This article explains the concept of health systems and their importance and funding practices. It helps the reader to understand public, private, and mixed health systems and their significance and roles in catering to any nation’s healthcare requirements.
What is a Health System?
A health system, also sometimes referred to as the health care system or healthcare system is the organization of people, institutions, and resources to deliver health care services to meet the health needs of target populations. There is a wide variety of health systems around the world, however health system planning can be broadly classified into Public, Private, and Mixed Health Systems. Health systems are generally distributed among market participants including governments, trade unions, charities, religious, or other coordinated bodies.
Agents in Health Systems:
Health care delivery refers to the manner in which medical services are organized, managed, and provided. Central to health care delivery are the professionals who provide those services. Any healthcare system can be divided into two basic elements; delivery and financing. There is a minimum of three types of agents in any healthcare system; “The Health Authority” (e.g. Ministry of Health), the hospital-based physicians, and individuals in need of medical treatment (i.e. patients). The health authority is responsible for providing public health care, assumed to be free of charge for the patients at the point of consumption. Physicians decide to work in a public hospital and/or establish their own private practice. Since private health care is not funded by the government, patients are charged a (full-cost) price if they decide to visit a private practice.
World Health Organization Definition of Health Systems
The World Health Organization defines health system as follows:
“A health system consists of all organizations, people and actions whose primary intent is to promote, restore or maintain health. This includes efforts to influence determinants of health as well as more direct health-improving activities. A health system is therefore more than the pyramid of publicly owned facilities that deliver personal health services. It includes, for example, a mother caring for a sick child at home; private providers; behavior change programs; vector-control campaigns; health insurance organizations; occupational health and safety legislation. It includes inter-sectorial action by health staff, for example, encouraging the ministry of education to promote female education, a well-known determinant of better health.”
Goals of Healthcare Systems:
The goals for health systems, according to the World Health Organization, are good health, responsiveness to the expectations of the population, and fair financial contribution. Progress towards them depends on how systems carry out four vital functions: provision of health care services, resource generation, financing, and stewardship.
Financial Resources & Funding of Healthcare Systems:
Given below are primary methods of funding health systems and most countries’ systems feature a mix of all of the below:
- General taxation to the state, county, or municipality
- Social health insurance
- Voluntary or private health insurance
- Out-of-pocket payments
- Donations to charities
Types of Healthcare Systems:
Health systems can vary substantially from country to country. Some countries have public health care systems, others have private systems, and some have a combination of both. Most health care systems involve a mixture of public and private provision and participation. Traditionally, health care is mainly provided publicly and financed by general taxation rather than private insurance payments. Still, there exists a private sector alongside the public one in most countries. An important difference, though, is that patients generally receive public health care for free, while seeking the private health care they often have to cover the costs of the medical treatment by themselves.
1. What is the Public Healthcare System?
The public system, run by the government is paid for by our taxes. The term “government” can include a wide range of entities, from the national or federal government, provincial governments, regional authorities, and local or municipal governments. Today, most governments recognize the importance of public health programs in reducing the incidence of disease, disability, the effects of aging, and health inequities. Public health care is generally administered by different government health acts that have the basic objective and aim of providing universal health care coverage to all of its citizens.
It’s designed to ensure that all eligible people in the country have reasonable access to insured health services on a prepaid/free basis, with no direct charges at the point of service. Public health care is paid for by the government, using money collected from taxpayers. It’s generally designed to ensure the delivery of care is consistent across the country – that everyone under the program receives the same level and quality of treatment.
Public participation may come in many different forms. At a minimum, the state may regulate the health care system by imposing laws governing the delivery and financing of health care. The state may play a more extensive role such as providing and funding health care services, employing healthcare professionals, owning or controlling hospitals and clinics, and directly administering and financing public health insurance schemes.
Most European Union countries, such as France and Germany, operate under this system. Public health generally receives significantly less government funding compared with medicine. For example, most countries have a vaccination policy, supporting public health programs in providing vaccinations to promote health. Vaccinations are voluntary in some countries and mandatory in some countries. Some governments pay all or part of the costs for vaccines in a national vaccination schedule.
2. What is a Private Healthcare System?
The private, or non-government part of the healthcare system, is made up of private hospitals, private health insurance companies, and other health providers like dentists. Governments don’t pay for these and the private healthcare system includes things like treatment in a private hospital, ambulance trips, dentistry, eyeglasses, and treatments like physio and acupuncture. Non-government in this context may include for-profit businesses, charitable and non-profit organizations, as well as individuals and families. Private participation may occur in the delivery of health care services through private for-profit or non-profit hospitals and clinics and the financing of services through individual out-of-pocket payments and private health insurance.
