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Universal health care is health care coverage that is extended to all eligible residents of a governmental region and often covers medical, dental, and mental health care. These programs vary in their structure and funding mechanisms. Typically, most costs are met via single-payer health care system or national health insurance. Universal health care is implemented in most wealthy, industrialized countries, with the exception of the United States. It is also provided in many developing countries and is the trend worldwide.
he 1890s, most citizens in Germany became covered under the mandatory health care system championed by Otto von Bismarck.
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Universal health care is health care coverage that is extended to all eligible residents of a governmental region and often covers medical, dental, and mental health care. These programs vary in their structure and funding mechanisms. Typically, most costs are met via single-payer health care system or national health insurance. Universal health care is implemented in most wealthy, industrialized countries, with the exception of the United States. It is also provided in many developing countries and is the trend worldwide.
History
In the 1890s, most citizens in Germany became covered under the mandatory health care system championed by Otto von Bismarck. The National Health Service (NHS), established in the United Kingdom in 1948, is considered the world's first universal health care system provided by government.
Implementation
Universal health care is a broad concept that has been implemented in several ways. The common denominator for all such programs is some form of government action aimed at extending access to health care as widely as possible. Most implement universal health care through legislation, regulation and taxation. Legislation and regulation direct what care must be provided, to whom, and on what basis. Usually some costs are borne by the patient at the time of consumption but the bulk of costs come from a combination of compulsory insurance and tax revenues. Some programs are paid for entirely out of tax revenues. In some cases, government involvement also includes directly managing the health care system, but many countries use mixed public-private systems to deliver universal health care.
Africa
Americas
Argentina, Brazil (see below), Canada (see below), Chile, Costa Rica, Cuba, Panama, Peru, Uruguay], and Venezuela all have public universal health care provided. Mexico plans to accomplish public universal health care by 2011.
Brazil
The universal health care system was adopted in Brazil in 1988 after the end of the military regime's rule.
Canada
In 1984, the Canada Health Act was passed, which prohibited extra billing by doctors on patients while at the same time billing the public insurance system. In 1999, the prime minister and most premiers reaffirmed in the Social Union Framework Agreement that they are committed to health care that has "comprehensiveness, universality, portability, public administration and accessibility."
The system is for the most part publicly funded, yet most of the services are provided by private enterprises or private corporations, although most hospitals are public. Most doctors do not receive an annual salary, but receive a fee per visit or service. About 30% of Canadians' health care is paid for by the private sector or individuals. This mostly goes towards services not covered or only partially covered by Medicare such as prescription drugs, dentistry and vision care. Many Canadians have private health insurance, often through their employers, that cover these expenses.
The Canada Health Act of 1984 "does not directly bar private delivery or private insurance for publicly insured services," but provides financial disincentives for doing so. "Although there are laws prohibiting or curtailing private health care in some provinces, they can be changed," according to a report in the New England Journal of Medicine. The legality of the ban was considered in a decision of the Supreme Court of Canada which ruled in Chaoulli v. Quebec that "the prohibition on obtaining private health insurance, while it might be constitutional in circumstances where health care services are reasonable as to both quality and timeliness, is not constitutional where the public system fails to deliver reasonable services." The appellant contended that waiting times in Quebec violated a right to life and security in the Quebec Charter of Human Rights and Freedoms. The Court agreed, but acknowledged the importance and validity of the Canada Health Act, and at least four of the seven judges explicitly recognized the right of governments to enact laws and policies which favour the public over the private system and preserve the integrity of the public system. But not if the public system fails to deliver reasonable service as to quality or timeliness, as the court found in this case.
United States
The United States is the only wealthy, industrialized nation that does not have a universal health care system. The government directly covers 27.8% of the population through health care programs for the elderly, disabled, military service families and veterans, children, and some of the poor, through Medicare, Medicaid, SCHIP, and TRICARE. Federal law ensures public access to emergency services regardless of ability to pay. However, this unfunded mandate has contributed to a health care safety net that some analyses say is increasingly strained. Certain types of medical spending and particularly health insurance benefit from significant tax subsidies; in particular, employer-sponsored health insurance is a non-taxable benefit. In all, government spending accounted for 45.1% of total health spending in the U.S. in 2005. Current estimates put U.S. health care spending at more than 15% of GDP, a greater portion than in any other United Nations member state except for the Marshall Islands.
