ill and possibly die. In rural regions of Africa, India, China, and South America, hundreds of millions of people go their whole lives without ever seeing a doctor.” In Cambodia out-of-pocket expenses account for 91% of total health spending. For India, it is 85% and for Egypt, 73%. For Britain, it is 3% while in America it is 17%.
Reid points out that it should be easy for Americans to understand all these systems as examples of all exist here in America. For most working people we’re using the Bismarck Model (e.g. Germany, Japan). For Native Americans, military and veterans, we’re the Beveridge Model (e.g. Great Britain). For those over 65, we’re the National Health Insurance Model (e.g. Canada). And finally, for those of our millions of uninsured we’re an Out-of-Pocket Model (e.g. Cambodia, Afghanistan).
In Part 3 we’ll begin to explore in more detail, the healthcare systems in other countries. The countries will include France, Germany, Japan, United Kingdom, Canada, Taiwan, and Switzerland. We’ll begin with France.