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Healthcare systems can be distinguished on a number of dimensions and in a number of ways. The need for care can be analyzed in terms of the burden of disease; here, developing countries differ considerably from industrialized nations. Healthcare incorporates a wide variety of types of service, whose delivery may be based on different combinations of providers, arranged in differing organizational structures. Financing these services may incorporate various combinations of public payment, social insurance, private insurance, and out-of-pocket payments. Reimbursement to providers may use various combinations of global budgets, fee-for-service, pay-for-performance, and capitation, which in turn imply differing incentive structures. System outcomes may be evaluated on a number of dimensions, including access, cost, quality, patient satisfaction, provider satisfaction, and health outcomes. No two systems are identical, and no system excels on all dimensions; tradeoffs are inevitable.

Need for Care

The Burden of Disease

As the World Health Organization has noted, there are major differences in the causes of death. In a fact sheet, they estimate that for 2002, in low-income countries, nearly one third of deaths occur among children under 14 and less than one quarter of people reach the age of 70. Infectious diseases and the complications of pregnancy and childbirth are the leading causes of death. In high-income countries, more than two thirds live past age 70, and they tend to die of chronic diseases. Middle-income countries fall in between. However, chronic diseases (cardiovascular diseases in particular) are the leading causes of death across all categories of nations. The healthcare systems must accordingly determine what resources are required to meet the health needs of their populations.

An ongoing difficulty is that health expenditures are highly skewed. In general, the sickest 20% of the population accounts for about 80% of health expenditures, and this persists in all age-sex categories. In turn, this distribution of health expenditures affects the implication of various funding models, particularly since those identified as being at high risk of incurring high expenditures are not desirable customers for insurers.

The Role of Public Health

The foundation of all healthcare systems is public health. Ensuring clean water, clean air, and communicable disease control is a vital starting point for preventing disease and disability. So is appropriate engineering (road traffic accidents are leading causes of death in low- and middle-income countries), availability of safe and healthy foods, avoidance of tobacco, and other interventions coming under the rubric of “health promotion/disease prevention.” In that sense, death by chronic disease is a success story; it means that people are living long enough to be affected by these conditions.

Financing, Delivery, and Allocation

Healthcare systems have a number of components. Although different writers may use slightly different nomenclatures and break down these functions in slightly different ways, they all note the importance of distinguishing between how services are paid for—often termed financing—and how they are organized, managed, and provided—often called delivery. Healthcare systems may also explicitly incorporate other key elements such as planning, monitoring, and evaluating, or leave these to the workings of market forces.

The missing link connecting financing and delivery, which has sometimes been termed allocation, refers to the incentive structures set up to manage how funds will flow from those who pay for care to those who deliver it. Saltman and von Otter have placed these allocation approaches on a continuum. At one end, patients follow money; funders allocate budgets to providers and people seeking that kind of care must go to those providers. At the other end of their continuum, money follows patients; providers are paid only to the extent that they attract clients. Unfortunately for those wishing clear reform prescriptions, there is no one best allocation model that can simultaneously ensure cost control, client responsiveness, and delivery of high-quality appropriate care; instead, one is often faced with policy trade-offs. Allocation is usually tied to reimbursement mechanisms.

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