Healthcare Organization Models PDF

1. Three models of healthcare organization Three models The “standard tripartite classification” [Freeman and Frisina 2010] which many authors have shared and used in their research. Healthcare systems – at least in industrialized countries – are referable to one of three basic models: 1) volunt...

1. Three models of healthcare organization Three models The “standard tripartite classification” [Freeman and Frisina 2010] which many authors have shared and used in their research. Healthcare systems – at least in industrialized countries – are referable to one of three basic models: 1) voluntary health insurance 2) social health insurance 3) national health service In their ideal form, these three models differ both as far as funding mechanisms are concerned, and in the way in which the provision of healthcare services is organized. 1. Voluntary health insurance (VHI) Citizens can freely choose whether to take out a health insurance policy with a private insurance company. Each single citizen – depending on income, health condition and inclination to risk – may design a custom-made insurance policy with his/her insurance company. The provision of healthcare services is usually entrusted to providers who are independent from insurance companies, whereby the latter simply reimburse the former. In many countries, private health insurance policy holders have great freedom in the choice of health providers. 2. Social health insurance (SHI) The SHI model is based on the principle whereby the government may require certain occupational groups to take out a health insurance policy. It is not the state which acts directly as insurer, but rather several different sickness funds, that is to say not-for-profit bodies which collect workers' insurance contributions on a territorial or occupational basis. As compared with the previous model, health service providers continue to be separate legal entities, amongst which citizens may choose.  Social health insurance The first country to adopt such a system was Germany, starting with the Bismarckian legislation of 1883. In the beginning, this obligation concerned only a limited number of occupational groups, and was later extended to 1) an ever-greater number of occupational groups; 2) not just to individual subscribers, but also to their families; 3) not just to workers but also to pensioners. Following the logic of a progressive extension of Otto von Bismarck insurance coverage, many countries have come (1815-1898) to include the vast majority of the population in mandatory insurance schemes.  3. National Health Service (NHS) National health services are financed through general taxation. It is the state which takes up the task of gathering and managing the resources needed to finance healthcare provision. National health services guarantee healthcare to the entire population. All citizens – at least in principle – have a right to the same medical treatment which is judged to be essential. Provision of services: most hospitals are Sir William publicly owned; most physicians are also public Beveridge (1879-1963) employees.  2. Financing health care 7 funding models 1. Simple market 2. Voluntary insurance 3. Targeted programs 4. Social health insurance 5. Mandatory residence insurance 6. Universalist model 7. Medical Savings Accounts  1. Simple market Simple or direct market system: providers - and by providers we mean all entities who or which provide healthcare services, i.e., hospitals, clinics, healthcare professionals, etc. – and healthcare service users interact without the mediation of third parties. In such a system, there are no entities that play the role of insurers. Providers are free to set the price of their services, and users, whenever they are provided a service, pay the relative fee directly to the provider, paying from their own pockets.  2. Voluntary insurance Citizens are free to choose whether or not to sign up for private health insurance. Those who cannot or do not want to get insurance coverage will pay for the required healthcare services out of their own pockets. Tax or cash incentives may be provided to those who opt for insurance. Private insurers are in competition with one another. Insurers may be for-profit insurance companies or non-profit institutions and funds. For profit insurers usually apply risk-rated premiums ( i.e., calculated on the basis of the individual risk of each single subscriber). Non-profit insurance entities often prefer community rated or group rated premiums. 3. Targeted programs In countries where either voluntary or social health insurance prevails, there often are programs that can be defined as “targeted” or "residual” [Wilensky and Lebeaux 1958; Titmuss 1974]. The programs defined as targeted are those that are financed by general taxation and intended for particular target populations. The beneficiaries of these programs are generally the most vulnerable categories, those that are most exposed to health risks: low-income individuals, the elderly and minors, persons suffering from serious illnesses, prisoners, and refugees. 3. Targeted programs Various countries have targeted programs not only for the "weaker groups", but also for certain professional categories considered particularly worthy of protection by the state, such as the military or civil servants. A key difference between targeted programs and other financing models is that in the latter those who pay earn the right to benefit from the program being financed. In the case of targeted programs, this is not necessarily true: beneficiaries coincide only in part (or not at all) with those who finance such programs. Targeted programs are programs financed by the entire community, but only available to particular categories. United States Public programs Medicare covers Americans over age 65 and younger people with long term disabilities. Medicaid is a mean-tested program, for low income persons. Chip (Children’s Health Insurance Program) provides insurance to children of low-income families whose earnings exceed the Medicaid ceilings. Others public schemes cover: war veterans, members of the Armed Forces, federal government employees, Native Americans and Alaska Natives, prisoners, and other “weak” group (e.g. people affected with HIV/AIDS). Overall, public programs cover – completely or only in part – about one third of US population. 4. Social health insurance The basic principle behind the SHI model is that the state requires certain categories of workers to pay contributions from their salary into a health insurance fund. Health insurance funds are managed by quasi-public, non- profit organisations subject to strict governmental regulation, appointed to collect their subscribers’ contributions; in exchange, insurance fund subscribers receive total or partial reimbursement of the medical expenses incurred. The contributions to be paid into a health insurance fund – which may be co-paid by employee and employer – are not calculated as a percentage of the overall income, but only of the earned income. 4. Social health insurance The classic SHI model provides for different health insurance funds, not in competition with one another: workers are assigned to a given fund by law, depending on their profession. Only in recent times, some countries have introduced a variant of the original model: the worker is entitled to choose his/her own health insurance fund. In these countries, including Germany, it is mandatory to pay contributions, but one can choose which health insurance fund to sign up for. SHI is a typical occupational system: the obligation to pay contributions is not prompted by nationality or residency, but rather by one’s occupation. France Since the 2000 reform (Coverture Maladie Universelle, CMU), the entire population has a basic health coverage. Basic package. Plurality of sickness funds with compulsory registration. Sickness funds are financed partly by taxes and partly by employees’ contributions. The largest sickness fund is CNAM (Caisse Nationale de l'Assurance Maladie), which assists over 90% of the population (employees in the industry and commerce sectors, and their families). Self-employed and student funds have also joined the CNAM. The fund of farmers (MSA) covers about 7% of the population. Other sickness funds: railway workers, the military, ministers of worship, parliamentarians, sailors, etc. France 7% of the population (those who are unable to pay contributions regularly) is covered by the CMU (targeted) scheme. The CMU scheme covers both the basic package and the complementary one. Medical treatments included in the basic package are not free. Tickets modérateurs. Patients’ co-sharing: 20% hospital admissions 30% visits to a general practitioner 30% dental care, ambulance, prescribed drugs. Complementary insurance. 