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Health care delivery systems play a critical role in shaping global health outcomes. These systems must ensure equitable access to health care services to prevent differential health outcomes. Transforming health care systems enhances efficiency, quality, and patient outcomes. These systems aim to provide universal health care (also known as universal health coverage), wherein all residents of a particular country or region are assured access to health care. Regardless of their ability to pay, everyone receives the full range of quality health services they need. This approach aims to promote equity, reduce financial barriers, and improve overall population health (World Health Organization [WHO], n.d.). Several health care delivery systems have been implemented worldwide. This lesson will highlight four main models (excluding the model the United States employs); some countries use features of each one to create a hybrid delivery system. No system will meet all our needs. Millions of people must wait too long to get the care they need, but billions have no access to health care services at all.
The Beveridge model is a health system in which the government provides health care for all its citizens through income tax payments. This model was first established by William Beveridge in the United Kingdom in 1948. This system is established as the National Health Service (NHS) in the United Kingdom (Harris, 2020). Some key features of the model include all residents within a country being guaranteed access to health care, health services being considered a human right, and the government ensuring everyone receives coverage and access to medical care. Most hospitals and clinics are owned by the government. Additionally, doctors and health care professionals work as government employees. However, there are also private institutions that receive fees from the government for their services. The government acts as the sole payer for health care services. This eliminates competition in the health care market and helps keep costs relatively low.
The main funding source for health in the Beveridge model is income tax. Services are provided free at the point of service, and patient contributions through taxes cover their health care expenses. Individuals who do not work and are residents in a country that uses this model can still receive services. They can seek medical care from government-owned hospitals and clinics and will be treated without financial barriers. This model prioritizes equitable access to health care for all citizens.
The image below depicts the logo for NHS, the U.K. health care delivery system described earlier in this lesson as the Beveridge model.
There are some challenges with this model. Because health care spending is related to the government, the budget may be predicated on the political party in leadership at any given time. The system has evolved over time and is currently challenged by fewer resources allocated to health care. When fewer resources are allocated to health care, there are fewer hospital beds, doctors, and nurses. An undersupply of staff can also compromise care, and there is little knowing of what to do to rectify the situation.
Long waiting times are also a challenge under this model. High demand and centralized decision-making can lead to long waiting times for specialist consultations, elective surgeries, and diagnostic tests. Unfortunately, while this model offers universal coverage, it doesn’t protect against the cost of severe or chronic illnesses. Families may face significant economic strain due to unexpected medical expenses. For example, some prescription medications may be out of pocket for certain drugs for diabetes, heart disease, or cancer. There could also be nonmedical costs related to illness that the system does not cover, such as transportation to health care facilities, home care, or modifications for disability.
While the Beveridge model has its distinct policies, most countries use variations of this model combined with other health care approaches. Countries implementing some form of this model include the United Kingdom, Italy, Spain, Denmark, Sweden, Norway, and New Zealand.
The Bismarck model was developed by German Chancellor Otto von Bismarck. This is a social insurance system where health care is financed through mandatory contributions from employees and employers. Under this model, individuals are required to participate through payroll deductions regardless of income. The system ensures that everyone has access to essential medical services.
Doctors and hospitals tend to be privately owned in Bismarck countries. Bismarck-type health insurance plans are nonprofit and cover everybody. Some countries, like Germany, have multiple insurers (about 240 different funds), but tight regulation gives the government significant cost-control influence (World Health Systems Facts, 2024). Unlike other systems, patients in Bismarck countries have direct access to specialists without needing a referral from a primary care physician. This feature allows for more flexibility in seeking specialized care. Services are delivered by private providers, and patients have a choice.
Countries utilizing this model include France, Belgium, the Netherlands, Japan, Switzerland, and Panama.
