|
BP-438E
PUBLIC-
AND PRIVATE-SECTOR INVOLVEMENT
IN HEALTH-CARE SYSTEMS:
A COMPARISON OF OECD COUNTRIES
Prepared by:
Claude Blanchette, Erin Tolley, Economics Division
May 1997
Revised February 2001
TABLE
OF CONTENTS
INTRODUCTION
DEFINING
"PUBLIC" AND "PRIVATE"
THE
ROLE OF THE PUBLIC SECTOR IN HEALTH CARE
THE
ORGANIZATION OF HEALTH-CARE SYSTEMS
A.
Public Financing
1.
Tax-based Financing
2.
Social Security Financing
B.
Private Financing
1. Private
Insurance
2.
Out-of-pocket Payments
C.
Public and Private Delivery
THE
COMPARATIVE APPROACH AND DOMESTIC POLICY-MAKING
HEALTH-CARE
SPENDING TRENDS IN OECD COUNTRIES: AN OVERVIEW
FINANCING
HEALTH CARE IN OECD COUNTRIES
DELIVERING
HEALTH CARE IN OECD COUNTRIES
RESOURCE
ALLOCATION: SERVICE RATIONING
WHAT
CAN WE EXPECT IN THE FUTURE?
CONCLUSION
PUBLIC- AND PRIVATE-SECTOR
INVOLVEMENT
IN HEALTH-CARE SYSTEMS:
A COMPARISON OF OECD COUNTRIES(1)
INTRODUCTION
At the end of the Second
World War, Canada and several other countries introduced significant measures
to build health-care systems that would meet the publics changing
needs and demands. During this time, health care became universally
accessible in many countries, and health-care spending accounted for an
increasingly large proportion of the gross domestic product (GDP).(2)
As a result, the range of publicly funded health services grew, hospital
infrastructure improved, and the use of new medical technologies significantly
increased the number of diseases that could be successfully treated.
This trend, however, would change. The oil crisis in the 1970s,
the recession in the 1980s, and the desire to balance governments
budgets in the 1990s necessitated changes in response to the rising costs
of health care.
Changes were introduced
to contain costs and enable health-care resources to be used more efficiently.
In general, these changes have meant reduced public coverage, decreased
publicly funded health services, and increased out-of-pocket payments.
Although the rate of growth in private-sector spending in health care
was decreasing in the 1960s and 1970s, it began to exceed public-sector
spending in many countries, including Canada, in the 1980s and 1990s.
There is now greater involvement by the private sector in health care.
Increasingly, the public and private sectors are working conjointly to
fund and deliver health services.
This paper will examine
public- and private-sector involvement in health care in the member countries
of the Organisation for Economic Co-operation and Development (OECD).
Using examples from the OECD countries, the first part of the paper discusses
the organization of health-care systems and the role of the public and
private sectors in financing and delivering health care. Following
a few remarks about the comparative method of analysis, the second part
of the paper provides an overview of health-care spending in OECD countries
from 1960 to the present. The next sections examine health-care
financing, delivery and resource allocation in OECD countries with a particular
focus on the increasing involvement of the private sector. After
a section on expectations for the future, the paper makes some concluding
remarks.
DEFINING
"PUBLIC" AND "PRIVATE"
The terms public
and private, although not precise, are often used as descriptors
for health-care systems. In general, public refers to
government involvement, while private may refer to involvement
by businesses, charitable organizations or individuals. This categorization
is illustrated in Table 1.
Table 1
Categories of Public and Private
Category
|
Levels
|
Public
|
|
|
|
|
|
|
|
Private
|
|
|
- Small business/entrepreneurial
|
|
- Charity/non-profit
(paid employees or volunteers)
|
|
|
Source: Raisa Deber
et al., The Public-Private Mix in Health Care,
Striking a Balance: Health Care Systems in Canada and Elsewhere, paper
commissioned by the National Forum on Health, MultiMondes, 1998, p. 433.
Although Table 1 presents
the public and private sectors as separate entities, the two are often
closely related. For example, even when hospital services are delivered
by charitable organizations (the private sector), the responsibility to
do so is typically delegated by the government (the public sector).
Governments frequently regulate private-sector involvement, as with the
German Sickness Funds, or they may provide additional funding, as with
the substantial government (public) subsidization of the U.S. health-care
system, which is typically described as private.
THE
ROLE OF THE PUBLIC SECTOR IN HEALTH CARE
Public-sector involvement
in health care dates back to 1883 when compulsory sickness insurance was
introduced in Germany for some categories of workers. This established
the first model of mandatory health-care insurance in the Western world.
Almost all industrialized countries now have health-care systems in which
there is a high level of public-sector involvement. Nonetheless,
there is little consensus between economists about the precise role that
the public sector should play in financing and delivering health care.
Some of the arguments for public-sector involvement in health care include
social justice, restriction of monopolies, redistribution and public goods.(3)
These arguments may overlap.
The social justice argument
applies to situations in which the provision of health services to one
person is advantageous for other members of society. For example,
the treatment of an infectious disease provides a broad societal benefit.
From a social standpoint, public-sector delivery of these types
of health services may be preferred to private-sector delivery because
when the price of a service is determined privately, it may not incorporate
the positive external social benefits of delivering it. As a result,
the price may be higher when it is determined privately. If the
price exceeds what people can afford, or are willing, to pay, they will
forego the treatment. This may have undesirable social consequences.
For example, an infectious disease may spread to a broad segment of society.
The second argument is that
government involvement in health care prevents health-care providers from
exercising a monopoly. In a health-care monopoly, the medical profession
is able to control access to training or impose restrictions on medical
substitutes. This can restrict the availability of services.
The redistribution argument
asserts that public-sector involvement permits the redistribution of funds
from people who are in good health to people who are in poor health.
Individuals are not equally afflicted with health problems. People
with unhealthy lifestyles or dangerous jobs, for example, have a higher
risk of developing health problems. In a private insurance system,
these people would pay a higher premium, but in a public insurance system,
the risks are pooled and everyone pays the same premium, regardless of
the risk for filing a claim. In the public model, insurance must
be mandatory, otherwise those at low risk would almost certainly opt out.
In the private model, insurance is voluntary and insurers may choose who
they wish to insure. In some cases, people in poor health may have
difficulty finding an insurer who is willing to cover them. Figure
1 depicts the health-care funding, risk pooling, and insurance coverage
patterns in selected countries.
The public goods
argument in favour of public-sector involvement in health care suggests
that health care is a public good in the sense that it cannot be
managed by market mechanisms because it is impossible to exclude people
who have not paid from consuming it.(4)
Clean air and military defence are two other examples of public goods.
There is a consensus that governments have a legitimate economic role
and responsibility to fund and deliver public goods.
Figure 1
Funding, Risk Pooling and Insurance Coverage
Source: World
Health Organization, The World Health Report 1999, WHO, 1999, p.
41.
