Health Care Economics and Finance


HealthCare Economics and Finance

Thehealth system of the U.S. is perceived as one of the most costlysystem in contrast to other health care systems from developednations. In spite of being considered the most expensive, aCommonwealth Fund report has also indicated that the health caresystem of U.S. is ranked last amidst 11 developed nations based onthe measures of health efficiency, quality, healthy lives, and access(Mahon &amp Fox, 2014). The chief aim of this research is toidentify, discuss, and analyze how the health care system of the financed, organized as well as delivered. These findings will becompared to the top two ranked countries (England and Switzerland)and how they are financed, organized and delivered. A central themeof the paper will be national health services or universal coverageand how they play roles in health care financing, delivery andefficiency.

Atpresent, there is an extensive discontent with the health care systemof the U.S. Health care restructuring has been perceived asprecedence in dealing with health care issues. A major emerging issuein the health system of U.S. is cost. Even though other developednations are facing the issue of mounting health costs, the healthsystem of U.S. has emerged as being the most costly compared to otherdeveloped nations. Another major issue facing the health system ofU.S. is health care reporting as well as access to care (Papanicolas&amp Smith, 2013).The United States emerges as the only developed country, which doesnot distinguish a right to health care or offer collective healthinsurance for its citizens. Although United States has the utmost percapita outlay in health care in the globe, it is worth noting thatone-sixth of the United States, population does not have healthinsurance, and the population of uninsured is on an increase on ayearly basis (Barr, 2011). Furthermore, in the measure of quality,the health system of U.S. has been indicated to compareinauspiciously with other developed nations and other middle incomenations especially based on infant mortality rates, avoidance ofpreventable mortality, and life expectancy. Out of 190 countries, theWorld Health Organization (WHO) has positioned the entire performanceof the United States health system at position 37 (Barr, 2011). Thisis a clear indication that the health system of U.S. needs to havesome changes in its policies that would aid in enhancing itsperformance as well as global ranking.

Financing,Organization, and Delivery of U.S. Health Care

TheAffordable Care Act (ACA) of 2010 helped in establishing shared taskamid the government, companies, and people so as to make sure thatall citizens get access to quality and affordable health insurance.Nevertheless, the health cover is still fragmented, having differentpublic and private streams as well as extensive loopholes in coveragerates in the entire American populace. The Centers for Medicaid andMedicare Services oversees the Medicare program and functions incoordination with state governments in offering Medicaid andChildren’s Health Insurance Program. On the other hand, privatecover is usually controlled at state level. As of 2014, federally andstate controlled health cover marketplaces had been developed tooffer supplementary access to private cover. Premium subsidies thatare based on incomes have been provided for middle and low incomehouseholds. The Affordable Care Act calls for all health plansprovided in the individual and meager-group markets to cater forservices within several essential health benefits categories. Everystate establishes the extent and range of services considered underthe essential benefit grouping. In the health system of U.S., thegovernment has the role of providing Medicare to individuals that aremore than 65 years of age and some disabled individuals. It also hasthe role of providing Medicaid to low-income earners.

Thefinancing of the health system of U.S. is through the public as wellas private financing. In 2012, public spending on health systemaccounted for about 47.6% of the entire health care expenditurehowever, this figure is projected to increase with the extension planof cover under the ACA. Medicare is normally financed throughcombining payroll taxes, federal general revenues, and premiums. Onthe other hand, Medicaid entails a tax-financed, joint health coverprogram between the federal and state governments. The extension ofMedicaid program under the ACA will be completely financed by federalgovernment for a period of three years commencing 2014. Privatehealth cover spending, in 2012, accounted for approximately 33percent of the entire health care expenditure. Private health covermay be bought by individuals, but is financed through voluntary,tax-exempt payment shared by workers and employers on anemployer-explicit basis. The rates paid under the Medicare cover areusually decided through a fee program that has varied adjustments.The rates under Medicare usually vary by state. In order to determinethe payment rates, private health insurers negotiate rates with theproviders.

TheDepartment of Health and Human Services (HHS) is the chief agency ofthe federal government that engages in health care services. TheJoint Commission has the responsibility of accrediting health careorganizations across the country it uses the criteria of qualityimprovement, culture, governance, and patient treatment. In order toensure provision of quality care, HHS has developed a nationalquality strategy that is provided under the ACA. This strategy guidesnational, state and local quality improvement efforts.

