Alternative Ways of Funding Healthcare System - Essay Example

Alternative Ways of Funding Healthcare System THESIS MENT The essay elaborates the various requirements of funding for performances as well as growth of healthcare system. In this context, healthcare system obtaining funds from different alternative sources are described. Additionally, an analysis of the OECD’s health system has been conducted to point out the methodological inefficiency of funding health system. INTRODUCTION In the present scenario, healthcare system plays an important role in providing appropriate care as well as treatment services in accordance with the needs of patients. The healthcare system is a vital segment for better health conditions and sustainability within a society. In this regard, healthcare system is required to be properly funded with the intention of meeting the needs of patients with enhanced medical technology and providing best practiced medication as well as treatment facilities. Subsequently, the increase cost of healthcare has been the main concern for the social policy makers with regard to health insurance coverage and growth for Medicaid. The increasing prices of the healthcare system have become a major concern as compared to other healthcare objectives. Developing countries are identified to be struggling in an immense manner in order to extend healthcare policies coverage in the entire population. The social and the health care system has been a mass concern and government intervention is necessary to improve the same. The need of health policy planning has been observed to be a major requirement for the development of healthcare system within a country. Contextually, funds are required to be procured with the aim of conducting healthcare operations effectively. In order to build a sustainable healthcare system the factor relating to accessibility plays an important role for the healthcare system with regard to its availability and affordability (Gutiérrez and Ferrara 1-16). Most of the countries are facing constant pressure to meet the need of funding of the healthcare policies owing to increasing healthcare expenditures. Presently, healthcare system needed adequate funds in order to meet the healthcare needs of people in an effective manner. Healthcare system obtains financial funds from different sources that include government firms, private firms, household or individuals, foreign charity organisation and non-governmental organisations (NGOs) among others. LITERATURE REVIEW In healthcare system, funding is necessary for different factors that include implementation of innovative technology, redefining medical services, better access to healthcare services and infrastructure development among others (WHO, p. 1-30). According to the report published by WHO, promoting and protecting health is the prime objective of healthcare system for sustainable as well as social development. The need of health priorities has been observed to be the highest priorities, besides the other basic economic concerns. Health service funding mechanism is the pivotal requirement in the development of the healthcare system objectives (WHO, p. 1-30). However, the increasing expenditure of the healthcare system cost in all the sector has been a major issue, which needs to be adhered in order to provide treatment and care services effectively (Duckett and Breadon, p. 1-53). According to Duckett and Breadon, the public hospital funding has been observed to be fast growing government expenditure. Different health institutions are identified to be providing same standard of health facilities at different costs (Duckett and Breadon, p. 1-53). According to Trafalski, Briffa, Hung, Moorin, Sanfilippo, Preen and Einarsdóttir, the Austrian federal government has introduced the private health insurance incentive reforms to encourage private health insurances for better coverage. Private health insurance incentive reforms are adopted by the Austrian government has been identified to be acting as a positive step of the government to increase the number of patients opting for both private as well as public hospitals (Trafalski, Briffa, Hung, Moorin, Sanfilippo, Preen and Einarsdóttir, 1-8). Contradicting to the above measures, Cheng elaborated that the possible drainage of valuable resources of public healthcare institutions are made owing to the introduction of healthcare incentive in private healthcare insurances. However, diversification in healthcare facilities would enable the public to avail the different modes of health facilities available in the country (Cheng, p. 1-10). Correspondingly, the Austrian health care reforms have assisted in better availability of wide range of benefits and high quality care (Hofmarcher and Quentin, “Austria: health system review”). According to Kenny, Hyett, Sawtell, Dickson-Swift, Farmer and O’Meara, the difference between urban and rural population has resulted in the priority of setting special financial reforms in a country. Special funding through local council and decentralisation of health funding decision makings have increased the availability of funds and enhance