No Health System in the World Is Fully Public or Private

Gregorio de Matos
Sep 24, 2020 · 4 min read

Countries’ varying health expenditure arrangements look more like a colorful mosaic

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Source: Boston University School of Medicine

Any system is “complex” by definition. Otherwise it wouldn’t be considered a system in the first place. For historical, cultural, civilizational, political, social e economic reasons, countries’ health systems around the world can differ from one another depending on three basic dimensions: 1) financing source (public or private); 2) financing scheme (compulsory or voluntary); and 3) implemented mechanism (permanent universal program or insurance-based). According to the Universal Declaration of Human Rights (1948), access to health is contemporarily attached to the concept of human dignity, but it hasn’t been always like this.

Health systems as we know them today are the institutional results of long processes of social construction, meaning that they reflect numerous interactions, tensions, conflicts, negotiations, agreements, consensus, progresses and setbacks along the way. Similarly, they represent unfinished products, which are still being jointly sculpted upon unique in-country conditions and factors. That said, multiple modalities of providing health care services can peacefully — or not so peacefully, in some cases — coexist within a same nation, whether this could be mostly State-based or more towards a market-oriented approach.

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Source: OECD — Health expenditure by type of financing, 2017 (or nearest year)

A first group of countries sustain universal, equitable, comprehensive, and publicly funded health care systems, which are based on compulsory contributions by their citizens through tax collection. Norway (85%), Denmark (84%), Sweden (84%), Iceland (82%) and the United Kingdom (79%) are world-renowned for their robust welfare state structures and are societies somewhat familiar to the idea of having the State as the protagonist in the provision of health care services. The British National Health Service (NHS) is a remarkable example in this segment. The health systems of nations like Italy (74%), Ireland (73%), Australia (69%), New Zealand (69%), Canada (68%), Spain (66%), Portugal (65%) and Finland (62%) are also mostly based on public-compulsory schemes.

A second set of nation-States also sit under the guidance of enforced legislation and close oversight from governmental entities, but the dynamics of health care provision are slightly different. In countries such as Germany (78%), Japan (75%), France (78%) and the Netherlands (75%), members of society are used to access health services through a compulsory (social) health insurance, which is usually tied to their employment. This means health coverage tends to be directly linked to each person’s job and to the regular contributions made by employers and/or employees as a social protection mechanism.

Moving away from State-run arrangements, a third group of countries is best known for the size and economic power of their privately owned voluntary health insurance companies. These are the cases of South Africa (49%), which also registers significant amounts of governmental subsidies to pay for these services, and Brazil (28%), which is home to one of the largest publicly funded unified health systems in the world. Nothing compared to it can be found in countries above 100 million inhabitants, and Brazil has 210 million. Nevertheless, there is still room for private sector entities to get a slice of the domestic market and make profits out of the gaps and deficiencies observed in the Brazilian Unified Healthcare System, known as ‘SUS’.

Finally, also on the market-oriented voluntary front, a fourth set of nation-States is characterized by their high incidence of out of pocket spending when it comes to populations needing to pay for the health services they get. India (65%), Mexico (41%), Russia (40%) and China (36%) all have domestic contexts filled with private health care providers who charge individually for each service, meaning that costs could be significantly high for any regular appointment, surgery or emergency procedure. According to the World Health Organization (WHO), this modality of health expenditure has been pushing about 100 million people into extreme poverty (defined as living on US$1.90 or less per day) every year. Around 12% of the world’s population still spends at least 10% of their annual household budgets to pay for health care, with no predictability whatsoever.

It is certainly hard to imagine health as a good or commodity. Rather than merely promoting the expansion of health coverage (through insurances), WHO and national governments should be investing on improving actual access to health services through the structuring of resilient, universal, and equitable public systems. Countries should be envisioning to invest way above 10% of their domestic annual budgets in health — the world’s average stands now at 10.2%; the average in the Americas is at 13.2%; European countries are closer to a 15%-20% range; while Japan (23%) and Costa Rica (26%) really seem to prioritize this agenda. In addition, it’s not about how much one nation invests, it’s more about how well it invests. Only the advent of a pandemic can prove the value of a well-structured health system for present and future generations.

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