92% of French residents buy an additional insurance policy (mutuelles and for profit private companies). 5. Mandatory residence insurance Mandatory residence insurance is here defined as the principle according to which the state requires all residents to take out a private health insurance policy covering essential healthcare services, using individual resources. There is not one single public scheme into which contributions can be paid. The policy has to be taken out with different, for-profit or non-profit insurers in competition with one another. This is therefore a multi- payer system, in which citizens can choose their insurers. The state may provide subsidies for low-income citizens, and may impose a strict regulation of the insurance market. Switzerland Since the introduction of the Health Insurance Law in 1996, each person living in Switzerland is obliged to purchase a health insurance policy. Basic insurance is offered by over 80 health insurers or health funds. Insurers are strictly regulated and are not allowed to make a profit on mandatory health insurance. Rates must be identical within each company for all insured persons in the same age category and region. Insurers must accept all applicants (open enrolment). Income-based subsidies. 6. The universalist model Universalist systems are financed, not by payroll contributions or voluntary insurance premiums, but through general taxation. Thus, whilst the distinguishing feature of the preceding systems is the multiplicity of private entities which act as insurers, in a universalist system it is instead the state which takes up the task of gathering and managing the resources needed to finance healthcare provision. A second characteristic of universalist schemes is that they guarantee healthcare to the entire population: all citizens thus have a right to medical treatment which is judged to be essential. The universalist model A universalist system is defined as a single-payer insurance scheme (one for the entire population) covering all residents and financed through taxation. The right to healthcare is not linked with payment of a premium or a contribution, but to residing in a given country. Given that (direct) taxes are usually paid more than proportionally with respect to income, universal schemes turn out to be typically progressive financing systems. Unlike the SHI model, the universalist system envisages taxation not only on earned income, but on all forms of income. The universalist system is not synonymous with the National Health Service. Canada: Medicare Canada has a universalist single-payer public insurance scheme, called Medicare. Medicare is regionally administered and it’s designed to be universal, comprehensive, publicly administered and mostly free at the point of use. The provision of healthcare services is publicly funded, but privately run (physicians are not salaried by the government; public hospital facilities do not belong to Medicare). Hospitals are a mix of public and private, predominantly not-for-profit, organizations. They are often owned by religious orders, universities, municipalities, etc. Sweden Sweden has a typical universalist system, funded through general taxation. The public system covers the entire population. The majority of care is provided by public facilities (hospital, ambulatories, primary care centers) belonging to the NHS. A minority of specialist care is provided by private hospitals contracted with the NHS. There are co-payments for visits to the family doctor, specialist visits, access to the emergency room and hospital admissions. Scrooge vs Donald Duck Annual Annual income $ income $ 10.000 100.000 Mandatory 1 1 residence insurance SHI 1 10 Universalist scheme 1 31 7. Medical savings accounts Medical Savings Accounts (MSAs) are individual deposit accounts into which workers periodically pay a fixed amount or a percentage of their salary. MSAs benefit from favourable tax treatment. The reserves on these deposit accounts can only be used to reimburse healthcare costs, and the holder of an MSA can only draw from the account to pay for medical care obtained for him/herself or for a household member. At the end of the year, any amounts left unused accrue interest and are left in the deposit account for the years to follow. Mandatory vs. voluntary MSAs 7. Medical savings accounts Unlike voluntary insurance or SHI, MSAs do not imply any solidarity among subscribers, and do not provide for any form of risk pooling with other people. With MSAs, each account holder only accumulates resources for him/herself. The MSA model is still scarcely widespread. It has been adopted in Singapore, the United States, South Africa and China. However, the MSA system is not autonomous in any of these countries: it is always combined with some other form of insurance coverage. Medisave a Singapore Medisave is a compulsory saving scheme, which is managed by Singapore’s pension fund. Under the scheme, every employee contributes 8%-10% of his monthly salary to a personal Medisave account. Part of the income is thus put aside into a Medical Savings Account (MSA) to meet future healthcare needs (hospitalization, day surgery, certain outpatient expenses, long term care), especially during retirement. Medisave savings are transferable only to one’s spouse, children and parents. MediShield Life: mandatory health insurance, covering ‘catastrophic’ healthcare costs (such as dialysis and chemotherapy). MediShield program covers all Singapore residents. Medifund is a targeted program for the poor, financed by the government.  3. Financing health care: hybrid systems Identikit and hybrid systems The segmentation of healthcare systems There are not any national systems that use only one of the models discussed above. All national health systems are hybrids. It is thus necessary to introduce the segmentation of healthcare systems. Segmentation: the presence of dividing lines according to which the overall national system is broken up into subsystems to which different models of healthcare organisation/financing are applied. There are two basic segmentation principles: 1) segmentation of healthcare services; 2) segmentation of the population. Two segmentation principles The segmentation of healthcare services It involves subdividing the entire range of healthcare services into different "packages". An example of segmentation of healthcare services can lead to distinguish between: 1) "essential" procedures; 2) "supplementary" procedures. The segmentation of the population It involves the subdivision of citizens into distinct groups associated with different insurance schemes. Common criteria are: occupation (employees vs. self-employed workers, or government vs. private employees); earned income; age (programs only for the young or the elderly); etc. United States Public programs Medicare covers Americans over age 65 and younger people with long term disabilities. Medicaid is a mean-tested program, for low income persons. Chip (Children’s Health Insurance Program) provides insurance to children of low-income families whose earnings exceed the Medicaid ceilings. Others public schemes cover: war veterans, members of the Armed Forces, federal government employees, Native Americans and Alaska Natives, prisoners, other “weak” group (e.g. people affected with HIV/AIDS). The Netherlands Healthcare is subdivided into three distinct sectors: 1)"exceptional" medical expenses; 2) the basic package for essential care; 3) “supplementary” procedures. 1. “Exceptional” expenses (identified by the acronym WLZ), related in particular to care for the disabled and long-term care, are covered by a single compulsory national scheme, which covers the entire population and is financed through mandatory income-related contributions. 2. The second sector (ZVW) consists of the basic package for essential care. All citizens residing in the Netherlands are required to have an insurance policy covering essential healthcare. There are about 40 (for-profit and non-profit) insurers to choose from, in competition with one another. The Netherlands Basic package: public subsidies are granted for both low-income citizens and minors. Two categories of people are excluded from mandatory basic insurance: 1) the military, as they have a dedicated targeted scheme; 2) people who refuse insurance for religious reasons or out of principle (they must nevertheless pay a contribution, that is deposited in MSA). 0.1% of population is unable to pay health insurance premiums regularly. 