health care facilities (Kenny, Hyett, Sawtell, Dickson-Swift, Farmer and O’Meara, p. 1-8). Healthcare expenses in Austria are usually dealt by the Federal Health Agency, which plans, governs and finance the healthcare system (Hofmarcher, p. 1-30). As described by Goldman, Karakus, Frey and Beronio, health insurances do not cover certain services for individuals, which limits them from availing certain healthcare benefits. It has been largely observed that the services that are insured under the insurance companies usually cover acute and hospitalization care (Goldman, Karakus, Frey and Beronio, p. 1-3). Adler-Milstein, Bates and Jha elaborates that lack of proper funding has been identified to pose a negative impact on the distribution of health information system. United States has been taking measures in developing the long term care for ailing citizens of the country (Adler-Milstein, Bates and Jha , p. 1; Calmus, p. 1-15). Gravelle and Lowry, noted that the implementation of the different taxation policies have helped to increase revenue to raise provision for health reforms. The medical device tax that has been imposed in January 2013 is likely to cultivate a large amount of funds to finance the health policies (Gravelle and Lowry, p. 1-32). As per the reports published by WHO, it has been observed that in order to develop a sustainable financing policies, the policies should be framed in such way that it gives a universal coverage (WHO, p. 1-4). The Medicaid insurance service providers have designed new policies to cover up the healthcare finances of larger masses through the implementation of different financing plans on the basis of which funds are obtained. In this context, majority of the workers are enrolled with the organizational schemes, which provides financing of the healthcare needs of employees (HOPE, p. 1-6). As described by Mills, the funding techniques in the middle to low income countries has been observed to be quiet backlogged and has lower fund available for developing a proper healthcare infrastructure. In order to mitigate this constrains, the governments of the middle to low-income countries have implemented certain standard norms to increase the infrastructural development of the healthcare facilities (Mills, p. 1-6). Again, ‘World Health Organisation’ (WHO) has defined the universal health care coverage as the opportunity for individuals to avail the curative healthcare services with better care as well as treatment opportunities. Parallel to this, the Mexican government has been working on improving household financial protection as well as access to the healthcare services in order to procure adequate funds for the development of the healthcare system (Gutiérrez, García-Saisó, Dolci and Ávila, p. 1-8). The funding needs of the healthcare systems have been observed to be shifting owing to the economic requirements of a country. The healthcare system includes hospital care as well as the ambulatory services. Funding strategies are adopted to meet the funding needs of the acute care or hospitalization in order to provide care as well as treatment services on the basis of the requirements of patients (López-Ortega, García-Peña, Granados-García, García-González and Pérez-Zepeda, p. 1-8). In developing countries like Albania, it has been observed that the public healthcare systems are quiet underdeveloped from the private healthcare systems. Special funding should be provided in order to develop the public healthcare centres to provide better care to the larger masses of population (Dumi and Sinaj, p. 1-6). According to the observation of Hsu and Yamada, ageing population of an economy is identified to face challenges in meeting their healthcare requirements and accordingly, the procurements of long term financing needs becomes mandatory. The different policies like the Universal Health Insurance (UHI) system have been implemented to cover almost all the population of a country (Hsu and Yamada, p. 1-10). In this context, different funding techniques comprising private as well as the government funding sources are developed to provide with an extended system of care giving constitutes f. The different sources that are common in most of the countries included private as well as public funding houses (COCIR, p. 1-29). With the impending need of designing healthcare services to cover all the sectors of the society irrespective of income and social status, the healthcare financing techniques needs to be redesigned in the developing countries. As noted by Addae-Korankye , the major sources of financing in a developing country like Ghana constitute of the health insurance organization, voluntary and private insurance organization, donations as well as the out of the pocket systems. The government of the countries plays a central role to meet the huge financing needs of healthcare systems (Addae-Korankye, p. 1-10). With The implementation of new policies i.e. ‘Universal Health Policies’ (UHC) by the WHO, the World Bank has also extended supports in meeting the financial need of the countries to align with the objective of UHC (Giedion, Alfonso and Díaz, p. 1-20). Since, the