Publicly funded health care

Publicly funded health care
This graph contrasts total health care spending with public spending, in U.S. dollars PPP-adjusted, for Switzerland

Publicly funded health care is a form of health care financing designed to meet the cost of all or most health care needs from a publicly managed fund. Usually this is under some form of democratic accountability, the right of access to which are set down in rules applying to the whole population contributing to the fund or receiving benefits from it. The fund may be a not-for-profit trust which pays out for health care according to common rules established by the members or by some other democratic form. In some countries the fund is controlled directly by the government or by an agency of the government for the benefit of the entire population. This distinguishes it from other forms of private medical insurance, the rights of access to which are subject to contractual obligations between an insurer (or his sponsor) and an insurance company which seeks to make a profit by managing the flow of funds between funders and providers of health care services.



Publicly funded health care systems are usually financed in one of two ways: through taxation or via compulsory national health insurance.[1] In compulsory insurance models, healthcare is financed from some combination of employees' salary deductions, employers' contributions, and possibly additional state funds. Insurance may cover other benefits as well as health.

When taxation is the primary means of financing health care, and sometimes with compulsory insurance, all eligible people receive the same level of cover regardless of their financial circumstances or risk factors.[1]

Increasing costs

As medical science advances more treatments, many increasingly expensive, become available, which increases health costs both for public and private systems. Advances in medicine, amongst other factors, increase life expectancy, leading to population aging; the proportion of the population who are working and pay tax or compulsory insurance, rather than retired, decreases at the same time as healthcare per capita becomes more expensive to provide.[citation needed]

Varieties of public systems

Most developed countries, with the exception of the United States, have partially or fully publicly-funded health systems. For example, the United Kingdom has a National Health Service (NHS). Other examples would be the Medicare systems in Canada and in Australia. In Europe, a system of social insurance based on the principle of social solidarity covers eligible people from bearing the direct burden of most health care expenditure, funded by taxation during their working life.

Among countries with significant public funding of health care there are many different approaches to the funding and provision of medical services. Systems may be funded from general government revenues (as in Canada), or through a government social security system (as in France, Belgium, Japan and Germany) with a separate budget and hypothecated taxes or contributions. The proportion of the cost of care covered also differs: in Canada, all hospital care is paid for by the government, while in Japan patients must pay 10 to 30% of the cost of a hospital stay. Services provided by public systems vary. For example, the Belgian government pays the bulk of the fees for dental and eye care, while the Australian government covers eye care, but not dental care.

Publicly funded medicine may be administered and provided by the government, as in the United Kingdom as of 2011; in some systems, though, medicine is publicly funded but most hospital providers are private entities, as in Canada. The organization providing public health insurance is not necessarily a public administration, and its budget may be isolated from the main state budget. Some systems do not provide universal healthcare, or restrict coverage to public health facilities. Some countries, such as Germany, have multiple public insurance organizations linked by a common legal framework. Some, such as Holland, allow private for-profit insurers to participate.

Two-tier health care

Almost every major country that has a publicly funded health care system also has a parallel private system for patients who hold private medical insurance or themselves pay for treatment.[2] In these states those able to pay have access to treatment and comforts that may not be available to those dependent upon the state system.

From the inception of the NHS model (1948), public hospitals in the United Kingdom have included "amenity beds" which would typically be siderooms fitted more comfortably, and private wards in some hospitals where for a fee more amenities are provided. Patients using these beds are in an NHS hospital for surgical treatment, and operations are generally carried out in the same operating theatres as NHS work and by the same personnel but the hospital and the physician will receive funding from an insurance company or the patient. These amenity beds do not exist in all publicly funded systems, such as in Spain. From time to time the NHS pays for private hospitals (arranged hospitals) to take on surgical cases under contract.

Policy discussion

Many countries are seeking the right balance of public and private insurance, public subsidies, and out-of-pocket payments.