In recent years, concerns
about cost containment, quality, and accessibility to health services
have prompted calls for health-care reform in many countries. As a means
of addressing these concerns, public-sector involvement in health care
has decreased, permitting increased involvement by the private sector
in health care in many countries. Proponents argue that private-sector
involvement in health-care systems encourages greater efficiency, innovation,
consumer choice, and client responsiveness.(5)
However, Deber et al. argue:
Most reasons advanced
in favour of allowing competing insurers or financers appear to be based
on ideology rather than evidence. The primary justification is
usually based on the assumptions that markets promote efficiency and
that competition is more responsive to innovation and patient choice.
There is good justification for these arguments when speaking of delivery,
but none when speaking of financing.(6)
Other critics argue that
greater private-sector involvement will lead to inequities in access and
eroded standards of care.(7)
THE
ORGANIZATION OF HEALTH-CARE SYSTEMS
In its simplest form, a
health-care system contains two components: financing and delivery.
Financing refers to the generation of funds to pay for health services,
while delivery refers to the provision of health services. Financing
and delivery can be carried out in the public sector, the private sector,
or both. As such, a variety of financing and delivery options are
available. Table 2 illustrates the possible combinations for public- and
private-sector involvement in financing and delivering health care, drawing
on examples from the OECD countries. A more detailed discussion
of these options follows.
The precise organization
of a health-care system is much more complex than Table 2 implies.
Most countries use a mix of financing and delivery options from both the
public and the private sector, although the private-sector component is
typically small. As Deber et al. point out, Virtually
every country employs some combination of financing and delivery models,
relying on various public-private combinations in various sectors of the
health-care system or for various groups of the nations population.(8)
Moreover, health-care systems are dynamic; changing needs, new
policy directions, and medical developments may all necessitate health-care
reform. As a result, it is quite difficult to place health-care
systems into static compartments.
Table 2
Private- and Public-Sector Involvement in Health Care
|
|
DELIVERY
|
|
|
Public
|
Private
|
FINANCING
|
Public
|
- Insurance and service delivery
are handled by a single public agency.
- Norway, Sweden, Denmark, Finland
|
- The public pays for services
through taxes or social security and the services are provided
by private agencies (commercial or non-profit).
- Canada, Japan, Germany, France,
United Kingdom
|
Private
|
- The cost is charged directly
to users (through insurance or out-of-pocket payments) but
services are provided in public facilities.
- To our knowledge, no good examples
of this system exist.
|
- Health care is funded by private
insurance or paid for directly by the patient and is provided
in private facilities.
|
A.
Public Financing
In publicly financed systems,
there is considerable government involvement in funding health services.
There are two types of public financing: (1) tax-based financing; and
(2) social security financing.
1.
Tax-based Financing
In a tax-based model, access
to health services is, in theory, independent of ones ability to
pay. In this model, health care is financed primarily through taxation;
and everyone enjoys the same level of public coverage, regardless of their
risk factors and level of taxation. Taxes are collected by the government,
which then delivers the services, as in Sweden, or pays others to do so,
as in Canada. Typically in these systems, no user charges are collected
for publicly insured health services. Even in tax-based schemes,
however, there are some financing variations. For example, New Zealand
uses general tax revenues to finance its system, but in Australia, the
National Health Insurance is funded through a mixture of general tax revenue,
a levy on taxable income, state revenues, and fees paid by patients.
In the United Kingdom, the National Health Service is funded through a
mixture of general taxation and national insurance contributions. Other
countries that use tax-based financing as the primary source of health-care
funding are Denmark, Finland and Ireland.
2.
Social Security Financing
Social security financing
schemes are funded by premiums collected through sickness funds.
Membership in a sickness fund is compulsory and the premium is generally
based on a percentage of an individuals wage. The sickness
funds are managed by a number of social partners (e.g., employers, professional
groups and regions) and are subject to stringent government regulation
and monitoring. Because of this partnership between the government
and others, the social security model for financing health care is sometimes
referred to as quasi-public financing. Austria, Belgium,
Japan, France, Germany, the Netherlands and Luxembourg fund their health-care
systems primarily through social security.
B.
Private Financing
Essentially, there are two
categories of private financing: (1) private insurance; and (2) out-of-pocket
payments. The latter category includes several forms of private payment.
For example, in private insurance schemes, co-insurance and deductibles
are types of out-of-pocket payments.(9)
In public insurance schemes, out-of-pocket payments may include extra
billing or user fees.(10)
A final type of out-of-pocket payment occurs when services are partially
covered, or not covered at all, by either the public or private insurance
plan. In these cases, the patients must pay the full cost of the
health service.
Although some type of private
financing is used in all OECD countries, the revenue generated in this
way remains a small portion of total health-care spending, except in the
United States where private financing is significant. Nonetheless,
some observers have noted that with the recent emphasis on cost-effectiveness,
these methods of financing have become increasingly common.(11)
Indeed, some health economists
assert that if individuals are required to pay directly for a portion
of their own health services, they will take steps to prevent illness
and their use of health services. As such, it is believed that
private financing will reduce incidences of under-prevention or overuse.
For example, dental care is not covered under Canadas public health-care
system. This may encourage people to develop better oral hygiene.
Limiting the number of eye examinations covered under the public plan,
as in Canada, restricts the availability of this service and reduces costs,
although perhaps not to the benefit of patients health.
Some observers, however,
contest this application of economic theory to health care, noting free-of-charge
services do not translate automatically into unjustified over-utilization
of services.(12) In
the first place, they argue that it is unlikely that people will abuse
their health solely because they will not have to pay for resulting care.(13)
Second, they suggest that these arrangements disproportionately affect
the poor. In their view, there is a correlation between poverty
and poor health; the poor require health care more frequently, and they
are less able to pay for the services out of their own pockets.
For this reason, many countries exempt low-income earners from cost-sharing
arrangements. This is the case in the United States where Medicare
and Medicaid provide coverage for the elderly and the poor. Despite
public coverage for these groups of people, it is estimated that around
60 percent of those below the federally defined poverty line are ineligible
for coverage in the United States.(14)
1.
Private Insurance
When private insurance is
used to finance health services, patients pay a premium and are usually
required to pay a deductible or co-insurance. The insurer covers
the remaining costs. Participation in a private insurance scheme
is voluntary and premiums are typically based on the insurees level
of risk.
The United States is the
only OECD country that relies primarily on private insurance for health-care
financing, but in many OECD countries, private insurance either supplements
or competes with publicly funded health care. For example, in the
United Kingdom, individuals are permitted to purchase private insurance
coverage for services that are covered under public health-care insurance,
as long as the service is provided by the private sector. In Holland
and Germany, private insurance is an alternative to public insurance;
those who have private insurance are exempt from the payroll taxes that
finance public plans. These plans cover the majority of the population
in both countries. By contrast, in Canada, provincial legislation
prohibits private insurance for services covered under public health-care
insurance, but private insurance is available for services that are not
publicly insured, such as drugs, dental care and eye care.
