With the advent of modern technology in medical sciences and therapeutics, the overall healthcare expenditures have increased that has over whelmed the public resources allocated for health care. It has been a continuous debate whether the cost of one’s health should be bear by himself through personal insurance or government should come up with more ways to incur less cost on individuals and more to public budget. The essay attempts to examines the pros and cons of both views.
To get a deeper understanding of the healthcare expenditures, we should indulge into the examples of various countries that are financing the healthcare of their citizen through budgetary allocations. A predetermined amount of money is deducted in the form of a direct tax and is added to government’s consolidated funds, then a percentage of annual fiscal budget is allocated for health and a number of health services including diagnostic, therapeutic and emergency services are provided to the citizens based on their residence-ship. This is a type of Beveridge model of health financing that is being used in United Kingdom for more than a century. However, it is purely based on taxation and in-land revenue system that requires a lots of transparency and accountability. A more resilient public tax collection would be the only way to survive this type of health financing and in countries where tax system are not very efficient a model like this would not be successful.
Another way of financing the healthcare of residents is through Employment based Bismarck model, that is more like a sickness funds. The approach is being used in Europe for years and is the most successful one there. In this approach, employees and employers contribute in a Mutual fund that comprises of a fixed percentage of their salaries and in case of any ailments, their health expenses are borne by the Organization. The fact that most people get sick in their later ages near the age of retirement, this type of insurance wouldn’t do any good to them as it is only active during your working period. For such individuals private insurance would be a better choice that provides a little coverage and but has a high premium. However, in countries that provide no publicly funded health programs, citizens have to finance their healthcare Out of pocket that results in over expenditure at the time of crisis leading to catastrophic health expenditures that can further push a person below the poverty line.
In conclusion, the decision to provide a full coverage to citizens is purely based on individual countries and their respective scenarios. If citizens pay a fair share of their tax money it would be easy for governments to allocate a larger percentage of their Gross domestic product for medical care. It would be the best way to financing healthcare of the residents without over burdening the government resources and the citizens.