Term paper: Health Care Funding System in the USA

Data about the state of health care systems of different countries published by the Organisation for Economic Co-operation and Development (OECD) in 2006 testify that expenses on health care in the developed countries continue to grow, and if this tendency remains, governments will be forced to raise taxes, reduce other budgetary charges or create conditions under which citizens will cover the greater part of them (Health Policies).

In every country – member of this organization (except Finland), during the last 20 years rates of growth of health care expenses are exceeding those of GDP. Thus, in 1990 an average 7% of GDP was spent on health care, in 2003 – 8,8%, in 2004 – 8,9%. The leader in resources spent on this sphere is the USA – 15,3% of GDP (12% in 1990), although considerable part of these means was received from private, not state sources. Switzerland is second in this rating – 11,6% of GDP. Among countries – members of the EU the first places belongs to Germany (10,9%) followed by France (10,5%), Belgium (10,1%), Greece and Portugal (10%), Great Britain and Hungary (8,3%), Spain (8,1%). In Japan on health care was spent 8% of GDP, in Turkey – 7,7%, in Mexico – 6,5%. In Finland charges in this sphere reduced in 2004 to 7,5% (from 7,9% in 2003) (Mossialos 2002).

Many specialists are concerned with such a considerable part of GDP being spent on health care. If so much is spent on medical services, less money is left for accommodation, food, clothes and other vitally important goods and services. In addition, the growth of charges on health care was caused mainly by governmental programs, not by the private sector. Consequently, the means intended for education, road construction, etc. reduced proportionally. It would not cause large difficulties, if the economy was growing, but it becomes a serious problem in the period of the crisis (Insuring America’s Health 2004).

In the USA individual insurance is almost entirely provided at the working place. Most American employees in addition to salary receive various funds, which can be different for the employees of both one company and different companies. Types and amounts of such funds, given by different employers, can substantially differentiate (Morris 2007).

Apart from medical insurance, there are funds for employees in the case of their loss of labor ability, life insurance, etc. Health insurance is the most widespread type of insurance at the working place; however, employers are actually not obligated to provide one. Not all American employees, even the full-day working ones, receive such insurance at work. However, the largest companies provide this type of insurance, and in 1990 it covered about 75% of population of the USA (Insuring America’s Health 2004). For any query or any problem is redeem the medical expense contact the workers injury compensation lawyers for best guidance’s.

There are many different types of medical insurance, offered by one or another employer. Till recently the most widespread type of medical insurance was the so-called compensative insurance or “services paying” insurance. In this form of insurance an employer pays an insurance company the so-called insurance bonus for every employee, provided with the corresponding policy. Then an insurance company pays the bills, presented by a hospital or other medical institution or a doctor. Thus, the services included in the insurance plan are paid. Usually an insurance company covers 80% of expenses on treatment, the rest has to be paid by the patient. Invest at Payday Champion provide you an instant financial assistant (Morris 2007).

The most frequently applied alternative to the services paying insurance is the so-called “controlled services” insurance. The number of Americans, covered by this type of insurance, grows quickly (more than 31 million people in 1991). There are several types of such insurance. One, known as the “staff model”, unites all or, in any case, greater part of medical staff providing services (mainly doctors). Others cover hospitals and rest homes. The so-called networks or associations of independent practices sign contracts with the certain groups of doctors and other medical staff and institutions including hospitals for providing of all the services, suggested to patients according to this type of insurance. Usually these insurance organizations receive a certain fixed sum which is paid beforehand for each patient insured (Insuring America’s Health 2004).

Differences between the two described types of insurance are very substantial. In the services paying insurance the concrete cost of necessary services really provided to patients is paid. In the insurance of “controlled services” their providers receive only the set amount for each patient insured, regardless of whether a patient will be given some additional services over this sum or not. Thus, in first case, the health care system workers are interested in attraction of patients and providing them various services, while in the second case, they will rather persuade the patients from appointing new procedures; at least, they will hardly give them more than necessary for achievement of satisfactory feeling.

Medical insurance is similar to other types of insurance. An insurance company risks, because a person who pays for it, insuring himself from a certain types of risk (such, as a risk to get ill and face the necessity of expensive treatment), can indeed get ill and demand the providing of these services. A person, purchasing insurance, on the opposite, risks that he may not need the services he pays for. When a large group of people purchases insurance at the same company or medical institution, it forms a “risk fund”. The expenses for providing of medical services which are difficult to forecast beforehand for a separate patient, are easier to estimate for a group of people ((Insuring America’s Health 2004).

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