Publicly funded health care

Publicly funded health care is a health care system that is financed entirely or in majority part by citizens' tax payments instead of through private payments made to insurance companies or directly to health care providers (health insurance premiums, copayments or deductibles).

Financing of health care in public systems
Publicly funded health care systems are financed in one of two ways: tax-based financing or social security financing. In some systems, taxation is the primary means of financing health care. Everyone receives the same level of coverage regardless of their ability to pay, their level of taxation, or risk factors. In others, compulsory membership in a social health insurance "sickness fund" finances health care through premiums determined by a percentage of a person's wage.

Varieties of public systems
Most developed countries currently have publicly funded health systems that cover the great majority of the population. The notable exception is the United States. For some examples, see the United Kingdom's National Health Service (NHS), or the Medicare systems in Canada and in Australia. In the United States, the role of the government in healthcare provision is a source of continued and sharp debate.

Even among these countries, different approaches exist to the funding and provision of medical services. Systems may be funded from general government revenues (as in Italy and Canada), or through a government social security system (as in France, Belgium, Japan, and Germany) with a separate budget and hypothecated taxes. The proportion of the cost of care covered also differs: in Canada, all hospital care is paid for by the government, while in Japan patients must pay 10 to 30% of the cost of a hospital stay. Services provided by public systems vary. For example, the Belgian government pays the bulk of the fees for dental and eye care, while the Australian government covers neither.

Publicly funded medicine may be administered and provided by the government, as in the United Kingdom; in some systems, though, medicine is publicly funded but most health providers are private entities, as in Canada. The organization providing public health insurance is not necessarily a public administration, and its budget may be isolated from the main state budget. Some systems do not provide universal healthcare, or restrict coverage to public health facilities. Some countries, such as Germany, have multiple public insurance organizations linked by a common legal framework.

Innovations in health care can be very expensive. Population aging generally implies more health care, at a time when the taxed working population decreases.

Two-tier health care
Almost every country that has a publicly funded health care system also has a parallel private system, generally catering to private insurance holders. While one goal of public systems is to provide equal service to all, this egalitarianism is often partial. Every nation either has parallel private providers or its citizens are free to travel to a nation that does, so there is effectively a two-tier healthcare system that reduces the equality of service. Private hospitals often get newer and better equipment and facilities, and since private providers are typically better paid, some medical professionals motivated by remunerative concerns migrate to the private sector.

From the inception of the NHS model (1948), public hospitals in the United Kingdom have included "amenity beds" which would typically be siderooms fitted more comfortably, and private wards in some hospitals where for a fee more amenities are provided. These are predominantly used for surgical treatment, and operations are generally carried out in the same operating theatres as NHS work and by the same personnel. These amenity beds do not exist in other socialized healthcare systems, such as the Spanish one. From time to time, the NHS pays for private hospitals (arranged hospitals) to take on surgical cases for which NHS facilities do not have sufficient capacity. This work is usually, but not always, done by the same doctors in private hospitals.

Debate
Issues regarding publicly funded health care is frequently the subject of political debate. In the United States, whether or not a publicly funded universal health care system should be implemented is one such example.

Claims made in support of publicly funded health care
Supporters of publicly funded health care claim that it has several advantages:
 * universal access to health care,
 * better health care,
 * reduced administrative spending,
 * more effective health care planning,
 * increased emphasis on preventative and primary health care,
 * improved ability to negotiate pharmaceutical prices,
 * improved population-based health outcomes,
 * equality in matters of life and death, and
 * the creation of uniform standards of care.
 * profitability of medical research is removed as a factor in Research and Development
 * people entering the health care profession are more likely to be motivated by the nature of the work rather than the money, since salaries are lower

According to a 2000 study of the World Health Organization, publicly funded systems of industrial nations spend less on health care, both as a percentage of their GDP and per capita, and enjoy superior population-based health care outcomes.

Claims made in opposition to publicly funded health care
Opponents of publicly funded health care claim that it has several disadvantages:
 * 1) subjection of the health care system to greater political pressures,
 * 2) a greater likelihood of lower-quality health care than privately funded systems,
 * 3) less motivation for medical innovation and invention
 * 4) long waiting lists for access to some medical treatments (particularly those of an advanced or specialized nature), and
 * 5) less financial motivation for the most able people to enter health care professions.
 * 6) Price no longer influences the allocation of resources, thus removing a natural self-corrective mechanism for avoiding waste and inefficiency.
 * 7) Health care workers' pay is often not related to quality or speed of care.  Thus very long waits can occur before care is received.
 * 8) Because publicly funded medicine is a form of socialism, many of the general concerns about socialism can be applied to this discussion.
 * 9) People are afraid that they cannot choose their own doctor. In some public systems, doctors are assigned by the state.
 * 10) Countries which have publicly funded medicine don't do as much medical research and development as there is very low payoff to developing new drugs and medical techniques.
 * 11) By limiting the amount of money in the health care system through political mechanisms, shortages of health care resources (such as physicians, nurses, medical equipment, medical devices, pharmaceuticals, and hospitals) are more likely to occur.

