Opinion article
All governments are entitled to provide essential and delicate facilities to all citizens. The government’s public services are to meet the interests of everyone living within the country boundaries. For instance, in the health system, governments are entitled to an array of responsibilities. These include developing the health care workforce, controlling health care markets, developing and evaluating health technologies, keeping an eye on the quality of health to the public, and ensuring that the endangered population has access to quality health care. However, there have been concerns about whether the facilities offered by the government are sufficiently enough for everyone and fair to private providers in the competition line. Therefore, to provide a greater understanding, the document shall focus on the government involvement in health care, highlight how the issue affects quality and equity as stipulated in Bismarck, American, and Beveridge models. The paper shall also examine the concept of cost-effectiveness analysis in public insurance programs, stating the economic problem it addresses. On the same subject, the article is to cover the stumbling blocks of cost-effectiveness analysis. Lastly, the paper shall talk about health externalities as a subtopic, narrowing down to its two primary examples in the health care system. After that, it will give the advantages and disadvantages of government involvement in the provision of externalities
- Equity and quality in health care.
Equity and quality of care are essential factors in a health care facility. Equity in health involves rendering health care accessible to all patients irrespective of geographical location, race, ethnicity, or gender. Health equity is said to have been achieved in a given country when every citizen has the opportunity to access health care without being disadvantaged. On the other hand, quality in health care is achieved by providing safe and inexpensive health care to patients in a productive manner. Government involvement in health care is an essential factor, significantly as it is a neutral body juxtapose to private institutions. Health has been described as a critical facility and should not be in the hands of private individuals. In most counties, governments have been mandated by the constitution to not only secure health care but also to ensure equity and quality health care to all citizens. For instance, it is the government responsibility tasked to run national and county hospitals by providing enough funds, providing enough doctors in the hospitals, ensuring safety and quality medical devices and pharmaceuticals. This promotes equity as all minority and marginalized groups’ gets to access same health care just like any other person.
There are three models describing how government involvement affects the equity and quality of healthcare. These models includes; the Bismark, Beveridge, and American models.
The Beveridge model
The Beveridge model, also known as single-payer National Health Service was developed by Sir William Beveridge in the year 1948. The model was first used in United Kingdom, then in Northern Europe and later spread to the rest of the world, (chung, 2017). Beveridge model was a centralized model. From the model, we are informed; healthcare is funded by income tax from the citizens, and patients were not to pay for the services. Consequently, the health staff were employed by the government. Heath care was thus universal and standardized to all citizens. However, the government acted as a single provider moderating the prices and removing competition in the market, ( chung, 2017). Beveridge model consequently denounce how government actions aided equality. It is important to state that the model did not pledge for quality in health care.
The Bismark model
Also known as social health insurance model, was created by Otto von Bismarck almost at the end of 19th century, (chung, 2017). In Bismark model, healthcare appears to be decentralized. This model reports; The Employees and Employer Fund Health Insurance, where compulsory “sickness fund” was made accessible to all employees, (Chung, 2017). Additionally, all employees were provided with private insurance cover. Nevertheless, the government controlled the prices in disregard to the number of insures. The intercession affected insurance companies making them to sustain losses reducing competition in the market. This model is practiced in France, Germany Belgium, Netherlands and also in Switzerland. From the model, government involvement is beneficial to the employed persons only, because they are provided with healthcare resulting in high production. However, the model never covered for the unemployed and the powerless in the society rendering the issue of fairness in health care provision at stake. Just like Beveridge model, Bismark model does not pledge for quality in health care.
American Model
In America, Out-of-pocket model has been on the lamb light for quite a while.
The Out-of-Pocket Model. This is also called market-driven health care model. Out-of-pocket is a model whereby the patients pay for the procedures by themselves. This model is mostly experienced in underdeveloped countries with limited resources, ( chung, 2017). The model is for the rich and not the poor who cannot afford to pay for the health care. Records by Chung shows that, in US, health care is controlled by ones pocket weight as compared to other counties like Canada who are averaged in provision of health care services.
This model where the able access medical care and the poor suffer, has affected equality in America. The government intervention should be considered to achieve equity and quality in health care.
Apart from the above three models, there is another model closely similar to both Beveridge and Bismark model that is worth mentioning. This is National Health Insurance Model.
The National Health Insurance Mode. Sing-payer national health insurance as also known, integrates both the Bismarck and Beveridge models. The providers were considered private as depicted in Bismark model. As from Beveridge model, medical services are paid by the government insurance cover, (chung, 2017). This mixed model is experienced in Germany and Hungary. This model is beneficial in that it gives the hospitals a right to self-governance because private and public insurers have equal operating rights.
