Countries around the globe are navigating complex legal, financial and political landscapes to determine the best path towards universal health coverage (UHC). Below we describe four basic models for health care systems.1
For many countries, while there are some patterns in the structure of their reforms, such as use of tax revenues to subsidize target populations, steps towards broader risk pools, and emphasis on purchasing services through demand-side financing mechanisms. Many of their reforms do not purely conform to common health-system archetypes, nor are they identical to each other.2
Beveridge Model
In the Beveridge Model, health care is provided and financed by the government through tax payments, similar to the public library.
Many, but not all, hospitals and clinics are owned by the government; some doctors are government employees, but there are also private doctors who collect their fees from the government. These systems tend to have low costs per capita, because the government, as the sole payer, controls what doctors can do and what they can charge.
Countries using the Beveridge Model or a variation include:
The Bismark Model
Despite its European heritage, this system of providing health care would look fairly familiar to Americans. It uses an insurance system -- the insurers are called "sickness funds" -- usually financed jointly by employers and employees through payroll deduction.
Unlike the U.S. insurance industry, though, Bismarck-type health insurance plans have to cover everybody, and they don't make a profit. Doctors and hospitals tend to be private in Bismarck countries. Although this is a multi-payer model -- Germany has about 240 different funds -- tight regulation gives government similar cost-controls as single-payer Beveridge Models.
Countries using the Bismark Model or a variation include:
- Germany
- France
- Belgium
- the Netherlands
- Japan
- Switzerland
The National Health Insurance Model
These systems have elements of both Beveridge and Bismarck. It uses private-sector providers, but payment comes from a government-run insurance program that every citizen pays into. Since there's no need for marketing, no financial motive to deny claims and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style for-profit insurance.
The single-payer tends to have considerable market power to negotiate for lower prices. The classic NHI system is found in Canada, but some newly industrialized countries -- Taiwan and South Korea, for example -- have also adopted the NHI model.
The Out-of-Pocket Model
These systems rely on direct, out-of-pocket, payments from people at the time they need care. These systems prevent hundreds of millions from accessing services and result in financial hardship, even impoverishment, for millions.3