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Publicly-funded health care

Publicly funded health care 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 (health insurance premiums, copayments or deductibles).


Financing of health care in public systems

Publicly funded health care systems are usually financed in one of two ways: through taxation or via compulsory Social health insurance. [1]

When taxation is the primary means of financing health care, everyone receives the same level of coverage regardless of their ability to pay, their level of taxation, or risk factors.[1].

In compulsory insurance models, healthcare is financed through a "sickness fund", which can receive income from a number of places such as employees' salary deductions, employers' contributions, or top-ups from the state.

Varieties of public systems

Main article: Health care system

Most developed countries currently have partially or fully publicly funded health systems. For some examples, see the United Kingdom's National Health Service (NHS), or the Medicare systems in Canada and in Australia. In the United States, the role of the government in healthcare provision is a source of continued and sharp debate.

Even among these countries, different approaches exist to the funding and provision of medical services. Systems may be funded from general government revenues (as in Italy and Canada), or through a government social security system (as in France, Belgium, Japan, and Germany) with a separate budget and hypothecated taxes. 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 neither.

Publicly funded medicine may be administered and provided by the government, as in the United Kingdom; in some systems, though, medicine is publicly funded but most health 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.

Innovations in health care can be very expensive. Population aging generally implies more health care, at a time when the taxed working population decreases.

Two-tier health care

Main article: Two-tier health care

Almost every country that has a publicly funded health care system also has a parallel private system, generally catering to private insurance holders. While one goal of public systems is to provide equal service to all, this egalitarianism is often partial. Every nation either has parallel private providers or its citizens are free to travel to a nation that does, so there is effectively a two-tier healthcare system that reduces the equality of service.

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. These are predominantly used for surgical treatment, and operations are generally carried out in the same operating theatres as NHS work and by the same personnel. These amenity beds do not exist in other socialized healthcare systems, such as the Spanish one. From time to time, the NHS pays for private hospitals (arranged hospitals) to take on surgical cases for which NHS facilities do not have sufficient capacity. This work is usually, but not always, done by the same doctors in private hospitals.


Issues regarding publicly funded health care is frequently the subject of political debate.[2][3] In the United States, whether or not a publicly funded universal health care system should be implemented is one such example.[4]

The case for publicly funded health care

Supporters of publicly funded health care claim that publicly funded health care has several advantages over free market provisions.


Some reports have claimed that a free market solution to health care provides a lower quality of care, with higher mortality rates, than publicly funded systems.[5] The quality of health maintenance organisations and managed care has also been criticised by proponents of publicly funded healthcare.[6].

According to a 2000 study of the World Health Organization, publicly funded systems of industrial nations spend less on health care, both as a percentage of their GDP and per capita, and enjoy superior population-based health care outcomes.[7] However, this study has been criticised by conservative commentators for being biased towards the political left[specify]; the WHO study marked down countries for having private or fee-paying health treatment, and rated countries by comparison to their expected health care performance, rather than objectively comparing quality of care. One commentator argued "it's a bit like giving a gold medal to the eighth fastest runner because he has the shortest legs and tried harder."[8]

Cost and efficiency

Proponents of publicly funded health care point out that the United States, which has a partly free market health care system, spends a higher proportion of its gross domestic product on health care (15%) than most other countries.[9] They have claimed that the need to provide profits to investors in a predominantly free market health system, and the additional administrative spending, tends to drive up costs, leading to more expensive health care provision.[5]


Some commentators on the political left argue that a publicly funded health care system is inherently superior because they regard health care as a human right, and argue that access to health treatment should not be based on ability to pay.[10][11]

The case against publicly funded health care

Those who oppose publicly funded health care, predominantly on the political right, have pointed out a number of flaws in publicly funded health care systems, such as those which operate in Canada, the United Kingdom and Germany. It has been criticised for poor quality of care, long waiting lists, and slow access to new drugs.[8][12][13]

Quality of care

International comparisons of health care quality are difficult and have yielded mixed results. For example, an international comparison of health systems in six countries by the Commonwealth Fund ranked the UK's publicly funded system first overall and first in quality of care. Systems in the US and Canada tied for the lowest overall ranking and toward the bottom for quality of care.[14]