Whether a government-mandated system of universal health care should be implemented in the US remains a hotly debated political topic, with Americans divided along party lines in their views of the US health system and what should be done to improve it. Those in favor of government-guaranteed universal health care argue that the large number of uninsured Americans creates direct and hidden costs shared by all, and that extending coverage to all would lower costs and improve quality. Opponents of government mandates or programs for universal health care argue that people should be free to opt out of health insurance. Both sides of the political spectrum have also looked to more philosophical arguments, debating whether people have a fundamental right to have health care provided to them by their government.
In lieu of a national program, supporters of universal health care have sought implementation of such programs at the state and municipal level. The Commonwealth of Massachusetts is implementing a near-universal health care system by mandating that residents purchase health insurance by July 1, 2007. The City of San Francisco is also undertaking a universal health care system for uninsured residents. Hawaii has, since 1974, required employers to provide employees working more than 20 hours per week with a comprehensive health insurance plan. California, Connecticut, Maine and Vermont are also considering or seeking to implement universal or near-universal systems.
Asia
Brunei, China, Hong Kong SAR, India, Kuwait, Qatar, UAE, Saudi Arabia, Israel, Japan, Malaysia, South Korea, Seychelles, Sri Lanka, Taiwan, and Thailand have universal health care.
China
Since the founding of the People's Republic of China, the goal of health care programs has been to provide care to every member of the population and to make maximum use of limited health-care personnel, equipment, and financial resources.
China is undertaking a reform on its universal health care system. The New Rural Co-operative Medical Care System (NRCMCS), is a new 2005 initiative to overhaul the healthcare system, particularly intended to make it more affordable for the rural poor. Under the NRCMCS, the annual cost of medical cover is 50 yuan (US$7) per person. Of that, 20 yuan is paid in by the central government, 20 yuan by the provincial government and a contribution of 10 yuan is made by the patient. As of September 2007, around 80% of the whole rural population of China had signed up (about 685 million people). The system is tiered, depending on the location. If patients go to a small hospital or clinic in their local town, the scheme will cover from 70-80% of their bill. If they go to a county one, the percentage of the cost being covered falls to about 60%. And if they need specialist help in a large modern city hospital, they have to bear most of the cost themselves, the scheme would cover about 30% of the bill.
On 21 January 2009, the Chinese government announced that a total of 850 billion yuan will be provided between 2009 and 2011 in order to improve the existing health care system.
India
India has universal health care system run by the local (state or territorial), governments. The government hospitals, some of which are among the best hospitals in India, provide treatment at taxpayer expense. Most drugs are offered free of charge in these hospitals.
Most government hospitals do not require payment from people below the poverty line, proof of citizenship or residency. Government hospitals in some parts of the country and some private non-profit (including teaching) hospitals charge a nominal fee to prevent abuse of the system. Most hospitals are operated on an annual budget allocated by the government, and do not rely on individual billing. These hospitals also provide better amenities (such as private air-conditioned rooms) if the patient can afford to pay. However, they charge less than comparable private hospitals.
Primary health care is provided by city and district hospitals and rural primary health centres. These hospitals provide treatment free of cost. Primary care is focused on immunization, prevention of malnutrition, pregnancy, child birth, postnatal care, and treatment of common illnesses. The primary health centres are staffed by general practitioners (primary care physicians), nurses and midwives trained in labour and delivery. Patients who receive specialized care or have complicated illnesses are referred to secondary (often located in district and taluk headquarters) and tertiary care hospitals (located in district and state headquarters or those that are teaching hospitals).
Now organizations like Hindustan Latex Family Planning Promotional Trust and other private organizations have started creating hospitals and clinics in India, which also provide free or subsidized health care and subsidized insurance plans.
