Two-tier healthcare is a situation in which a basic government-provided healthcare system provides basic care, and a secondary tier of care exists for those who can pay for additional, better quality or faster access. Most countries have both publicly and privately funded healthcare, but the degree to which it creates a quality differential depends on the way the two systems are managed, funded, and regulated.
Some publicly funded universal healthcare systems deliver excellent service and the private system tends to be small and not highly differentiated. In other, typically poorer countries, the public health system is underfunded and overstretched, offering opportunities for private companies to deliver better-quality, albeit more expensive coverage.
In Canada, patients have freedom with regard to which doctors and facilities they use. Under Canada's single-payer system, all Canadian citizens have the right to access healthcare services governed by provincial and territorial authorities. Within a person's province of residence, where they pay taxes, they are able to access any doctor they choose for most basic and essential healthcare services free of charge. Both referrals to specialists and hospital visits are covered.[citation needed]
The decentralized, universal, publicly-funded health system is called Canadian Medicare. The federal government distributes funds to the provinces for healthcare, providing that the provinces have designed their systems to meet certain criteria, which they all do at present. Most people receiving care in Canada do not pay for their care apart from prescriptions and certain procedures that are not covered, such as visits to dentists, optometrists, and some others. The healthcare system is financed primarily through tax revenue. Canadians can choose to purchase health insurance to cover some or all of the healthcare services that are not covered by the government. Medical providers are generally paid fixed fees depending on the type of visit. The average doctor is paid $258,049 a year for the care provided.[1] In situations where a doctor is being paid by their respective provincial healthcare system, the law bans the medical provider from charging patients to supplement their income from Medicare.[citation needed]
Canada technically does not have a two-tiered healthcare system. However, some services in Canada are covered not by government provided healthcare, but instead by the private sector (dentistry, laser eye surgery, most cosmetic plastic surgeries), while most basic essential services are provided by the public healthcare systems, which are primarily administered by the country's 13 provinces and territories. Each province and territory has their own insurance plan receiving federal funding on a per-capita basis. About 70% of Canada's healthcare spending is via the public system. The other 30% comes from private funding, divided approximately equally between out-of-pocket funding and private insurance, which may be complementary (meeting costs not covered by the public system such as the cost of prescription medicines, dental treatments, and copayments) or supplementary (adding more choice of provider or providing faster access to care).[2] Financial disincentives are in place to make private medicine for services that are covered by Medicare less economical.[citation needed]
Six of Canada's ten provinces used to ban private insurance for publicly insured services to inhibit queue jumping and so preserve fairness in the health care system. In 2005, the Supreme Court of Canada ruled that in Quebec, such bans are unconstitutional if the waiting period for care is excessively long. However, this ruling only applies within the Province of Quebec. A second court challenge to determine whether the prohibition of private parallel health care violates the patients' right to life, liberty, and security under Section 7 of the Canadian Charter of Rights and Freedoms was defeated by the Supreme Court of British Columbia in 2020.[3]
Some private hospitals operating at the time the national healthcare plan was being instituted (for example, the Shouldice Hernia Centre in Thornhill, Ontario) continue to operate, but they may not bill additional charges for medical procedures. The Shouldice Hospital, however, has mandatory additional room charges not covered by public health insurance. That effectively places it in the "upper tier" of a two-tier system. Welfare recipients, for example, cannot be referred there, as they would not be able to afford the extra costs.[citation needed]
Clinics are usually private operations but may not bill additional charges. Private healthcare may also be supplied, both in uncovered fields and to foreigners.[citation needed]
Denmark
Healthcare in Denmark, although primarily subsidised by the government at the county and the national levels health, is supported by complementary insurance plans to cover elective services not covered by the public system; they also help cover copayments.
France
Healthcare in France is a system of private and public physicians, who largely draw their income from the government. There are public as well as private hospitals.
Patients pay a small copayment for certain aspects of care, but many people choose to cover the costs by taking out supplemental health insurance for which a small premium is payable each year.
Thus, France also has a mixed delivery system with complete patient freedom of supplier choice. There is a two-tier funding arrangement, with compulsory funding of core medical services from taxation, with optional private insurance for the cost of copayments.