2.
Out-of-pocket Payments
Out-of-pocket payments involve
payment, by the patient, of a fee charged for the provision of health
services. As noted above, out-of-pocket payments may be required
in both private insurance schemes and public health-care insurance plans.
In Canada, legislation prohibits
the use of user charges or extra billing for services that are publicly
insured. For services that are not publicly insured, user charges
may be levied, but infrequently. User charges are widely used in
OECD countries. In both Sweden and France, where public coverage
is broader than in Canada, user charges are applied to physician services,
drugs and dental care. In Germany, patients are assessed a fee, approximately
$15 Canadian, for hospitalization. In Japan, co-payments are charged
for all medical bills, physicians bills, inpatient care, pathology,
pharmaceuticals and X-rays, although various government subsidies exist
and fees are adjusted based on income. Extra billing is not common
in OECD countries. Australia and Finland do permit this practice, but
with protections for low-income families.
The highest out-of-pocket
payments are incurred when there is no form of insurance to cover the
cost of health services. In these cases, patients pay for the service
in its entirety. For example, although Canadians do not incur any
out-of-pocket payments for publicly insured health services, certain services
dental care, eye care and prescription drugs are not publicly
insured. It has been estimated that approximately 12% of Canadians
do not have a drug insurance plan and therefore must pay the full cost
of their prescription drugs. In 1999, in the United States, some
44 million people 16% of the population did not have health-care
coverage.(15)
C.
Public and Private Delivery
Publicly delivered health
care is provided by non-profit public-sector practitioners in publicly
owned facilities. Funding for these systems typically comes from
the public sector. Denmark and Norway are examples of countries
that deliver the majority of health services in this way, although a portion
of services in all OECD countries are publicly owned and publicly delivered.
In privately delivered systems,
services are provided by private practitioners, either commercial or non-profit,
in privately owned facilities. Canada delivers most health care
in non-profit settings, as do the United Kingdom and the Netherlands.
Funding for these systems may come from the public sector or the private
sector. By contrast, the United States relies extensively on private,
for-profit delivery of health care.
THE
COMPARATIVE APPROACH AND DOMESTIC POLICY-MAKING
The comparative analysis
of social policies, or cross-border learning, has grown rapidly
in recent years. In the context of health-care systems, Marmor and
Okma argue that the growth of comparative analysis is linked to three
developments:
-
funding for health care
is a major expenditure in most developed welfare states, and the fiscal
strain of the 1980s and 1990s resulted in greater policy scrutiny;
-
the maintenance of existing
programs has taken priority over bold fiscal expansion; and
-
the post-war consensus
on the welfare state is eroding.(16)
These developments have
necessitated new approaches to health-care delivery, financing and policy.
As there is no laboratory in which to test new social policy
ideas, the practices and policies of other countries have at times been
used to generate domestic policy. Nonetheless, as Marmor and Okma
point out, there is much ill-advised cross-border shopping. (17)
Therefore, comparative analyses should be interpreted and used with caution.
The specificity of local conditions, stakeholders and institutions requires
that policy-makers generate policy solutions that fit within the context
of each country.
Numerical comparative data
demand an even greater level of caution. When compiling health-care
data, countries may use different methods to report, record and calculate
these figures. Not only may countries differ in terms of the items
that they exclude and include in their reports, but the way that variables
are defined may differ as well. As such, comparative numerical data
should be used as guidelines for assessing trends, rather than as precise
indicators of similarity and difference.
HEALTH-CARE
SPENDING TRENDS IN OECD COUNTRIES: AN OVERVIEW
In order to contextualize
health-care spending in relation to overall economic growth, health-care
expenditures are often reported as a percentage of GDP. In general,
health-care expenditures increase as GDP increases. However, caution
is advised. For example, if one examines health-care expenditures
as a proportion of GDP during a recession, there is the illusion of
growth. This is because during times of economic recession, health-care
expenditures remain relatively stable while GDP decreases, making it appear
as though there has been growth in health-care spending. Nonetheless,
the relationship between health-care expenditures and GDP is the most
commonly used comparator. It would be inappropriate, and difficult, to
define a correct level of health-care funding, but the World
Health Organization suggests that while spending much more than
9% of GDP may indicate macroeconomic inefficiency, countries spending
less than 2% are almost certainly investing too little in health.(18)
Table 3 shows the level
of health-care spending as a proportion of GDP in OECD countries.
When examining total health-care expenditures, two trends are apparent.
First, in the 1960s and 1970s, spending on health care increased dramatically
in most OECD countries. Second, throughout the 1980s and 1990s,
health-care spending slowed, or decreased, in most countries. Indeed,
between 1960 and 1980, health-care spending as a proportion of GDP grew
by 2.9 percentage points; between 1980 and 1998, health-care spending
as a proportion of GDP grew by only 1.4 percentage points, half the rate
of growth experienced in the previous two decades.
In Canada, the rate of growth
in health-care spending was the fastest in the 1960s and 1980s; it was
slower in the 1970s and the 1990s. In the late 1990s, health-care
spending as a proportion of GDP has changed only marginally in relation
to GDP. This is consistent with most other OECD countries.
Even in the United States, where health-care spending in relation to GDP
has been increasing since the 1960s, between 1995 and 1999, health-care
spending declined in relation to GDP. Clearly, cost control has
become a key plank in the health-care policies of most OECD countries.
Table 3
Total Health-Care Spending as a Percentage of GDP
|
1960
|
1965
|
1970
|
1975
|
1980
|
1985
|
1990
|
1992
|
1994
|
1996
|
1997
|
1998
|
1999
|
Australia |
4.7
|
4.9
|
5.4
|
7.2
|
7
|
7.4
|
7.9
|
8.2
|
8.2
|
8.3
|
8.3
|
8.5
|
|
Austria |
4.3
|
4.6
|
5.3
|
7.2
|
7.7
|
6.7
|
7.2
|
7.6
|
8.1
|
8.9
|
8.2
|
8.2
|
8.3
|
Belgium |
3.4
|
3.9
|
4.1
|
5.9
|
6.4
|
7.2
|
7.4
|
7.9
|
7.9
|
8.6
|
8.6
|
8.8
|
|
Canada |
5.4
|
5.9
|
7
|
7.2
|
7.2
|
8.4
|
9.2
|
10.2
|
9.8
|
9.4
|
9.3
|
9.5
|
9.5
|
Czech.
