Public and private health care systems: a taxonomy (for the new SHA)

1. Introduction In all countries of the world different health financing schemes coexist, usually in the form of an insurance scheme (mandatory or voluntary) and direct payments (out-of-pocket). The existing criteria for classifying the different schemes (e.g. by OECD) seem incomplete or ambiguous, especially when they set a distinction between their public and private nature (e.g. the Dutch or Swiss schemes). Moreover no official criteria exist for typifying the whole health care system (HCS) of a country. Different scholars use different criteria. The joint effort by OECD, WHO and EUROSTAT to revise the System of Health Accounts (SHA), that is ongoing, is an opportunity to set common criteria for classifying the various financing schemes and health care systems of the different countries. This paper aims to contribute to this clarification. 2. Methodology The proposed approach consists of two parts. The first is to identify the main characteristics of each financing scheme (or sub-system); the second to look at the prevailing scheme(s) and to characterise the country health care system as a whole. Some criteria for assessing whether a scheme is public or private are proposed and various options of ‘prevalence’ are discussed. The criteria for discriminating among different health schemes are based on: (i) mandate or free choice to have an insurance coverage, (ii) financing through risk related premiums or income related taxes, (iii) public or private nature of deliverers of benefits, (iv) single or multiple payers, (v) integration of health care providers into the insurance scheme and other criteria. 3. Results Drawing from the literature and the analysis of the available data, eleven basic financing schemes (sub-systems) are identified. They range from the universalistic, tax-financed, with a single deliverer, integrated ‘national health service’ (e.g. UK) to the mandatory, financed through community-rated premiums and earmarked taxes, with multiple private deliverers ‘market social insurance’ scheme (e.g. the Netherlands), to the voluntary, financed by risk- or community-rated premiums, with multiple competing deliverers ‘voluntary health insurance’ scheme, to end up with a scheme based solely on donations by non profit institutions and transfers from the rest of the world. After discussing the dimensions according to which a health scheme should be considered as public, private or mixed (i.e. financing and delivery) and the threshold of prevalence, eight possible models of HCS are suggested. They are also characterised as public, private or mixed. Each model is described with reference to a country as an example. In order to classify the HCS of various countries, some new accounting schemes are devised, that subdivide ‘financing’ in three functions (resource collection, risk equalisation and payment of providers) and inform on the legal nature of institutions/agents carrying out these functions. This information, which is only partially available now, will allow to compare HCS in a more meaningful way and to learn from the experiences of the other countries.