Israel
In Israel, the National Health Insurance Law (or National Health Insurance Act) is the legal framework which enables and facilitates basic, compulsory universal health care. The Law was put into effect by the Knesset on January 1, 1995, and was based on recommendations put forward by a National Committee of Inquiry which examined restructuring the health care system in Israel in the late 1980s. Prior to the law's passage approximately 85% of the population was already covered by voluntarily belonging to one of four nation-wide, not-for-profit health maintenance organizations (HMOs/sick funds). However, there were three problems associated with this arrangement. First, membership in the largest HMO, Clalit, required one to belong to the Histadrut labor organization, even if a person did not wish to (or could) have such an affiliation while other HMOs restricted entry to new members based on age, pre-existing conditions or other factors. Second, different HMOs provided different levels of benefit coverage or services to their members and lastly was the issue mentioned above whereby a certain percentage of the population, albeit a small one, did not have health insurance coverage at all.
Before the law went into effect, all the HMOs collected premiums directly from members. However, upon passage of the law, a new progressive national health insurance tax was levied through Israel's social security agency which then re-distributes the proceeds to the HMOs based on their membership and its demographic makeup. This ensured that all citizens would now have health coverage. While membership in one of the HMOs now became compulsory for all, free choice was introduced into movement of members between HMOs (a change is allowed once per year), effectively making the various HMOs compete equally for members among the populace. Annually, a committee appointed by the ministry of health publishes a "basket" or uniform package of medical services and prescription formulary which all HMOs must provide as a minimum service to all their members. Achieving this level of equality ensured that all citizens are guaranteed to receive basic healthcare regardless of their HMO affiliation which was one of the principal aims of the law. An appeals process was put in place to handle rejection of treatments and procedures by the HMOs and evaluating cases falling outside the "basket" of services or prescription formulary.
While the law is generally considered a success and Israeli citizens enjoy a high standard of medical care comparatively, with more competition having been introduced into the field of health care in the country, and order having been brought into what was once a somewhat disorganized system, the law nevertheless does have its critics. First and foremost among the criticisms raised is that the "basket" may not provide enough coverage. To partly address this issue, the HMOs and insurance companies (often in conjunction with employers) began offering additional "supplementary" insurance to cover certain additional services not included in the basket. However, since this insurance is optional, critics argue that it goes against the spirit of the new law which stressed equality among all citizens with respect to healthcare. Another criticism is that in order to provide universal coverage to all, the tax income base amount (the maximum amount of yearly earnings that are subject to the tax) was set rather high, causing many high-income taxpayers to see the amount they pay for their health premiums (now health tax) skyrocket. Finally, some complain about the constantly rising costs of copayments for certain services.
Singapore
Singapore has a universal health care system where government ensures affordability, largely through compulsory savings and price controls, while the private sector provides most care. Overall spending on health care amounts to only 3% of annual GDP. Of that, 66% comes from private sources. Singapore currently has the lowest infant mortality rate in the world (equaled only by Iceland) and among the highest life expectancies from birth, according to the World Health Organization. Singapore has "one of the most successful healthcare systems in the world, in terms of both efficiency in financing and the results achieved in community health outcomes," according to an analysis by global consulting firm Watson Wyatt. Singapore's system uses a combination of compulsory savings from payroll deductions (funded by both employers and workers) a nationalized catastrophic health insurance plan, and government subsidies, as well as "actively regulating the supply and prices of healthcare services in the country" to keep costs in check; the specific features have been described as potentially a "very difficult system to replicate in many other countries." Many Singaporeans also have supplemental private health insurance (often provided by employers) for services not covered by the government's programs.
Thailand
Thailand introduced universal coverage reforms in 2001, becoming one of only a handful of lower-middle income countries to do so. Means-tested health care for low income households was replaced by a new and more comprehensive insurance scheme, originally known as the 30 baht project, in line with the small co-payment charged for treatment. People joining the scheme receive a gold card which allows them to access services in their health district, and, if necessary, be referred for specialist treatment elsewhere. The bulk of finance comes from public revenues, with funding allocated to Contracting Units for Primary Care annually on a population basis. According to the WHO, 65% of Thailand's health care expenditure in 2004 came from the government, 35% was from private sources. Although the reforms have received a good deal of critical comment, they have proved popular with poorer Thais, especially in rural areas, and survived the change of government after the 2006 military coup. The then Public Health Minister, Mongkol Na Songkhla, abolished the 30 baht co-payment and made the UC scheme free. It is not yet clear whether the scheme will be modified further under the coalition government that came to power in January 2008.
