Healthcare Financing: Between Profit and Public Good (2)

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According to Anyasor C.O (2017), there are about 200 countries on our planet and each country devises its own set of arrangements for financing healthcare. For all the local variations, healthcare systems tend to follow general patterns derived from four basic models, which are: the Beveridge Model, the Bismarck Model, the National Health Insurance Model and the Out-of-Pocket Model.

The Bismarck model

Named after Otto von Bismarck, the model has the following characteristics:

It uses an insurance system.

The insurers are called “sickness funds”.

Usually financed jointly by employers and employees through payroll deduction.

Covers everyone, with no profit made.

Doctors and hospitals are usually private.

Also known as the multi-payer model.

Found in Germany, France, Belgium, the Netherlands, Japan, Switzerland and Latin America.

The Beveridge model

Named after William Beveridge, who designed Britain’s National Health Service, its characteristics include:

Healthcare is provided and financed by the government through tax payments

Most of all the hospitals and clinics are government-owned.

Have low costs per capita, because the government, as the sole payer, controls what doctors can do and what they can charge.

Countries using this model are Britain, Spain, most of Scandinavia and New Zealand.

The National Health Insurance model

This has elements of both Beveridge and Bismarck. It has the following characteristics:

It uses private-sector providers, but payment comes from a government-run insurance programme that every citizen pays into.

Cheaper and simpler administratively, since there’s no need for marketing, no financial motive to deny claims and no profit.

Controls costs by limiting the medical services they will pay for, or by making patients wait to be treated.

This model is found in Canada, Taiwan and South Korea.

The Out-of-Pocket model

This is the model obtainable in most countries of the world. Only the developed, industrialised countries, perhaps 40 of the world’s 200 countries, have established healthcare systems. Most of the other nations are too poor and too disorganised to provide any kind of mass medical care. The basic rule in such countries is that the rich get medical care while the poor stay sick or die.

In rural regions of Africa, India, China and South America, hundreds of millions of people go their whole lives without ever seeing a doctor. They may have access, though, to a village healer, using home-brewed remedies that may or not be effective against diseases.

Healthcare financing in Nigeria

In Nigeria, healthcare services are delivered through the public and private sectors. Yunusa et al., while reviewing the challenges of public healthcare financing in Nigeria, noted that healthcare services in the public sector are provided at the primary, secondary and tertiary levels. These levels are under the control of the local, state and federal governments respectively.

Most local and state governments are purportedly running free health services, while the federal government subsidises the cost of healthcare services or runs a national health insurance scheme to cater for the cost of healthcare. The National Health Insurance Scheme as presently being run in Nigeria is still not totally effective and is yet to guarantee adequate cover or Universal Health Coverage.

Unfortunately, because of poor management and corruption, the public healthcare system is highly ineffective and citizens who can afford choose the private sector over the public health system. As observed by Nduaka (2018) the government facilities that were supposed to provide free healthcare services turned out to be merely “consulting clinics” where drugs and other consumables were often unavailable with attendant gross infrastructural decay due to poor funding.

Incidentally, the healthcare delivery system as obtainable within the private sector is poorly regulated in terms of quality and cost. The citizens are therefore at the mercies of private practitioners who either provide substandard services or exploit their clients financially.

By Comrade Olubunmi Akinola, Assistant Gen Secretary, Ogun State NANNM