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Running Head: A Closer Look into Healthcare Systems

A Closer Look into Healthcare Systems

Jaydean Leon

5 December 2018

Health 101 Overview Health Care Industry

Professor Blair Craddock

Online
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Running Head: A Closer Look into Healthcare Systems

Healthcare, according to the textbook, refers to the treatment of illnesses and the

maintenance of health. All around the world there are many different kinds of healthcare systems

that provide different types of coverage and services. In chapter one of the textbook, it states that

there are three basic models for structuring national health care systems which include national

health insurance (NHI), national health system (NHS), and socialized health insurance (SHI).

Another kind of healthcare system that tends to be used is a privately financed system. In the

United States there is a very unique system of healthcare delivery, best described as a hybrid.

Unites States healthcare is “delivered through an algorithm of private and public financing

through private health insurance and public insurance programs,” (Shi & Singh, 2015). In

Australia, healthcare is universal but as most nations would have it, there is also a private sector

within the system. Universal health care is delivered publicly, and private providers are done

through insurance. Whatever kind of healthcare system a nation decides to follow, the perfect

system is subjective. There are advantages and disadvantages to each and every system of

healthcare.

As stated in the previous paragraph, the United States has a very special way of

delivering healthcare, it does not work as a “rational and integrated network of components

designed to work together coherently,” (Shi &Singh 2015). Instead, each basic functional

component of United States healthcare loosely coordinates with one another. Like many other

systems of healthcare, the United States has both public and private insurers, what makes this

unique however is the fact that their private sector dominates the public one (Chua, 2006). In the

article titled Overview of the U.S. Health Care System, it is stated that “62% of non-elderly

Americans received private employer-sponsored insurance, while only 15% were enrolled in

public insurance programs like Medicaid,” (Chua, 2006).

Australian healthcare is similar to that of the United States in the way that they both

utilize public and private insurers. However, Australia differs in the way that their national

program Medicare offers “a universal public health insurance program providing free or

subsidized access to care for Australian citizens, residents with a permanent visa, and New

Zealand citizens following an enrollment,” (Osborn, Sarnak, Mossialos, & Djordjevic, 2017). In

Australia, there isn’t such a drastic difference between those insured publicly and those insured

privately. According to the textbook, 43% of Australians carry private insurance in addition to

Medicare. Although not necessary, private health insurance is strongly encouraged by the

Australian government, “through tax subsidies for purchasers and tax penalties for non-

purchasers” (Shi &Singh 2015).

In the United States, healthcare is financed through “the collection of money for health

care (money going in), and the reimbursement of health service providers for health care (money

going out),” (Chua, 2006). The responsibility is placed on both the government and private

insurance companies better known as payers to create a multi-payer system. Individuals and

businesses utilize taxes on payrolls to finance Medicare and pay income taxes to the government.

Premiums are either payed off or mostly payed off by businesses for employer-based insurance

and employees are responsible to pay off any left-over fees. For individual payers, they are

required to pay an entire premium out of pocket. These premiums are then collected by private

insurers. Direct or out of pocket payments are also used to pay a provider directly for any

services received. The government is in charge of Medicare, Medicaid, S-CHIP, and the VA, as

well as public employees’ premiums, and tax subsidies. The government uses tax money to

reimburse providers that take care of those enrolled in Medicare, Medicaid, S-CHIP, and the VA.

They also use tax money to pay private insurers their health insurance premiums.
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Running Head: A Closer Look into Healthcare Systems

In Australia, the healthcare system is financed largely by the government. According to

the Australian Institute of Health and Welfare, “almost 68% of total health expenditure during

2013–2014 was funded by governments, with the Australian Government contributing 41% and

state and territory governments nearly 27%,” (AIHW 2016). The other 32% of expenses that

remain are what individuals pay from out of pocket. The Australian government is in charge of

Medicare and funding pharmaceuticals as well as community-controlled Aboriginal and Torres

Strait Islander primary health care. They must also regulate private health insurance. State and

territory governments are in charge of public community-based and primary health services,

ambulance services, and preventative services. Individuals and private health insurers are

responsible for “providing large portions of the funding for dental services, aids and appliances,

some medications, and other health practitioner services,” (AIHW 2016).