Europe
Virtually all of Europe has publicly sponsored and regulated health care. The public plans in some countries provide basic or "sick" coverage only; their citizens can purchase supplemental insurance for additional coverage. Countries with universal health care include Austria, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine and the United Kingdom.
Finland
In Finland, public medical services at clinics and hospitals are run by the municipalities (local government) and are funded 76% by taxation, 20% by patients through access charges, and 4% by others. Private provision is mainly in the primary care sector. There are a few private hospitals . The main hospitals are either municipally owned (funded from local taxes) or run by the medical teaching universities (funded jointly by the municipalities and the national government). According to a survey published by the European Commission in 2000, Finland's is in the top 4 of EU countries in terms of satisfaction with their hospital care system: 88% of Finnish respondents were satisfied compared with the EU average of 41.3%. Finnish health care expenditures are below the European average. The private medical sector accounts for about 14 percent of total health care spending. Only 8% of doctors choose to work in private practice, and some of these also choose to do some work in the public sector.
Taxation funding is partly local and partly nationally based. The national social insurance institution KELA reimburses part of patients prescription costs and makes a contribution towards private medical costs (including dentistry) if they choose to be treated in the private sector rather than the public sector. Patient access charges are subject to annual caps. For example GP visits cost €11 per visit with annual €33 cap; hospital outpatient treatment €22 per visit; a hospital stay, including food, medical care and medicines €26 per 24 hours, or €12 if in a psychiatric hospital. After a patient has spent €590 per year on public medical services (including prescription drugs), all treatment and medications thereafter in that year are free.
Germany
Germany has the world's oldest universal health care system, with origins dating back to Otto von Bismarck's Health Insurance Act of 1883. As mandatory health insurance, it originally applied only to low-income workers and certain government employees, but has gradually expanded to cover virtually the entire population. Currently 85% of the population is covered by a basic 'Statutory Health Insurance' plan, which provides the standard level of coverage. The remainder opt for private health insurance, which frequently offers additional benefits. According to the World Health Organization, Germany's health care system was 77% government-funded and 23% privately funded as of 2004.
The government partially reimburses the costs for low-wage earners, whose premia are capped at a predetermined value. Higher wage workers pay a premium based on their salary. They may also opt for private insurance, which is generally more expensive, but whose price may vary based on the individual's health status.
Reimbursement is on a fee-for-service basis, but the number of physicians allowed to accept Statutory Health Insurance in a given locale is regulated by the government and professional societies.
Capitated care, such as that provided by health maintenance organizations, has been prohibited since the 1930s, but has been recently reconsidered as a cost containment mechanism. Copayments were introduced in the 1980s in an attempt to prevent overutilization. The average length of hospital stay in Germany has decreased in recent years from 14 days to 9 days, still considerably longer than average stays in the U.S. (5 to 6 days). Part of the difference is that the chief consideration for hospital reimbursement is the number of hospital days as opposed to procedures or diagnosis. Drug costs have increased substantially, rising nearly 60% from 1991 through 2005. Despite attempts to contain costs, overall health care expenditures rose to 10.7% of GDP in 2005, comparable to other western European nations, but substantially less than that spent in the U.S. (nearly 16% of GDP).
The Netherlands
The Netherlands has a dual-level system. All primary and curative care (i.e. the family doctor service and hospitals and clinics) is financed from private compulsory insurance. Long term care for the elderly, the dying, the long term mentally ill etc. is covered by social insurance funded from taxation. According to the WHO, the health care system in the Netherlands was 62% government funded and 38% privately funded as of 2004.
