Healthcare Management

By Kieran Walshe; Judith Smith | Go to book overview

3: Financing healthcare: funding
systems and healthcare costs
Suzanne Robinson
Introduction
Healthcare funding in developed countries accounts for a large percentage of gross domestic product (GDP) and is usually the largest single industry in most countries. Increased demand and technological advances mean that healthcare expenditure continues to grow, whilst on the supply side there is a constant pressure because resources are scarce. Policymakers face tough decisions in this regard. Do they increase funding, contain costs, or both? Whilst this debate continues in the literature (Mossialos et al. 2002; Dixon et al. 2004), policymakers and managers alike need to balance the books and thus find enough revenue to meet healthcare expenditure. With public sector borrowing becoming a less attractive economic policy option in developed countries, policymakers are increasingly looking towards the structure and organisation of healthcare systems – including revenue collection (demand side) and organisation of service provision (supply side) – as a means to manage ever-increasing pressures on health expenditure.This chapter explores four areas relevant to the financing of healthcare in developed countries:
The first section draws on the work of Mossialos et al. (2002) and Murray and Frenk (2000) to provide a framework by which to facilitate understanding and analysis of healthcare funding.
The second section draws on data from the Organisation for Economic Co-operation and Development (OECD) and Office of Health Economics (OHE) to explore the levels of healthcare expenditure in selected OECD countries.
The third section looks at the examples of how money is distributed through healthcare systems.
The fourth section identifies some of the pressures on healthcare costs and expenditure.

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