Germany
Healthcare in Germany has multiple sickness funds, either publicly owned or not-for-profit mutuals. Membership of a sickness fund is compulsory for everyone except certain people, who opt out of the insurance system altogether. Doctors are usually self-employed, and hospitals may be publicly owned, privately owned or not for profit.
Ireland
Healthcare in the Republic of Ireland is financed mainly by the state. However, all citizens have the option of buying additional private health insurance, provided by four companies. They include VHI, a large publicly owned insurer, operating, like all other insurers, community rating; people are insured at the same basic rate regardless of health status. The other insurers are Glo Healthcare, LAYA and Avivia. Also, much smaller restricted membership companies provide benefits for certain professions, such as police officers.
There are public as well as private hospitals. Private patients are often treated in public hospitals, as all privately insured patients have an entitlement to use the publicly funded system.
Netherlands
Healthcare in the Netherlands is essentially single tier, with all persons accessing a common system of private and public providers with complete freedom of choice between providers. Insurers are all private companies. It is heavily subsidized from tax revenues and heavily regulated, with a common, regulated standard insurance policy coverage set nationwide for all providers and a more flexible top up insurance, which is less regulated and set by each company as it chooses.
Insurers set a standard price for each adult for the year throughout the country and must insure all people who apply for insurance at that price regardless of the age or health status of the applicant. An equalization fund, which is essentially a national sickness fund funded from a form of income tax on employers and employees, is used to pay for the health care of all children and to compensate insurers if they have more high risk profile clients than the other insurers.
Thus, Dutch insurers welcome the sick and the elderly because they are fully compensated for the higher-risk profile of these clients. People living in more expensive areas of the country have to pay higher premiums, since they get less compensation from the government because they can afford to pay more but the elderly and the sick pay the same premiums as everyone else in that region. Social insurance covers the insurance costs of those with limited incomes, such as the unemployed and the permanently disabled.
Singapore
Healthcare in Singapore uses a true two-tier system for both the provider network and the insurance funds. A government-sponsored and subsidized system of hospitals accepts all patients, with a guaranteed list of services. A parallel system of private hospitals provides services not available in public hospitals or available with extra amenities (such as private rooms and other boutique services).
Singapore uses a universal insurance fund in which all citizens are required to participate, as a baseline. Seniors and certain groups are subsidised in their membership in the universal basic insurance fund.[4]
Optional additional supplementary insurance funds are available for purchase for elective coverage, such as for plastic surgery or for extra amenities in hospital.
Spain
Private insurance, private hospitals and private management of public hospitals exist in Spain, and coexist with hospitals completely run by the government. Public insurance guarantees universal coverage, with no expenditure from patients other than a fraction of prescription drug cost. Some private hospitals are only accessible with private insurance. The system is regularly ranked amongst the world's best.[5]
Switzerland
Private health insurance is compulsory for all persons residing in Switzerland. Insurance companies are required to sell the compulsory basic health insurance at cost, and individuals who cannot afford the premium (based on a premium-to-income ratio) are provided with public cash subsidies. Public hospitals are subsidised, but there are also private hospitals that provide additional services, such as elective services.
In addition to the compulsory basic health insurance, optional complementary and supplementary private insurance plans are available for purchase.
Private healthcare has continued parallel to the NHS, paid for largely by private insurance, and is used by about 11% of the population,[6] generally as an add-on to NHS services and mostly obtained by employer funded insurance schemes. That is a taxable benefit to the employee, the value imputed by the tax authorities as income to the beneficiary. Because NHS services are so comprehensive, there are many areas in which the private sector usually does not compete and private insurers almost always refuse to fund. Childbirth and perinatal services are good examples.
Conversely, there are some areas where the NHS does not offer free treatment (cosmetic surgery for vanity purposes, for example) and so the private sector offers a pay-for-service alternative.
