4 Types of Healthcare Systems

Created: 21 May, 2018
Updated: 17 October, 2022
6 min read

Types of Healthcare Systems

Politicians love to brag about how the United States is the greatest nation on earth. But when it comes to health insurance, this is far from true. 28 million Americans currently have no health insurance coverage, and given the recent introduction of the American Health Care Act, or “Trumpcare,” that number has strong potential to soar even higher.

Even more sobering is the fact that the United States has the highest maternal death rate in the developed world. Why do matters related to health care seem to be so lacking in the “greatest nation on earth?”

The answer: The United States stands alone among developed nations in not providing health care coverage to all citizens as a right. It's well past time the US evolves to a new model of care that is both less expensive and better in outcome.

Other developed nations such as Canada, Germany, Australia and Britain tout different types of healthcare systems than our own, and the US would be smart to take a hard look at the particulars of some of these other models to see what might work better.

There are four types of healthcare systems that are the most common to developed countries; three types of healthcare systems are single-payer. The US is unique in that what system you are a part of depends upon your age and your income and overall good fortune.

1. The Beveridge Model

The first national single-payer health care system is the Beveridge model. In this system, the majority of the hospitals and doctors work for the government, although private physicians do exist.

Those who live in a nation with this type of system never see a doctor's bill, as all health care is paid through the government through taxes. And, because the government controls what pharmaceutical companies and doctors can charge, this system saves an enormous sum of money. While opponents of single payer care claim this causes longer wait times due to a lack of physicians, the data does not substantiate this. England, for example, uses this model, and their quality of care is not compromised, and most hospital waits are still less than four hours long.

2. The Bismarck Model

The second form of a national single-payer health care system is the Bismarck model. At first glance, the Bismarck system looks similar to the US system, as health care is provided through insurance companies who are paid by employer and employee payroll deductions.

However, under Bismarck, everyone must be covered, and no one is left with no access to care. In addition, hospitals and doctors may not operate for profit, so overall costs are again much more affordable than they are under our current US model. While it is true that doctors in Germany earn less than they do in the US, they also leave medical school with little to no debt. And the majority of sick German citizens can obtain an appointment the next day at a far greater rate than Americans do.

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3. The National Health Insurance Model

The National Health Insurance Model is offers a third type of national single-payer health care system. These types of healthcare systems are most popular in Asian countries, the National Health Insurance Model combines aspects of both Beveridge and Bismarck.

Health care is paid through higher taxation; however, patients are free to choose any doctor or hospital they wish. And, again, as with Beveridge and Bismarck, there is no profit incentive, so prices tend to stay lower. And they have better health outcomes. For example, Japan uses this system with a heavy emphasis on preventative care, and as such, have some of the highest life expectancies in the world.

4. The Private Insurance System

The final of the four types of healthcare systems is the one that the majority of US citizens are covered by: the private insurance system. In this system, individuals are either covered by their employers, covered by a private policy the policyholder purchases themselves or they go without coverage at all.

This is currently the health care system in the United States, and this combined with shrinking wages, ever-increasing prices and more and more employers switching to a “gig” model of work leaves millions of Americans with nowhere to go for care other than the emergency room.

In some areas of the United States, particularly poorer areas in the South, citizens may go their entire lives without ever once seeing a doctor. People living in California’s San Joaquin Valley consume some of the most contaminated drinking water nationwide, yet funding is largely unavailable for those who need immediate care as a result.

In places like Alabama, close to a fifth of the population has failed to see a doctor in the past year due to cost. And while many of us consider doctor visits to be a bit of a pain, it’s safe to say that having the option to see a doctor when necessary is generally preferable.

Some critics of the universal health care system, such as Senator Rand Paul, state that instituting a universal health care system equates doctors to slaves because they must provide care even if the profit incentive is not there, leading to an extreme doctor shortage. This assertion is false.

The United States already, for example, guarantees the right to a free public education to all. And while teacher shortages do exist, particularly in states that refuse to compensate teachers well, all students nevertheless receive a free K-12 education, and teachers teach by choice.

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The problems with the private insurance model extend beyond the obvious. It's clear that an uninsured person in the US who suffers an accident or illness may find themselves bankrupted by the experience, something that happens in no other developed nation on the planet. But there are additional problems with these types of healthcare systems as well.

Under the ACA, private insurers were required to cover pre-existing conditions. Under the Trump administration, which repealed the individual mandate portion of the ACA with the Tax Cuts and Jobs act, those with pre-existing conditions may once again find it impossible to afford coverage, as many of those who feel they are healthy will simply opt not to have insurance.

We know that one of the pitfalls of the ACA was that large numbers of healthy younger people chose to take the IRS fine rather than sign up for health insurance.

The private insurance health care system also means that more Americans put off needed preventative care that can keep illnesses from becoming devastating down the road. An ounce of prevention can truly be worth a pound of cure, and with some diseases, like certain aggressive forms of cancer, early detection is the key to survival.

When Americans avoid going to their annual checkups because health care is out of their budget, they may be setting themselves up for a true health crisis.

To say that the United States’ health insurance model is not working for its citizens is an understatement. Countries across Europe, Asia and South America already have one of the three types of healthcare systems offering national single-payer plans in place to ensure all citizens are covered. It is well past time for the US to follow their lead. That the death rate in America has climbed from 7.99 per 100,000 to 8.44 per 100,000 since 1990 is ridiculous.

With the many technological and medical advancements of modern-day America, that number should be decreasing, not growing higher every year. We know it can be done; what we must do now is insist that in the greatest nation on earth, no one is left to die simply because they cannot afford health care.

Photo Credit: Sheff / Shutterstock.com

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