Rep. |
|
|
|
|
3.8
|
4.5
|
5
|
5.4
|
7.3
|
7.0
|
7.1
|
7.2
|
7.6
|
Denmark |
3.6
|
|
|
|
9.2
|
8.8
|
8.4
|
8.4
|
8.5
|
8.3
|
8.2
|
8.3
|
8.3
|
Finland |
3.9
|
4.9
|
5.7
|
6.2
|
6.4
|
7.2
|
7.9
|
9.1
|
7.8
|
7.7
|
7.3
|
6.9
|
|
France |
4.2
|
5.2
|
5.8
|
7
|
7.4
|
8.3
|
8.8
|
9.2
|
9.6
|
9.7
|
9.6
|
9.6
|
9.5
|
Germany |
|
|
6.3
|
8.8
|
8.8
|
9.3
|
8.7
|
9.7
|
9.8
|
10.6
|
10.5
|
10.6
|
10.5
|
Greece |
3.1
|
|
5.7
|
|
6.6
|
|
7.6
|
8.3
|
8.3
|
8.3
|
8.5
|
8.3
|
|
Hungary |
|
|
|
|
|
|
|
7.8
|
8.2
|
7.2
|
6.9
|
6.8
|
|
Iceland |
3.3
|
3.9
|
5
|
5.8
|
6.2
|
7.3
|
8
|
8.2
|
8.1
|
8.1
|
7.9
|
8.3
|
8.4
|
Ireland |
3.8
|
4.2
|
5.3
|
7.7
|
8.7
|
7.9
|
7
|
7.8
|
7.7
|
7.2
|
7.0
|
6.4
|
6.1
|
Italy |
3.6
|
4.3
|
5.2
|
6.2
|
7
|
7.1
|
8.1
|
8.5
|
8.4
|
8.1
|
8.4
|
8.4
|
8.4
|
Japan |
3
|
4.5
|
4.6
|
5.6
|
6.5
|
6.7
|
6.1
|
6.3
|
6.9
|
7.1
|
7.4
|
7.6
|
|
Korea |
|
|
1.9
|
2
|
3.4
|
4.3
|
4.8
|
4.8
|
4.6
|
4.9
|
5.0
|
5.0
|
|
Luxembourg |
|
|
3.7
|
5.1
|
6.2
|
6.1
|
6.6
|
6.6
|
6.5
|
6.4
|
6.0
|
5.9
|
|
Mexico |
|
|
|
|
|
|
3.6
|
4.4
|
4.7
|
4.6
|
4.7
|
|
|
Netherlands |
|
|
|
7.9
|
8.3
|
8.1
|
8.8
|
9.2
|
9.2
|
8.8
|
8.6
|
8.6
|
|
New Zealand |
4.3
|
|
5.2
|
6.7
|
6
|
5.3
|
7
|
7.6
|
7.3
|
7.3
|
7.6
|
8.1
|
|
Norway |
2.9
|
3.5
|
4.5
|
6
|
7
|
6.7
|
7.8
|
8.2
|
8.0
|
8.0
|
8.1
|
8.9
|
8.6
|
Poland |
|
|
|
|
|
|
5.3
|
6.6
|
6.0
|
6.4
|
6.2
|
6.4
|
6.3
|
Portugal |
|
|
2.8
|
5.6
|
5.8
|
6.3
|
6.4
|
7.2
|
7.5
|
7.7
|
7.6
|
7.8
|
|
Spain |
1.5
|
2.6
|
3.7
|
4.9
|
5.6
|
5.7
|
6.9
|
7.4
|
7.4
|
7.1
|
7.0
|
7.1
|
|
Sweden |
4.7
|
5.5
|
7.1
|
7.9
|
9.4
|
9
|
8.8
|
8.8
|
8.6
|
8.7
|
8.5
|
8.4
|
|
Switzerland |
3.1
|
3.6
|
4.9
|
6.6
|
6.9
|
7.7
|
8.3
|
9.3
|
9.5
|
10.1
|
10.3
|
10.4
|
|
Turkey |
|
|
2.4
|
2.7
|
3.3
|
2.2
|
3.6
|
3.8
|
3.6
|
3.8
|
4.0
|
|
|
United
King. |
3.9
|
4.1
|
4.5
|
5.5
|
5.7
|
5.9
|
6
|
6.9
|
7.0
|
7.0
|
6.7
|
6.7
|
7.0
|
United
States |
5.1
|
5.7
|
7.1
|
8
|
8.9
|
10.4
|
12.4
|
13.6
|
13.9
|
13.8
|
13.6
|
13.6
|
13.7
|
OECD
Average |
3.79
|
4.46
|
4.91
|
6.26
|
6.73
|
7.0
|
7.29
|
7.83
|
7.86
|
7.9
|
7.83
|
8.15
|
8.63
|
() = insufficient
data
Source: OECD, OECD
Health Data 2000: A Comparative Analysis of 29 Countries, CD-ROM.
FINANCING
HEALTH CARE IN OECD COUNTRIES
This was not always the
case. In the decades following the Second World War, health-care
spending in all OECD countries increased dramatically, as did government
involvement in health care. As Table 4 shows, in the OECD countries for
which sufficient data exist, public spending on health care (as a proportion
of GDP) increased 2.8 percentage points between 1960 and 1980, while private-sector
spending increased by only 0.2 percentage point in the same period.
In Canada, the comparison is even more striking: while public spending
increased by 3.1 percentage points between 1960 and 1980, private spending
decreased 1.3 percentage points and did not begin to rise again until
the 1980s. The strong growth in health-care spending in Canada
and elsewhere during the 1960s was largely a result of growth in the public
sector.