Having parallel public and private health care systems in a country is important. Imagine of a situation where the private health care operations are restricted while at the same time public health care have limited or rather poor facilities. Incorporation of the two sectors is beneficial in a number of ways. First, it provides for a fair competition environment leading to improvement of facilities. Moreover, patients are able to access the best health facilities of their choice.
- Cost-effectiveness analysis
Cost-effectiveness analysis can be defined as the aspect of scrutinizing interventions by examining both the relative cost and outcome in health care. It is a form of economic analysis that compares two or more interventions in terms of cost impact and is normally represented in terms of cost effective ratio. Cost effectiveness ratio is a proportional estimate of health outcome to the net cost. Cost-effective ratio is also realized when intervention cost is divided by the anticipated health gain.
In the ancient times, countries such as France and Germany, just to mention, patients were allowed to seek medical care from specialist without an instruction from any medical doctors, (Bhattacharya et al., 2014). However, in the resent years, these decentralized countries have assimilated their health care with HTA significantly to reduce excessive use of technology in hospitals. For instance, in Germany through the (IQWiGs), Institute for Quality and Efficiency, the country is able controls the effectiveness of new technology, (Bhattacharya et al., 2014).
However, in the US, the government was in full control of the prices, exposing private insurers to clinical deformation. Medicare in US was described to have similar system as Bismarck model in spite of the fact that the US does not support the model. Initially, the US Medicare program was compensating for surgical operations at a very low cost, (Bhattacharya et al., 2014). Medicare insurance was ineffective in terms of cost effectiveness. For instance, Medicare repaid doctors less even after performing an expensive surgery. These activities has negatively affected Medicare and now, Medicare is prohibited by the constitution from covering for health care.
Cost effectiveness analysis is an important aspect used by government to improve health sector. It is through the subject, governments are able to redirect resources to the right use. Cost-effective analysis helpful in spotting a gap in health care situation, suggesting an effective and less costly intervention that can sufficiently fit the gap. For instance, cost-effectiveness analysis in DCP2, identified interventions suggesting use of surgery in an even of bipolar disorder and stroke .Governments should embrace using cost-effectiveness analysis.
Cost-effective analysis have proven its significance to public insurance programs. By applying the best cost-effectiveness thresholds, public insures are able to reduce analytical problem. Cost-effectiveness analysis incorporates the use of various cost-analysis techniques that is able to conveys a remarkable yield to the programs in comparison to how it do to health outcome after the cost interventions are debited. Additionally, cost-effective analysis assists in allocating resources to more effective interventions. Cost-effectiveness analysis is as well important as it point out risk factors through comparison of interventions. We should agree that using cost-effective analysis in public insurance program is a good idea.
Cost-effectiveness analysis addresses countless economic concerns; for instance, the issue of health equity. Cost-effectiveness analysis techniques have tried to tackle health social inequalities by prioritizing most delicate conditions in health sector. However, the problem has not been tackled to the fullest. Recently, methods such as equity impact analysis and equity trade of analysis are being incorporated together with CEA to tackle the issue of equality in health care.
To improve the quality of care in a health system, incorporation of medical technology should be considered. Technology in a health care setup includes; surgical procedures and equipment used in surgery rooms, drugs and even the support staff. Research and studies have identified technology as an additional factor increasing the cost health in many countries. Medical technology is costly to buy leave alone the cost of utilization. The need for insuring the technology, personnel to ensure its appropriate use and the operating costs of technology suggests how technology has greatly increased cost of health.
There are effects and complications of using medical technology in delivery care. These complications are costly if they are to be compensated. Most countries have therefore, included cost-effectiveness analysis as a criteria, to address the issues surrounding medical technology. Cost-effectiveness analysis helps in achieving good health outcome at a cheaper cost. There are benefits of using cost-effectiveness analysis in acquisition of medical technology as well as drawbacks of using the criteria.
Talking of the benefits; cost-effectiveness analysis ensures good resource allocation by providing a priority on medical technology that can produce quality health outcome at a less cost.
One of the limitations that comes with the use of cost-effectiveness analysis is that; not all technology are rendered cost effective in a clinical situation by the analysis. For instance, Coronary bypass graft surgery is not cost effective to patients with single vessel disease as it is cost effective to people suffering from left coronary artery condition. Apart from that, using cost-effectiveness analysis in new technologies needs commitments and decisiveness in data before resolutions on cost effectiveness of the technology is realized. Even with these stumbling blocks of cost-effectiveness analysis, its use in acquisition of new technology has brought significant change in a heath care.