3. “Complementary” care (dental care, physiotherapy, alternative medicine, cosmetic procedures, etc.). Supplementary care fits under a typical voluntary private insurance system. Around 80% of the Dutch have a complementary insurance policy. Il cocktail  HC systems in 27 OECD countries Prevalent model Ancillary models US VHI and TPs Market, MSAs Belgium, Czech Rep, Poland, SHI Market, VHI Hungary, Turkey Austria, France, Japan, Korea SHI VHI, Market and TPs Germany SHI and MRI VHI, Market and TPs Switzerland MRI Market and VHI Netherlands MRI and Universalist VHI, Market and TPs Australia and Canada Universalist Market and VHI Denmark, Ireland, Iceland, Italy, Norway, New Zealand, Universlist Market and VHI UK, Sweden Finland, Portugal and Spain Universalist SHI, Market and VHI Greece Universalist and SHI Market, VHI Private health insurance Private health insurance plays different roles in different contexts. It is possible to identify three distinct roles: Substitutive / Primary : a private policy is taken out instead of the mandatory coverage. In this case, those who subscribe to the private policy do not have any other form of basic insurance coverage. Complementary: provides coverage for services excluded or not fully covered by the statutory health insurance. Supplementary / Duplicate: usually covers the same range of services as statutory health insurance (“double coverage”). Its main purpose is to increase the choices of provider (for example, private providers) and level of inpatient hotel amenities (for example, a single room). By increasing the choices of provider it may also provide faster access to health care. It does not exempt individuals from contributing to the compulsory insurance scheme. Private health insurance Glossary Group/community-rated premiums: premiums are priced on the basis of the average expenditure incurred by a working category or a “community” (a geographically-defined area). Risk-rated premiums: premiums are priced according to the individual’s risk. Opting out: a situation in which individuals are allowed to choose between statutory and private health insurance coverage; if they choose the latter, they are exempt from contributing to the former. Risk selection (cherry-picking): a process whereby an insurer tries to attract people with a lower-than-average expected risk and deter those with a higher-than-average expected risk. Open enrolment: a regulatory requirement that prevents health insurers from rejecting applications for coverage. Insurers must accept all applicants. Cost sharing There are two main reasons for introducing cost sharing. First, to reduce excessive use of health services facilitated by health insurance. Second, to raise revenue for the health system, particularly in countries where public budgets are under pressure. Forms of cost sharing: Co-payment - The user is charged a flat rate per item or service received. Co-insurance - The user pays a fixed proportion/percentage of the total cost, the insurer pays the remainder. Deductible - The user pays a fixed quantity of the costs, the insurer the remainder. Deductibles can apply to specific cases or a period of time. Extra billing - An additional fee the provider levies in addition to the payment received from the third-party payer. Total health expenditure (OECD Health Statistics 2024)  Health insurance coverage (% of population with healthcare insurance, OECD 2024) Australia 100 Mexico 77.4 Austria 99.9 Netherlands 99.9 Belgium 98.5 New Zealand 100 Canada 100 Norway 100 Czech Rep 100 Poland 96.9 Denmark 100 Portugal 100 Finland 100 Romania 89.0 France 99.9 Spain 100 Germany 99.9 Sweden 100 Greece 100 Switzerland 100 Hungary 96.0 Turkey 99.2 Israel 100 UK 100 Ireland 100 US 91.6 Italy 100 Japan 100 Korea 100 OECD average 97.9  4. Health care provision Two rival models Separated model ▪ actors enjoy a high degree of autonomy ▪ pluralism ▪ contractual relations ▪ ample freedom of choice Integrated model ▪ actors belong to the same organisation ▪ stable and biunique relationships ▪ hierarchy, internal rules ▪ limited freedom of choice  Organizational vs. clinical integration Organizational integration concerns the formal contractual agreements that bind healthcare providers together. Formal structure. Clinical integration evaluates to what extent different providers treating the same patient actually coordinated their efforts. Actual interaction among providers.  Integrated vs. separated model Integrated model Separated model Insurers and providers Vertical Insurers and providers belong to the same integration are independent entities organisation GPs and specialists Primary and secondary Horizontal belong to the same care is provided by integration organisation separate entities Mandatory Gatekeeping Discretionary Patient choice is limited Patient choice Choice among all to contracted providers providers (pub or priv) Group practice GPs Solo practice  1. Vertical integration Integrated model Insurers and providers belong to the same organisation. (1) Denmark, Finland, Ireland, Italy, New Zealand, Norway, Portugal, Spain, Sweden, UK. Separated model Insurers and providers are independent entities. (2) Australia, Canada. (3) Austria, Belgium, Czech Rep., France, Germany, Hungary, Japan, Netherlands, Poland, Korea, Switzerland, Turkey, US. 1 2 3 4 I I I I I I I I P P P P P P P P P P P P Primary vs. secondary care Primary care: basic procedures performed in response to the most common illnesses and problems. Primary care is provided in the consulting rooms of general practitioners, in outpatient clinics, at the patient’s home. GPs follow the patient from a continuous and broad- spectrum perspective. Secondary care is medical care of a specialized nature. Secondary care requires more sophisticated equipment. It is provided by medical specialists who have a more sectorial approach to illnesses and whose relationships with patients are usually limited to single pathological episodes.  2. Horizontal integration Integrated model GPs and hospital specialists belong to the same organisation. Finland, Greece, Portugal, Spain, Sweden. Denmark, Ireland, Italy, New Zealand, Norway, UK (GPs are self- employed professionals). Separated model Primary and secondary care provided by separate entities. Australia, Austria, Belgium, Canada, Czech Rep, France, Germany, Hungary, Israel, Japan, Netherlands, Poland, Korea, Switzerland, Turkey, US. 1 2 3 4 H H H H H H H H H H H H GP GP GP GP GP GP GP GP GP GP GP GP The gatekeeping role of the GP Gatekeeping is the principle by which access to specialist healthcare is possible - apart from accidents and emergencies - only through referral by general practitioners. This means that patients do not have direct access to secondary care. Gatekeeper GPs are given a fundamental role in sorting and filtering healthcare needs. GPs must ensure access to specialist care to only those patients who have a real need for it. The GP has to recommend the most suitable specialist to the patient. The gatekeeper physician is also assigned an additional task: advising and guiding patients throughout their care process within the health system. The family doctor should coordinate the different specialist services, ensuring continuity of treatment. 3. Gatekeeping Gatekeeping systems Patients must have a referral from their GP to access a specialist. Australia, Denmark, Finland, Ireland, Israel, Italy, Netherlands, New Zealand, Norway, Portugal, Spain, UK. Non-gatekeeping systems GP referral is optional Austria, Belgium, Czech Rep, France, Germany, Greece, Japan, Korea, Sweden, Switzerland, Turkey, US. Mixed: Canada, Hungary, Poland 4. Patient freedom of choice Patient access to different types of healthcare varies among countries, reflecting different levels of patient choice Complete freedom of choice Patients are allowed to choose any provider (public or private) Australia, Austria, Belgium, Canada, Czech Rep, France, Germany, Japan, Netherlands, Norway, Korea, Sweden, Turkey. Free choice among public and approved private providers Denmark, Finland, Greece, Israel, Ireland, Italy, Spain, UK. Limited choice Hungary, New Zealand, Portugal, Switzerland, US. Primary care physicians Solo vs. group practice General practitioners may work in solo practice or in group practice. In solo practices it may be difficult for GPs to provide a broad range of services around the clock and to coordinate with care provided by others. Larger practices can hire ancillary staff, purchase equipment more efficiently and have regular meetings for coordination and joint policy-making.  5. Solo vs. group practice Group practice Australia, Canada, Denmark, Finland, France, Greece, Ireland, Israel, Italy, Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Turkey, UK, US. Solo practice Austria, Belgium, Czech Rep, Germany, Hungary, Japan, Korea, Switzerland.  