Table 4
Public- and Private-Sector Health-Care Spending as a Percentage of GDP
|
1960 |
1970 |
1980 |
1990 |
1998 |
|
Public |
Private |
Public |
Private |
Public |
Private |
Public |
Private |
Public |
Private |
Australia |
2.2
|
2.5
|
3.6
|
1.8
|
4.3
|
2.7
|
5.3
|
2.6
|
5.9
|
2.6
|
Austria |
3
|
1.3
|
3.4
|
1.9
|
5.3
|
2.4
|
5.3
|
1.9
|
5.8
|
2.4
|
Belgium |
2.1
|
1.3
|
3.5
|
0.6
|
5.4
|
1
|
6.6
|
0.8
|
7.9
|
0.9
|
Canada |
2.3
|
3.1
|
4.9
|
2.1
|
5.4
|
1.8
|
6.8
|
2.4
|
6.6
|
2.9
|
Czech Rep. |
|
|
|
|
3.7
|
0.1
|
4.8
|
0.2
|
6.6
|
0.6
|
Denmark |
3.2
|
0.4
|
|
|
8
|
1.1
|
7
|
1.4
|
6.8
|
1.5
|
Finland |
2.1
|
1.8
|
4.2
|
1.5
|
5
|
1.4
|
6.4
|
1.5
|
5.3
|
1.6
|
France |
2.4
|
1.8
|
4.3
|
1.5
|
5.8
|
1.6
|
6.7
|
2.1
|
7.2
|
2.3
|
Germany |
3.2
|
1.6
|
4.6
|
1.7
|
6.9
|
1.9
|
6.7
|
2
|
7.9
|
2.7
|
Greece |
1.5
|
1.6
|
2.4
|
3.3
|
3.7
|
2.9
|
4.8
|
2.8
|
4.7
|
3.6
|
Hungary |
|
|
|
|
|
|
|
|
5.2
|
1.6
|
Iceland |
2.5
|
0.8
|
4.1
|
0.9
|
5.5
|
0.7
|
6.9
|
1.1
|
7
|
1.3
|
Ireland |
2.9
|
0.9
|
4.3
|
1
|
7.1
|
1.6
|
5
|
2
|
4.8
|
1.6
|
Italy |
3
|
0.6
|
4.5
|
0.7
|
5.6
|
1.4
|
6.3
|
1.8
|
5.6
|
2.8
|
Japan |
1.8
|
1.2
|
3.2
|
1.4
|
4.6
|
1.9
|
4.7
|
1.4
|
6
|
1.6
|
Korea |
|
|
0
|
1.9
|
0.7
|
2.7
|
1.7
|
3.1
|
2.3
|
2.7
|
Luxembourg |
|
|
3.3
|
0.4
|
5.7
|
0.5
|
6.1
|
0.5
|
5.4
|
0.5
|
Mexico |
|
|
|
|
|
|
2.1
|
1.5
|
|
|
Netherlands |
|
|
5
|
|
5.9
|
2.4
|
6.1
|
2.7
|
6
|
2.6
|
New Zealand |
3.5
|
0.8
|
4.2
|
1
|
5.3
|
0.7
|
5.8
|
1.2
|
6.2
|
1.9
|
Norway |
2.3
|
0.6
|
4.1
|
0.4
|
5.9
|
1.1
|
6.5
|
1.3
|
7.1
|
1.5
|
Poland |
|
|
|
|
|
|
4.8
|
0.5
|
4.2
|
2.2
|
Portugal |
|
|
1.6
|
1.2
|
3.7
|
2.1
|
4.2
|
2.2
|
5.2
|
2.6
|
Spain |
0.9
|
0.6
|
2.4
|
1.3
|
4.5
|
1.1
|
5.4
|
1.5
|
5.4
|
1.7
|
Sweden |
3.4
|
1.3
|
6.1
|
1
|
8.7
|
0.7
|
7.9
|
0.9
|
7
|
1.4
|
Switzerland |
1.9
|
1.2
|
3.1
|
1.8
|
4.6
|
2.3
|
5.7
|
2.6
|
7.7
|
2.7
|
Turkey |
|
|
0.9
|
1.5
|
0.9
|
2.4
|
2.2
|
1.4
|
|
|
United
King. |
3.3
|
0.6
|
3.9
|
0.6
|
5.1
|
0.6
|
5.1
|
0.9
|
5.6
|
1.1
|
United
States |
1.2
|
3.9
|
2.6
|
4.5
|
3.7
|
5.2
|
4.9
|
7.5
|
6.1
|
7.5
|
OECD
Average |
2.2
|
1.5
|
3.5
|
1.5
|
5.0
|
1.7
|
5.4
|
1.9
|
6.0
|
2.2
|
() = insufficient
data
Source: OECD, OECD
Health Data 2000.
A period of slow economic
growth and a deterioration of public finances resulted in decreasing growth
in public health-care spending in the 1970s and 1980s in many countries.
This decline in the rate of growth of public financing was accompanied
by growth in private-sector financing, a trend that has continued in the
1990s. Between 1960 and 1980, private-sector spending on health
care as a proportion of GDP increased by 0.2 percentage point; from 1980
to 1998, private-sector spending on health as a proportion of GDP increased
by 0.5 percentage point. In Canada, private-sector spending
as a proportion of GDP decreased during the 1960s and 1970s, but it increased
during the 1980s and 1990s. This is shown in Table 5.
Table 5
Health-Care Spending as a Percentage of GDP,
Change Expressed in Percentage Points
|
1960
(Level)
|
1960-69
(Change)
|
1970-79
(Change)
|
1980-89
(Change)
|
1990-98
(Change)
|
1998
(Level)
|
Public
|
Private
|
Public
|
Private
|
Public
|
Private
|
Public
|
Private
|
Public
|
Private
|
Public
|
Private
|
Australia |
2.2
|
2.5
|
0.6
|
-0.3
|
0.7
|
0.9
|
0.8
|
-0.3
|
0.6
|
0
|
5.9
|
2.6
|
Austria |
3
|
1.3
|
0.6
|
0.4
|
1.8
|
0.5
|
0.1
|
-0.5
|
0.5
|
0.5
|
5.8
|
2.4
|
Belgium |
2.1
|
1.3
|
1.3
|
-0.8
|
2.1
|
0.6
|
1.2
|
-0.2
|
1.3
|
0.1
|
7.9
|
0.9
|
Canada |
2.3
|
3.1
|
2.3
|
-1.1
|
0.4
|
-0.4
|
1.1
|
0.4
|
-0.2
|
0.5
|
6.6
|
2.9
|
Czech Rep. |
|
|
|
|
|
|
0.5
|
0.1
|
1.8
|
0.4
|
6.6
|
0.6
|
Denmark |
3.2
|
0.4
|
2.0
|
0.5
|
0.6
|
0.1
|
-0.8
|
0.3
|
-0.2
|
0.1
|
6.8
|
1.5
|
Finland |
2.1
|
1.8
|
2.2
|
-0.3
|
0.8
|
-0.1
|
0.8
|
0
|
-1.1
|
0.1
|
5.3
|
1.6
|
France |
2.4
|
1.8
|
1.7
|
-0.1
|
1.3
|
0.1
|
0.6
|
0.5
|
0.5
|
0.2
|
7.2
|
2.3
|
Germany |
3.2
|
1.6
|
1.1
|
-0.1
|
2.1
|
0.1
|
-0.2
|
0.2
|
1.2
|
0.7
|
7.9
|
2.7
|
Greece |
1.5
|
1.6
|
|
|
|
|
1
|
-0.1
|
-0.1
|
0.8
|
4.7
|
3.6
|
Iceland |
2.5
|
0.8
|
1.8
|
0.1
|
1.5
|
-0.3
|
1.8
|
0.5
|
0.1
|
0.2
|
7
|
1.3
|
Ireland |
2.9
|
0.9
|
0.8
|
0.4
|
2.2
|
0.4
|
-2.4
|
0.3
|
-0.2
|
-0.4
|
4.8
|
1.6
|
Italy |
3
|
0.6
|
1.3
|
0
|
0.8
|
0
|
0.3
|
0.4
|
-0.7
|
1
|
5.6
|
2.8
|
Japan |
1.8
|
1.2
|
1
|
0.6
|
1.3
|
0.2
|
0.2
|
-0.5
|
1.3
|
0.2
|
6
|
1.6
|
Korea |
|
|
|
´
|
0.5
|
0.6
|
0.8
|
0.6
|
0.6
|
-0.4
|
2.3
|
2.7
|
Luxembourg |
|
|
|
|
2.3
|
0
|
0
|
0
|
-0.7
|
0
|
5.4
|
0.5
|
Netherlands |
|
|
|
|
0.8
|
|
0.1
|
0.4
|
-0.1
|
-0.1
|
6
|
2.6
|
New
Zealand |
3.5
|
0.8
|
0.4
|
0.5
|
1.3
|
0.1
|
0.3
|
0.3
|
0.4
|
0.7
|
6.2
|
1.9
|
Norway |
2.3
|
0.6
|
1.4
|
-0.2
|
1.9
|
-0.2
|
0.6
|
0.1
|
0.6
|
0.2
|
7.1
|
1.5
|
Portugal |
|
|
|
|
1.8
|
0.4
|
-0.3
|
0.9
|
1
|
0.4
|
5.2
|
2.6
|
Spain |
0.9
|
0.6
|
1.2
|
0.7
|
2
|
-0.2
|
0.6
|
0.3
|
0
|
0.2
|
5.4
|
1.7
|
Sweden |
3.4
|
1.3
|
2.4
|
-0.2
|
2.1
|
-0.2
|
-0.8
|
0.2
|
-0.9
|
0.5
|
7
|
1.4
|
Switzerland |
1.9
|
1.2
|
1.2
|
0.6
|
1.5
|
0.4
|
1.1
|
0.3
|
2
|
0.1
|
7.7
|
2.7
|
United
King. |
3.3
|
0.6
|
0.5
|
0
|
0.8
|
0
|
-0.1
|
0.3
|
0.5
|
0.2
|
5.6
|
1.1
|
United
States |
1.2
|
3.9
|
1.2
|
0.3
|
0.8
|
0.6
|
0.9
|
1.8
|
1.2
|
0
|
6.1
|
7.5
|
OECD
Average |
2.2
|
1.5
|
1.3
|
0.1
|
1.4
|
0.2
|
0.3
|
0.3
|
0.4
|
0.2
|
6.0
|
2.2
|
() = insufficient
data. Hungary, Mexico, Poland and Turkey were excluded because of insufficient
data.
Source: OECD Health
Data 2000.