healthcare systems are majorly dependent on the funds that are sourced by the government or private institutions, the only way that could help the healthcare services to cultivate more funds is through maintenance of a ‘smart investment’ initiative in the care delivery pattern. In the present modern healthcare delivery system, the healthcare demands and the critical transition of the different healthcare requirements has enlightened the need of the development of the advanced healthcare services. Contextually, healthcare system is recognised to procure required funds through different alternative sources that include direct as well as indirect taxes, payroll taxes, taxes relating to compulsory insurance contributions, voluntary insurance premiums, medical savings account and donations along with grants among others (COCIR, p. 1-29). The healthcare system finds huge difficulty in identifying appropriate sources to collect funds for accomplishing the healthcare needs of a country. The government funding sources are mainly limited to the emergency and the outpatient services of the healthcare providers. The other healthcare services that are available in the healthcare system are majorly contributed by e private funding organization (Australian Institute of Health and Welfare, “How are our hospital services funded?”). Across the globe, it has been widely observed that the financing requirement is met either by the private or public expenditure or else by external aid. The external aids are recognised in the form of bilateral aids programme undertaken by the international non-governmental organizations (OECD, p. 1-4). In United States of America (US), the Medicaid financing acts as a major portion of the funding sources for healthcare system. Parallel to this, the majority of the population of the US is covered under the corporate schemes of insurances or else by other public schemes (National Center for Health Statistics, p. 1-30). Moreover, the national schemes have been backed by the global schemes to facilitate the development of the health standards in an equal manner globally. However, the diversified development of different countries all over the globe, a single plan will not be an effective measure of collecting required funds and meet the requirement of healthcare system operating worldwide (Thomson, Osborn, Squires and Jun, p. 5-30). The increase in the life expectancy of the people by the development and implementation of lifesaving drugs and healthcare facilities has increased healthcare cost per capita. This in turn has increased the need for funding for healthcare system to conduct operations efficiently (Bloomberg, “Bloomberg Visual Data”). The healthcare system funding technologies need to be planned in a separate methodology in order to fund the long term care funds. In this context, the governments of countries have adopted ‘Social Health Insurance’ (SHI) schemes in order to pave a faster way towards universal coverage (Muiya and Kamau, p. 1-10). Most of the countries have adopted a methodology of funding through NGOs and other private funding sources. Additionally, the different revenues collected by the government of a country through payroll taxes, sales taxes as well as levy premiums serves as a source of funding for the healthcare system (Irvine, Ferguson and Cackett, p. 1-11). Subsequently, with the development of the global healthcare organization, the funding necessities have also developed owing to the increased demand for quality care and treatments services. The World Bank has developed different schemes to finance the requirement of healthcare system in the present day context (WHO, p. 1-4). OECD’s HEALTH SYSTEM The improvement of the health system performance has become a key concern and objective for the developed nations and many initiatives have been undertaken in order to develop the present state of healthcare maintenance as well as care services. Achieving value for money is an important objective of the healthcare sector in all the OECD countries. Healthcare spending indeed needs to become more effective. Parallel to this, the government of the OECD countries has to care about the health status of the population and budget sustainability. Different sets of policy instrument often work in a complementary way with the intention of meeting the care and treatment requirement of patients. It has been likewise observed that healthcare organisations require funds to provide better care as well as treatment services on the basis of best practices and service facilities (OECD, 1-12). The economical differences amidst the countries develop diversity in the requirements of the funds differs owing to technological factor, healthcare infrastructure and patient requirements. The member countries of the OECD use mostly the public and the private methods of the healthcare funding. The public healthcare funding sources are mostly dependent on the government grants and other external aids. Parallel to this, donations as well as public grants are also accounted as important sources of fund for the healthcare system (Blanchette and Tolley, “Public and Private-Sector