Integrated vs. separated systems Integration index 5 Finland Portugal, Spain Highly integrated 4.5 Denmark, Ireland, Italy, N.Zealand, UK systems 4 3.5 Greece, Israel, Norway Moderately integrated 3 Sweden systems 2.5 Poland 2 Australia, Netherlands, US Moderately separated 1.5 Canada, Hungary systems 1 France, Switzerland, Turkey Highly separated Austria, Belgium, Czech Rep, Germany, 0 Japan, Korea systems  Financing + Provision Provision Separated Integrated Austria, BEL, CZE, SHI FRA, (GER), HUN, JPN, KOR, POL, TUR Financing MRI NED, SWI, (GER) Australia, DEN, FIN, IRE, ITA, Universalist NOR, NZL, POR, UK, CAN SPA, SWE Universalist separated National Health Service (NHS)  5. The US health care system Public and private expenditure (OECD 2024)  Health insurance coverage (% of population with healthcare insurance, OECD 2024) Australia 100 Mexico 77.4 Austria 99.9 Netherlands 99.9 Belgium 98.5 New Zealand 100 Canada 100 Norway 100 Czech Rep 100 Poland 96.9 Denmark 100 Portugal 100 Finland 100 Romania 89.0 France 99.9 Spain 100 Germany 99.9 Sweden 100 Greece 100 Switzerland 100 Hungary 96.0 Turkey 99.2 Israel 100 UK 100 Ireland 100 US 91.6 Italy 100 Japan 100 Korea 100 OECD average 97.9 The American “healthcare patchwork” The health system in the US is not so much a system as a collection of systems that span the full range of organizational models previously described. They range from a publicly funded, fully centralized system with salaried providers in the Veteran’s Administration Health Care System to private insurance system that still provides complete freedom to choose providers and services in a competitive marketplace. In the US, there is no national health coverage plan that provides universal access to medical care. The federal Medicare program provides nearly universal coverage for persons over age 65, but coverage for persons under 65 is highly variable and depends on the individual’s characteristics. Financing - The public programs Medicare Administered by the US government. Funded mainly by payroll taxes. Medicare covers Americans over age 65 and younger people with long term disabilities (such as end stage renal disease). Part A (hospital insurance); part B (outpatient care); since 2006, part D (drug coverage). Each component is financed differently. The program contains premiums, deductibles, out-of- pocket payments. Medicare covers approximately 75% of health care costs for enrollees. In 2023, it provided insurance to 62.5 million Americans (18.9% of the US population). Medicare spending accounted for about 14% of the federal budget. Financing - The public programs Medicaid Jointly funded by the state and federal governments, and managed by the states. It’s a mean-tested program, for low income and disabled persons. Poverty alone not necessarily qualify someone for Medicaid. Medicaid eligibility and the effectiveness of coverage for the poor vary widely across the states. In 2023, Medicaid provided coverage to 62.7 million low income and disabled people (18.9% of US population). Medicaid covers a wider range of health care services than Medicare. Cost-sharing requirements are minimal Financing Other public programs CHIP (Children’s Health Insurance Program) Created in 1997, it provides insurance to children of low-income families whose earnings exceed the Medicaid ceilings. Stated are given flexibility in designing their SCHIP eligibility. The federal government finances 70% of SCHIP costs. CHIP covers approximately 7.1 million children. In 2023, however 5.8% of children under 19 (4.4 million) remain uninsured. Veterans Health Administration (VA/CHAMPVA) Military Health System (TRICARE) Indian Health Service (IHS): not comprehensive Programs covering individuals with particular diseases (e.g. HIV/AIDS). The Federal Employees Health Benefits Program (FEHB): civilian government employees pay 1/3 of the cost of insurance; the government pays the other 2/3. Financing – Private insurance Employer-based insurance Employers are not legally required to provide insurance to their workers, except in Hawaii and Massachusetts. About 178 million individuals (53.7% of population) hold employer sponsored insurance coverage. 99% of large firms (200 or more workers) offer health insurance. Only 47% of small firms (less than 50 employees) offer employer-sponsored insurance. In 2024, the average premium across all employer sponsored plan types is $8,951 for single coverage and $25,572 for family coverage. Financing – Private insurance Individual insurance policies A large number of health insurance companies sell non- group policies to individuals who pay the premiums themselves. Direct-purchase health insurance: 10.2% (34 million). Almost one third of direct-purchase policies are bought through a Marketplace. Traditional indemnity plans (private, non-group insurance). The premiums for these policies tend to be higher than those for employer group policies. Financing Health insurance coverage Overall, public programs cover 36.3% of population 18.9% Medicaid + SCHIP; 18.9% Medicare; 3.6% military health care (2.6% Tricare + 1% VA). 65.4% of population covered by private insurance 53.7% employed-based; 10.2% direct-purchased (4 % Marketplace). More than 20% of population with health insurance has multiple coverage. Uninsured (2023): 8.0% (26,4 million). https://www2.census.gov/library/publications/2024/demo/p60-284.pdf The uninsured A large number of individuals meet none of the above criteria - they are not over 65, they do not meet the eligibility requirements for Medicaid, they are not veterans, neither they nor their family members are employed in a firm that offers health insurance nor can they afford to purchase the employer-linked insurance. Many of these individuals — 26.4 million in 2022 — remain uninsured. In 2013 the uninsured rate was 13.3% (46 million). Individuals who do not have health insurance receive medical care from county hospitals, community health centers, migrant health centers, and free clinics. The uninsured The uninsured Insurer-provider relationships Indemnity insurance Reimbursement of billed charges. No restrictions on the patient’s choice Health Maintenance Organizations Vertical integration. HMOs directly provide, or contract for, medical care. Capitation payment. GPs gatekeeper. The patients pay no co-payment as along as care is obtained from the HMO’s affiliated physicians and hospitals. Preferred Provider Organizations The PPO presents financial incentives for its enrollees to seek care within the PPO network of physicians and hospitals. PPOs offer the option of going to a non-contracted physician, but with a higher co-payment. PPO is the most common plan type, enrolling around 48% of covered workers. Problems of the US health care system Fragmentation and conflictual relationships Insurers vs doctors: high administrative costs Patients vs physicians: malpractice claims Patients vs insurers: pre-existing conditions High costs The problem of the uninsured safety net episodic and acute care uncompensated care The Patient Protection and Affordable Care Act On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act into law. It represents the most significant government expansion and regulatory overhaul of the US health care system since the passage of Medicare and Medicaid in 1965. The PPACA includes numerous provisions to take effect over several years beginning in 2010. http://www.youtube.com/watch?v=3-Ilc5xK2_E Obamacare (I) 1.Individual mandate/ «play or pay» (starting in 2014) All individuals are required to purchase an approved insurance policy or pay a penalty. Exemptions for religious reasons and for low income households. Penalties (2016): $ 695 individual/ $ 2,085 for families. A $ 2,000 per employee penalty on employers with more than 50 employees who do not offer health insurance to their full-time workers. Individual mandate penalties abolished in 2019. 2. Health insurance exchanges (2014) State-regulated marketplace where individuals and small businesses can compare policies and premiums, and purchase insurance. (in 2023: 4% of population) Obamacare (II) 3. Federal subsidies Low income individuals and families up to 400% of the poverty level will receive federal subsidies. Small businesses will get subsidies if they purchase insurance through an exchange. 