Government Provided Health Care Research Paper Examples
In the United States, the health care system can be qualified as consisting of a public system and private health insurance providers that caters the health insurance needs of the elderly and low income individuals. According to Johnsons (2009), the Federal government’s Medicaid program serves the disabled and the poor families. The health coverage for the low-income children, pregnant women, disabled, and elderly is taken care by the state government. The Medicaid program also has separate health coverage for the individuals over 65 years old. Also, the State Children’s Health Insurance Program covers the health care of children who belong to family that do not qualify for Medicaid but don’t make enough money to buy private health insurance. The benefits derived from health care covered by the Medicaid differ depending on the kind of insurance but typically include physician visits, outpatient and inpatient services. There are plans that are consisted of dental care, preventive services, and prescription drugs.
Private insurance companies provide the employer-sponsored private insurance services of the Americans. Such health care plans have to accept everyone at the same price. Usually the plans are underwritten based on health history smoking status, weight, and age (Johnsons, 2009).
As to the government’s role in the provision of health care, almost 46 percent of the total spending in health care is from the government (World Health Organization, 2012). In particular the Federal utilizes the tax revenue in reimbursing health care agencies that provide care for patients under the Medicaid, Medicare, VA or SCHIP programs. The government also provides subsidy to employer-based insurance agencies.
In comparing the care system of the US is compared with that of The Netherlands and Japan, it was reported by Johnsons (2009) that among the developed nation, it is only the US that does not provide full access to health care to all its citizens primarily due to the high-end health and expensive features of the health care. Because of the sophisticated facilities and equipment used in the health care services, the government found it very costly to provide the so-called universal health care. Compared to the abovementioned countries, the US government has the biggest spending on health care.
Johnsons (2009) described the health care system as comprising of AWBZ (a universal national social insurance programs for long-term care) under the Exceptional Medical Expenses Act, and health group- plan insurance administered employers. In Netherlands, the government requires all the residents to buy health insurance from the private, not-for-profit or for-profit health insurance companies. The health insurance businesses are found to be very competitive in the country but are highly regulated by the government. The present health care system in the country was established in 2006 through a reform in the health policy. The previous system was comprised of a private health insurance and a social health insurance system. Under the new system, a subsidy is provided by the government to health insurance agencies that cater the insurance needs of elderly, sicker or have pre-existing conditions. Meanwhile, a tax credit is granted to low income patients; and individuals below 18 years are automatically insured without any cost. The coverage of standard insurance benefits includes maternity care, hospitals, general practitioners, medicines, and lab tests. Patients who have purchased more costly insurance plans have the privilege to choose health provider. Relative to the US, the health care system in Netherlands uses private health insurance companies that partly cover the public insurance through government regulation of these companies. Moreover, 80% of the total spending in health services is financed by the federal government (World Health Organization, 2012). The government required standard insurance is a combination of flat-premiums and individual contribution from income earned which is set at 6.5%. The insured individual pays a premium for a policy with flat-rate. The same policy is paid with the same premium; and residents who belong to the lower income group are given healthcare allowances by the government to help them in their healthcare insurance payments.
Meanwhile in Japan, being the first country in Asia to establish a comprehensive social insurance program, the government requires all of its citizens to obtain health insurance (Johnsons, 2009). The health insurance can be obtained either through the national health care program or through the employer-based health insurance. The insurance companies are non-profit companies hence there is no competence in the health insurance industry. The government intervenes by ensuring the fixed prices of the insurances and negotiating insurance rates with the health care industry every two years. Also, patients have full access to all the health institutions in the country. The healthcare services that are covered by the Japanese healthcare system include prosthetics, home nursing, home care, outpatient care, prescriptions, dental, long term care, and home nursing for the elderly. It also includes cash benefits that are given to women for their childbirth. There are however costs that are not covered like over the counter drugs, routine physical exams and some of the dental services. Under the employer-health insurance, the premium for the insurance shared by the employer and the employer, of which, about 4% of the employee’s salary is required for the average contribution. Also, before the employee can avail of the full insurance coverage, he/she has to pay around 20-30% of the care costs. Moreover, the participants in the national health insurance pay a premium based on salary and co-payments for the prescription drugs and care. They are also required to pay or share at least 30% of the cost of the health insurance before they can enjoy full coverage. As to the role of the state, the Japanese government’s share in spending for health care is more or less at 81% of the total health expenditure of Japan (World Health Organization, 2012). Relative to the health system of the United States, the socialized health care system of Japan is considered as one of the best performing among countries.