Insurance companies must offer a core universal insurance package for the universal primary, curative care which includes the cost f all prescription medicines. They must do this at a fixed price for all. The same premium is paid whether young or old, healthy or sick. It is illegal in The Netherlands for insurers to refuse an application for health insurance, to impose special conditions (e.g. exclusions, deductables, co-pays etc or refuse to fund treatments which a doctor has determined to be medically necessary). The system is 50% financed from payroll taxes paid by employers to a fund controlled by the Health regulator. The government contributes an additional 5% to the regulator's fund. The remaining 45% is collected as premiums paid by the insured directly to the insurance company. Some employers negotiate bulk deals with health insurers and some even pay the employees' premiums as an employment benefit). All insurance companies receive additional funding from the regulator's fund. The regulator has sight of the claims made by policyholders and therefore can redistribute the funds its holds on the basis of relative claims made by policy holders. Thus insurers with high payouts will receive more from the regulator than those with low payouts. Thus insurance companies have no incentive to deter high cost individuals from taking insurance and are compensated if they have to pay out more than might be expected. Insurance companies compete with each other on price for the 45% direct premium part of the funding and try to negotiate deals with hospitals to keep costs low and quality high. The competition regulator is charged with checking for abuse of dominant market positions and the creation of cartels that act against the consumer interests. An insurance regulator ensures that all basic policies have identical coverage rules so that no person is medicially disadvantaged by his or her choice of insurer.
Hospitals in the Netherlands are also regulated and inspected but are mostly privately run and for profit, as are many of the insurance companies. Patients can choose where they want to be treated and have access to information on the internet about the performance and wait times at each hospital. Patients dissatisfied with their insurer and choice of hospital can cancel at any time but must make a new agreement with another insurer.
Insurance companies can offer additional services at extra cost over and above the universal system laid down by the regulator, e.g. for dental care. The standard monthly premium for health care paid by individual adults is about 100€ per month. Persons on low incomes can get assistance from the government if they cannot afford these payments. Children under 18 are insured by the system at no additional cost to them or their families because the insurance company receives the cost of this from the regulator's fund.
United Kingdom
Each of the Countries of the United Kingdom has a National Health Service that provides public healthcare to all UK permanent residents that is free at the point of need and paid for from general taxation. However, since Health is a devolved matter, considerable differences are developing between the systems in each of the countries.
England
The National Health Service (NHS), created by the National Health Service Act 1946 has provided the majority of healthcare in England since its launch on 5 July 1948. It provides, among other things, primary care, in-patient care, long-term healthcare, ophthalmology and dentistry. All treatment is free with the exception of charges for prescriptions, dentistry and ophthalmology (which themselves are free to children, the elderly, the unemployed and those on low incomes). The charge for prescriptions is a flat rate of £7.10 pounds, except for a few exceptions. Those under 16 or over 60 do not pay for prescriptions. Private health care has continued parallel to the NHS, paid for largely by private insurance, but it is used by less than 8% of the population, and generally as a top-up to NHS services.
The outsourcing of medical services and support to the private sector is a recent innovation. Hospitals may have both medical services (such as "surgicentres"), and non-medical services (such as catering) provided under long-term contracts by the private sector. Capital projects such as new hospitals have been privatized through the Private Finance Initiative, enabling the public sector borrowing requirement to be circumvented, at least in the short term.
Northern Ireland
Health and Social Care in Northern Ireland is the designation of the national public health service in Northern Ireland.
Scotland
NHS Scotland, created by the National Health Service (Scotland) Act 1947, was also launched on 5th July 1948 though it has always been a separate organisation. Since devolution, NHS Scotland follows the policies and priorities of the Scottish Government, including the phasing out of all prescription charges by 2011.
Wales
NHS Wales was originally formed as part of the same NHS structure created by the National Health Service Act 1946 but powers over the NHS in Wales came under the Secretary of State for Wales in 1969, in turn being transferred under devolution to what is now the Welsh Assembly Government.