4. Regulation of insurance companies (2014) Insurers must offer the same premium to all applicants of the same age and geographical location without regard to gender or pre-existing conditions. Insurers are prohibited from dropping policyholders when they get sick (2010). Insurers must spend 85% of premium dollars on health care and claims, leaving only 15% for administrative costs and profits (2011). Obamacare (III) 5. Medicaid expansion (2014) Medicaid will include all individuals and families up to 138% of the poverty level ($ 20,783 in 2024) 2012: the Supreme Court allows states to opt out of the Medicaid expansion. (from 2013 to 2015: + 15 million) In 2024: 40 ‘Expansion States’; 10 ‘non expansion’ states Restructuring of Medicare reimbursement from FFS to ‘bundled payments’. Temporary high risk pool (2010) Children permitted to remain on their parents’ insurance plan until their 26th birthday. Trump vs Harris 2024 https://www.youtube.com/watch?v=8p6zZZ3DPGE https://www.youtube.com/watch?v=oPk8d1jA34k  6. Health care systems in three countries Germany The German system of social insurance was first established in 1883 by the Bismarck government. Around 78% of funding was derived from contributions to statutory health insurance, about 8% from general taxation and 11% from OOP payments. Voluntary private insurance accounted for the remaining 3%. Since 2009, health insurance has been mandatory for all citizens and permanent residents (previously, certain populations could choose not to have insurance, though few did so). It is provided by competing, not-for-profit, nongovernmental health insurance funds (called “sickness funds”) in the social health insurance scheme (SHI), or by substitutive private health insurance. Germany: coverage All employed citizens with a gross monthly income less than € 5,775 are mandatorily covered by social health insurance. Employees whose gross wages exceed the threshold and the self- employed can choose either to remain in the SHI scheme on a voluntary basis or to purchase private insurance. 1. Employees earning less than 69,300 € per year Compulsory SHI (75%) 2. Employees earning more than 69,300 € per year Opting out (12% SHI; 5% private insurance) 3. Self-employed NO SHI. Private insurance (6%) 4. Other groups (Soldiers, Policemen, Civil servants, etc.) Special regimes (2%) An estimated 0.1% of the population does not have insurance due to administrative hurdles or problems paying premiums. The German nesting doll Germany: sickness funds Sickness funds (which are currently around 100) are autonomous, not-for-profit, nongovernmental bodies. Germans are free to choose their insurer, and ‘open’ sickness funds must accept any applicant. Prior to 1996, the majority of Germans were assigned by law to specific insurance funds. Since 2011, a uniform contribution rate has been set by the government. Employees currently contribute 7.3% of their gross wages, while the employer adds another 7.3% (plus a possible supplemental rate of 1%). Sickness funds’ contributions are centrally pooled and then reallocated to each sickness fund based on a risk-adjusted capitation formula, taking into account age, sex, and serious illnesses. Germany Members of an employee’s family are also covered, usually nonearning spouse and children up to the age of 18. What is covered? The health insurance funds pay the cost of preventive services, inpatient and outpatient hospital care, physician services, dental care, prescription drugs, rehabilitation and hospice care. Co-payments GPs, specialists and dentists: free. €5 to €10 for prescription drugs; €10 per day for hospital and rehabilitation stays. Germany: provision Hospitals: 48% public; 52% private (33% private not-for-profit and 19% private for-profit). Regardless of ownership, hospitals are staffed principally by salaried doctors. Ambulatory care is delivered by physicians who work in their own practices - around 56% in solo practice and 33% in dual practices. Ambulatory physicians are reimbursed on a FFS basis, with a fee schedule negotiated between sickness funds and medical associations. GPs. Registration with a primary care physician is not required and GPs have no formal gatekeeping function. Sickness funds may however offer financial bonuses to those who use GPs as gatekeepers to specialist services. Canada Canada has a single-payer public insurance program, called Medicare. The Canadian healthcare system is publicly funded, but privately run (physicians are not salaried by the government). About 70% of total health expenditure comes from general tax revenues. The organization and delivery of health services is highly decentralized, with the provinces and territories responsible for administering Medicare and planning health services. Federal and provincial governments Universal coverage The Canadian healthcare public scheme, known as Medicare, is designed to be universal, comprehensive, publicly administered and mostly free at the point of use. Provincial plans Rather than having a national healthcare plan, Canada’s health care is based on its 13 provinces and territories, each of which has its own health insurance plan. While the provinces raise the majority of funds through own- source revenues, they also receive less than a quarter of their health financing from the federal government. Canada: Medicare Basic package. The Medicare basic package that all provincial and territorial health insurance plans offer includes: hospital services, ambulatory care and preventing medicine. Additional services such as prescription drugs and dental care may be offered under a provincial health insurance plan, funded and delivered on their own terms and conditions. Problems Long waiting times for specialty consultations or non-urgent surgeries. There's also the problem of scarcity of doctors in remote areas. https://www.youtube.com/watch?v=5YAulbyENfc Canada: private voluntary insurance 71% of Canadians purchase private health insurance (average annual premium: $756). VHI accounts for approximately 14% of total health spending. Private insurance is obtained mainly through employment-based group plans, which cover services which are not included in the Medicare basic package (such as vision and dental care, prescription drugs, rehabilitation, etc.). Almost all PHI in Canada would thus be classified as complementary. Contributions to complementary employer-sponsored private insurance are deductible from income for tax purposes. Supplementary private insurance is prohibited or discouraged by a complex array of provincial laws and regulations. Canada: provision Hospitals Hospitals are a mix of public and private, predominantly not-for- profit, organizations. They are often owned by religious orders, universities, municipalities, etc. Most hospital-based physicians are not hospital employees and are paid fee-for-service. Secondary care In Canada, most of specialist care is provided in hospitals. Specialists are paid mostly on a fee-for-service basis. Canada: primary care Most physicians are in private practices and are remunerated fee- for-service, although an increasing number of GPs receive alternative forms of payment such as capitation or salary. Gatekeeping. Patients can access the specialist directly, but it is common for family physicians to refer patients to specialty care because many provinces pay lower fees for non-referred consultations. Many of recent reforms focus on moving from the traditional solo practice to inter-professional primary care teams that provide a broader range of primary health care services on a 24- hour, 7-day-a-week basis. As a consequences, most GPs work in group practice. Switzerland Since the introduction of the Health Insurance Law in 1996, each person living in Switzerland is obliged to purchase a health insurance policy. Basic insurance is offered by over 80 health insurers or health funds. Although private, these are strictly regulated and are not allowed to make a profit on mandatory health insurance. The federal government and the cantons provide income-based subsidies to individuals or households to help cover mandatory insurance premiums. Overall, around 30% of residents benefit from public subsidies. https://www.youtube.com/watch?v=gniCVinKkSo Switzerland: mandatory health insurance Mandatory health insurance can be purchased from a number of competing insurers. In order to avoid discrimination, insurers must accept all applicants (open enrolment) and cannot vary premiums based on the health of each consumer. They are not allowed to make a profit on basic care, but can on supplemental plans. Insurers must charge the same price to every individual that buys a particular health care plan: rates must be identical within each company for all insured persons in the same age category and region, regardless of sex or state of health. Three age levels: children (0-18), young adult (19-25), and adults (26+). In 2024, the average cost of a health insurance policy for an adult was around CHF 5,000 (EUR 5,480). For young adults: 3,800 euros. For children 1,450 euros. Switzerland: coverage A risk-equalization system seeks to compensate insurers for the varying risk profiles of their membership. Insurers with a fewer number of women and the elderly than the average must pay money into a common pool, which is then redistributed to insurers with a greater than average number of women and the elderly. Coverage is universal. Every individual intending to reside in Switzerland is required, within three months of arrival, to take out an insurance policy. The mandatory basic insurance covers a broad range of treatments: most family doctor and specialist services, hospital care, physiotherapy, some preventive therapies. Dental care is largely excluded. Switzerland: cost sharing Swiss patients are expected to contribute to the cost of treatments. 