Health Systems Financing Flashcards
Financing
Who is providing the money.
Delivery
Who is providing the service.
General Taxation
Also called the beverage system. Revenue is collected through various forms of taxation and then is divided across many different sectors. Is a public insurance system and has a wide tax base. Patients do not pay at the point of entry. Used in Canada, UK, and Sweden. Is not used in America. Positives: effective in pooling the risks (money will still flow in even if certain areas are not providing money (people aren’t working)), lower administrative costs (one main insurer, prevents doctors from charging higher prices), and good in cost-containment. Negatives: not responsive to individual needs and cannot see how much was spent on health through taxes.
Social Insurance
Health insurance is organized in groups. Is often tied to employment. Private not-for-profit bodies. Workers are mandated to contribute. Limited by their size and is based on payroll taxes. Provides funding for certain services that are aligned with the job, for example, truckers may have more massage coverage while teachers may have more mental health services. Contributions are more tied to health services and advantages are largely political. Used in Germany and France. Positives: its transparency and responsiveness to local needs. Negatives: not always effective in pooling the risks, tied to employment, services may not be fully covered, and tends to be more expensive.
Private and Out-of-Pocket Models
Private financing models. Used in America. Government takes on a role of regulator. Allocative efficiency (money isn’t being wasted in order to generate profit). Hard to apply to health needs. Complementary/user fees. Regressive in nature (the poor bears the economic burden, have to pay higher premiums). High administrative costs.
Markets in Health Care (aka Private and Out-of-Pocket Models)
1) Efficiency and Responsiveness (services are provided faster and quality is higher)
2) Excessive Bureaucratic and Administrative Requirements (physicians are restricted on what services they can apply)
3) Overcapacity (needs to have enough supplies and equipment available, more expensive)
4) Overtreatment and Undertreatment (physicians may provide more or less tests depending on whether or not the patient can pay for the services)
5) Information Asymmetry (not transparent to patients)
6) Absence of Economies of Scale (can’t buy medical supplies in bulk, have to purchase it at a higher price)
1977
Federal and provincial governments create Established Programs Financing (EPF) agreement (provided a set amount of money for healthcare and the provinces can decide how to spend it).
1994
Canada Health and Social Transfer introduced (combine various services, healthcare, education, infrastructure, into one combined payment. Allowed provinces freedom on where they want to spend the money).
2004
Federal government introduces the Canada Health Transfer.
2017
Federal government re-negotiates the Canada Health Transfer.
2023 Agreement
1) $2 billion Canada Health Transfer (CHT) that would help to address the current pressures in the system.
2) A 5% CHT guarantee for next five years.
3) $25 billion over 10 years to address the specific priorities identified by the federal government, which include family health services, health workers, backlogs, mental health, substance use, and a modernized health system.
4) $1.7 billion over five years to support hourly wage increases for PSWs and related professionals.
5) $175 million over five years for the Territorial Health Investment Fund.