Oceania
Australia
Medicare was introduced in Australia by the Whitlam Labor Government on 1 July 1975 through the Health Insurance Act 1973. The Australian Senate rejected the changes multiple times and they were passed only after a joint sitting after the 1974 double dissolution election. Yet Medicare has been supported by subsequent governments and became a key feature of Australia’s public policy landscape. The exact structure of Medicare, in terms of the size of the rebate to doctors and hospitals and the way it has administered, has varied over the years. The original Medicare program proposed a 1.35% levy (with low income exemptions) but these bills were rejected by the Senate, and so Medicare was originally funded from general taxation. In October 1976, the Fraser Government introduced a 2.5% levy. The program is now nominally funded by an income tax surcharge known as the Medicare levy, which is currently set at 1.5% with exemptions for low income earners. There is an additional levy of 1.0%, known as the Medicare Levy Surcharge, for those on high annual incomes ($50,000) who do not have adequate levels of private hospital coverage. This was part of an effort by the previous Coalition Federal Government to encourage takeup of private health insurance. According to the WHO, government funding covered 67.5% of Australia's health care expenditures in 2004; private sources covered the remaining 32.5% of expenditures.
New Zealand
As with Australia, New Zealand's healthcare system is funded through general taxation. According to the WHO, government sources covered 77.4% of New Zealand's health care costs in 2004; private expenditures covered the remaining 22.6%.
Economics
Funding models
Universal health care in most countries has been achieved by a mixed model of funding. General taxation revenue is the primary source of funding, but in many countries it is supplemented by specific levies (which may be charged to the individual and/or an employer) or with the option of private payments (either direct or via optional insurance) for services beyond that covered by the public system.
Almost all European systems are financed through a mix of public and private contributions. The majority of universal health care systems are funded primarily by tax revenue (e.g. Portugal). Some nations, such as Germany, France and Japan employ a multi-payer system in which health care is funded by private and public contributions.
A distinction is also made between municipal and national healthcare funding. For example, one model is that the bulk of the healthcare is funded by the municipality, speciality healthcare is provided and possibly funded by a larger entity, such as a municipal co-operation board or the state, and the medications are paid by a state agency.
Universal health care systems are modestly redistributive. Progressivity of health care financing has limited implications for overall income inequality.
Single-payer
The term single-payer health care is used in the United States to describe a funding mechanism meeting the costs of medical care from a single fund. Although the fund holder is usually the government, some forms of single-payer employ a public-private system.
Public
Some countries (notably the United Kingdom, Italy and Spain) have eliminated insurance entirely and choose to fund health care directly from taxation. Other countries with insurance-based systems effectively meet the cost of insuring those unable to insure themselves via social security arrangements funded from taxation, either by directly paying their medical bills or by paying for insurance premiums for those affected.
Compulsory insurance
This is usually enforced via legislation requiring residents to purchase insurance, though sometimes, in effect, the government provides the insurance. Sometimes there may be a choice of several funds providing a basic service (e.g. as in Germany) or sometimes just a single fund (as in Canada).
In some European countries where there is private insurance and universal health care, such as Germany, Belgium, and Holland, the problem of adverse selection (see Private insurance below) is overcome using a risk compensation pool to equalize, as far as possible, the risks between funds. Thus a fund with a predominantly healthy, younger population has to pay into a compensation pool and a fund with an older and predominantly less healthy population would receive funds from the pool. In this way, sickness funds compete on price and there is no advantage to eliminate people with higher risks because they are compensated for by means of risk-adjusted capitation payments. Funds are not allowed to pick and choose their policyholders or deny coverage, but then mainly compete on price and service. In some countries the basic coverage level is set by the government and cannot be modified.
Ireland at one time had a "community rating" system through VHI, effectively a single-payer or common risk pool. The government later opened VHI to competition but without a compensation pool. This resulted in foreign insurance companies entering the Irish market and offering cheap health insurance to relatively healthy segments of the market which then made super profits at VHI's expense. The government later re-introduced community rating through a pooling arrangement and at least one main major insurance company, BUPA, then withdrew from the Irish market.
Private insurance
In some countries with universal coverage, private insurance often excludes many health conditions which are expensive and which the state health care system can provide. For example in the UK, one of the largest private health care providers is BUPA which has the following list of general exclusions.