Involvement in Health-Care Systems: A Comparison of OECD Countries”). The implementation of universal health insurances and social insurances act as the funding sources for healthcare system of OECD countries. In OECD countries, separate states and federal agencies have been acting as a source of funds for financing the healthcare systems. The centralized and the non-centralized method of universal care have been observed to be quiet different among the OECD countries (Department for Professional Employees 1-13). Depending on the needs of an economy, healthcare funding sources are required to be devised appropriate in order to ensure that care as well as treatment services are offered effectively. Moreover, the budgetary planning for healthcare has been a major requirement of an economy based on which treatment needs of patients are met. Depending on the GDP growth, the public sector is acting as a source of fund largely. The revenues and the tax collection policies of the government vary from one financial year to another and accordingly, act as a major determinant of budgetary allowance for the development of healthcare system (Curristine, Lonti and Joumard 1-30). In addition, the major inefficiency that could be observed in the field of the healthcare financing is the lack of ample amount of funds owing to unstable economic conditions. Additionally, the deficiency of public investment options are accountable for the failure of the healthcare centres to trade and incur advantage of increasing capital through public trading, as the funds obtained from the general sources are very limited (OECD 1-24). Since, the health expenditures form a ratio of the total expenditure that is allotted in the GDP, the recession has also an adverse effect on the allocation of fund for the healthcare system. Thus, the rate of the recession, which causes the fall in the GDP of a country, acts as a major reason for the fall in the sources of generating funds for the healthcare system. Moreover, the fall in the GDP of the country forces the country to lower down their health and other expenditures. Parallel to this, the government funds form a major portion of the funds that are used for healthcare curtailing down funds, which leads to the major fall in meeting the financial needs of the healthcare system. The GDP growth and the recession even constrain the availability of fund from the private insurances and the other external aids. Moreover, the healthcare expenditure is also a part of the national expenditure, which tends to be low at the time when the economy faces a downturn (OECD 1-24). In this regard, a comparative study suggests that healthcare system in developed countries is different from that of a developing or an underdeveloped country. This again triggers the need of the better funding sources in the countries that are in need of funds majorly. The government funds acts as a major source of funds and failure of the same leads to the overall failure of the total availability of fund for financing the healthcare expenditure. In this regard, the opportunity of developing a universal healthcare system, which facilitates in meeting the treatment needs of the total population. The degradation of the healthcare system as a result of the lack of funds has adversely affected the national health (OECD 1-24). CONCLUSION The major constrains of the healthcare system has been observed to be the lack of funds. Healthcare system is unable to operate in accordance with the healthcare standards of providing the adequate level of caregiving due to inadequate availability of funds. The public insurance, private insurances, donations, NGOs and the external aids form a major source of funds for the operation of healthcare system. The different alternative sources of funds assists healthcare system to implement innovation with better accessibility for effective care as well as treatment of patients. Moreover, the economic and the external factors cause a huge effect on the availability of funds for the development of the healthcare systems. Additionally, there has been a huge difference in the requirement of funds among the developing and the developed countries to meet the needs of healthcare systems. The developing countries have to depend majorly on the healthcare system to maintain a sustainable national health, which elated the financial needs of healthcare system. Owing to the limitation of healthcare system to receive capital from the public, they have to depend majorly on the different sources of the funds to accomplish day to day operational requirements effectively. Again, the limitation of the availability of funds in healthcare systems adversely affected the functioning of national health system. 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Trafalski, Shauna, Tom Briffa, Joseph Hung, Rachael E Moorin, Frank Sanfilippo, David B Preen and Kristjana Einarsdóttir. “Effect Of Private Insurance Incentive Policy Reforms On Trends In Coronary Revascularisation Procedures In The Private And Public Health Sectors In Western Australia: A Cohort Study”. BMC Health Services Research 13 (2013): 1-8. Read More