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Health Systems Classification

The healthcare debate in the United States and now the debt crisis in Europe brought to the forefront the discussion about health systems and its sustainability. In essence the question is: How can a society deliver the best healthcare to its members at the lowest possible cost?

However in order to answer this question we must be able to compare the different health systems and first off all we must classify them. There is generally confusion in the public about how different health systems operate in different countries which contributes to a poor policy debate. The purpose of this column is therefore to contribute to an informed debate.

We will use the the “Rothgang-Wendt-Typology” in order to classify different health systems. This typology analyses three dimensions, regulation, financing and provision.

Regulation relates to the relationships between the beneficiaries the financing agencies and the service providers. Financing is just which agent provides the resources and provision is related to the agents that deliver the healthcare to patients. These dimensions can be classified in 3 ways: State, Societal or Private meaning that the state intervenes directly, there is collective bargaining in place or market mechanisms are at work, respectively.

 When the state is in charge of the three dimensions we have the known National Health Service which is used in Denmark, Finland, Iceland, Norway, Sweden, Portugal, Spain and the UK. This model consists in tax-based funding and public provision with relationships between agents being determined by the state. There is some variance among these countries with private spending on healthcare accounting for a larger percentage of total spending in Spain and Portugal.

A second group of countries (Australia, Canada, Ireland, New Zealand and Italy) uses the National Health Insurance system. It consists in state regulation and financing and private provision. It is similar to the NHS with the exception that the state contracts with private agents to deliver care. It is also known as the single-payer.

Another type of system used by countries in central Europe is the Social Health Insurance. Austria, Germany, Luxembourg and Switzerland have this system in play. In this case we have societal regulation and financing with private provision. Social Security contributions cover much of the expenses with relationships between the agents being settled in agreements between associations of sickness funds and service providers. In the hospital sector only public and not-for-profit agents can operate while in other sectors for-profit are allowed.

 The Etatist Social Health Insurance is the most used in OECD countries with great variances among them. Belgium, Estonia, France, Czech Republic, Hungary, Netherlands, Poland, Slovakia, Israel, Japan and Korea are the countries that use state regulation, societal financing and private provision. Although primary care is private, hospital care has remained mostly public. Financing also consists of a social security scheme.

Lastly we have the purely private system of which the US is the only OECD country that still follows this model. Given the great leeway the different states enjoy and the size of the country it has great regional variance. However we note that the role of the state has been growing steadily and already accounts for more than 40% of total healthcare expenditure.

Jorge Moreira dos Santos, nº 616


Author: studentnovasbe

Master student in Nova Sbe

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