EnglandHealth Care Financing, Organization, and Delivery

Englandhas been considered among the best countries, in the industrializedworld, that is associated with superior care. According to theCommonwealth Fund report (2014), England has been ranked the bestoverall amidst other 10 developed countries. England was rated thebest in terms of effective care, efficiency, coordinated care,cost-related problems, safe care, and patient-centered care.Furthermore, the health service in England became ranked second interms of equity (Mahon &amp Fox, 2014). The National Health Service(NHS), which became initiated in 1948, is the body that deals withhealth issues in England. This body became commenced based on theguideline that excellent healthcare must be accessed by allindividuals without regard to people’s affluence. The NHS isusually free at the position of use for any individual who is aUnited Kingdom resident however, there is an exception of somecharges like dental, optical and prescriptions services charges(Zühlke,2004).

Fundingfor the National Health Service hails directly from taxation. In2012, England spent approximately 9.3 percent of GDP on matters ofhealth care, out of which public expenses accounted for approximately84%. Most of the financial support comes from broad taxation while asmall percentage comes from national cover through a payroll charge.The National Health Service also collects income from copayments.Besides, the health system is also financed privately. Most of theprivate expenditure is usually for Over-The-Counter (OTC) drugs aswell as other medical commodities and personal hospital care, whichinclude both uninsured and insured spending. Most of private hospitalcare is funded through voluntary health cover that provides morehasty and expedient access to care.

NHSEngland has the responsibility of overseeing the overall budgetarycontrol along with Monitor. NHS also commissions a number ofdedicated low-volume services like pediatric heart surgery, screeningprograms, nationwide immunization, as well as primary care services.On the other hand, the National Institute for Health and ClinicalExcellence (NICE) has the responsibility of setting guidingprinciples on clinically valuable treatments and reviews emergenthealth technologies for their cost-effectiveness and efficacy. Besides, NICE has the responsibility of developing quality standardsthat cover the common conditions that occur in social, primary, andsecondary care (Mossialoset al, 2015).The Care Quality Commission makes sure common principles of qualityand safety through provider listing and examines care principlesattained. The Care Quality Commission may require the closure ofhealth services in case a health facility is noted to have seriousquality concerns. Monitor has the responsibility of authorizingNational Health Service trusts in becoming foundation trusts andoverseeing their finances. Monitor has powers of intervening in caseperformance is seen to deteriorate significantly. The Act of 2012extended the role of Monitor of becoming the economic watchdog ofprivate and public providers. Monitor offers licenses to allproviders of National Health Service-financed care and can explorepossible violations of National Health Service collaboration andcompetition provisions. Apart from managing clinical commissioningentities, NHS England also has the responsibility of setting up thestrategic direction of health information technology.

SwitzerlandHealth Care Financing, Organization, and Delivery

Theexisting Swiss healthcare system became effected in 1996 under theHealth Insurance Law of 1994. This law was seeking to pioneer aperfect controlled rivalry system all over Switzerland, havingcomplete coverage in the basic health cover. The law extended thewrap up of services initially covered under the statutory healthcover, which made this a basic cover (Williamset al., 2009).The health system in Switzerland is highly decentralized. Accordingto Commonwealth Fund report (2014), a survey that was carried out inorder to determine different measures of healthcare in 11 developedcountries indicated that the Swiss healthcare ranks second overallamid the 11 countries. According to the report, the Swiss healthcareperformed as the best system in terms of timeliness of care and wasranked second in terms of equity, access and patient-centered care.

Dutiesand tasks in the healthcare system of Switzerland are separated amidthe communal, cantonal, and federal government categories. The 26cantons, six half-cantons included, have the responsibility oflicensing providers, subsidizing institutions and organizations, andhospital planning. Coverage of health services is universal sincecitizens are required to buy constitutional health cover fromdifferent insurers. Virtually, there are no uncovered residents inthe country every person desiring to dwell in the country isobligated to take out a cover within a period of three months uponentrance. This makes individuals to apply for an insurance policycover upon arrival to the country, in case one is consideringresiding in the country.

Thereare three streams, when it comes to public funding in the countrythese include mandatory statutory health insurance premiums, socialcover contributions that are from health-associated coverage ofold-age cover, military cover, disability cover, and accident cover(Mossialoset al, 2015).The other stream entails direct funding by the government for healthcare providers. Funds become distributed among the insurers through acentral fund. On the other hand, private expenditure to the healthsystem is usually from voluntary health cover and payments frompocket. Voluntary health cover is usually controlled by the SwissFinancial Market Supervisory Authority. Insurers that offer voluntarycover may change benefit packages and premiums and may also refusecontributions of the applicants on the ground of medical record.Unlike the case for legal health insurers where they are non-profitorganizations, voluntary insurers are usually for profitorganizations. In most cases, insurers usually have non-profitbranches and for-profit branches in order to offer both statutory andvoluntary health insurance.