Many OECD countries have implemented reforms to achieve policy goals of ensuring access to health-care, improving the quality of health care and health outcomes, allocating an appropriate level of public sector other resources to health care, whilst at the same time ensuring that services are provided in a cost-efficient and cost-effective manner (microeconomic efficiency). A range of measures, such as better payment methods, have improved the microeconomic incentives facing providers. However, introducing improved incentives through a more competitive environment among providers and insurers has proved difficult.[3]

A 2009 Harvard study published in the American Journal of Public Health found more than 44,800 excess deaths annually in the United States due to Americans' lacking health insurance, equivalent to one excess death every 12 minutes.[4][5] More broadly, the total number of people in the United States, whether insured or uninsured, who die because of lack of medical care was estimated in a 1997 analysis to be nearly 100,000 per year.[6]

See also


  1. ^ a b Claude Blanchette, Erin Tolley. "PUBLIC- AND PRIVATE-SECTOR INVOLVEMENT IN HEALTH-CARE SYSTEMS: A COMPARISON OF OECD COUNTRIES." May 1997. Retrieved September 12, 2006.
  2. ^ Canadian Supreme Court after expert testimony found that all OECD countries, and four of the ten Canadian provinces, allow private medical insurance alongside the state system
  3. ^ Elizabeth Docteur and Howard Oxley (2003). Health-Care Systems: Lessons from the Reform Experience. OECD. 
  4. ^ American Journal of Public Health | December 2009, Vol 99, No.12
  5. ^ State-by-state breakout of excess deaths from lack of insurance
  6. ^ A 1997 study carried out by Professors David Himmelstein and Steffie Woolhandler (New England Journal of Medicine 336, no. 11 [1997]) "concluded that almost 100,000 people died in the United States each year because of lack of needed care—three times the number of people who died of AIDs." The Inhuman State of U.S. Health Care, Monthly Review, Vicente Navarro, September 2003. Retrieved 2009-09-10

Further reading

Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Publicly-funded health care — Publicly funded health care, or publicly funded healthcare, is health care that is financed entirely or in majority part by citizens tax payments instead of through private payments made to insurance companies or directly to health care providers …   Wikipedia

  • Health care politics — Health care often accounts for one of the largest areas of spending for both governments and individuals all over the world, and as such it is surrounded by controversy. Though there are many topics involved in health care politics, most can be… …   Wikipedia

  • Health care in Australia — is provided by both private and government institutions. The Minister for Health and Ageing, currently the Hon. Nicola Roxon MP, administers national health policy. Primary health care remains the responsibility of the federal government.The… …   Wikipedia

  • Health care reform in the United States — ] Current estimates put U.S. health care spending at approximately 16% of GDP. [ NHE Fact Sheet.asp#TopOfPage National Health Expenditure Data: NHE Fact Sheet, ] Centers for Medicare and Medicaid… …   Wikipedia

  • Health care systems — This article describes policy related systems. For the article on hospital networks, which are sometimes referred to as health care systems, see hospital network. A health care system is an arrangement in which health care is delivered. There are …   Wikipedia

  • Health care system — A health care 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 care systems around the world, with as many… …   Wikipedia

  • Health care in Canada — Under Lester Pearson s government, Canada s health care was expanded through the Medical Care Act, or Medicare to provide near universal coverage to all Canadians according to their need for such services and irrespective of their ability to pay …   Wikipedia

  • Health care reform debate in the United States — See also: Health care reform in the United States, Health care in the United States, and Uninsured in the United States Health care in the United States Public health care Federal Employees Health Benefits Program Indian Health Service… …   Wikipedia

  • Health care in the United States — ] Current estimates put U.S. health care spending at approximately 15.2% of GDP, second only to the tiny Marshall Islands among all United Nations member nations. The health share of GDP is expected to continue its historical upward trend,… …   Wikipedia

  • health care —    Spain has had a comprehensive health service only since 1986, when the PSOE government introduced the General Health Law. Previously, cover was provided under a compulsory health insurance introduced by the Franco regime in 1942, which by 1975 …   Encyclopedia of contemporary Spanish culture

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.