1) an annual deductible which ranges from a minimum of CHF 300 to a maximum of CHF 2,500. A higher deductible usually permits lower premiums. 2) insured persons pay 10% copayment above deductibles for all services (including GP consultations), but it is capped at CHF 700 per year. Out-of-pocket payments account for 23% of total health expenditure. Many residents also purchase complementary and supplementary VHI for coverage of services not covered under the basic package, for free choice of hospital doctor, or for improved accommodation when hospitalized. Switzerland: provision Hospitals About 70% of acute inpatient care is provided by public or publicly subsidized private hospitals. Public hospitals are owned and often run by cantons, municipalities or foundations. Private hospitals are either for-profit or not-for-profit. Most hospital doctors are salaried. Secondary care Ambulatory services are largely provided by physicians operating as independent practices. Solo practice is the norm. GPs and specialist doctors working in ambulatory-care settings are usually paid on a fee-for-service basis. Switzerland: freedom of choice Swiss citizens are free to choose their health care physician and have free access (without referral) to specialists working in ambulatory care services. There is no formal gatekeeping. Hospital care: patients’ choice is restricted through cantonal hospital lists. HMOs Patients are increasingly taking up the option to join HMOs or physician networks: almost 2/3 of Swiss residents hold a HMO insurance policy where they receive premium reductions in exchange for agreeing to a managed care arrangement. https://www.css.ch/en/private-customers/properly-insured/health- insurance/basic-insurance/telmed.html  memos How doctors are paid How doctors are paid is not merely a technical issue. It is widely believed that the method by which physicians are paid may affect their clinical and professional behaviour. In general, physicians are paid one or more of the following three methods: 1. Fee-for-service (FFS) 2. Capitation 3. Salary Each of these methods has relative strengths and weaknesses. Many combinations are possible. 1. Fee-for-service (FFS) The fee-for-service (FFS) method requires each doctor to be paid in proportion to the type and quantity of services actually provided. Physicians are rewarded for every service or test they provide. Since each service is paid a certain rate, the most productive doctors – or those who provide the services with the most profitable rates – will be the ones who earn the most. At least on paper, the FFS should stimulates productivity the most. However, it provides an incentive to increase the total volume of services provided, to also provide services that are not strictly necessary. 2. Capitation Physicians are paid a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care. The capitation fee can be uniform, or it can be weighed (taking into account variable such as the age or health conditions of the patient, etc.). Like FFS, it invites doctors to seek user satisfaction. But it does not offer economic incentives for the provision of unnecessary services. Capitation should also ensure the stability of the doctor-patient relationship. Capitation can induce doctors to select patients, accepting the less demanding ones. Since doctors do not have financial incentives to provide many services, the risk is that patients 3. Salary Doctors are required to observe a certain working schedule, for which they are rewarded with a previously agreed amount, regardless of both the number of patients and the services actually provided. Physicians have no incentive to provide excessive treatment. Salary does not provide any premium for the productivity of the individual professional. Not having a direct economic incentive in this sense, the salaried doctor could, instead, take the patient's judgment less into consideration. Other payment methods 4. Extra-billing (EB) Extra-billing is the practice of billing a patient for the difference between what the patient's health insurance chooses to reimburse and what the provider chooses to charge. Physicians are thus allowed to charge more than the scheduled fee, and patients must pay the difference. 5. Private practice (PP) Employed physicians are also allowed to have a private practice. Private patients are source of additional income. Recently, some countries have been experimenting with innovative forms of payment for doctors. 'Pay-for-performance' mechanisms have been introduced in several countries, including Australia, Czech Rep, France, Hungary, Netherlands, UK and the US.  Primary care physicians Australia FFS + EB Japan FFS Austria Capit + FFS Netherlands Capit + FFS Belgium FFS New Zealand Capit + FFS Canada FFS Norway FFS + Capit Denmark FFS + Capit Portugal Salary France FFS + EB Spain Salary + Capit Germany FFS Sweden Capit + FFS Salary or Switzerland FFS Greece FFS UK Capit + FFS Ireland Capit + FFS US FFS Italy Capit  Hospital doctors Australia Salary + PP Japan Salary Austria Salary + PP Norway Salary + PP Belgium FFS New Zealand Salary + PP Canada FFS Netherlands Salary or FFS Denmark Salary + PP Portugal Salary + PP France Salary + PP Spain Salary + PP Germany Salary Sweden Salary + PP Greece Salary + PP Switzerland Salary + PP Ireland Salary + PP UK Salary + PP Italy Salary + PP US Salary or FFS  7. The politics of health care  Financing + Provision Provision Separated Integrated Austria, BEL, CZE, SHI FRA, (GER), HUN, JPN, KOR, POL, TUR Financing MRI NED, SWI, (GER) Australia, DEN, FIN, IRE, ITA, Universalist NOR, NZL, POR, UK, CAN SPA, SWE Universalist separated National Health Service (NHS) The role of State ❑ Laissez-faire (minimal regulation) ❑ Stimulator (incentives/disincentives, no obligations) ❑ Regulator (obligations, coercion) ❑ Protective (covers catastrophic risks and/or weaker groups) ❑ Financier ❑ Producer  A standard developmental path 1.The first stage corresponds to the diffusion, as a supplement to the market, of forms of voluntary insurance. 2. The second stage coincides with the establishment of the principle of social health insurance. The first country to adopt such a system was Germany (1883). 3. The third stage corresponds to the establishment of a NHS/universalist scheme. The first country to adopt such a model was New Zealand in 1938. The standard path followed by different national systems is thus marked by two crucial passages: the first, from VHI to mandatory insurance; and the second, from SHI to a NHS/universalist coverage.  Laws establishing SHI and NHS First laws establishing social health Law establishing Law establishing insurance (year and groups to a universalist mandatory which it originally applied) scheme residence insurance Australia - 1974 Austria 1888 (blue-collar workers) - Belgium 1944 (salaried employees) - Canada - 1966 Denmark - 1971 France 1930 (low-income workers) - Finland - 1963 Germany 1883 (blue-collar workers) - 2007 Greece 1934 (urban salaried employees) 1983 Hungary 1891 (blue-collar workers) 1972-75 * Ireland 1911 (low-income workers) 1970 Israel - 1994 Italy 1943 (private sector employees) 1978 Japan 1922 (blue-collar workers) - Netherlands 1941 (low-income workers) - 2006 New Zealand - 1938 Norway 1909 (low-income employees) 1956 Poland 1920 (low-income employees) 1972 * Portugal 1946 (blue-collar workers) 1979 Spain 1942 (blue-collar workers) 1986 Sweden - 1953 Switzerland - - 1994 UK 1911 (low-income workers) 1946 United States - - The question Why do some countries have a national health service, others a system of social health insurance, and the United States have neither of the two, at least to date? The question may also be formulated in the following manner: if – as we have previously seen – it is true that health systems may evolve according to a standard sequence, why have some countries stopped at the first stage (VHI), others at the second stage (SHI), and others have gone further and reached the third stage (NHS)? 