Understanding Healthcare: An Overview of Healthcare Models Around the World

Healthcare around the world has evolved through the ages. As civilization developed, it lead to the development of different healthcare systems around the world. Countries employ various healthcare models to combat problems arising from the lack of proper healthcare coverage and provision. Understanding the healthcare system can be a daunting task. The roles and functioning of each constituent in the vast machinery of the Healthcare system are varied from one healthcare model to another. Every individual or company associated with the Healthcare industry must be aware of the healthcare systems in place and the forever happening changes in the healthcare industry. This article aims to our viewers with a detailed overview of the healthcare systems and models around the world, offering valuable insights to help readers navigate this intricate domain.

4 Models of Healthcare Coverage in the World

There are four models of healthcare coverage in the world. These four models differ from each other based on the following factors:

  • Number of Sources of Coverage
  • The Sources of Coverage
  • Source of Revenue for the funding of coverage
  • Sector Responsible for the delivery of Medical care

We will go into the detail of each of these factors differentiating the types of healthcare coverage models.

Number of Sources for Coverage:

As far as the number of sources for healthcare coverage is concerned, a healthcare model is either a Single Payer Model or a Multi-payer model. In a single-payer model, healthcare coverage needs are fulfilled by a single entity, for example, the Government or Private Sector (i. e. Health Insurance companies.) Only the source responsible takes on all the costs involved in the management, disbursement, and innovation of healthcare in the country or state.

In a multi-payer model, multiple sectors or entities are involved in the funding of the healthcare industry. These sources can work in a combination, or alongside each other to fund the processes involved in the provision of medical care.

Sources of Coverage:

A country depends on a source of funding, to fulfill the needs of its healthcare system. Government is one source of funding; Private Health Insurance companies are another. In most companies, however, all or partial cost of medical care comes out of the pocket of the citizens themselves. A healthcare model can vary greatly depending on the source of funding. This is the key area, which dictates the complexity of healthcare coverage, the innovations in the medical field, and the freedom of healthcare providers and patients. We will discuss its impact in detail in each of the healthcare models mentioned below.

Source of revenue for the funding of coverage:

A source of revenue for the funding of coverage means, how government or the private insurance companies generate funds to pay for the costs incurred as a result of the provision of medical care in the country. These sources can be taxes, premiums on private health insurance, or a cut from the employees’ salary. Whatever, the source may be, an efficient healthcare model is supposed to decrease the overall burden of healthcare funding on the population and to devise an efficient mechanism ensuring maximum delivery of medical care.

Sector Responsible for the delivery of medical care:

Some countries rely on a single sector, whether Public or Private, for the delivery of medical care. In other countries, a hybrid model is in effect which means that public and private sectors coexist to fulfill the medical needs of the population. In a public healthcare system, the government owns the healthcare facilities (hospitals, clinics, etc.), employs healthcare providers on its payroll, and manages the provision through its departments. Whereas, in a private healthcare system, hospitals are privately owned, the doctors are not on government payroll and can work in hospitals or individually and every hospital or clinic setup is responsible for its management and administration.

Now we will discuss the four models of Healthcare Coverage in place in different countries of the world.

1. Beveridge

Beveridge model is based upon the concept of public delivery of care, through the public sector and funded by the government. In this particular model, the hospitals and clinics are owned and operated by the government and the doctors are the employees of the government. This model is in place in Great Britain. The British government dictates everything, and it is up to the parliament and the government officials to develop and disburse medical care throughout the county. This model provides universal coverage to all the citizens of the United Kingdom, which means each citizen is entitled to free of cost medical care when and where needed. Every patient walking out of the hospital is free from the worries of a medical bill. The government generates revenue for the provision of healthcare through the collection of taxes.

Beveridge model provides great relief to the UK population as it is easy to navigate and provides low-cost universal coverage that is standardized. There is no market competition in terms of healthcare provision and no concern for profit. Therefore, it is ranked as one of the best healthcare models in the world.

However, there are some downsides to this model. Being that this model puts no direct cost on the patients receiving medical care, it is susceptible to overutilization leading to demand for unnecessary medical services, which in turn puts a greater burden on the health department and drives up the taxes. In theory, this model is also at risk of political involvement and lack of innovation due to inefficient government policies. Moreover, the patients cannot have their choice of healthcare providers as it is dictated by the government.

2.National Health Insurance Model (NHI)

Private delivery of care (through private hospitals, clinics, or doctors) funded by the government leads to the formation of a healthcare coverage model known as the National Health Insurance model or NHI. This model is employed by the Canadian Government to provide universal coverage to all citizens. In this model, health care is delivered by the private sector, but the government pays the bills. One other differentiating factor of the NHI from Beveridge is the freedom of choice of doctor/hospital for the population.

All the healthcare facilities in the country are privately owned and operated and employ healthcare providers. This factor enables this system to be supportive of innovation and evolution, free of any government interference. Like the other single-payer method, this model also entails low-cost medical care, less concern for profit, standardized medical care, and ease of navigation. Certain checks can be placed to discourage overutilization of the healthcare system as the government handles medical billing for individuals. Once again, the government manages to pay for medical care through the collection of taxes.

3. Bismarck

Germany has set up the most privatized model of healthcare coverage in the world known as the Bismarck model. In this model, universal healthcare coverage is provided through health insurance which is linked to employment. The employees in return reserve a portion of their salary to pay for the health insurance. Health insurance is compulsory for every citizen employed as per this model. Medical insurance in itself is provided by private health insurance companies. In theory, there is a concern for profit which is kept in place due to robust government policies.

This model aims to provide universal coverage to all citizens of the country without putting an extra burden on government bodies. However, unemployed or people transitioning from one job to another are at risk of having no medical insurance to pay for their needs. In this model, the source of funding is the mandatory payroll deduction.

4. Out-of-Pocket Model

Many underdeveloped nations of the world cannot afford to set up and pay for healthcare coverage for their citizens. This results in every person paying for their medical needs out of their pocket. In most cases, the healthcare facilities are privately owned, and the medical industry is underdeveloped due to various factors (political, social, economic, etc.) This model leaves the population susceptible to a lack of medical care due to the unavailability of funds in a time of need. Citizens find it difficult to navigate the intricacies of the healthcare system. Healthcare facilities and providers can be left out of check. And the overall health of the community may be affected.

It is worth noting, that most countries around the world employ a hybrid of all these systems and the healthcare industry can become more complex in most cases. It is the job of the governing bodies to come up with strategies and policies to make the healthcare system more efficient, to decrease the burden of healthcare costs on the economy, and to assist individuals in maintaining a better healthcare standard. The medical industry is a forever evolving one and there will always be a need for innovation. The right system has to have all the benefits with little or no downsides. Health is a fundamental right of every human being, and it should be easy to access, rather than being denied due to a lack of governing structure or unavailability of funds.

Give us your feedback in the comments below or suggest a modification. We always welcome constructive criticism.

Dr. Muhammad Hussain
Dr. Muhammad Hussain

MD, Entrepeneur & Administrator. Six years of experience, working in the field of clinical care, medical administration, and healthcare business.

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One comment

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