County health care systems cannot be generalized. Financing the developed or developing counties, or the under developed parts of the country, are discreet and varied. There cannot be any general characteristics drawn in unison. By the 1960s, the average costs of the health care for the OECD nations around the world used to be just in the margin of about four percent or so, against the respective GDPs.
Today it is more than double in the year 2016. Efficient systems must help the downtrodden and the poor. The flow of money must be in one direction and obviously, that is from the rich to the poor. Deadweight losses are removed at once, by raising the revenue and disbursing the revenue in the right direction.
Alternative financing systems must oblige to this basic thumb rules and regulations. Yet, how far it is practically happening and how good it is turned around is one something that must be examined with immediate attention. Who does that and how can it be done, is all something that the officials, committees and the government bodies must explain, without fail as the need of the hour.
If that is not done with, immediate attention then there is only going to be continuous escalation in the above-mentioned health care percentage against the GDPs, parameter, even in the upcoming fifty odd years.
To address to the issue, first a thorough understanding of the health care financing systems is necessary.
Definition of terms
General revenues, finance from social insurances, finances from private insurances as well as the out of the pocket funding, are the major financial choices for the health care system today. Portion of the revenue from these sources are only used for health care financing in many cases, in many countries around the world.
There are so many reasons for that to be so. Yet, the reality is that very many nations are not using all the funds generated into this channel.
General revenues
It is possible to raise the general revenues statewide. It can be raised at lower levels locally too. Federal level revenue raising strategies are also there. Tax vehicle is the major source of raising general revenue and this is considered as a slow progressing tool for raising finance. Only a portion of the funds is spent in the health care systems financing channel in most of the countries. Pay as anyone go kind of arrangement is the specialty about the general revenues.
Funds raised in this way are mainly to protect the interests of the non working class in the community. All the current revenues collected will be used immediately to meet out the current expenditures.
Social insurance finances
Rising health care expenses has created enormous amount of pressure in the health care systems Implementation councils, around the world, now. A recurring theme is the utmost need for the reforms to come in the health care segment. Addressing to the issues, of efficient set up, equity, and the easiest possible access to the medical care, critical reforms has to come in. alternate funding sources must be sourced inside. These can be the social insurance financing. There are funding sources across the globe today. Regional disparities must be borne in mind before getting deeper into the core of the issues.
Income levels surely affect the funding process and that is the major deviation. It varies well within the same states or provinces too. Third party payers, based on risks sharing are invited to fund. Government intervention has to play a crucial role here, in the health care markets.
Based on the financing schemes and the paying schemes health care financing sources are varying widely across the world, in different countries. It becomes an institutional structure in that way, rather than arriving at any generic conclusions. The particular society has to be in charge on how much to produce for medical care and attention. Who must enjoy the medical care that is produced and how to produce it, is all decided by that particular society.
Individuals that have no insurance are left out with no other options but to bear the entire expenditure in case of any mishap. To the contrary, when other individuals are paying to the insurance provider on a monthly basis, majority of the risks, fall on the insurance payer.
Fixed premium payments are paid by the individual to the third party payer. To put it briefly the overall monetary benefits expected in the dealing is limited to the health risk characteristics of the individual or the group that invests in this channel. Here the deductible and the copayments are the risks that are forced on the premium payers by the third party health care financiers. This is why they are less inclined to get medical care.
Policyholders are categorized further into different groups. Community rated basis, insurance premiums are distinct, here. When it is based on the experience – rated, calculations, the individuals are the groups are placed into different risk categories. Age and gender will be the predominant deciding parameters in such a case.
Those who are deemed as less healthy are subjected to pay higher premiums compared to the others. This is the major reason why some of the governments are emphasizing the third party insurance providers to offer the community based premium calculations towards the benefits of the individuals as well as the groups. At the same time, the low-income categories are forced to move out of the system for they do not have the money power to buy the health care plan.
Financing the sustained health care
In this category, who is to pay who and how. Moral fabric and the values in the society will have an answer here. Undertones of the social involvement, as well as the personal responsibilities, and freedom of choice, combined with the ideological and political question has the answer here. Yes, there cannot be big changes in the health care financing frequently.
Globalization and income inequality
Top income brackets; absorb the majority share of the nations GDP where globalization is implemented successfully. Competitiveness of the economy is further declined down. Ill economy due the imbalance created amidst the social classes, can lead way to individual health care systems that are local bound.
An information and technology engineer, consultant, an assistant, or a designer draws hefty salary compared to the workers in many other classes. For a civil engineer to pursue the post of the project manager it takes decades together. The pay that he or she gets at that point of time is not equivalent to that of the designer in the IT companies that are established in the developing nations.
Very many names can be pulled out in the list. These are well-established business conglomerates in the developed countries. They do have the standards of pay scale. They pay as per their regulations. They consider that the employees deserve that salary at least.
To the contrary, the engineers and the technicians belonging to the other industries are not drawing equivalent amount of money despite working hard. They are also working hard in their profession tirelessly but they are not able to make even a fraction of the money what the IT professionals are making. Opportunities in the health care sector are unlimited today too.
They are just nursing assistants, the nurses, or the paramedical staff of the big health care facilities. They do get a decent package while compared to the others in much other industry. These imbalances are the result of the globalization. Inequality in the income do affects majority classes in the social set up.
