Academic journal article Research in Healthcare Financial Management

Comparative Health Care Financing Systems, with Special Reference to East Asian Countries

Academic journal article Research in Healthcare Financial Management

Comparative Health Care Financing Systems, with Special Reference to East Asian Countries

Article excerpt

ABSTRACT

Both the national health service and insurance approaches have come under increased scrutiny in recent years. Decisions about the types of care to offer, the technology to acquire, and the reimbursement of physicians, hospitals, and pharmaceutical companies become political decisions under a national health service or insurance system. A decision to limit the availability of expensive health care, such as heroic operations, organ transplants, and intensive chemotherapy, often provokes public outcry over rationing. The government therefore bears responsibility for denying care. Yet the government also bears responsibility for any rise in costs, and the necessary tax increases, that will result if it fails to limit the health services it provides or finances.

In this context, the emphasis on achieving universal coverage and access must also be consistent with other objectives of seeking efficiency, cost-savings and investments (as opposed to consumption), wage and labor competitiveness in many East Asian economies. Equity concerns should be a priority for any government, but this has to be considered with other implications, along with their longer-term effects on the rest of society and the economy. At increasingly high levels of personal health care consumption that may be of marginal value, governments must rethink how much should be paid out of the public purse, and whether principles of equity should be redefined in society's best interests.

The current systems of government-provided and financed health care are based mainly on the national health service or national health insurance models. This approach has taken many specific forms throughout the world. The essential characteristics of such systems include tax-based financing (which may be supplemented with small user fees), universal coverage, and budgetary controls. A national health insurance system can help to ensure that every citizen has access to health care (universal access) and that all are able to receive similar types and levels of medical care for similar health conditions (equity). Public provision of health care also gives the government control over the delivery of health services and the costs of care.

Both national health service and insurance approaches, however, have come under increased scrutiny in recent years. Decisions about the types of care to offer, the technology to acquire, and the reimbursement of physicians, hospitals, and pharmaceutical companies become political decisions under a national health service or insurance system. A decision to limit the availability of expensive health care, such as heroic operations, organ transplants, and intensive chemotherapy, often provokes public outcry over rationing. The government therefore bears responsibility for denying care. Yet the government also bears responsibility for any rise in costs, and the necessary tax increases, that will result if it fails to limit the health services it provides or finances.

These pressures are likely to intensify as the economy continues to grow in the newly industrializing countries of East Asia. An increasingly well-educated and wealthy population is demanding greater access to high-quality, state-of-the-art health care. As they live longer, they will demand more, and frequently more expensive, care for chronic diseases. If expanded to meet the demands of a wealthier population, the current tax-based system of governmental health care financing and delivery will require increased taxes, diminished access, or lowered provider prices. The ability to lower provider prices, however, is limited, since many physicians are already leaving for the private sector in many East Asian countries with national health services because they believe that the conditions of employment in the government health care delivery system are insufficiently rewarding. Although a substantial number of the population receive care from private providers, many of them do so without insurance coverage. …

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