In a private health care system, people can choose the services they require and the provider they want. They then pay out of their own pocket or through insurance, which is either paid for by themselves or their employer. A large number of people in the United States and most developing economies are covered by private health care. In many countries that have extensive public health care for basic services, extended services, such as dental, vision, prescription drugs, etc. are part of private health insurance.
3. Combination / Mixed Healthcare Systems:
There are very few countries in the world with exclusively public or private health care systems. In most countries, there is a combination of public and private health care. In a combination or mixed system, fee-for-service health care is available to those who pay the full cost of privately offered services instead of using basic public health care. Another model of a mixed public-private system is a system where the private sector delivers health care services and the public sector is responsible for financing those services.
This trend towards combination health care systems is also evident in key developing countries. India’s system is a combination of public and private health care. Hospitals are run by the government, charitable trusts, and private organizations. Government-run hospitals in rural areas are known as primary health centers.
In recent years, some governments have also experimented with greater private participation in hospitals through public-private partnerships where a private company constructs and owns the physical hospital building and then leases to space to a hospital board. The hospital board controls the provision of medical services and the private company simply owns the physical building and is responsible for its maintenance.
Major Differences between Public and Private Healthcare Systems:
People may choose private over public health care for a number of reasons. Wait times for specific treatments are often shorter. Many people rely on private health care for services such as nursing care, surgeries, and intensive care treatment. The medical treatment they require may not be available on the public health care system. People with private health care may also get to choose the hospital and the specialist that will treat them. Given below are some key differences:
Funding: In the public healthcare system the funding is done by the Government out of the taxation revenues whereas the private healthcare system is funded on its own generating revenue by charging the patients.
Medical Service Providers: In the public sector physicians are on salary, while in the private sector they are self-employed and earn profits from their private practice.
Quality of Service: In a public system the objective is that everyone under the program receives the same level and quality of treatment whereas in the case of a private system the quality may vary with the cost incurred by the patients for treatment.
Patient Preference: Patients prefer to be taken care of by the public sector since this is free at the point of consumption. Patients not served by the public health care sector may for sure demand private health care.
Time to Treatment: Patients might have to go on the Public Hospital Waiting List and wait a while for their treatment in case of treatment in Public Health Systems with an exception in case of an emergency where patients are treated straight away.
Costs: Public healthcare systems don’t usually cover the full cost of doctor’s visits, tests, and prescription medicines, so patients might have to pay some money towards the cost of these things. In the case of Private Health Systems patients have to pay for themselves or get personal private health insurance to help cover the cost.
Choice of Treatment: Generally in the case of public systems, patients have a limited choice in terms of hospitals or physicians whereas, in the case of private healthcare systems, Patients can choose which hospital and which doctors treat them.
Major Challenges in Healthcare Systems:
The rapid emergence of many chronic diseases, which require costly long-term care and treatment, is making many health managers and policymakers revisit their health care delivery practices. Some important health issues facing the world currently are HIV/AIDS, Dengue, Diabetes, and Antibiotic Resistance.
In the past century, the so-called “short century,” when World War I was still going on, precisely starting in January 1918, deadly pandemic influenza, identified for the first time in Kansas, exploded, lasting 36 months, that is, till December 1920. It infected over 500 million people – around one-third of the world’s population at the time. The death toll has had and still has, a rough estimate: at least 25 million people, but possibly even up to 50 or more.
The second pandemic came after World War II, called the Asian flu, virus AH2N2, isolated in China, that was fortunately reduced in its impact by a vaccine, produced in record time.
In December 2019 a series of cases were reported, describing patients admitted to hospital with a new disease characterized by pneumonia and respiratory failure caused by a novel coronavirus (SARS-CoV-2), in the province of Hubei (China). On 11 February 2020, the World Health Organization (WHO) termed this etiological agent as COVID-19 (Coronavirus Disease, 2019). Posteriorly, and despite the adoption of extensive containment measures, the disease continued to spread, affecting the rest of Asian countries, the Middle East, and Europe. On 11 March, COVID-19 was declared a pandemic at a world press conference held by Tedros Adhanom Ghebreyesus, General Director of the WHO.
The coronavirus disease 2019 (COVID-19) pandemic has laid bare many of the structural challenges of the US health care system and other nations worldwide.
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Creation Date Monday, 14 January 2013