Historically, avoiding waiting lists was the main reason that patients opted out of NHS treatment and into private care. Queues of many months are common. NHS Consultants, who can run both NHS and private services during their NHS contracts, used to be in charge of waiting lists and had a financial incentive to keep the public waiting list long, to ensure a stream of private income to the private business.[citation needed]
Since the Blair government reforms of the NHS, strict rules apply to waiting lists (see hospital choice in the NHS). That and the allocation of better funding in hospitals both reduced waiting times significantly. Most hospital patients are in fact not admitted from a list at all, and those that do, on average, wait less than 9 weeks. Nobody should wait more than 18 weeks. The 18 weeks is not dead time because it includes the time taken to book a first appointment, to conduct all the tests, for the doctor and patient to agree on the desired treatment, and to book and execute an operation or commence the treatment regime. A patient not seen in the 18-week period without just cause has the legal right to go private at the NHS's expense.[according to whom?] As of August 2020, 53.6% of patients were waiting for more than 18 weeks.[7]
As a result of these improvements, long waiting times reduced, and the private healthcare sector now sells its surplus capacity to the NHS. Dentistry is an area where many practitioners prefer to work privately (because they can set their own fees). NHS dentistry can then be patchy, and some people may find that private dentistry is the only practical option open to them in their locality.
There has always been a degree of private medicine conducted within NHS hospitals, with private work being done in those hospitals and the patient being accommodated in segregated accommodation. Until recently, few NHS patients were ever treated in private hospitals. In the English NHS, however, there has been greater willingness to outsource some work to the private sector, and so some NHS patients do sometimes gain access to private health care facilities at public expense. The equivalent NHS operations in Wales, Scotland and Northern Ireland do not often fund treatment outside of their own facilities.
Whether the NHS funds treatment in a private hospital is a decision for the local commissioning health authority based on formal service contracts.
The United States has a two-tier health system, but most of the population cannot gain access to the public provision tiers. Healthcare provided directly by the government is limited to military and veteran families and to certain Native American tribes. Certain cities and towns also provide free care directly but only to those who cannot afford to pay. Medicare, Medicaid, and the State Children's Health Insurance Program pay for health care obtained at private facilities but only for the elderly, disabled, and children in poor families. Since enacting the Patient Protection and Affordable Care Act in 2010, Medicaid has been substantially expanded, and federal subsidies are available for low- to middle-income individuals and families to purchase private health insurance.
Health care reform is for the most part governmental policy that affects health care delivery in a given place. Health care reform typically attempts to:
Medicare is an unofficial designation used to refer to the publicly funded single-payer healthcare system of Canada. Canada's health care system consists of 13 provincial and territorial health insurance plans, which provide universal healthcare coverage to Canadian citizens, permanent residents, and depending on the province or territory, certain temporary residents. The systems are individually administered on a provincial or territorial basis, within guidelines set by the federal government. The formal terminology for the insurance system is provided by the Canada Health Act and the health insurance legislation of the individual provinces and territories.
Socialized medicine is a term used in the United States to describe and discuss systems of universal health care—medical and hospital care for all by means of government regulation of health care and subsidies derived from taxation. Because of historically negative associations with socialism in American culture, the term is usually used pejoratively in American political discourse. The term was first widely used in the United States by advocates of the American Medical Association in opposition to President Harry S. Truman's 1947 health care initiative. It was later used in opposition to Medicare. The Affordable Care Act has been described in terms of socialized medicine, but the act's objective is rather socialized insurance, not government ownership of hospitals and other facilities as is common in other nations.
Publicly funded healthcare is a form of health care financing designed to meet the cost of all or most healthcare needs from a publicly managed fund. Usually this is under some form of democratic accountability, the right of access to which are set down in rules applying to the whole population contributing to the fund or receiving benefits from it.
The healthcare industry is an aggregation and integration of sectors within the economic system that provides goods and services to treat patients with curative, preventive, rehabilitative, and palliative care. It encompasses the creation and commercialization of products and services conducive to the preservation and restoration of well-being. The contemporary healthcare sector comprises three fundamental facets, namely services, products, and finance. It can be further subdivided into numerous sectors and categories and relies on interdisciplinary teams of highly skilled professionals and paraprofessionals to address the healthcare requirements of both individuals and communities.
Health insurance or medical insurance is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among many individuals. By estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization, such as a government agency, private business, or not-for-profit entity.
Healthcare in Canada is delivered through the provincial and territorial systems of publicly funded health care, informally called Medicare. It is guided by the provisions of the Canada Health Act of 1984, and is universal. The 2002 Royal Commission, known as the Romanow Report, revealed that Canadians consider universal access to publicly funded health services as a "fundamental value that ensures national health care insurance for everyone wherever they live in the country."
