Healthcare Financing
Healthcare financing = collection, management and allocation of financial resources necessary for the functioning of the healthcare system.
Funds are used for:
Medical personnel – Equipment – Medicines – Diagnostic and treatment activities – Prevention programmes – Public health services
No country uses a completely pure financing model.
Modern healthcare systems combine different financing sources.
WHO Classification of Financing
Indirect financing:
Government budgets – Health insurance funds – Municipal budgets – Donations and charities – International organisations
Direct financing:
Direct payment by patients for healthcare services
Beveridge Model (State Budget System)
Developed by William Beveridge in the UK.
Characteristics:
Healthcare financed mainly through taxation
Government finances and organises healthcare
Healthcare provided according to need rather than ability to pay Example:
United Kingdom (NHS)
Advantages:
Universal coverage – Equal access – Strong preventive programmes – Lower administrative costs
Disadvantages:
Waiting lists – Budget limitations – Risk of underfunding
Bismarck Model (Health Insurance System)
Developed by Otto von Bismarck in Germany.
Characteristics:
Compulsory health insurance
Employees and employers contribute to insurance funds Public and private providers may participate
Main principle:
Citizens contribute according to income and receive healthcare according to need
Examples:
Germany – France – Belgium – Austria
Advantages:
Stable financing – High-quality services – Wider patient choice – Encourages personal responsibility
Disadvantages:
Complex administration – High operating costs – Difficult coordination between institutions