Significant growth has occurred
in the private-sector financing of health care in most OECD countries
in the past two decades. Nevertheless, health-care financing in
most OECD countries remains largely a public responsibility. This is illustrated
in Figure 2, which shows the proportion of health-care financing that
comes from tax revenues, social security, and private insurance and other
out-of-pocket payments. Public financing, through taxation and social
security, is the primary source of funding for health care in seven of
the eight countries shown, but private-sector contributions are used to
finance health care in all of these countries. Private-sector financing
as a proportion of all health-care funding is the highest in the United
States and the lowest in the United Kingdom and Japan.
Figure 2
Proportion of Health-Care Funding Generated by Different Methods in
Selected Countries, 1998
Source: Gerard
F. Anderson and Peter Hussey, Health and Population Aging: A Multinational
Comparison, The Commonwealth Fund, October 1999.
Accompanying the increasing
prevalence of private-sector funding is the use of cost control strategies
in OECD countries. Some of the measures that have been introduced include
spending controls, budget limits on expenditures for new hospitals and
expensive equipment, restrictions on the number of medical staff, and
decreased volume of services. No two countries have adopted identical
policies, but each of these reforms has one thing in common: they
shift some of the responsibility for health-care funding and delivery
away from the public sector and on to the private sector.(19)
Indeed, in her analysis
of OECD countries in 1996, Susan MacPhee found that in the past two decades
most countries have altered the ways health care dollars are spent
rather than how they are raised.(20)
She notes that major financing reforms have not been undertaken, or have
been slow-moving, in most countries because of concerns about accessibility
and the political implications of doing so. In order to maintain
current levels of services, without significantly reforming health-care
financing or increasing public funding, cost shifting has become a common
strategy in OECD countries. Cost shifting can occur between the
public and the private sectors, or between levels of government. In general,
the cost-shifting initiatives that have been adopted in OECD countries
have been on the delivery side of health care, rather than the financing
side. Nevertheless, some countries have used strategies to shift
costs on the financing side. These include increases to out-of-pocket
payments, greater reliance on private insurance, and reducing public coverage
of health services.
Out-of-pocket payments
through user fees, extra billing, deductibles, co-insurance, and reduced
public coverage are cost-shifting initiatives, as well as cost-sharing
initiatives. Through cost sharing, patients bear a portion of the
financing burden accrued through their use of health services. Cost-sharing
initiatives are common in almost all OECD countries, but will vary depending
on the service, the user and the country. Table 6 illustrates the
cost-sharing arrangements in some OECD countries.
Table 6
Cost-Sharing Arrangements in Selected OECD Countries,
Description of Fees Charged to Patients
($
Cdn) |
Hospital Supplies
and Hospitalization
|
Pharmaceutical
Supplies
|
Dental Services
|
Austria
(1995) |
$9/day
max. 28 days/year
|
$5/prescription,
except in cases of infectious disease or hardship; variable according
to package size. |
25-50% of cost
|
Australia
(1998) |
None
|
$8-$48/prescription |
Up to $118/exam
|
Belgium
(1995) |
$16/day
|
Up to
75% of cost |
Up to 25% of cost
|
Canada
(2000) |
None
|
Varies
from
province to province |
100% of cost
|
Denmark
(1995) |
Only in unregistered
private clinics
|
25-50%
of cost |
55-60% of cost
|
France
(1995) |
35% of cost for
the first 30 days
|
35% of
cost; 65% for minor illnesses; 100% for over-the-counter medications;
no extra payment for chronic illnesses |
30% of cost
|
Germany
(1997) |
$16 or $14/day
|
$9-$13/pharmaceutical;
100% of cost for over-the-counter medications; variable according
to package size |
Dentures:
55% of cost
|
Greece
(1995) |
None
|
10-25%
of cost; no extra payment for chronic illnesses |
Dentures:
25% of cost
|
Ireland
(1995) |
$48-$479/year (insured
persons with high incomes only)
|
$211/quarter
of a year (insured persons with high incomes only); $81 if illness
is chronic |
Dentures:
Small fee
|
Italy
(1995) |
None
|
$5/prescription
except for serious illnesses (50% of cost); numerous exceptions |
None
|
Netherlands
(1997) |
None
|
20% of
cost |
Partial cost of
dentures
|
Spain
(1995) |
None
|
40% of
cost except for pensioners and the unemployed |
None
|
Sweden
(1995) |
$15/day
|
$29 for
first prescribed medication; $11 for each additional medication |
30-75% of cost
(varies according to dentists fee)
|
United
Kingdom (1995) |
None
|
$11 for
each special prescribed medication, or $57 per quarter of a year,
or $163 per year; variable according to social status; many exemptions |
20% of cost, up
to $646; $8 for follow-up examination
|
United
States |
Varies
|
100% of
cost |
100% of cost
|
Source: Xenia
Scheil-Adlung, Steering the healthcare ship: Effects of market incentives
to control costs in selected OECD countries, International Social
Security Review 51.1 (1998), pp. 112-113.