The United States offers a multitude of services under its healthcare system. For private

insurance, the Affordable Care Act (ACA) states that, “all health plans offered in the individual

insurance market and small-group market must cover services in ten essential health benefit

categories,” (Shi & Singh, 2015). These ten services include ambulatory patient services,

emergency services, hospitalization, maternity and newborn care, mental health services and

substance use disorder treatment, prescription drugs, rehabilitative services and devices,

laboratory services, preventive and wellness services and chronic disease management, and

pediatric services, including dental and vision care (Osborn, Sarnak, Mossialos, & Djordjevic,

2017). For public insurance, Medicare covers hospitalization, physician services, and, through a

voluntary supplementary program, prescription drugs (Osborn, Sarnak, Mossialos, & Djordjevic,

2017). The healthcare funding priorities from statistics taken from 2014 showed that most money

was being spent on hospital care. The next biggest expense was physician and clinical services
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Running Head: A Closer Look into Healthcare Systems

and the third biggest expense came from prescription drugs. Other expenses in funding that were

lower than 10% included nursing care, other health care, dental services, home health care, and

durable equipment.

In Australia, services provided through their public health insurance plan is simple.

Medicare covers hospital, medical and pharmaceutical services. Other free care they have access

to include “free public hospital services, including subsidies and incentive payments in the areas

of prevention, chronic disease management, and mental health care, as well as limited optometry

and children’s dental care,” (Osborn, Sarnak, Mossialos, & Djordjevic, 2017). Services that are

not usually covered by Medicare however include “ambulance services, most dental

examinations and treatments, most physiotherapy and other allied health services, and glasses

and contact lenses” (AIHW 2016). For private insurance, all of these services as well as the ones

not included in Medicare are covered. They also have the option to choose and/or change their

doctors as well as insurance plans. Similarly, to the United States, the most healthcare funding

went to hospital care. Next it was primary care, and finally at 22% was other services which

includes referred medical services, administration and research, and other health goods and

services.

In the United States, amounts that consumers pay for outpatient and inpatient care

depends on the type of coverage that they have. Most private insurance plans vary widely, with

most requiring copayments for physician visits, hospital services, and prescription drugs.

Consumers with high deductible plans have an average of $1,250 in payments when paying

individually. Families with high deductibles have an average payment of $2,500 per family. In

2016, “cost-sharing for most private insurance plans capped at $6,850 for individuals and

$13,700 for families (Osborn, Sarnak, Mossialos, & Djordjevic, 2017). In 2017, these prices
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Running Head: A Closer Look into Healthcare Systems

raised by about $1,000 for both families and individuals. The United States public insurance

Medicare also requires deductible payments for hospital stays and ambulatory care as well as

copayments for physician visits and other services. Medicaid is the only insurance forum that

requires only minimal cost-sharing expenses. According to the article International Profiles of

Health Care Systems, “Out-of-pocket spending accounts for 11 percent of total health

expenditures in the United States,” (Osborn, Sarnak, Mossialos, & Djordjevic, 2017).

Australian healthcare, in comparison to the United States, has less deductibles to worry

about, but a much higher percentage of out-of-pocket spending. For any citizen receiving public

insurance through Medicare, there are no deductibles or out-of-pocket expenses to worry about

when receiving any kind of hospital service. General practitioner care is subsidized through this

program at 100% and specialist visits are subsidized at 85% (Osborn, Sarnak, Mossialos, &

Djordjevic, 2017). In Australia, General practitioners and specialists can choose to charge above

the Medicare Benefits Schedule (MBS) in which case then patients would have to make out-of-

pocket payments. However, only 17% of them decided to charge above this. Patients that were

charged payed an average of about $20. According to the International Profiles of Health Care

Systems article, it states that “out-of-pocket payments accounted for 18 percent of total health

expenditures in 2013–2014,” (Osborn, Sarnak, Mossialos, & Djordjevic, 2017). These costs were

mostly made by those that chose to add additional coverage through private insurance.

The main healthcare providers in the United States are primary care physicians, in fact

they account for one-third of all U.S. doctors. The majority of these physicians operate in small

self-or-group owned practices but in recent years larger practices have become more common.

Theses practices are helped run by nurses and other clinical staff. The job of primary care

physicians is to do routine checkups and check for health problems as well as help with
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Running Head: A Closer Look into Healthcare Systems

preventative care. The other main healthcare providers in the United States are specialists.

Specialists are able to work in both private practices and hospitals. The difference between

primary care physicians and specialists is the fact that, “access to specialists can be particularly

difficult for Medicaid beneficiaries and the uninsured, because some specialists refuse to accept

Medicaid patients owing to low reimbursement rates, and safety-net programs for specialist

care being limited,” (Osborn, Sarnak, Mossialos, & Djordjevic, 2017). The job of a specialist is

to provide care and treatment in specialized areas. Some examples of specialists include

oncologists, cardiologists, and orthopedists.