1 2 3 The cultural explanation Some scholars have identified the cause of the differences between health systems in the prevalent political culture of each nation (Jacobs 1993; Blank & Burau 2004). Those countries characterized by a communitarian culture (such as Germany, Netherlands or Japan) find the SHI model congenial; those with an egalitarian culture (UK or Sweden) display a tendency towards the NHS; whilst those countries with an individualistic culture (such as the US) display greater affinity with the VHI model. The ideological orientation of governments Does it exist a link between the health care models (VHI, SHI, NHS) adopted in different national contexts and the ideological orientation of the governments which have instituted them? First laws introducing SHI Year Government in charge Austria 1888 Taaffe (Conservatives) Belgium 1944 Pierlot (Christian Democrats) France 1930 Tardieu (Conservatives) Germany 1883 Bismarck (Conservatives; not elected) Greece 1934 Tsaldaris (Conservatives) Hungary 1891 Szapary (Liberal Party) Italy 1943 Mussolini (authoritarian) Japan 1922 Tomosaburo (military) Netherlands 1941 German occupying forces Norway 1909 Knudsen (Liberals) Poland 1920 Skulski (Conservatives) Portugal 1946 Salazar (authoritarian) Spain 1942 Franco (authoritarian) Sweden 1946 Hansson (Social Democrats) UK 1911 Asquith (Liberals) Laws introducing universalist schemes Year Government in charge Australia 1974 Whitlam (Labour) Canada 1966 Pearson (Liberal minority gov’t supported by Social Democrats) Denmark 1971 Baunsgaard (Centre-right coalition) Greece 1983 Papandreou (Socialist Party) Hungary 1972-75 Fock (Communist regime) Italy 1978 Andreotti (DC minority government supported by the Communist Party) N. Zealand 1938 Savage (Labour) Norway 1956 Gerhardsen (Labour) Poland 1972 Jaroszewicz (Communist regime) Portugal 1979 Pintassilgo (Socialists) Spain 1986 Gonzalez (Socialist Party) Sweden 1953 Erlander (Social Democrats) UK 1946 Attlee (Labour) The ideological orientation of governments There seem to be a link between healthcare models and ideological leaning. Most laws instituting a system of SHI were taken on by conservative or non-democratic governments; whilst most laws instituting a NHS/ universalist scheme were the work of social democratic governments. The SHI model envisages a reduced public intervention; it seems therefore to be more congenial to right-wing parties (whether conservative or liberal). The NHS model envisages a much more extensive intervention on the part of the State, and proposes equality of treatment for all citizens, even at the cost of the individual's freedom to choose. It should not be surprising that a system with these characteristics is more often invoked by leftist parties. Health politics The ‘health politics’ perspective assumes that the choices made by different countries in the field of healthcare largely result from clashes involving governments and competing interest groups. The process of formulating health policies can be conceived as an arena in which actors – such as governments, health professionals, trade unions, employers, political parties and insurance companies – compete. The past outcomes of these clashes were influenced not only by the strength of the actors, but also by the rules of the game and the institutional constraints, which distinguish each national system. Three I’s: Ideas - Interests - Institutions The Obama Reform Role-playing game The problems to be solved Overall costs. The United States is the country that spends the most on health care: total health care spending in the United States is 16 percent of GDP, compared with an OECD average of 8.8 percent. The uninsured. 16.7 percent of the population (more than 50 million Americans) lack health insurance. Health insurance policies are expensive. The average price of a policy obtained through the employer is around $5,000 annually. Opportunistic and dishonest behavior of insurance companies (pre-existing conditions, drop, cherry picking). The political context Various polls confirm that a majority of Americans believe that the system needs to be reformed, and that the uninsured are a problem; however, they are unwilling to pay more taxes, and are concerned about the rising costs of insurance policies; they are convinced that the management of health care should be in the hands of private actors, not the government. Those with health insurance are generally satisfied with the quality of care they receive; they are not willing to give up their freedom of choice. House: 258 Democrats (out of 435 deputies). Senate: 58 Democrats; 39 Republicans; 2 independents Interest groups 1. American Medical Association. 2. American Hospital Association. 3. Phrma (union of pharmaceutical companies). 4. AHIP (America’s Health Insurance Plans). The health insurance companies 5. AARP (American Association of Retired Persons). The pensioners' union 6. Chamber of Commerce. Large enterprises 7. NFIB (National Federation of Independent Business). Small enterprises 8. Club for Growth e Tea Party. Lobbies of those who claim to be "fiscally conservative." Other key players President Obama. He promised a radical reform of the healthcare system. Rahm Emanuel is President Obama's chief of staff. Blue Dogs. A group of moderate and conservative Democratic members of the House of Representatives. Independent senators. To avoid obstructionist practices, a bill must be passed by a majority of 60 senators. The two independent senators are decisive to reach 60. Supreme Court. The Court consists of 9 justices, with a balance of 5 conservative justices and 4 liberal justices.  The importance of institutional rules: majoritarian model In those countries where political power is concentrated in the hands of the executive branch, it is more likely that the will of the government will prevail over that of interest groups. Few veto players. Cohesive single- Single-chamber Bill party government parliament, with a large majority Approval of the act  The importance of institutional rules: consensual model In those countries where power is dispersed amongst multiple actors, the executive is weaker and interest groups find it easier to block its initiatives. Many veto players. Constitutional Court Sub-national governments Bill Coalition Bicameral government parliament, with different majorities Referendum Political institutions, veto players and health care model Country Lijphart’s index Tsebelis’ Healthcare of veto model concentration players of power N. Zealand -2.78 1,19 NHS UK -2.33 1,00 NHS Greece -1.48 1,00 NHS France -1.39 3,24 SHI Portugal -0.34 1,91 NHS Spain -0.18 1,00 NHS Norway -0.03 1,76 NHS Sweden 0.15 1,43 NHS Italy 0.86 3,81 NHS Japan 0.91 1.85 SHI Belgium 1.09 3,29 SHI Netherlands 1.56 3,13 MRI US 1.82 1,65 VHI Germany 3.19 2,28 SHI/MRI Switzerland 3.29 4,00 MRI Conclusions The ideological orientation of governments. SHI schemes have more commonly been adopted by conservative governments, while the majority of laws instituting a NHS have been passed by social democratic executives. The importance of political institutions. Completing all the stages of the standard developmental sequence (from VHI to NHS) has been easier and quicker in those political systems which have fewer veto players.  8. The Italian health care system VHI, SHI and NHS Italy - over the decades - has experimented with three different models of healthcare organization (VHI, SHI and NHS). Until the late 1930s, Italy relied on a typical voluntary insurance system. Targeted program for the poor. At the end of World War II, the social health insurance model was adopted. Finally, the 1978 reform established the National Health Service, which was radically reorganized in the early 1990s. The Italian NHS The Italian National Health Service (Servizio Sanitario Nazionale, SSN) is mainly financed through general taxation. The SSN is committed to guaranteeing people resident in Italy a basic package of health services. The benefits package provided by the SSN includes preventive services, hospital care, family doctors and specialist services. Dental care, rehabilitation and vision care are – on the contrary – largely excluded. Inpatient care and primary care are free at the point of use. Patients pay a co-payment for diagnostic procedures, specialist visits and pharmaceuticals. Cost-sharing exemptions exist for low income people or people with chronic or rare diseases. O The architecture of the system The Ministry of Health The Ministry of Health is responsible for determining the overall budget for the SSN. A second strategic task assigned to the