Apart from cost-effectiveness analysis, there are other separate approaches that can still be used in acquisition of new technology. For example, case study analysis. These alternative approaches has a lot of drawbacks compared to cost-effectiveness analysis. Just to mention, they do not account for the induced cost of using new technology.
Health Externalities
Externalities is a term used in economic evaluation and it refers to the profits or losses a third party undergoes even though the party do not participate in the creation of the profits and the losses. Externalities in health care are of two types; positive externalities and negative externalities. Positive externalities come to benefit individuals as opposed to the negative externalities, for instance, a person’s likelihood of contracting a disease from a patient is reduced when the patient undergoes treatment, the person is then said to have benefited from positive externalities. However, the person is still mandated to pay insurance company to cater for health care of the sick. In this case, the individual experiences a negative externality. On the other hand, negative externality is evidenced when there is an outbreak of infectious disease as well as in events where bacteria offers resistance to the available antibiotics in the market. Consequently, positive externalities is experienced when a vaccine is developed as well as when inventions of new technology is on the rise.
Initially in US, patients were to pay for health care from their pockets but some were insured by insurance providers. This happened for a while until the government passed a legislation aimed to provide health insurance cover to all citizens. The government through the Affordable Care Act; promoted quality in health care by removing the deficiencies.
Research and studies shows; government activities has both negative and positive impacts on health externalities. To be sure, negative externalities are reduced when government impose penalties in form of regulations and taxations to prevent market failure. On the other hand, positive externalities are encouraged by provision of incentives and subsidies. Above are the two main ways the government is able to answer the issue of health externalities in markets.
There have been a concern on to which extent government should intercede in an economic setup. Economists argue that, government intervention is important in ensuring resources are fairly and efficiently distributed. On the other hand, some maintains that government should focus on maintaining peace and protection of private properties. However, there are a portion of economists claiming that government should identify market gaps and bring out prudent results out if it, ( Pettinger, 2019). Generally, government interventions have showed both the positive and negative impacts on economy.
Focusing on the positive impacts or the pros; through government intervention, resources are made available all times reducing emergency occurrences such as going bankrupt. In addition to that, public goods that may not be present in the market are made available to the public. Moreover, the government provides uniform health care that is fair and affordable to all persons through system benefits and taxation. Consequently, the intervention is important as it help in reducing deaths rates by ensuring affordability in health care. Finally, government can buy health facilities in large quantities leading to economies of scale, ( Pettinger, 2019)
There are countries that governments do not participate in public provision. In such a country, citizens pay less to the government in form of taxes and more to private insurers. A market where the private sectors are in control, quality and equity in health care is not promised.
This market is only beneficial to rich individuals compared to the less privileged.
Among the disadvantages or rather cons of government interventions includes, limitation of individuals who value paying health care services through private insurers. Additionally, with the increased income tax there are likelihood of reducing incentive. On the same note, treatment are rendered unavailable due to rationing of health care services. Lastly, incentives are likely to be reduced due to the continuously raising taxes to improve health sectors, ( Pettinger, 2019)
There has been a concern on whether government involvement in the externalities is a good idea. The answer here is likely to be a yes simply because, interventions has promoted equality and equity through provision of uniform security and public services to everyone. Secondly, there has been limitation of monopoly powers especially in provision of sensitive facilities. This ensures favorable environments to customers in the markets. Also through taxation and campaigns, the government is able to change bad behaviors in a country. Lastly, government intervention promotes economic growth and improves production in different sectors, (Pettinger, 2019).
As I conclude, the concept of government participation in provision of services has brought confusion and controversy in some countries. Private insurers has led many to think that government activities has no benefit to a county; but it is in fact the opposite of the truth as illustrated by the models above. Beveridge model points out clearly how government intervention promotes quality and equity in a country. However, American model gives a clue on the need for universal health care in a country. On the other hand, both public and private insures should consider incorporation of cost-effectiveness analysis in the acquisition of new technology to ensure equitable resource allocation in a health care situation.
References
Bhattachrya, j., Hyde, T., & Tu, P. (2014). Health Economics.
chung, m. (2017). Health Care Reform: Learning From Other Major Health Care Systems | Princeton Public Health Review. https://pphr.princeton.edu/2017/12/02/unhealthy-health-care-a-cursory-overview-of-major-health-care-systems/
Pettinger, T. (2020). Pros and cons of government intervention – Economics Help. https://www.economicshelp.org/blog/151818/economics/pros-and-cons-of-government-intervention/