Posted on 25th November 2011No Responses
Public and private health care definitions

Public and private health care definitions
The definitions of private and public health care have different meanings in different countries. People usually understand private health care to mean that health care services are delivered and funded by ‘for-profit’ insurance companies or by ‘out of pocket’ payments. It is the opposite of public health care, which is available to a wide spectrum of the general public and uses government subsidies to control and reduce costs.
People usually understand public health care to mean the national health system (NHS). Publicly funded health care is a form of health care financing designed to meet the cost of all or most health care needs from a publicly managed fund. Usually this is under some form of democratic accountability, the right of access to which is set down in rules applying to the whole population contributing to the fund or receiving benefits from it. The fund may be a not-for-profit trust which pays for health care according to rules established by the members or by some other democratic form. In some countries the fund is controlled directly by the government or by an agency of the government for the benefit of the entire population. This distinguishes it from other forms of private medical insurance, the rights of access to which are subject to contractual obligations between an insurer (or his sponsor) and an insurance company which seeks to make a profit by managing the flow of funds between funders and providers of health care services.[]. Publicly delivered health care system is when most of the services are delivered by public providers. Often these providers would be government hospitals and medical centers.

In the private health care system (PHCS) we also can distinguish between private funding and private delivery. In the delivery services we can distinguish direct services, such as medical, diagnostic, and surgical care, and ancillary services, such as food preparation, cleaning, maintenance.
By public health care in Canada we usually mean national public funded health care delivered by a mix of public and private organizations and individuals. This is versus the heath care that is funded privately out-of-pocket or by private insurance for so called non-medical necessary needs such dentistry, orthodontist or eye care. Canadian provinces finance health care through a combination of provincial revenues and federal transfers.

Advantages of Private healthcare
Among the advantages of private funding over the public system is flexibility over the choice of the level of your one’s coverage. The individual can choose who, when and how much to pay. If it is an insurance policy, there is the possibility of choosing coverage that the individual sees as providing the best value for one’s money. Regarding the delivery, the benefits of the private system are all about flexibility, speed and choices. Advantages of private healthcare system are:

  • Fast Service: In countries that offer free public health care, like the United Kingdom and Canada, individuals may choose to take advantage of private health care to receive treatment more quickly. Public health services can become overwhelmed with demand, leading to long waits to see specialists and long lines at doctors’ offices and public clinics. Going to a private health care provider is one way to access a doctor more quickly, though only at an additional cost.
  • Focus: Ability to get treatment for certain medical needs (i.e. consultations, operations, inpatient/outpatient and day patient treatments) more quickly
  • Variety: Being given a wider choice of where to have treatment, when to have it and which consultant/specialist to be treated by. For example, the U.K.’s National Health Service does not offer nursing care or intensive care. Private health care providers do supply these services, leading some patients to choose private health care only for additional services not included in the public option.
  • Added Services: Being able to use more comfortably appointed private hospitals or private rooms/wards. When patients have a choice of public and private health care, the private option generally includes more types of treatment and services.
  • Competition: Unlike public health care systems that receive government support, private health care is an open market where health care providers compete for customers. Market self regulation forces the health care providers to take steps, such as lowering prices or providing better services, to remain profitable. Health care providers that fail to provide services that customers want will fail, leaving only the best health care providers for people to choose from.
  • Self-Financing: One key economic advantage of private health care is that it is entirely self-financed, requiring no government grants or start-up loans. Instead, individual health care providers issue stock and secure investors to go into business. The enormous cost of health care is distributed among the health care providers and, indirectly, their customers, rather than the entire tax base as is the case in a publicly financed system.

Disadvantages of private healthcare
With the offered flexibility comes complexity. It is difficult to choose proper insurance coverage even for experts, with so many companies offering insurance; it’s worth talking to an independent financial adviser, who can help you see the differences between the policies. Advisers at insurance companies can only discuss their own policies and can’t give you advice on how it compares with others. The biggest disadvantage of out-of-pocket payments is that it can vary dramatically, depending on the situation.
Disadvantages of private insurance over relying on the public system are:
• Exclusions: Not all services are covered. The insured are generally expected to pay the full cost of non-covered services out of their own pockets.
• Coverage limits: Some health insurance policies only pay for health care up to a certain dollar amount. The insured person may be expected to pay any charges in excess of the health plan’s maximum payment for a specific service. In addition, some insurance company schemes have annual or lifetime coverage maximums. In these cases, the health plan will stop payment when they reach the benefit maximum and the policy-holder must pay all remaining costs.
• You can’t predict illness: you might develop a condition that isn’t covered.
• Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share. For example, policy-holders might have to pay a $500 deductible per year, before any of their health care is covered by the health insurer. It may take several doctor’s visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care.
• Co-payment: The amount that the insured person must pay out of pocket before the health insurer pays for a particular visit or service. For example, an insured person might pay a $45 co-payment for a doctor’s visit, or to obtain a prescription. A co-payment must be paid each time a particular service is obtained.
• Difficult to get money back: It can be difficult to get Private insurance firms to refund the cost of treatment once an individual has paid for it “up- front”.

In terms of private health care delivery services the disadvantages are:

• Problems in rural areas: It is hard for private companies to offers high level of service in rural, low populated areas;
• Expertise: private hospitals might not have the same depth of expertise found in teams within the NHS or all departments on one site. So if you have a problem with your mouth, it might not be easy to coordinate treatment between a dental department and the ENT (ear, nose and throat) unit.
• Bureaucracy: Part of the reason that the United States has the most expensive health care system in the world is the administrative costs of its huge private insurance system.
• For-profit: Private service providers usually work for profit.

In Canada, health care is publicly insured and available to all at no charge. Public administration with a single payer has helped to control costs in Canada. Although public financing in Canada has successfully controlled administrative costs, it has been somewhat less successful in controlling the cost and volume of services.
One of the frequently heard recommendations for reform is to supplement the current public system in Canada with a parallel private health care system for those patients who are willing to pay, creating what is often called a “two-tiered” system.
Proponents of a two-tiered system argue that it would relieve pressure on the public system, thus ensuring its survival. Critics of the two-tiered option say that it would erode the public system by destroying its broad base of support and increasing costs.
Other countries experience shows that the private sector will not necessarily relieve pressure on the public sector [Private sector providers in England, Eurohealth, Volume 16 Number 3, 2010]
Canadians care passionately about their health care system, rate equal access and quality of care as its most important features, and believe that a two-tiered health care would erode these core values.[Private Care in Canada. Carolyn A. DeCoster, RNMBA, Marni D. Brownell, PhD]

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