Ministry of Health regards the definition of the so-called ‘essential levels of assistance’ (Livelli essenziali di assistenza – LEA). LEAs are the services that the public health system undertakes to provide for everyone in the country, on a uniform basis. The architecture of the system The regional level Regions, in compliance with the general principles established by the national government, can decide how to organize the provision of health services in their territory. The individual regional government is responsible for identifying hospitals to turn into hospital agencies and deciding how many local healthcare agencies to divide their territory into. The autonomy enjoyed by Italian regions is such that some consider it no longer appropriate to talk of a single national health service, but rather of twenty different regional systems. The architecture of the system The local level Local healthcare agencies (aziende sanitarie locali, ASL) are required to guarantee LEAs over their territory. The whole Italian territory is currently divided into 120 ASL (with an average number of about 500,000 people). Some hospitals have been separated from the respective ASL and transformed into independent hospital agencies (aziende ospedaliere, AO). In most cases, it is the larger and most specialised hospitals. There are currently 43 AO throughout Italy. Ongoing reforms ‘Community Houses’ With Next Generation EU/Recovery Plan funding, all regions are expected to adopt the ‘Community House’ (‘Case della comunità’) model. This model calls for all health professionals and social workers responsible for the same territorial community to work in the same building and integrate with each other. More than 1,000 community houses are to be established by mid-2026, spread over the entire country. The intertwining of public and private healthcare Funding The public/private mix Spending on healthcare in Italy comes 76% from tax revenues (it is used to finance the NHS), while the remaining 24% is private (21.4% out-of-pocket; 2.7% PHI). Italians are used to going private for many treatments that they could receive from the public service. The possibility to skip waiting lists, to choose the individual health professional and the ease of access are the main reasons why people turn to private providers. Provision The public/private mix On average, the Italian NHS spends around EUR 2,210 per patient per year. Two thirds of the healthcare funded by the SSN is issued by public suppliers, while one third is provided by private suppliers holding special agreements with the public service. Every Italian spends an average of about EUR 700 per year on health care purchased from the private sector. Looking at the whole system, approximately 51% of healthcare services are provided by public providers (belonging to the NHS) and 49% by the private providers.  The ‘matrix’ of public-private mix Provision Public Private SSN ‘in-house’ Private suppliers Public production contracted with the SSN 50% 26% Funding ‘Intramoenia’ ‘Private-private’ Private 1% 23% Private health insurance A growing phenomenon VHI is provided both by mutual associations distinguished by their nonprofit status, and by for-profit commercial companies. In 2004, there were fewer than 5 million Italians with some form of private health insurance. In 2022, Italians with some form of supplementary health coverage are about 30% of the population (18 million). 76% of private health policies are included in employment contracts, 24% are purchased individually.  Comparing National Health Services in Northern and Southern Europe Total health expenditure (OECD 2024) Public vs private expenditure (OECD 2024) Hospital beds (OECD 2024) Satisfaction with the public health service (OECD 2024)  9. Health care reforms over the last three decades Five major reform trends 1. Stimulation of greater competition 2. Promotion of integration (both in terms of financing and delivery) 3. Decentralization 4. Strengthening patients’ rights and freedom of choice. 5. Extension of insurance coverage UK, 1990 The 1990 reform of the Thatcher government was inspired by the principles of the ‘internal market’. A fundamental component of the internal market was the separation of suppliers and purchasers. The split promised efficiency by introducing a system of provider competition in which ‘money would follow the patient’. Local health authorities would receive a budget, with which to purchase services from a vast array of providers. ‘Fund holding’ general practitioners (GPs) represented a second category of purchasers. The provision of services was the responsibility of hospitals transformed into autonomous ‘trusts’. UK, 2001-2005 Second Blair administration (2001-05): strengthening of patients’ choice. From 2006 onwards, patients would have the right to choose from a list of at least four hospital providers selected by their GP, including an option in a private hospital. By 2008, English patients would be allowed to choose from any provider meeting the Healthcare Commission’s standards and charging the NHS price. In order to facilitate patients’ choice, the ‘star rating system’ was developed. The latter consists of a set of indicators – including waiting lists, cleanliness, treatment-specific data – through which public and private providers’ performances are assessed. Spain, 2002 In Spain, important competences in health matters have been transferred from the national level to regional governments. The decentralisation process has been gradual and asymmetrical. In the first phase, from 1981 to 1994, full competencies in health were transferred only to the 7 ‘historical’ regions (including Catalonia, Andalusia and Valencia). In 2002, autonomy in health matters was also granted to the other 10 autonomous communities. Netherlands, 2006 Following the 2006 reform, all Dutch residents are obliged to purchase an insurance policy covering a standard, basic benefits package. Citizens are free to choose their insurer, which may be changed every year. Insurers are obliged to accept each person who applies for an insurance plan. Premiums must be community-rated. Adults are required to pay an annual premium directly to their insurer. In addition to the fixed premium, subscribers pay an income-dependent contribution to a single national fund. The contributions collected by this fund are redistributed among all insurers on a risk-adjusted basis. Low-income families can apply for fiscal subsidy to purchase basic health insurance. Sweden, 2005 In 1992 the Bildt government issued a three-month guarantee for ten elective treatments with long waiting lists. The National Treatment Guarantee, implemented since 2005, is based on the ‘0-7-90-90’ rule, meaning instant contact (zero delay) with the health care system for advice, seeing a general practitioner within 7 days, consulting a specialist within 90 days, and waiting no more than 90 days between diagnosis and treatment. If the county council could not provide treatment within three months, the patient was to be offered treatment at a hospital in some other county council or at a private facility. France, 1996-1999 The Juppé Plan introduced important structural changes in both the financing and provision of healthcare services. The Universal Health Coverage Act, passed in 1999, established a targeted program covering all residents not already covered by the mandatory SHI scheme. As far as the provision is concerned, in 1997 the carnet de santé was introduced with the intention of avoiding contradictory or redundant prescriptions. Since 1998: médecins traitants (family doctors entrusted with the role of gatekeeping for secondary care). Germany, 2007 Act to Strengthen Competition in SHI Starting in 2009, the obligation to take out insurance includes all German residents. Non-SHI subscribers are required to have a private insurance policy (covering a benefit basket similar to the one guaranteed by the SHI). All mandatory SHI contributions are collected by a Central Reallocation Pool, which allocates them to individual sickness funds according to a morbidity-based risk-adjustment scheme. Standardization of the contribution rate for SHI subscribers, which is currently14.6% of the worker’s salary. South Korea, 1999 In 1999, the Korean parliament approved a reform of the funding system that required all sickness funds to merge into a single national insurance scheme. Previously, more than 350 health insurance societies operated in Korea, which workers belonged to, based on profession or place of residence. The introduction of ‘national health insurance’, therefore, led to the adoption of a single-payer model, with uniform contribution rates and the same benefit package.