Dental/oral treatment (such as fillings, gum disease, jaw shrinkage, etc)†; pregnancy and childbirth†; temporary relief of symptoms†; convalescence, rehabilitation and general nursing care†; drugs and dressings for out-patient or take-home use†; screening and preventive treatment; birth control, conception, sexual problems and sex changes†; allergies or allergic disorders; chronic conditions†; eyesight†; physical aids and devices†; *deafness; cosmetic, reconstructive or weight loss treatment† ; ageing, menopause and puberty ; dialysis† ; complications from excluded or restricted conditions/ treatment ; HRT and bone densitometry†; learning difficulties, behavioural and developmental problems ; overseas treatment and repatriation ; AIDS/HIV† ; pre-existing or special conditions ; experimental drugs and treatment† ; sleep problems and disorders ; speech disorders†
all of which (except overseas repatriation) are available for free or very low cost from the NHS.
(† indicates that treatment may be provided in certain circumstances)
Where voluntary insurance (often private) is predominant, such as in the U.S., medical (health) insurance is subject to the well-known economic problem of adverse selection which may also be referred to as a market failure. Adverse selection in insurance markets occurs because those providing insurance have limited information with which to estimate the health risks on which they may need to pay future claims. In simple terms, those with poor health are more likely to apply for insurance and more likely to need treatments requiring high insurance company payouts. Those with good health may find the cost of insurance too high for the perceived benefit, and some will remove themselves from the risk pool. This adverse selection concentrates the risk pool, thereby further raising costs. In practical terms, the potential for adverse selection means that private insurers have an economic incentive to use medical underwriting to 'weed out' high cost applicants in order to avoid adverse selection. Among the potential solutions posited by economists are single payer systems as well as other methods of ensuring that health insurance is universal, such as by requiring all citizens to purchase insurance and limiting the ability of insurance companies to deny insurance to individuals or vary price between individuals.
Politics
Health care systems throughout the world face sustainability challenges that may require far-reaching changes in national policy. Over the last decade, health spending has been accelerating as a percent of Gross Domestic Product (GDP) among Organisation for Economic Co-operation and Development (OECD) countries. Many industrialized countries have aging populations, with resulting increases in health care utilization, while others face rapid population growth. One recent study, by global consulting firm PriceWaterhouseCoopers, projected that global health care spending would triple in real dollars by 2020, consuming 21% of GDP in the U.S. and 16% of GDP in other OECD countries.
United States
Whether a government mandated system of universal health care should be implemented in the U.S. remains a hotly debated political topic. Those in favor of universal health care, such as the non-partisan Institute of Medicine of the National Academies, which has called for the U.S. to implement universal health care by 2010, argue that the current rate of uninsurance creates direct and hidden costs shared by all, and that extending coverage to all would lower costs and improve quality. Americans have a lower average life expectancy than those in other industrialized nations with universal health care, such as Australia, the United Kingdom, Canada, and Sweden. Infant mortality rates also remain higher in the U.S., despite declines in recent decades, and are higher than the average of the European Union.
Critics of this argument note that there is very little correlation between life expectancy and infant mortality with the quality of health care, due to such factors as alternate causality and variations in the way countries collect their statistical data. In fact, the U.S. led the world in life expectancy twenty years ago with virtually the same health system. Rather, many analysts attribute the lower life expectancy to a great surge in obesity rates. Opponents of universal health care programs argue that people should be free to opt out of health insurance and that government programs would require higher taxes, increase utilization, and reduce health care quality. They also claim that the absence of a market mechanism may slow innovation in treatment and research, and lead to rationing of care through waiting lists.
Both sides of the political spectrum have also looked to more philosophical arguments, debating whether people have a fundamental right to have health care provided to them by their government.
Survey research shows that Americans see expanding coverage as a top national priority, and a majority express support for universal health care. There is, however, much more limited support for tax increases to support health care reform. Most Americans report satisfaction with their own personal health care. Some argue that support for a single-payer system is less than the level of dissatisfaction with the current system and desire for increased coverage might suggest.
Debate in the United States
The following is a listing of universal health care pros and cons as argued by supporters and opponents.
Common arguments forwarded by supporters of universal health care systems include:
- Health care is a basic human right or entitlement.
- Ensuring the health of all citizens benefits a nation economically.This study estimated that the value of health forgone each year because of uninsurance in the U.S. was $65–$130 billion and concluded that this figure constituted "a lower-bound estimate of economic losses resulting from the present level of uninsurance nationally."