IN CONTEXT
Challenges with the Bismarck Model
The challenges with this health care system are the focus on low costs and efficient care, which means fewer health care services are available for citizens in rural areas. This disparity can lead to challenges in accessing necessary medical services for those residing outside urban centers (American Healthcare for All Advocacy Program, n.d.). The system leads to significant disparities in access to health care, with services often available only to those who can afford to pay. The primary challenge is the lack of financial protection against the cost of severe or chronic illnesses, leading to significant economic strain on families. To maintain affordability, the Bismarck model relies on mandatory employment taxes. While this helps fund the system, it can also burden individuals and employers, affecting disposable income and economic growth. Patients may experience longer waiting times for elective secondary and tertiary services. This can be frustrating for individuals seeking specialized care and procedures.
The characteristics of NHI include the fact that this model aims to provide universal coverage for all citizens. It ensures that everyone has access to essential health care services regardless of their socioeconomic status. In this system, the government establishes and manages a centralized insurance program. Citizens contribute through taxes or premiums, and the government funds the health care services. While the system is government funded, it relies on private-sector health care providers. These providers deliver services to insured individuals. NHI promotes equitable access to health care. It reduces disparities by ensuring that everyone has equal access to necessary treatments.
IN CONTEXT
Challenges with NHI
One challenge of NHI is that adequate funding is critical for its success. Balancing costs, revenue collection, and sustainability remains a challenge. Managing a large-scale insurance system involves significant administrative complexity. Efficient coordination among various partners is essential. Provider payment mechanisms are also a challenge. Determining fair payment for private providers can be challenging. Capitation, fee-for-service (pay-as-you-go), or other models must strike a balance between cost control and quality care. Capitation involves a predictable, up-front, set amount of money to cover the predicted costs of services for a patient.
Implementing NHI often faces political resistance and public skepticism. Convincing citizens and policymakers about its benefits is essential. Ensuring the quality of care across providers is also very challenging. Monitoring and enforcing standards is necessary to maintain high-quality services. A gradual transition is needed to move from existing health systems to NHI without disrupting services.
Countries that use this type of health care delivery system are Canada, South Korea, and Taiwan.
The OOP model is a health care delivery system commonly found in less developed countries with insufficient financial resources to create a comprehensive national health care system. A characteristic of this system is that patients must pay for their medical procedures directly out of their own pockets, and there is no centralized insurance or government-funded health care costs. Since there is no pooling of funds or risk sharing, individuals face significant financial risk when seeking medical care. They bear the full burden of expenses related to consultations, medications, tests, and treatments.
IN CONTEXT
Challenges with the OOP Model
The OOP model often leads to inequitable access to health care. Those with limited financial means may delay or avoid seeking medical attention due to cost concerns, resulting in health disparities.
Health care inequities develop without safety net programs like the United States has in Medicaid or Medicare. People who cannot afford the necessary treatments may suffer from preventable illnesses or complications because they do not have access to care and the money to pay for it. In extreme cases, some may even die due to lack of access to care. Millions of people are pushed into extreme poverty due to costs related to health care (Harris, 2020).
As mentioned earlier, this model is mostly used in less developed countries with insufficient financial resources for a national system. Areas employing this health care delivery system include Sudan; Nigeria; Cambodia; rural parts of India; and parts of Africa, Yemen, and Afghanistan.
Many countries create their own hybrid systems, borrowing from these models. Balancing access, cost control, and quality of care is a challenge with these systems. Austria, Costa Rica, Bulgaria, Greece, and Croatia use a hybrid system combining features from both the Beveridge and Bismarck models.
EXAMPLE
Costa Rica’s health care system is notable for its commitment to universal health coverage. Costa Rica provides universal health care to its citizens and permanent residents. Both the private and public health care systems are continually upgraded. Statistics from the WHO frequently rank Costa Rica among the top countries globally for long life expectancy (WHO, 2021). The Costa Rican Social Security Fund (Caja Costarricense de Seguro Social) plays a key role. It provides 100% coverage for medical procedures, appointments, hospital visits, and prescription drugs. Worker and employer contributions fund the system under the principle of solidarity.Costs tend to be much less than those in the United States, focusing on preventive care. Costa Rica spends one tenth as much per capita on health care as the United States. Costa Rica employs a community-oriented primary care system where public health is integrated with primary care. A team approach to care includes a doctor, nurse assistant, medical clerk, and community health worker. All citizens are assigned to a team based on where they live, beginning with the country’s most underserved communities to promote greater equity in outcomes and access. Quality assurance is backed by robust data feedback mechanisms. The country also employs an electronic health records (EHR) system that facilitates the delivery of comprehensive care to patients. Teams use mobile tablets when traveling to urban or rural areas.