Although out-of-pocket payments
are usually introduced to reduce public spending in health care, there
is little evidence that they are an effective strategy for reducing total
spending on health care. The assumption behind out-of-pocket payments
is that they will decrease the use of health services, but as noted previously,
this is open to debate. Moreover, some observers argue that multiple-payer
systems, such as those that charge out-of-pocket fees, are less efficient
than single-payer systems, such as those financed solely through government
funding.(21) If the use
of health services remains relatively stable and costs are charged directly
to the patients, the overall cost of health care may increase, rather
than decrease. Alternatively, if patients forego necessary treatment
because they do not wish to pay directly for the service, greater costs
may be incurred to treat the condition later on.
In addition, charging patients
directly for services may increase administrative costs. For example,
in New Zealand, user fees were set so high that people simply refused
to pay their medical bills; the government was forced to lower the fees
in the face of high collection costs.(22)
In Italy, to avoid paying user fees, patients will ask to be hospitalized
because medication and diagnostic tests are free in Italian hospitals.(23)
A second way that countries
have shifted costs from the public sector to the private sector is to
decrease public coverage of health services. Services no longer
covered under the public plan must be paid for either through private
insurance or out of the patients own pocket. In some cases,
the treatment will be foregone altogether.
As this section has shown,
health-care financing continues to be carried out primarily by the public
sector, but private-sector financing has increased significantly in the
past 20 years. According to some analysts, private-sector spending
on health care in OECD countries may increase further in the coming years
because of further reductions in public-sector spending, as well as demographic
changes. In most OECD countries, the population aged 65 years and
older is increasing, as is the average income among those in this age
bracket. According to the OECD, per capita health-care expenditures
for those 70 years of age and older are approximately double the average
per capita health-care expenditures; expenditures for those 80 years of
age and older are about four times higher than the average.(24)
Moreover, the marginal propensity to use health care increases with income.(25)
As the population of the over-65 age group increases and grows wealthier,
the demand for health care will increase. This demand could be met
by increasing the involvement of the private sector in financing and delivering
health care. Other analysts believe that improving the efficiency
and effectiveness of publicly funded health care is the best means of
addressing the pressures of an aging population.
DELIVERING
HEALTH CARE IN OECD COUNTRIES
As previously noted, significant
reforms have been made to the ways in which countries deliver their health
services. MacPhee suggests that these reforms have typically translated
into greater private-sector involvement, with increased private delivery
of health services being one of the most common strategies.(26)
The trend toward increased private delivery is based on two assumptions.
First, in health-care systems that are publicly financed and publicly
delivered, consumer choice and satisfaction are believed to be low.
Second, current health economics theory posits that competitive markets
create greater monetary efficiency in health-care systems. As a
result, most countries have attempted to promote greater micro-economic
efficiency in their health-care systems.(27)
Although the Scandinavian
countries have maintained publicly financed and publicly delivered health-care
systems (often called integrated systems), many countries
are moving to public-contract or reimbursement systems that combine public
financing with private delivery. This type of system is used in
Canada, Germany, Japan, the United Kingdom and most of the countries that
have emerged from the former Soviet Union, among others.(28)
In addition, certain countries
are moving away from an institutionalized approach to health care. Because
hospital expenditures comprise a large portion of overall health-care
spending, many countries are attempting to decrease hospitalization rates
and the length of hospital stays. In general, this has affected the way
that health care is delivered, with an increased emphasis on ambulatory
care and outpatient care, as well as shifting responsibility for long-term
care from hospitals to patients and their families.(29)
RESOURCE
ALLOCATION: SERVICE RATIONING
In addition to the financing
and delivery reforms introduced to promote greater efficiency, some countries
have changed the way in which resources are allocated, a strategy that
is often referred to as rationing. The Netherlands, New Zealand, Norway,
Sweden and the United States are some of the OECD countries that have
introduced rationing mechanisms into their health-care systems.(30)
Rationing may take several forms. In some cases, the government
will give each hospital a budget, with penalties for budget overruns and
the imposition of measures to prevent the reallocation of revenue.
In other cases, limits are placed on the number of new hospitals or efforts
are made to discourage the proliferation of expensive medical equipment.
Finally, direct controls may be applied to the number of staff, the volume
of service, and rates of pay.(31)
These measures force health-care
workers to operate using limited resources. In so doing, they attempt
to improve the allocation of resources and to deliver health services
more efficiently. In some countries, the limitation of services
tended to shift demand and expenditures to service points with fewer restrictions.
For example, in Canada and France, where physicians are paid by procedure,
the cost of outpatient care has increased primarily because of the constraints
on hospital spending. In other countries, where regulations permitted,
budget constraints shifted the demand for health care to the private sector
which, in some cases, spurred the growth of the private insurance market.(32)
In Canada, private insurers offered Canadians health insurance so that
they could get non-emergency care outside of the country.(33)
In many countries, rationing has created increased waiting times.(34)
Although rationing may decrease
public spending on health care, there are indirect private costs associated
with this practice. These include the discomfort a person feels
while awaiting treatment, the economic losses incurred when a person is
unable to work for an extended period while awaiting treatment, and the
increased travel costs incurred as a result of decreases in the number
of service points.(35) When health
care is rationed, private costs are unpredictable and it is therefore
difficult to determine the overall cost of health care. As a result
of rationing, a countrys real health-care spending may be underestimated
and this can skew international comparisons.
Moreover, some observers
have suggested that rationing is both subjective and economically less
effective than other forms of allocation. As there is no way
of determining the optimal level of health-care spending in any country,(36)
resource allocation in a context of rationing is arbitrary.
For example, front-line physicians will determine which patients should
be treated and, in the absence of clear selection criteria, they may reject
patients with fewer chances of suffering ill effects if they are not treated.(37)
Similarly, when purchasing new equipment, hospital administrators may
be forced to choose a dialysis machine over a magnetic resonance imaging
unit (MRI). If the dialysis machine is chosen, patients requiring
MRIs will have to travel elsewhere, or be subjected to longer wait times.
If the MRI is chosen, those requiring dialysis will suffer. The
choice is highly subjective. Rationed allocation is therefore problematic.
WHAT
CAN WE EXPECT IN THE FUTURE?
Although controlling health-care
costs and maintaining equitable access to services will likely remain
important policy goals in most OECD countries, we can expect to see increased
emphasis on health-care quality and illness prevention in the future.
In a survey of OECD countries in 1996, it was found that while cost
containment remained an issue for most countries, countries emphasis
on customer satisfaction, equity of health status, and promotion of a
healthy lifestyle showed that these issues have become important to member
countries as well.(38) In general,
countries have realized that cost containment, on its own, can adversely
affect the quality of health care.(39)
In addition, countries are beginning to recognize the long-term benefits
that are derived from the maintenance of quality health services, the
promotion of healthy lifestyles, and the prevention of future illnesses.