In a report published by OECD (2010), the new dataset on health policies and institutions reveals that: first, across countries, the basic coverage of insurance (in terms of degree of cost sharing for the premium, covered population and services included) is found to be almost similar with the exception of the United States, Mexico and Turkey. The population covered by health care insurance in the three countries are limited. Second, more and more countries rely on the mix of a centralized health care services and regulated market mechanism though there are some OECD economies that have reliance on centralized command-and-control systems in affecting the demand and supply of health care services; and even some have reliance on solely regulated market mechanisms like the fee-for-services, competition driven by user choice and private insurance. And third, the varying policy tools of the government are found to be complementarily working. For example, there are countries that adopt or use command and control health care systems that pay fixed wages relies on standard setting and rules. There are also countries that utilize the fee for service while relying at the same time on private health care providers.
As to spending, there are several identified significant differences in terms of the spending levels and outcome. In particular: first, in countries that rely mostly on market mechanisms, the spending levels are found to be high. The health outcomes include a long life expectancy. Second, there are countries that have high health status inequalities. There are also countries like Germany, Switzerland and The Neatherlands that rely on private insurance and have low level of health status inequality. The differences can be explained partly by the degree of intervention or regulation that the government imposes on the health care sector. Third, in countries where private insurance companies have significant role in the provision of health care insurance, the administrative costs were found to be high. The cost is found to be higher than the OECD average by a considerable margin in France, Belgium, Luxembourg, Mexico and New Zealand, signaling a potential for reducing spending in these countries.
A government provided health care service has both a good side and bad. On one side, a government’s spending on public goods and merits goods like the health care has been viewed to create inefficiency and excess bureaucracy. Most economists believed that government-owned companies tend to lack profit incentive resulting to inefficiency and often leads to misuse of resources. The problem relating to moral hazard is a particular issue associated with government provided health care service. Interventions in the form of subsidies and health insurances only create dependency program among people, that is, people may not bother to take care of their health because they would always expect that the government will always be on assistance.
On the other side of the argument, government-run health services may be better than private health service and insurance providers especially if the government adopts the principle of transparency and accountability.
Nichols (2012) emphasized in his paper that government intervention in the health care markets is practical, necessary and morally sound. He articulated that it is not possible to have a better and sustainable health system in the absence of a government that plays specific yet absolutely crucial roles.
In the United State, the health care system is different from other countries like The Netherlands and Japan because it does not have a universal health care, that is, not all of the population in the country is covered by the health care program of the government. According to Poterba, the federal, state and local governments if the US are direct providers of heath care but of relatively little health care coverage. The health care insurance benefits can be obtained from school or from jobs, or from private health care providers (which is very costly). However, unemployed individuals or non-students do not have access to it. This is one of the obvious limitation and flaw of the US health care system.
Johnson, James (2009).“Comparing International Health Care Systems” Accessed from http://www.pbs.org/newshour/updates/health/july-dec09/insurance_10-06.html
OECD (2010). “Health care systems: Getting more value for money”, OECD Economics Department Policy Notes, No. 2. Accessed from .
“Accountable Care Organizations” (2011). Accessed from .
Nichols, Len (2012). “Government intervention in heath care market is practical, necessary, and moraaly sound”. DOI: 10.1111/j.1748-720X.2012.00688.x
Poterba, james (1994). “Government intervention in the markets for education and health care: how and why? Accessed from
World Health Organization (2012) at http://www.who.org