Health care in the UK and USA: welfare versus the market

CHAPTER 15 Health care in the UK and USA: welfare versus the market



When you finish this chapter you should be able to:








Introduction


Countries throughout the world have developed different health care systems, shaped over time by the policy decisions of their particular governments. Generally, health care systems may be thought about as being either a welfare-based or public system where the government provides the health care system for all citizens, or a market-driven or private system where the services are run by private providers, and citizens pay for their own health care. Many health care systems such as Australia’s are mixed systems, with both public and private elements.


How much of a system should be public and how much should be private, however, is still being debated. Recently this debate has become more vigorous as the rising cost of health care has led governments to question their role in health care provision and to re-examine the role for public and private providers. In many countries there has been a move to privatisation, through government policies that attempt to shift a considerable portion of the increasing financial burden of providing health care to their population to the private sector.


The governments in most countries retain a leading place in health care due to their role in regulating the quantity and distribution of services and in public health, where government regulations ensure safe water and food, control quarantine for infectious diseases and legislate on environmental issues. The private sector is characterised by its market orientation and for-profit philosophy and is much more involved in areas of the health care system where a fee is paid for a particular service, such as hospital care, medical care, diagnostic services, pharmaceutical services and so on.


This chapter will describe the health care services provided in the United States (US) and in the United Kingdom (UK). The US is generally considered to have a predominantly private and market-led system, whereas the UK has a public health care system based on welfare-state principles.



Health care in the US: evolution of health services


Drawing on Weitz (1996), Sultz and Young (1997), Scott (1998), Scrambler (2002) and Saleh and Levin (2005) critical phases which have shaped the US health care system may be identified. Historically, health care in the US was dominated by the relationship between doctors and their patients in a private fee-for-service arrangement. Hospitals were established by community, religious and fraternal organisations and perceived to be charitable institutions. These hospitals were not expected to generate profits but they were expected to be self-supporting. Doctors charged fees for the services they personally provided. This arrangement separated the functions of the doctor and the hospital.







More recent developments


During the 20th century the US health care system moved from a locally based, individually organised health care with not-for-profit institutions to an increasingly for-profit nationally orientated ‘corporatised system’ (Saleh & Levin 2005). Rising health care costs and a growing portion of the population who did not have access to health care insurance became a concern. The uninsured included the unemployed and lowly paid, casual and sessional workers whose employers did not provide health insurance and who could not afford to pay the premiums, and those with disabilities who did not meet the criteria for Medicaid, and the aged who could not meet the gap for Medicare.


In 1993 President Bill Clinton presented a comprehensive approach to reforming the complex health delivery system that included a government-sponsored system of universal health care insurance (Budetti 2004). For various reasons, this proposal failed and the responsibility for managing costs again fell to the private sector.


What followed was a rise in managed care, controlled by the insurance companies and newer models of HMOs. The HMOs offered various prepaid health plans for which the insured persons or families paid a fixed fee for designated health services. Costs for any services beyond the agreed health plan with the insurance company were met by the patient. Under managed care, insurers focused on setting limits for the individual medical encounter (‘managing care’). Insurers typically contract with a limited number of doctors and preferred provider organisations (PPOs), negotiating price discounts in exchange for guaranteed patient volume, thus excluding high-cost providers. Clinical decisions were subject to external review by the insurance providers with doctors having to seek permission to admit patients to hospital, or perform diagnostic tests or medical procedures. The HMOs were expected to hold down costs by changing the profit incentive from fee-for-service to promoting health and preventing illness. Despite inconclusive evidence about the anticipated savings, HMOs now functioned as corporatised for-profit businesses and are an important part of the US health insurance market.

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Mar 24, 2017 | Posted by in MEDICAL ASSISSTANT | Comments Off on Health care in the UK and USA: welfare versus the market

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