A closer look at universal healthcare
While many Americans understand the basic economics of our existing healthcare system, healthcare reform is front-and-center in the 2008 election cycle. One of the most discussed and dramatic changes being proposed is universal healthcare. Once viewed as impossible, universal healthcare now seems more possible than ever. Consider that Massachusetts, California, Maine, Vermont and Hawaii have created, or are currently considering implementing, universal or near-universal systems.
While many Americans understand the market-based model, universal healthcare is a very nebulous and undefined idea in the American political discussion. This leaves many of us asking: What is universal healthcare and what does it mean for the modern healthcare industry?
Coverage for all citizens
Whether one calls it universal healthcare or universal coverage, the goal is the same: to extend healthcare coverage to every citizen by either private insurance or government programs. Beyond that common goal, proponents often vary greatly on how to achieve it.
Understanding the differences between the primary methods of implementation around the world is the key to assessing what effect any such healthcare reform will have on patients, providers and payers in the US.
What are the most common forms of universal healthcare?
Compulsory Insurance - Currently used in Massachusetts, Germany and Belgium
The compulsory insurance model uses legislation to require every citizen to purchase affordable health insurance. A government oversight board creates the definition of affordable after negotiating with pharmaceutical and insurance companies to mediate their potential liability. In the Massachusetts model, which took effect in 2006, citizens who do not qualify for poverty/low-income assistance must buy insurance or face yearly fines assessed on their income tax. Legislation also expands coverage for the poor and penalizes employers who do not offer healthcare coverage.
Taxation - Currently used in England, Australia and India
Taxation is a very different way to achieve universal healthcare. In this model, which has been used in England since the end of World War II, insurance is almost entirely eliminated and the healthcare system is regulated by the government and funded from the public tax pool. Hospitals and high-level healthcare infrastructure are overseen by government agencies, while doctors and staff are a mixture of private and government employees. Some countries have also used the taxation model, but left direct control up to state or provincial governments.
Combined - Currently used in Canada, Singapore and the Netherlands
Several countries have taken this dual-level approach to universal healthcare wherein primary care is directly funded by tax dollars collect from the general public. Private insurance companies still exist to offer supplemental coverage for extra services like dental, vision, elective procedures, extended hospital stay, upgraded facilities for hospital stays and other services deemed outside of primary care. Often, such as in Canada, almost all hospitals are publicly managed. The amount of public and private mixture varies between each version implemented by a nation or state.
The reforms to the healthcare industry discussed during this election cycle are sure to be as complex and difficult as the problems facing our industry in general. Whether any politician in America rallies enough public and political support to implement a universal healthcare system, there is an undeniable urge on all sides to change the business of healthcare for the better. Everyone agrees that increasing efficiency, reducing costs and improving overall care are of vital importance to any plan, but how we achieve those goals, it appears, will remain open to debate.
