Chapter 40
Healthcare systems
In most countries, the provision of doctors and other health professionals, and of the hospitals and clinics in which they work, involves national organisation, regulation and financing. This need to have a linked and coordinated ‘national healthcare system’ stems from the inevitable need for some government involvement in healthcare, which in turn stems from the different types of market failure from which healthcare generally suffers (see Chapter 39). Even in countries such as the United States, where healthcare organisation is highly fragmented and dominated by private interests, the safety net of federal government and State-funded care programmes, plus the regulation of the insurance industry and the health professions, mean that it is still very much a publicly subsidised and government-regulated system.
‘Public’ versus ‘private’
The organisation and financing of healthcare is often characterised using the polar opposites of ‘public’ (i.e. government control or ownership) and ‘private’ (non-government). In fact, the wide variety of health systems that exist shows that there is considerable variation between these two extremes, and that publicly financed health systems (e.g. by taxation) may provide most of their care through private organisations. Conversely, though less commonly, privately financed healthcare may be provided through organisations (e.g. hospital groups) that are publicly owned and run. Thus, there exists a spectrum of arrangements in terms of the degree and type of government involvement (see Figure 40a). Within the ‘private’ healthcare sector too, organisations may be for-profit or not-for-profit (e.g. charitable insurance funds or hospitals).
Who pays for healthcare and how?
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