Overall, Canadians are quite satisfied with the quality of health care they receive. In a regularly conducted opinion poll, 70% of Canadians reported that they were either very satisfied or somewhat satisfied with the quality of care they receive compared to 30% being somewhat dissatisfied or very dissatisfied. The main factor of dissatisfaction is waiting times.[15] A 2006 study by Nadeen Esmail and Michael Walker of the Fraser Institute found that Canadians are more likely than citizens of most other developed countries to experience long waiting lists for medical care, and that access to doctors is comparatively difficult; the study criticized the Canadian model of universal health care, in which health insurance is a government monopoly.[16]

Public health care varies significantly from country to country. Many countries allow for private medicine in addition to the public health care system. Some countries, e.g. Norway, have more doctors per capita than the US.[17] Also, the US does not have any official record for waiting lists, but a 2005 survey by the Commonwealth Fund of sick adults in six nations found that only 47% of U.S. patients could get a same- or next-day appointment for a medical problem, worse than every other country except Canada. [18]

Innovation and development of new treatments

It has also been noted that the largely free market system of health care in the United States has led to the faster development of more advanced medical treatment and new drugs, and that cancer patients in the United States for many forms of cancer (including breast, thyroid and lung cancers) have higher survival rates than their counterparts in publicly-funded health systems in Europe.[13] Some analysts have pointed out the difficulty of comparing international health statistics. In particular, the mortality rates for cancer in the United States is at about the same level as many other countries, suggesting that the higher survival rates are a function of the way cancer is diagnosed. [19] Many have theorized that public care systems, in which there is more bureaucratic government involvement and less financial incentive in the health care industry, lead to less motivation for medical innovation and invention.[20]

Quality of physicians

Some commentators have pointed out that in publicly funded systems, health care workers' pay is often not related to quality or speed of care. Thus very long waits can occur before care is received. There is also less financial motivation for the most able people to enter health care professions. For example, in Canada, which has a broad publicly-funded health system, the average physician earns only 42 percent of the annual salary earned by their counterparts in the United States, which has a largely free market system; this has led to long waiting lists for care (17.8 weeks in 2006), as many Canadian doctors choose to work in the United States.[21] By limiting the amount of money in the health care system through political mechanisms, shortages of health care resources (such as physicians, nurses, medical equipment, medical devices, pharmaceuticals, and hospitals) are more likely to occur. Opponents claim that higher salaries constitute an incentive to enter the profession and attract more qualified individuals who would otherwise choose a different profession.


Another possible criticism of publicly-funded systems cites the fairness of paying for people's poor individual decisions (obesity, smoking, drinking, drugging, etc.) as they relate to health care costs. It is argued that these costs should be incurred solely by those making those poor decisions. Many American commentators have opposed publicly-funded health systems on ideological grounds, as they argue that public health care is a step towards socialism and involves extension of state power and reduction of individual freedom.[22]

Aspects of the United States health system

Whether publicly funded healthcare can adequately deliver health care more cost effectively than the free market is a matter of much debate. Of all developed nations, the healthcare system of the United States has the highest degree of privatization. Consequently, it is frequently cited by those favoring or opposing universal healthcare.

The cost and quality of care in the United States are frequently the two major issues of discussion. The United States is below the average for developed countries in health measures such as infant mortality[23] , maternal death[24], and life expectancy[25] , although some studies claim the data collected regarding infant mortality and life expectancy do not lend themselves to fair comparison.[26] Access to advanced medical treatments and technologies is greater than in most other developed nations and waiting times may be substantially shorter for treatment by specialists.[27]

The United States does spend more on health care, as an absolute dollar amount and per capita, than any other nation. It also spends a greater fraction of its national budget on health care than Canada, Germany, France, or Japan. In 2004 the United States spent $6,102USD per person on health care, 92.7%(PPP) more than any other G7 country, and 19.9% more than Luxembourg, which, after the US, had the highest spending in the OECD.[28] Risk factors specific to the U.S. population, such as a relatively high prevalence of obesity, may partially explain increased health care spending; however, many other industrialized nations do share these problems to some extent.[citation needed] Although the U.S. Medicare coverage of prescription drugs began in 2006, most patented prescription drugs are significantly more costly in the U.S. than in most other countries. Factors involved are the absence of U. S. government price controls, enforcement of intellectual property rights limiting the availability of generic drugs until after patent expiration, and the monopoly purchasing power seen in national single-payer systems[citation needed]. Some U.S. citizens obtain their medications, directly or indirectly, from foreign sources, to take advantage of lower prices.