That creates a whole lot of mess in the social set up. There are more than 14 disciplines in the engineering category alone. IT related engineering disciplines could be hardly a couple or so. Yet, they are recruited the first. The recruitments are from the biggest companies with hefty pay packets. Rest of all the other engineers who come out from the college are either not interested to take a job that pays not as handsome salary as the IT companies, or else they are moving to the IT industry too.
This is not the latest trend, though. This is the trend even before globalization started to be implemented everywhere vigorously. US demands for the IT pros and the UK demands were creating a big void between the other segment of engineers and the IT engineers. Bachelors in computer engineering studies became the hottest seller for the engineering colleges while distributing seats to the students. After the globalization, this trend became a biggest menace to either pull in all the qualified engineers eventually, towards IT field services, or else, made them to stay in the same field with low paying jobs.
Health care financing for engineers
The imbalance created due to inequality in the income created whole lot of issues. The health benefits enjoyed by the IT professionals or even the IT support service professionals were not comparable to what the other engineers were getting. Corporate set up, the varied terms and conditions are favorable for those who worked in the IT companies, and the multinational players in many other field like automobile industry, health care and so on. This variation resulted, in social imbalance. The IT professionals were not hesitant to pay any amount of money that is asked by the vendors out there in the market selling and distribution various fast moving consumer goods.
Rents increases for the bachelor rooms in the prime cities just because of the so many bachelors that were working in the big it companies. Compared to them the other bachelors who are also engineers but working in the other companies that are local could not afford to pay equivalent rents. It is not just the accommodation alone, but every occupation was extravagant for the IT industry staff, compared to the others in the varied other sectors of the service industries. Prices shoot up targeting on this majority populace. This is inclusive of the health care insurance costs. All in all the globalization, which is assumed a meritorious move towards development, has also created some havoc to the people in many other unexpected ways.
Corporate workers and the health care funds
Some of the private companies out there are entering into best schemes with the insurance companies in such a way that the employee and the employer will contribute a portion every month to pay the insurance provider. This is obtained as lump sum cash in returns, after the ripened period. Else, in case of any needy situation this money can come in handy for assistance. The policies are varied only based on the insurance provider. The companies do formulate some of the unique pans too, only based on the interests and desires of the staff.
Government workers and the health care funds
Most of the developed nations today, have their employees taken care well with structured policies of health care funds allocations directly taken out from their income on a regular basis. Monthly health care proportions are going regularly to the government funds as deductions in the salary.
These funds are offered to the employee in case of any needs that may arise during the course of lifetime. These funds are used to be beneficial income of the additional kind when they do retire. This health care financing scheme has helped millions of people around. This one excellent scheme is meant to protect the interests of the staff and their family members.
There are quite a few who don’t use these funds at all. All throughout their career, they are not using these funds. They are taking the money that is accumulated in that way, as a lump sum cash, when they retire. Even in that way, anyone can use it for wise investments at that point of time, for higher benefits to help further.
Business sector and the health care funds
This is one complicated sector, which is quite varied when it comes to health care financing allocations. They do not pay any part of their income to any public bodies. They do not have any part of their income being offered to any employers. It is purely their own well and wishes to allocate any funds for the health care needs in the future in the form of insurance or savings. Therefore, basically, the unstable sector here is most often taking care on its own, or else has to rely on the public sector funding. It is added burden to the public sector funding, as they are sure to find it to be a sudden havoc to their managed funds allocations.
One ever knows what will happen in the next moment and that is the reality for anyone. Under such circumstances, the modern occupation to use the insurance companies or the third party payers for our health care needs is not a bad idea at all. This practice was not followed heavily in the past in the developing nations. Yet, with the advent of the modern technology and advancements in every occupation, the practice is getting viral everywhere. It is for the good cause and that is appreciated by all the sectors without any doubt, but there are risks too.
There are varied levels of risks. Even without the third party payers, there are heavier risks, though for the local governments to arrive at one structured plan to protect and safeguard the interests of the varied classes in the social sort up. Unfortunately, it is not feasible so far to arrive at a unanimous model to be helpful for all the classes in any social set up, when it comes to health care financing assistance.
Health care financing is done in different ways. Government funding is one of the different ways. OUT OF THE pocket, payments and the private insurance later on are the few other solutions. Donations coming from the non-profitable organizations, as voluntary aid, are one another channel too. Therefore, it is all about the source that anyone is going to find more than anything else as a definite solution to meet your needs.
Health disparities are varied too. The best of the aid can be offered to the worst of the health disparities. Taxes paid by the commons are to make sure that the government extends right helping facilities in time, to administer proper drugs and medicines and support those who are in need of health care assistance.
Effects of government and corporate health care policies
Group insurance policies purchased by the employer of an industry, business or corporate office, is usually meant to safeguard their own staff. The costs of group insurance are comparatively lesser rather than what anyone pays for each individual employee of the organization. At the same time, the costs would vary by far from one provider to that of the other only based on the terms and conditions.
Norms and regulations are there to be followed by the health care provider in accordance with the international safety rules and the WHO suggestions. If any breach is done by, the health care insurance provider against the WHO policies, anywhere in the world, that can be complained to the key officials involved in the affair, to get the due compensations.
Would you like to read more about this topic? This book might interest you: Health Care Finance.