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Health Care For All Texas
Models of National Health Insurance
Bismarck Model or “Sickness Funds”
Employers and employees fund national health insurance through compulsory payroll taxes. Insurance companies are private entities but are required to be non-profit and are heavily regulated especially with respect to fees and medical services. They are not allowed to exclude people for pre-existing conditions nor drop anyone if they develop an illness. Health providers and hospitals are largely private. Patients pay small co-pays for their health care. Patients can buy secondary insurance coverage for services not provided by through the national health system such as a private hospital room. In this model, there are many private insurance companies therefore it is referred to as a multi-payer system. Germany and Switzerland use this model.
Beveridge Model or “Socialized Medicine Model”
In this system, the health care is provided and financed by the government through taxes. There are no medical bills for patients. Medical care is treated as a public service like public education or the fire department. Hospitals are owned by the government and many doctors who are specialists are employees of the government. Most primary care doctors are private practitioners who are paid by the government and receive bonuses for keeping their patients as healthy as possible. England and Spain use this model. In the United States the Veterans Administration is an example of this socialized medicine model.
Single-Payer Model
In a single payer model, the providers of health care are largely private. There is one payer, the government. The national insurance plan collects the money and pays the medical bills. There are usually no co-pays or deductibles. Medicare is an example of a single payer system. Health care is provider by private doctors in private facilities and the majority of the medical bill is paid by the government. Canada and Taiwan use this model.
History of U.S. Health Care
The origins of national health insurance began with the very conservative government of Otto von Bismarck, Chancellor of Germany in the 19th century. Conservatives in both Britain and Germany supported laws that provided for “sickness funds” for workers. This was done as a move to weaken the growing strength of labor unions. Three models for financing health care evolved from the initial sickness fund movement: Bismarck Model, Beveridge Model and Single Payer model. In the United States a fourth model for health care financing was developed during WWII, the employer-based model.
Due to wage and price freezes in WWII along with a shortage of workers, employers began to offer health insurance in lieu of wages as a way to attract workers. The government gave a tax subsidy to employers for offering health insurance and workers were not taxed on the value of their health insurance. Employer-based health insurance came about from the special circumstances created by WWII. It was not designed by experts in health care financing as a sensible system for our health care system.
Because this system of employer-based health insurance left out many people, especially the elderly and the poor, Medicare and Medicaid were adopted in 1965. The AMA was opposed to Medicare and lobbied against its passage calling it “socialized medicine”. However, one year after passage, doctors’ incomes increased by about 7.8%. Today all other industrialized nations have some form of national health insurance that covers everyone from birth to death. The United States is the only industrialized nation that does not provide health care to all its citizens.
Health Systems in Other Industrialized Nations
The French Health Care System
as described bBy Isabelle Durand-Zaleski
Professor of Medicine, University of Paris XII
Who is covered? Coverage is universal. All residents are entitled to publicly financed health care. The State finances health care for illegal residents and residents not eligible for public health coverage.
What is covered? Hospital care, ambulatory care and prescription drugs are covered. There is some minimal coverage for outpatient eye care and dental care.
How is the system organized? A board of representatives comprised of an equal number employers and employees manages the public health insurance fund. This board defines the benefits package and sets the prices and co-pays. Two-thirds of the hospital beds are government owned or not-for-profit hospitals. Doctors in these facilities are salaried. Private non-profit clinics make up the remaining one-third. Doctors in these facilities and outpatient clinics are self-employed and paid on a fee-for-service basis. Public and not-for-profit hospitals receive government grants to pay for research, teaching, emergency services, organ harvesting and transplantation.
How is it financed? Technically a sickness fund model, the French system is primarily financed by employer and employee payroll taxes. Financing also comes from private health insurance (usually complementary through the employer or government for low income persons) and through a national income tax on alcohol and tobacco. Patients have co-pays. Co-pay rates are applied to all health services and drugs listed in the benefits package. Co-pay rates vary by type of care (e.g., hospital vs. outpatient); type of patient (the chronically ill and poor are exempt from cost sharing). About 92% of the population receives complementary private health insurance through their employer, which reimburses out-of-pocket expenses. Doctors who meet a higher level of professional experience are allowed to charge above the fee set by the board.
How are costs controlled? France controls costs by increasing generic drug prescribing, reducing the number of drugs eligible for public reimbursement and reducing the number of acute hospital beds.
As of 2008, complementary private insurance has not reimbursed ambulance transport, doctor visits or prescription drug co-pays.
These are financed solely by the public system.
How is quality of care ensured? France has a mandatory accreditation system under the responsibility of the national health authority. Accreditation reports and standards are publicly available online. Hospitals must be accredited every four years, physicians every five years.
References
World Health Organization (2007), World Health Statistics 2007, Geneva, World Health Organization
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Danish Health Care System
as described by Karsten Vrangbaek, Associate Professor
Dept. of Political Science of Copenhagen
(Commonwealth Fund, 2008)
Who is covered? Everyone is covered and coverage is compulsory. All residents in Denmark are entitled to health care that is largely free at the point of use.
What is covered? All primary and specialist medical services are covered based on medical assessment of need.
How is the health system financed? The health system is publicly financed through a centrally collected healthcare tax set at about 8% of taxable income. Around 30% of the Danish population purchases private health insurance from a not-for-profit organization called “Danmark” to cover co-pays. For-profit private health insurance companies provide health care in private hospitals and cover about 5% of the population. Employers mainly purchase it as a fringe benefit for workers.
How is the system organized? 99% of hospitals and health care facilities are owned by the government. The professionals who work in them, including physicians, are paid a salary by the central and local governments. General practitioners are self-employed and paid by a combination of capitation payment and fee-for-service. Non-hospital specialists are paid on a fee-for-service basis.
What is being done to ensure quality of care? Hospitals are assessed on their ability to improve how they provide care and their medical outcomes. Quality reviews are done by both an external professional accreditation body and by hospitals’ self-assessments. Quality data is published to give patients choice of hospitals and to encourage hospitals to maintain high standards.
How are costs controlled? Annual negotiations between the central and local governments determine the level of taxation and health budget. In turn, hospitals negotiate with local governments for reimbursement and monitor their level of spending. Using generic drugs, using prescribing guidelines, and making assessments of prescribing behavior and the merits of health technologies also control costs. Central, regional and local governments do assessments jointly.
How are costs controlled? Annual negotiations between the central and local governments determine the level of taxation and health budget. In turn, hospitals negotiate with local governments for reimbursement and monitor their level of spending. Using generic drugs, using prescribing guidelines, and making assessments of prescribing behavior and the merits of health technologies also control costs. Central, regional and local governments do assessments jointly. Reference
Single Payer is health care based on need, not ability to pay