Swisscitizens purchase insurance for themselves. In this health system,there are no government-run insurance programs or employer-sponsoredprograms. Thus, insurance prices are perceived to be transparent tothe beneficiaries. The government has the responsibility of definingthe minimum benefit package, which qualifies for the directive.Critically, all packages need beneficiaries to consider a part oftheir coinsurance and deductibles so as to incentivize theirthriftiness.

Becausethe health care is vastly spread out, the principal entities forhealth system control exist chiefly at the cantonal point. The 26cantons normally have distinct ministers of public health. Theseministers license providers, subsidize institutions, and promotehealth. The key national player in health issues is the FederalOffice of Public Health. This body oversees the legal submission ofcompulsory statutory health cover, governs statutory coverage as wellas prices of pharmaceuticals, and authorizes insurance premiumsprovided by statutory insurers. Professional self-regulation issignificant to quality improvement in the health system. Qualitycontrol methods do not usually involve data from patient surveys orregistries (Mossialoset al, 2015).

Comparisonsand Contrasts

Thehealth system of the U.S. differs from that of Switzerland and theUnited Kingdom since there is absence of a health insurance coverage,which is universal. The health systems of Switzerland and UnitedKingdom ensure that there is universal health coverage, which is notthe case in the U.S. The presence of a universal coverage in Englandand Switzerland ensures that health care is accessible. Therefore,health care is more accessible in England and Switzerland than in theUnited States due to the availability of universal health insurancecoverage that are overseen by the governments. However, theimplementation of the Affordable Care Act will see the increase ofthe number of individuals that are insured in the United States(Davis et al., 2014). This aspect will be of immense importance tothe health system in the United States since it will facilitate theimprovement of the system’s performance in terms of accessibilityto health care services. Besides, since there is a difference ininsurance coverage amid the three countries, it also follows thatthere is a difference in equity in the provision of health careservices. Because there is universal insurance coverage in Englandand Switzerland, it implies that equity in accessing health careservices is high in both England and Switzerland. On the other hand,the United States performs poorly in the measure of equity since itlacks a universal insurance cover that can equate all citizens inaccessing health care.

Besides,the health systems compare in that the United States measures poorlyin terms of quality health and efficient care, while Switzerland andUnited Kingdom rank high in these measures. The health system in theU.S. has ranked poorly in the measures of efficiency and qualitybecause U.S. practitioners are considered to encounter certainproblems in obtaining timely information, handling administrativehassles, and coordinating care. United Kingdom and Switzerland havebeen on the frontline in adopting modern health information systemshowever, the practitioners and health facilities in the United Statesare catching up with the information systems. Supplementaryrequirements in the ACA will enhance the efficient planning as wellas delivery of health care. Also, the adoption of the appropriatetechnology will aid in enhancing the quality measure and efficiencyof the health system in the United States.

Althoughthere are differences that can be observed in the three healthsystems, it is important to note that all the three health systemshave a similarity in that they all indicate room for improvement. Allthe three health care systems are not 100% effective, which calls fortheir improvement in one way or another. For example, United Kingdomhas been ranked position 10 in terms of healthy lives measure, asindicated in the Commonwealth Fund report. This implies that thehealth system of England has to device ways of improving healthylives. In the case of Swiss health system, there is a need to lookfor ways of enhancing efficiency and cost. Alternatively, the healthsystem of the United States will need to look for ways of improvinghealth cost, efficiency, equity, healthy lives, and health accessamong other measures.


Comparingthe health system of the U.S. with that of United Kingdom andSwitzerland, the health system of the U.S. is seen to perform muchbelow the performance of the other two countries. The measures beingconsidered in this case are access to care, efficiency, quality care,equity, and healthy lives. The funding, organization, and delivery ofhealth systems are different in the U.S., Switzerland, and UnitedKingdom. In the U.S., the Affordable Care Act (ACA) calls for allhealth plans provided in the personal and meager-group markets tocater for services that fall in essential health benefit category.Every state has a mandate of determining the extent and range ofservices considered under the indispensable benefit grouping. Thereis no universal insurance coverage in the case of the health systemin the U.S. However, in the United Kingdom and Switzerland, there isuniversal insurance cover, where all individuals in the two countriesare in a position to access health care. This is the key differenceof the health system in the three countries. Government role incontrolling the health systems is apparent in all the three systems,which indicates the importance of involving the government in theprovision of pubic goods. In order for the health system of theUnited States to attain high performances in the measures of healthequity, health efficiency and overall performance, it will need toaccess health access through introducing a universal cover andintegrating modern health information systems into its system.


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