IN CONTEXT
Challenges with Costa Rica’s Hybrid Model
Challenges with Costa Rica’s health care system include environmental concerns like the preservation of water sources. Costa Rica must ensure a sustainable water management system and address the impact of climate change. Further, frequent rainfall and winds lead to emergencies; therefore, emergency preparedness and response are critical. Social tensions, criminality, and drug trafficking contribute to high rates of crime and drug addiction. Immigrants also challenge the system. Immigrants, mainly from Nicaragua, comprise 9% of the population. Providing care for this population also presents challenges. Despite these challenges, Costa Rica’s health care goals include an inclusive and equitable society with a sustainable health system that offers user-friendly, high-quality services along with comprehensive education and a secure society.
Australia’s health system is one of the most comprehensive in the world, providing safe and affordable health care for all Australians. It is also a hybrid of the Beveridge and Bismarck models. It operates under a shared public-private model with two major components: a Medicare system and a private health system.
The Medicare component of universal health care is available to Australian and New Zealand citizens, permanent residents, and people from countries with reciprocal agreements. Medicare covers the costs of public hospital services, general doctors’ visits, medical specialists, and essential health services. The system also provides subsidized prescription medicines.
Private health insurance allows individuals to access private hospitals and additional services. Individuals contribute toward the cost of private health care. Private insurance complements the public system.
The U.S. health care system operates as a nonuniversal model, which means it lacks a comprehensive system of universal health coverage. Health care in the United States is primarily by private-sector health care facilities. These include private hospitals, clinics, and physician practices. Some Americans receive health care coverage through public programs such as Medicare (for seniors) and Medicaid (for individuals with low income). Many people have private health insurance through their employers, or they purchase it individually. A significant proportion of the population relies on out-of-pocket payments for medical services.
IN CONTEXT
Challenges with the U.S. Nonuniversal Model
The United States is the only high-income country without a system of universal health care. As a result, not everyone has access to health insurance. Other challenges with this system include a lack of universal coverage, which leads to disparities in access and some individuals facing barriers to essential care. Health care spending per person continues to be far higher in the United States than in other high-income countries. Out of all the world’s high-income countries, the United States has the lowest life expectancy at birth, the highest death rates for avoidable or treatable conditions, the highest maternal and infant mortality, and one of the highest suicide rates. The United States is the only high-income country that does not guarantee health coverage. Despite high health care spending, the system faces inequities and fragmentation (Gunja et al., 2023). The U.S. health care system relies on a mix of private providers, public programs, and out-of-pocket payments, but it does not achieve universal coverage.
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REFERENCES
American Healthcare for All Advocacy Program. (n.d.). The Bismarck model. www.ahaap.org/bismarck-model
Gunja, M. Z., Gumas, E. D., & Williams, R. D., III (2023). U.S. health care from a global perspective, 2022: Accelerating spending, worsening outcomes. The Commonwealth Fund. www.commonwealthfund.org/publications/issue-briefs/2023/jan/us-health-care-global-perspective-2022
Harris, B. (2020, October 9). The world has 4 key types of health service – this is how they work. World Economic Forum. www.weforum.org/agenda/2020/10/covid-19-healthcare-health-service-vaccine-health-insurance-pandemic/
World Health Organization. (n.d.). Universal health coverage. www.who.int/health-topics/universal-health-coverage#tab=tab_1
World Health Systems Facts. (2024, May 2). Bismarck model. healthsystemsfacts.org/national-health-systems/bismarck-model/
Zawada, S. K., Sweat, J., Paulson, M. R., & Maniaci, M. J. (2023). Staff successes and challenges with telecommunications-facilitated patient care in hybrid hospital-at-home during the COVID-19 pandemic. Healthcare, 11(9), 1223. doi.org/10.3390/healthcare11091223
