Analyzing Models of Healthcare Funding

Introduction

The funding in healthcare help to develop resources and economic incentives required to operate health system and it is one of the determinants of health system in terms of efficiency, equity and health outcome. In this presentation, four key model of healthcare funding are to be discussed and critically evaluated. Moreover, they influence care delivery to the people in healthcare organisation are also to be focussed.

Beveridge Model

In 1948, the Beveridge Model was established by Sir William Beveridge in the UK which later was used in different areas of northern Europe and the world. According to the model, the government of the country is the single-tax payer who is responsible for arranging funds and delivering free healthcare to all by resolving any competition in the market and forming a national healthcare system. The model mentions that no cost of healthcare is to be collected out from the pocket of the public and the expense of healthcare arrangement are to be managed from the tax paid to the government (Kos, 2019).

One of the criticisms of the model is that it has the potential to be overused in which free healthcare access and funding without any form of restriction would allow the public develop intension to create demand beyond their needs and waste it (Mitonga and Shilunga, 2020). However, the advantage of the model is that it would help to deliver reach of healthcare to all people belong from least to most deprived areas, in turn, creating lesser inequalities in healthcare access among the people due to economic issues (Kos, 2019). The Beveridge Model is used for delivering patient care in the National Health Services (NHS), the UK whereas per the model people of all class irrespective of their condition are allowed to avail any nature of healthcare free of cost for living healthy life and having enhanced well-being (Kos, 2019).

Bismarck Model

The Bismarck Model is developed by Otto vonBismarck by the end of 19th century. The model mentions that funding for healthcare is to be made from the employees and employers health insurance funds which are mainly sick funds created out of the compulsory payroll of employees (Nei, 2017). The model also mentions use of private insurance funds by the people in funding the healthcare cost needed for their treatment (Wielechowski and Grzęda, 2020). Thus, according to this model, the funding in healthcare is made mostly privately with only Social Health Insurance funds to be considered public.

According to the Bismarck Model, the Social Health Insurance find developed are mainly used to fund the disabled, unemployed, poor and old people who do not effective economic efficiency in arranging finance to access healthcare (Mihalache et al., 2018). However, these funds are available under specific conditions to be met by the public (Wielechowski and Grzęda, 2020). The criticism of the Bismarck Model is that it creates healthcare imbalance between the retired professionals and the unemployed old age people in receiving care as while the initial has to depend on employees finds, the later is able to avail Social health Insurance (Mihalache et al., 2018). However, the advantage of the model is that it does create financial burden on the government to be unnecessarily exploited by the common people in receiving healthcare not needed to them (Nei, 2017). The Bismarck Model helps delivery of patient care by organisation by making the employed people responsible for managing own economic resources to avail preferred healthcare whereas social funding are managed to be availed by the poor in receiving healthcare (Mihalache et al., 2018).

National Health Insurance Model

The National Health Insurance model is seen to act by incorporating the theoretical idea of The Bismarck as well as Beveridge Model. According to this model, the funding for medical procedure is healthcare is managed through the government as the single taxpayers, but the healthcare providers are private. Thus, people willing to access care in the private are required to spent finances in accessing the services whereas the people unable to avail private care have the opportunity of funding support for healthcare from the government (Cuadrado et al., 2019). The advantage of the model is that it has helped in creating a balance between the private practice and public insurance by allowing hospitals to maintain independence to work privately to avail increased finance while also creating reduction in internal complication with insurance policies for the people. The other benefit is that the people based on their economic efficiency are able to choose between public or private care in turn creating lower financial barriers for the poor to avail healthcare as they can easily access support from the government funds in funding their care (You et al., 2017). However, the criticism of the National Health Insurance Model is that it leads the individuals trying to avail public treatment have to face long waiting list and treatment delay which causes deterioration of their health due to lack of early care intervention (Cuadrado et al., 2019). The model influences delivery of patient care by healthcare organisation by arranging fund for healthcare for the low economic class from the government and availing insurance money from the employed and higher economic class of people (Cuadrado et al., 2019).

Out-of-Pocket Model

The Out-of-Pocket Model is used in areas of lesser development and according to it, the patient is to directly fund their healthcare from their own pocket without any assistance from the government or insurance companies (Kaonga et al., 2019). The model is mainly prevalent in the area where there is void of financial resource to support medical system (Kos, 2019). In this nature of model, often unregulated direct charges for healthcare are faced by the people which makes them pay more finances than required in availing healthcare services. This model influence delivery of healthcare in an equal manner as people who are unable to spend finances or have the economic ability in accessing healthcare are entirely deprived of receiving any healthcare support and die due to lack of care (Kaonga et al., 2019).

Conclusion

The above discussion mentions that the Beveridge model support government funding for healthcare management whereas the Bismarck model mentions the use of healthcare insurance and social insurance from the payroll of the employees to be used in funding healthcare. The National Health Insurance Model include inclusion of both the model (Bismarck and Beveridge) in funding healthcare whereas the Out-of-Pocket model mentions all expenses for healthcare is to be made specifically by the person on their own without support from any government or insurance funds.

References

Cuadrado, C., Crispi, F., Libuy, M., Marchildon, G. and Cid, C., 2019. National Health Insurance: a conceptual framework from conflicting typologies. Health Policy, 123(7), pp.621-629.

Kaonga, O., Banda, C. and Masiye, F., 2019. Hardship financing of out-of-pocket payments in the context of free healthcare in Zambia. PloS one, 14(4), p.e0214750.

Kos, M., 2019. Introduction to healthcare systems. In The pharmacist guide to implementing pharmaceutical care (pp. 437-441). Springer, Cham.

Mihalache, I.C., Tomaziu-Todosia, M.I.H.A.E.L.A. and Apetroi, F.C., 2018. Economic models of financing health services in European Union. European Financial Regulation-EUFIRE, pp.211-224.

Mitonga, H.K. and Shilunga, A.P.K., 2020. International Health Care Systems: Models, Components, and Goals. Handbook of Global Health, pp.1-20.

Nei, S.V., 2017. Estonian Health Care System: Accomplishments and Challenges. In 7th INTERNATIONAL SCIENTIFIC FORUM, ISF 2017 (p. 106).

Wielechowski, M. and Grzęda, Ł., 2020. Health Care Financing in The European Union Countries–Structure and Changes. Acta Scientiarum Polonorum. Oeconomia, 19(1), pp.71-80.

You, S.C., Lee, S., Cho, S.Y., Park, H., Jung, S., Cho, J., Yoon, D. and Park, R.W., 2017. Conversion of national health insurance service-national sample cohort (NHIS-NSC) database into observational medical outcomes partnership-common data model (OMOP-CDM). Studies in health technology and informatics, 245, pp.467-470.

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