Single-payer healthcare is a type of universal healthcare in which the costs of essential healthcare for all residents are covered by a single public system.
The term managed care or managed healthcare is used in the United States to describe a group of activities intended to reduce the cost of providing health care and providing American health insurance while improving the quality of that care. It has become the predominant system of delivering and receiving American health care since its implementation in the early 1980s, and has been largely unaffected by the Affordable Care Act of 2010.
...intended to reduce unnecessary health care costs through a variety of mechanisms, including: economic incentives for physicians and patients to select less costly forms of care; programs for reviewing the medical necessity of specific services; increased beneficiary cost sharing; controls on inpatient admissions and lengths of stay; the establishment of cost-sharing incentives for outpatient surgery; selective contracting with health care providers; and the intensive management of high-cost health care cases. The programs may be provided in a variety of settings, such as Health Maintenance Organizations and Preferred Provider Organizations.
A public hospital, or government hospital, is a hospital which is government owned and is fully funded by the government and operates solely off the money that is collected from taxpayers to fund healthcare initiatives. In some countries, this type of hospital provides medical care free of charge to patients, covering expenses and wages by government reimbursement.
The Medicare for All Act, also known as the Expanded and Improved Medicare for All Act or United States National Health Care Act, is a bill first introduced in the United States House of Representatives by Representative John Conyers (D-MI) in 2003, with 38 co-sponsors. In 2019, the original 16-year-old proposal was renumbered, and Pramila Jayapal (D-WA) introduced a broadly similar, but more detailed, bill, HR 1384, in the 116th Congress. As of November 3, 2019, it had 116 co-sponsors still in the House at the time, or 49.8% of House Democrats.
Health care in Australia operates under a shared public-private model underpinned by the Medicare system, the national single-payer funding model. State and territory governments operate public health facilities where eligible patients receive care free of charge. Primary health services, such as GP clinics, are privately owned in most situations, but attract Medicare rebates. Australian citizens, permanent residents, and some visitors and visa holders are eligible for health services under the Medicare system. Individuals are encouraged through tax surcharges to purchase health insurance to cover services offered in the private sector, and further fund health care.
Healthcare in the Netherlands is differentiated into several main categories. Firstly in three different echelons; secondly in physical (somatic) versus mental healthcare; and thirdly in "cure" versus "care".
Germany has a universal multi-payer health care system paid for by a combination of statutory health insurance and private health insurance.
Healthcare rationing in the United States exists in various forms. Access to private health insurance is rationed on price and ability to pay. Those unable to afford a health insurance policy are unable to acquire a private plan except by employer-provided and other job-attached coverage, and insurance companies sometimes pre-screen applicants for pre-existing medical conditions. Applicants with such conditions may be declined cover or pay higher premiums and/or have extra conditions imposed such as a waiting period.
Cost-shifting is an economic situation where one individual, group, or government underpays for a service, resulting in another individual, group, or government overpaying for a service. It can occur when one group pays a smaller share of costs than before, resulting in another group paying a larger share of costs than before. Some commentators on health policy in the United States believe the former currently happens in Medicare and Medicaid as they underpay for services resulting in private insurers overpaying. Although the term cost shift is used in the field of healthcare these days and there are many studies about it, other fields have more or less used it. For example, its origins go back to the environmental economy where cost-shifting referred to the practice where corporations pass the harmful consequences and negative externalities of economic production to third parties and communities whether those that are part of the production circuit or are in some way beneficiaries or those that are outside this circle, K.W. Kapp, is one who coined the concept. This concept is also used in the American legal system, especially since the cost of electronic discovery has increased dramatically due to a large amount of raw information and the urgent need to extract relevant data, its processing, and analysis. In the past, each of the plaintiffs and defendants had to bear the cost, but later many of those who prepared the summons demanded the transfer of the cost because they thought they would have to pay for something they did not do. In this regard, some courts have agreed to shift part of the costs to the complainant.
Health care rationing refers to mechanisms that are used for resource allocation in health care.
Examples of health care systems of the world, sorted by continent, are as follows.
Health care finance in the United States discusses how Americans obtain and pay for their healthcare, and why U.S. healthcare costs are the highest in the world based on various measures.
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