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The National Health Insurance model

Overview

           "This system has elements of both Beveridge and Bismarck. It uses private-sector providers, but payment comes from a government-run insurance program that every citizen pays into. Since there’s no need for marketing, no financial motive to deny claims, and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style for-profit insurance.

           The single-payer tends to have the considerable market power to negotiate for lower prices; Canada’s system, for example, has negotiated such low prices from pharmaceutical companies that Americans have spurned their own drug stores to buy pills north of the border. National Health Insurance plans also control costs by limiting the medical services they will pay for, or by making patients wait to be treated.

           The classic NHI system is found in Canada, but some newly industrialized countries — Taiwan and South Korea, for example — have also adopted the NHI model."

Health Care Systems: 4 Basic Models

Benefits

1. It lowers the costs of health care for the economy.
   a. government is able to leverage the medical market and negotiate better pricing
   b. Lower cost of care as services and medication are less expensive
   c. Doctors and the pharmaceutical industry receive less payment
   d. Health care spending, as a portion of the GDP, goes down

2. It reduces administrative costs for care access.
   a. There are fewer/lower administrative costs
   b. There is only one agency to bill

3. It simplifies the rules process as there are no complicated rules for utilization and payment review.

4. It removes the competition, removing the focus from those who can pay and less on those who cannot.

5. It creates a workforce that is healthier.
   a. In the United States, 46% of patients went to the emergency room for medical services
   b. With universal health care, there is a greater emphasis placed on preventative care, and the need for emergency interventions decreases

6. It helps children when they are able to get the care they require for good health. (The so-called social determinants of health where children are less likely to get involved with crime, take advantage of welfare programs, or deal with chronic health issues as an adult)

Health Care System Choices: National Health Insurance Model

Faults

1. It requires people to pay for services they do not receive.
   a. In the United States, about 5% of people consume about 50% of the health care costs which are generated each year.
   b. The healthiest 50% of the population consumes just 3% of the health care costs
   c. Universal health care- the healthy and wealthy are asked to pay for the care for those who are not

2. It may stop people from being careful about their health.
   a. Under a universal health care system, people tend to be non-compliant
   b. No financial incentive for someone to stay healthy

3. It may limit the accuracy of patient care as doctors are often assigned more patients than they can legitimately handle.

4. It may have long wait times for elective procedures (some people waiting almost 9-12 months for elective procedures)

5. It limits the payouts which doctors receive.

6. It can limit new technologies when there is a goal to keep costs down.

7. It requires significant budgeting skills as it can be as much as 40% of the government’s annual budget (at the provincial level in Canada for example).

8. It may limit services due to cost-saving measures that may restrict access to certain procedures or medications if the chances of patient success are minimal.
   a. Palliative care might take precedent over life-saving measures.
   b. About 25% of the costs found in the Medicare budget each year are directed toward people in the last 6 years of their life

9. It may offer multiple systems of coverage, which increase patient costs

Health Care System Choices: National Health Insurance Model

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