Privatization of Healthcare - Essay Example

Since government funds are finite, the public health care system had to perforce follow certain norms and set limits on the extent of assistance that could be given in public hospitals. As a result, those who could afford to, or these who were covered under various insurance schemes turned to private hospitals to attend to their needs. As these private hospitals and clinics flourished, a debate arose on the very necessity of a public health scheme. Some countries have a dual public-private hospital system which also seems to work wherein, " complex conditions and procedures are serviced largely by the public sector, whereas private hospitals are utilized for elective and less complex surgery and non-urgent conditions" (O'Hara & Brook 1996).

While this may well be the case for those covered by private health insurance, this may not necessarily hold good for the poor and indigent. For this category of people, public hospitals are the first choice for all kinds of treatment, except when a particular facility is no available, when they might be forced to go to private hospitals at their own expense. There are three main factors around which the case for privatization of the healthcare system revolves. These are firstly, that private hospitals are more efficient and cost effective; secondly, that it reduces pressure on the public health system; and thirdly, that it provides for increased choice for both doctors and patients.

Although these reasons appear reasonable and logical at first sight, a more detailed analysis at the functional level will reveal that there are some Grey areas. An understanding of these facets as pertaining to public and private hospitals will serve to put this subject in the correct perspective.Efficiency and Cost Effectiveness. It is always assumed that in a market economy, "private enterprise is always more efficient and cost effective than public enterprise because competition forces them to be so" (Friends Of Medicare).

While this is true at the initial stages, competition also forces private hospitals to invest more and more on infrastructure and administrative costs, such as advertising as the competition becomes more intense. Over a period of time, these costs far exceed the maintenance and operating costs of similar public hospitals, offering the same services, albeit without the frills.Reducing Pressure on the Public System. It is assumed that since those who can afford private medical care would go to private hospital, there would be lesser load on the public system.

Again, this is true in an ideal world but it does not take into account the politico-economic facet of healthcare. As more and more people gravitate towards private hospitals, the government reduces or freezes spending in the public domain the results of these cuts translate into longer waiting periods for those still utilizing the public system.Increased Choice for Doctors and Patients. It is felt that a public system is more bureaucratic in nature where rules and regulations govern all aspects of medical care from who all are authorized treatment to what all treatment can be given.

As long as people are going to private hospitals and paying for it from their own pockets this holds good. In reality, medical treatment is being covered through medical insurance. Instead