Doctors' salaries tend to be lower in public systems; for example in 1996, the average U.S. physician income was $199,000 while the comparable OECD median physician income was $70,324. Opponents claim that higher salaries constitute an incentive to enter the profession and attract more qualified individuals who would otherwise choose a different profession.

Another possible criticism cites the fairness of paying for people's poor individual decisions (obesity, smoking, drinking, drugging, etc.) as they relate to health care costs. It is argued that these costs should be incurred solely by those making those poor decisions.

In 2006, Sylvia Lott, aged 72, made headlines in the UK after it was reported that she had been waiting thirteen years for a hip replacement surgery from the Swansea NHS Trust, South Wales' publicly funded health provider.

Role of the free market
There is variation amongst individuals about how much they value peace of mind and a lower risk of death. For example, a public-funded system, based on cost efficiency, might limit access to a pap smear only once every five years if the patient was not positive for the human papilloma virus. In a private system, a consumer can choose to be screened more often, and enjoy the luxury of greater peace of mind and reduced risk, if they value this more than other luxury items. Such "luxury" discretionary spending might be moved to non-medical luxury goods and should not be viewed as available to fund a public system as is assumed in some analyses.

Aspects of the United States health system
Whether publicly funded healthcare can adequately deliver health care more cost effectively than the free market is a matter of much debate. Of all developed nations, the healthcare system of the United States has the highest degree of privatization. Consequently, it is frequently cited by those favoring or opposing universal healthcare.

The cost and quality of care in the United States are frequently the two major issues of discussion. The United States is below the average for developed countries in health measures such as infant mortality, maternal death, and life expectancy, although some studies claim the data collected regarding infant mortality and life expectancy do not lend themselves to fair comparison. Access to advanced medical treatments and technologies is greater than in most other developed nations and waiting times are substantially shorter for treatment by specialists.

The United States does spend more on health care, as an absolute dollar amount and per capita, than any other nation. It also spends a greater fraction of its national budget on health care than Canada, Germany, France, or Japan. In 2001 the United States spent $4,887USD per person on health care, more than double the rate of any other G7 country except Japan, which spent $2,627 per capita annually. Risk factors specific to the U.S. population, such as a relatively high prevalence of obesity, may partially explain increased health care spending; however, many other industrialized nations do share these problems to some extent. Although the U.S. Medicare coverage of prescription drugs is scheduled to begin in 2006, most patented prescription drugs are significantly more costly in the United States than in most other countries. Factors involved are the absence of U. S. government price controls, enforcement of intellectual property rights limiting the availability of generic drugs until after patent expiration, and the monopoly purchasing power seen in national single-payer systems. Many U.S. citizens obtain their medications, directly or indirectly, from foreign sources, to take advantage of lower prices.

The United States system does have substantial public components. Of every dollar spent on health care in the United States, 44 cents comes from some level of government. The elderly are covered by Medicare, the poor (those with assets of less than $2,000) are covered by Medicaid, merchant seamen are covered by the Public Health System, and retired railway workers and military veterans are also covered by the government. Government also affects private sector medicine through licensing and regulatory barriers to entry into health professions.

Market failure issues
Various healthcare analysts have asserted that market failure occurs in healthcare markets, but some have suggested that it is result of too much government involvement rather than too little.

The consumers of health care often lack basic information compared to the medical professionals they buy it from, and fully informed choices (particularly in emergencies) are often not plausible. Meanwhile, health insurance companies and care providers also suffer from information asymmetry, as patients are almost always more aware of their particular family histories and risky behaviors than the firms are. Price theory dictates that the risk cost associated with this lack of information gets passed on to consumers. Demand is likely to be inelastic. The medical profession potentially may set rates that are well above ideal market value, and they are controlled by licensing requirements, with some degree of monopoly or oligopoly control over prices. Monopolies are made more likely by the variety of specialists and the importance of geographic proximity. Private insurance has been perhaps the only stabilizing force as they pay a contractually fixed cost for a given procedure. With no more than one or two heart specialists or brain surgeons to choose from, competition for patients between such experts is limited so contractually pre-arranged pricing helps reduce supply-limited pricing.

Preventive medicine issues
There is much conflicting information about the role of preventive medicine in controlling medical costs and the improving the health of citizens. Advocates of publicly funded medicine claim that preventive care saves money and prolongs life, but opponents assert that it does neither.

Difficulties of analysis
Cost-benefit analyses of various health care systems are frequently mentioned by advocates and opponents of publicly funded healthcare programs. Others caution that these analyses are difficult to do accurately due to the multifactoral nature of health, healthcare delivery, and healthcare financing, as well as the lack of consensus on what is "best" for a nation or its people.