For example, many OECD countries
have, or are in the process of developing, performance standards and quality
assurance programs to ensure the quality of health-care systems.
Australia, Canada, France, Mexico, Belgium, Denmark, Austria, Sweden,
the United Kingdom and the United States all have such programs.
Some countries now link the quality of health services to the reimbursement
of costs. This may include financial incentives to increase quality,
as in France, or introducing quality as a variable when awarding service
contracts, as in Italy.(40) Many countries
have implemented strategies to encourage healthier living, as in France
and Canada, which have developed educational initiatives to combat substance
abuse among teenagers.(41) Other countries
are taking steps to prevent illnesses, as in Hungary and Poland, where
concerns about the long-term health effects of pollution and poor water
quality have prompted efforts to improve the environment. Other
countries, such as Canada and the United States, have improved screening
programs for breast cancer to promote early detection.(42)
Key future health-care concerns
are likely to be focused on: containing costs; maintaining accessibility;
and ensuring quality. To address these concerns, private-sector
involvement in health-care systems will undoubtedly continue in the future
and, as noted, this involvement may increase.
CONCLUSION
The 1960s and 1970s were
a period of health-care socialization in OECD countries, while the 1980s
and 1990s were a period of health-care privatization. Increased
private-sector involvement in health care has been achieved through cost
containment strategies, delivery reforms and new methods of allocation.
In general, private financing has increased, while access to some services
has decreased.
High public debt, the desire
for efficiency, and an aging population have all contributed to the increased
reliance on private-sector resources for financing and delivering health
care. In the future, we will likely see an increased emphasis on
promoting healthy lifestyles, preventing illnesses, and maintaining the
quality of health-care systems in OECD countries. Addressing these
objectives while maintaining costs in the face of increasing demands will
likely require even greater private-sector involvement in health-care
systems. As a result, we are likely to see further government withdrawal
from the health-care sector in most OECD countries, a trend that is consistent
with government withdrawal from other sectors.
(1)
This document is an edited and updated version of Public and Private
Sector Involvement in Health Care Systems: An International Comparison
produced by the Parliamentary Research Branch, Library of Parliament,
May 1997.
(2)
Gross domestic product is the value of all goods, services and investments
in Canada during a defined period of time.
(3)
For a detailed discussion of these justifications, see Deber et
al., pp. 434-435.
(4)
Ibid., p. 434.
(5)
Ibid., p. 435.
(6)
Ibid., p. 434.
(7)
See, for example, Paul Leduc Browne, Unsafe Practices: Restructuring
and Privatization in Ontario Health Care, Canadian Centre for Policy
Alternatives, 2000; and Pat Armstrong, Hugh Armstrong and Colleen Fuller,
Health Care, Limited: The Privatization of Medicare, a report prepared
by the Canadian Centre for Policy Alternatives for the Council of Canadians,
2000.
(8)
Deber et al., p. 439.
(9)
When deductible payment is used, patients pay for the cost of health services
up to a specified, fixed level, after which the insurer begins paying.
For example, patients will pay for the first $100 of their total prescription
costs and then the insurer pays for subsequent prescriptions. When
co-insurance is used, patients pay a proportion of the total cost of the
service, and the insurer covers any remaining costs. For example,
the patient will pay only 10% of the total cost of a service and the insurer
pays for the remainder.
(10)
In extra-billing arrangements, physicians charge patients an amount in
addition to the rate paid by public insurance in order to cover costs.
User charges or user fees, which are sometimes called co-payments, require
a patient to pay a specified fee upon receipt of the service.
(11)
Bill Ross, Jen Nixon, Jamie Snasdell-Taylor and Keir Delaney, International
Approaches to Funding Health Care, Volume 2 of Occasional Papers;
Health Financing Series, Commonwealth of Australia, 1999, p. 29.
(12)
World Health Organization, World Health Report 2000, 2000, p. 99.
(13)
Deber et al., p. 441.
(14)
Ross et al., p. 73.
(15)
Ibid.
(16)
Theodore R. Marmor and Kieke G.H. Okma, Cautionary lessons from
the West: What (not) to learn from other countries experiences in
the financing and delivery of health care in The State of Social
Welfare, 1997, Peter Flora et al., eds., Aldershot, 1998, p. 328.
(17)
Ibid., p. 329.
(18)
World Health Organization, The World Health Report 1999, p. 34.
(19)
OECD, New Directions in Health Care Policy, Health Policy Studies
No. 7, OECD, 1995, pp. 41-42.
(20)
Susan MacPhee, Reform the Watchword as OECD Countries Struggle to
Contain Health Care Costs, Canadian Medical Association Journal
164.5, 1996, p. 699.
(21)
Deber et al., p. 442.
(22)
OECD, New Directions in Health Care Policy, p. 61.
(23)
Ulrich K. Hoffmeyer and Thomas R. MacCarthy, eds., Financing Health
Care, 2 volumes, 1994, p. 533.
(24)
OECD, Ageing in OECD Countries: A Status Report, Volume
5, No. 42 of the OECD Working Papers, OECD, 1997, p. 18.
(25)
OECD, Reform of Health Care Systems:
A Review of Seventeen OECD Countries, OECD, 1994.
(26)
MacPhee, p. 700.
(27)
Ibid.
(28)
Ibid.
(29)
See Karen Davis, Common Concerns: International Issues in
Health Care System Reform, The Commonwealth Fund, 1998, online
at http://www.cmwf.org/annreprt/1998/kdmes98.asp;
and WHO, World Health Report 1998, p. 39.
(30)
WHO, World Health Report 2000, p. 59.
(31)
OECD, New Directions in Health Care Policy, p. 42.
(32)
Ibid., p. 44.
(33)
Cynthia Ramsay and Michael Walker, Waiting Your Turn: Hospital
Waiting Lists in Canada, 6th ed., Fraser Forum, 1996, p. 12.
(34)
Ibid., p. 44.
(35)
Henke, Cost Containment in Health Care: Justification and
Consequence, Health Economics Worldwide, 1992, p. 247.
(36)
See William Baumol, Health Care, Education, and the Cost
Disease: A Looming Crisis for Public Choice, Public Choice,
Vol. 77, 1993, pp. 17-28; and Henry Aaron, Thinking About Health
Care Finance: Some Propositions, Health Care Reform: The Will
to Change, OECD, 1996, pp. 47-57.
(37)
Ramsay and Walker, p. 9.
(38)
OECD, Social and Health Policies in OECD Countries: A Survey
of Current Programmes and Recent Developments, OECD, 1998, p. 85.
(39)
Ross et al., p. 26.
(40)
Ibid., p. 94.
(41)
Ibid., p. 88.
(42)
Ibid., pp. 87-88.
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