- About 60% of the U.S. health care system is already publicly financed with federal and state taxes, property taxes, and tax subsidies - a universal health care system would merely replace private/employer spending with taxes. Total spending would go down for individuals and employers.
- A single payer system could save $286 billion a year in overhead and paperwork. Administrative costs in the U.S. health care system are substantially higher than those in other countries and than in the public sector in the US: one estimate put the total administrative costs at 24 percent of U.S. health care spending.
- Several studies have shown a majority of taxpayers and citizens across the political divide would prefer a universal health care system over the current U.S. system
- Universal health care would provide for uninsured adults who may forgo treatment needed for chronic health conditions.
- Wastefulness and inefficiency in the delivery of health care would be reduced.
- America spends a far higher percentage of GDP on health care than any other country but has worse ratings on such criteria as quality of care, efficiency of care, access to care, safe care, equity, and wait times, according to the Commonwealth Fund.
- A universal system would align incentives for investment in long term health-care productivity, preventive care, and better management of chronic conditions.
- Universal health care could act as a subsidy to business, at no cost thereto. (Indeed, the Big Three of U.S. car manufacturers cite health-care provision as a reason for their ongoing financial travails. The cost of health insurance to U.S. car manufacturers adds between USD 900 and USD 1,400 to each car made in the U.S.A.)
- The profit motive adversely affects the cost and quality of health care. If managed care programs and their concomitant provider networks are abolished, then doctors would no longer be guaranteed patients solely on the basis of their membership in a provider group and regardless of the quality of care they provide. Theoretically, quality of care would increase as true competition for patients is restored.
- A 2008 opinion poll of 2,000 US doctors found support for a universal health care plan at 59%-32%, which is up from the 49%-40% opinion of physicians in 2002. These numbers include 83% of psychiatrists, 69% of emergency medicine specialists, 65% of pediatricians, 64% of internists, 60% of family physicians and 55% of general surgeons. The reasons given are an inability of doctors to decide patient care and patients who are unable to afford care.
- According to an estimate by Dr. Marcia Angell roughly 50% of health care dollars are spent on health care, the rest go to various middlepersons and intermediaries. A streamlined, non-profit, universal system would increase the efficiency with which money is spent on health care.
- In countries in Western Europe with public universal health care, private health care is also available, and one may choose to use it if desired. Most of the advantages of private health care continue to be present, see also two-tier health care.
- Universal health care and public doctors would protect the right to privacy between insurance companies and patients.
- Public health care system can be used as independent third party in disputes between employer and employee.
- Libertarians and conservatives can favor universal health care, because in countries with universal health care, the government spends less tax money per person on health care than the U.S. For example, in France, the government spends $569 less per person on health care than in the United States. This would allow the U.S. to adopt universal health care, while simultaneously cutting government spending and cutting taxes.
Common arguments forwarded by opponents of universal health care systems include:
- Health care is not a right.(Reprinted as ) As such, it is not the responsibility of government to provide health care.
- Universal health care would result in increased wait times, which could result in unnecessary deaths.
- Unequal access and health disparities still exist in universal health care systems.
- The performance of administrative duties by doctors results from medical centralization and over-regulation, and may reduce charitable provision of medical services by doctors.
- Many problems that universal health insurance is meant to solve are presumed caused by limitations on the free market. As such, free market solutions have greater potential to improve care and coverage.
- The widely quoted health care system ranking by the World Health Organization, in which the US system ranked below other countries' universal health care systems, used biased criteria, giving a false sense of those systems' superiority.
- Empirical evidence on the Medicare single payer-insurance program demonstrates that the cost exceeds the expectations of advocates. As an open-ended entitlement, Medicare does not weigh the benefits of technologies against their costs. Paying physicians on a fee-for-service basis also leads to spending increases. As a result, it is difficult to predict or control Medicare's spending. Large market-based public program such as the Federal Employees Health Benefits Program and CalPERS can provide better coverage than Medicare while still controlling costs as well.
- Universal health care systems, in an effort to control costs by gaining or enforcing monopsony power, sometimes outlaw medical care paid for by private, individual funds.
See also
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