Australia, very similarly to the United States, utilize general practitioners and specialists

as their primary healthcare providers. In Australia, statistics from 2015 stated that there were

about 34,367 general practitioners and 8,386 specialists. There were also 49,060 practitioners

registered as both generalists and specialists. Here, not only do general practitioners provide

routine checkups, preventative care, and check for health problems they also are in charge of

providing after-hours care. General practitioners do not have to provide this kind of care directly,

however they must “demonstrate that processes are in place for patients to obtain information

about after-hours care and that patients can contact them in an emergency,” (Osborn, Sarnak,

Mossialos, & Djordjevic, 2017). Just as in the United States, specialists can either deliver care

through private practices or public hospitals. The only difference between here and the U.S. is

that patients must be referred through a general practitioner in order to be seen. In the United

States it is not necessary to be referred by a primary care physician.

The perfect healthcare system is subjective. Each system has its own strengths and

weaknesses. The strengths of the United States healthcare system are as follows, “there is high-
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Running Head: A Closer Look into Healthcare Systems

quality services available for those with good insurance, the US is at the forefront of clinical

research, major technological breakthroughs have occurred in treating numerous diseases, and

there are large numbers of physicians, especially specialists, in certain parts of the country,”

(Cooper & Taylor, 2011). However, because the United States doesn’t have universal coverage

for all, that leaves 15% of the population or 37 million people with no healthcare. Other

weaknesses of the U.S. healthcare system include rising costs for healthcare, poor outcomes

compared to other developed countries in areas such as infant mortality and life expectancy, and

uneven distributions of physicians. Financial incentives here also encourage expensive high-tech

diagnosis, treatment, and specialization without enough primary care (Cooper & Taylor, 2011).

The biggest strength of the Australian healthcare system is the fact that it is universal, so

every citizen has access to free healthcare. Other strengths of this healthcare system include

equal access no matter social standing, improvement of public health, and a boost in economy

due to a rise in the standard of living. Even though universal healthcare seems like it can create

nothing but good, there are also a lot of issues that are brought forth because of it. Disadvantages

to this type of healthcare include long wait times, system abuse which leads to rationing, heavy

taxes that increase each year, and a lack of innovation due to the fact that there is no competition.

Australia’s healthcare system also greatly increases government debt.

Healthcare is a very complex system. It can differ in the way by which the system is

financed, the scope of services provided, health care funding priorities, amounts that consumers

pay for outpatient and inpatient care, and primary healthcare providers in each system and their

respective roles. The United States healthcare system and Australian healthcare system both have

advantages and disadvantages to them. There is no such thing as a perfect healthcare system.
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Running Head: A Closer Look into Healthcare Systems

Reference Page

Shi, L., & Singh, D. A. (2015). Delivering health care in America: A systems approach (6th ed.).

Burlington, MA: Jones & Bartlett Learning.

Osborn, R., & Sarnak, D. (2017). International Profiles of Health Care Systems (E. Mossialos &

A. Djordjevic, Eds.). International Profiles of Health Care Systems, 1-182. Retrieved

November 11, 2018, from

https://www.commonwealthfund.org/sites/default/files/documents/___media_files_public

ations_fund_report_2017_may_mossialos_intl_profiles_v5.pdf.

A. (2016). Australia’s health 2016. How Does Australia’s Health System Work?, 1-13. Retrieved

November 29, 2018, from https://www.aihw.gov.au/getmedia/f2ae1191-bbf2-47b6-a9d4-

1b2ca65553a1/ah16-2-1-how-does-australias-health-system-work.pdf.aspx.

Chua, K. (2006). Overview of the U.S. Health Care System. Overview of the U.S. Health Care

System, 1-6. Retrieved November 29, 2018, from

https://publichealth.arizona.edu/sites/publichealth.arizona.edu/files/Chua_Kao-

Ping_HealthCareSystemOverview_2006.pdf.

A. (2017, July 03). 2016 National Healthcare Quality and Disparities Report. Retrieved

December 1, 2018, from

https://www.ahrq.gov/research/findings/nhqrdr/nhqdr16/overview.html

Cooper, E., & Taylor, L. (2011, September 15). Comparing Health Care Systems. Retrieved

December 2, 2018, from https://www.context.org/iclib/ic39/cooptalr/

Formosa Post. (2018, November 26). Pros & Cons of Universal Health Care (THE COMPLETE
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Running Head: A Closer Look into Healthcare Systems

LIST). Retrieved December 2, 2018, from https://www.formosapost.com/pros-and-cons-

of-universal-health-care/