The United States system already has substantial public components. Of every dollar spent on health care in the U.S., 45 cents comes from some level of government.[29] The federal Medicare program covers the elderly and people with disabilities, the federal-state Medicaid program provides coverage to the poor, the State Children's Health Insurance Program (SCHIP) extends coverage to low-income families with children, merchant seamen are covered by the Public Health System, and retired railway workers and military veterans are also covered by the government.[30] Government also affects private sector medicine through licensing and regulatory barriers to entry into health professions.

Market failure issues

Various healthcare analysts have asserted that market failure occurs in healthcare markets,[31] but some have suggested that it is a result of too much government involvement rather than too little.[32][33]

The consumers of health care often lack basic information compared to the medical professionals they buy it from, and fully informed choices (particularly in emergencies) are often not plausible. Meanwhile, health insurance companies and care providers also suffer from information asymmetry, as patients are almost always more aware of their particular family histories and risky behaviors than the firms are. Price theory dictates that the risk cost associated with this lack of information gets passed on to consumers. Demand is likely to be inelastic. The medical profession potentially may set rates that are well above ideal market value, and they are controlled by licensing requirements, with some degree of monopoly or oligopoly control over prices. Monopolies are made more likely by the variety of specialists and the importance of geographic proximity. Private insurance has been perhaps the only stabilizing force as they pay a contractually fixed cost for a given procedure. With no more than one or two heart specialists or brain surgeons to choose from, competition for patients between such experts is limited so contractually pre-arranged pricing helps reduce supply-limited pricing.

Preventive medicine issues

There is much conflicting information about the role of preventive medicine in controlling medical costs and improving the health of citizens. Advocates of publicly funded medicine claim that preventive care saves money and prolongs life,[34][35] but opponents assert that it does neither.[36][37]

Difficulties of analysis

Cost-benefit analyses of various health care systems are frequently mentioned by advocates and opponents of publicly funded healthcare programs. Others caution that these analyses are difficult to do accurately due to the multifactoral nature of health, healthcare delivery, and healthcare financing, as well as the lack of consensus on what is "best" for a nation or its people.

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. ^
  3. ^
  4. ^
  5. ^ a b For-Profit Hospitals Cost More and Have Higher Death Rates, Physicians for a National Health Program
  6. ^ For-Profit HMOs Provide Worse Quality Care, Physicians for a National Health Program
  7. ^
  8. ^ a b Why Isn't Government Health Care The Answer?, Free Market Cure, 16 July 2007
  9. ^ The World Health Report 2006
  10. ^ The Right to Health in the United States of America: What Does it Mean?, Center for Economic and Social Rights, October 2004
  11. ^ Human Rights, Homelessness and Health Care, National Health Care for the Homeless Council
  12. ^ The Myths of Single-Payer Health Care, Free Market Cure, 16 July 2007
  13. ^ a b A Story Michael Moore Didn't Tell, Washington Post, 18 July 2007
  14. ^ "Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care" by Karen Davis, Ph.D., Cathy Schoen, M.S., Stephen C. Schoenbaum, M.D., M.P.H., Michelle M. Doty, Ph.D., M.P.H., Alyssa L. Holmgren, M.P.A., Jennifer L. Kriss, and Katherine K. Shea Commonwealth Fund, May 15, 2007.
  15. ^ A POLLARA Report: Health Care in Canada Survey: Retrospective 1998-2003
  16. ^ How Good is Canadian Health Care, Fraser Institute, 24 July 2007
  17. ^
  18. ^
  19. ^
  20. ^ Pipes, S. Border Crossings, Pacific Research Institute, October 17, 2003. Retrieved September 18, 2006.
  21. ^
  22. ^ Moore "World of We", National Review, 13 July 2007
  23. ^
  24. ^
  25. ^
  26. ^
  27. ^
  28. ^
  29. ^ Appleby, Julie. "Universal care appeals to USA", USA Today, 2006-10-16. Retrieved on 2007-05-22. 
  30. ^ U.S. Department of Health & Human Services, Centers for Medicare and Medicaid Services
  31. ^
  32. ^
  33. ^
  34. ^
  35. ^
  36. ^
  37. ^
This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Publicly-funded_health_care". A list of authors is available in Wikipedia.
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