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What is Healthcare System?

A healthcare system is the organization by which health care is provided.

Although some view healthcare from an economic perspective as being no different from other products or services, others believe it has many characteristics that encourage government intervention or regulation:

  • The provision of critical healthcare treatment is often regarded as a basic human right, regardless of whether the individual has the means to pay—some treatments cost more than a typical family's life savings.
  • Healthcare professionals are bound by law and their oaths of service to provide lifesaving treatment.
  • Healthcare professionals are monopolists in various respects: surgery, gynecology, prescribing, etc.
  • Consumers often lack the information or understanding to be able to choose rationally between competing healthcare providers when they need treatment, particularly in the event of the need of urgent or emergency treatment.

Healthcare Systems Models

Purely private enterprise healthcare systems are comparatively rare. Where they exist, it is usually for a comparatively well-off subpopulation in a poorer country with a poorer standard of healthcare–for instance, private clinics for a small, wealthy expatriate population in an otherwise poor country. But there are countries with a majority-private healthcare system with residual public service (see Medicare, Medicaid).

The other major models are public insurance systems:

  • Social security healthcare model where workers and their families are insured by the State.
  • Publicly funded healthcare model, where the residents of the country are insured by the State.
  • Sickness insurance model, where the whole population or most of the population is a member of a sickness insurance company, which many regard as the ideal U.S. model, but which due to increasing costs is now less true than it was previously in the U.S.

In almost every country with a government health care system a parallel private system is allowed to operate. This is sometimes referred to as two-tier health care. The scale, extent, and funding of these private systems is very variable. In Canada the lack of private care is notable, and pride is widespread in their one-tier system of only government-provided healthcare, largely coordinated at the provincial level.

Publicly-funded medicine

Publicly funded medicine is a healthcare system that is financed entirely or in majority part by government funds (taxes or quasi-taxes) instead of through private payments made to insurance companies or directly to health care providers (health care premiums, co-payments or deductibles.)

Varieties of public systems

Most developed countries currently have publicly funded health systems that cover the great majority of the population. The notable exception is the United States. For some examples, see the British National Health Service (NHS), or the Medicare systems in Canada and in Australia. 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, 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.

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


All text of this article available under the terms of the GNU Free Documentation License (see Copyrights for details).

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