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Social health insurance  

Social health insurance

Social Health Insurance services in Western Europe will be of interest to students of health policy, policy-makers and managements of all kinds. Ask reception to walk you through any questions you may have regarding how social health insurance can benefit your business or call centre.

Social health insurance is health insurance that insures a national population for the costs of health care and usually is instituted as a program of healthcare reform. It may be administered by the public sector, the private sector, or a combination of both. Funding mechanisms vary with the particular program and country. Therefore National health insurance does not equate to government run or government financed health care, but is usually established by national legislation.

Types of programs

Some countries implement national health insurance through a national insurance fund operated by the government from which medical expenses are paid. These services are provided by private health care providers. This is known in the United States as single-payer health care, and if US Medicare were expanded and covered all Americans (Medicare for All), it would be considered national health insurance. A 2008 survey shows that a majority of US physicians (by almost 2 to 1), favor national health insurance. Two existing examples of this type of program are Australia's Medicare and Canada's health insurance system.

In other programs, the funds can only be spent on health services commissioned by the government. An example of this is the UK's National Health Service.

The National Health Service (NHS) is the publicly funded healthcare system in England (though the term is also used to refer to the four national health services in the UK, collectively). The NHS provides healthcare to anyone normally resident in the United Kingdom with most services free at the point of use for the patient though there are charges associated with eye tests, dental care, prescriptions, and many aspects of personal care. The NHS has agreed a formal constitution which sets out the legal rights and responsibilities of the NHS, its staff, and users of the service and makes additional non-binding pledges regarding many key aspects of its operations.

The NHS provides the majority of healthcare in England, including primary care, in-patient care, long-term healthcare, ophthalmology and dentistry. The National Health Service Act 1946 came into effect on 5 July 1948. Private health care has continued parallel to the NHS, paid for largely by private insurance: it is used by about 8% of the population, generally as an add-on to NHS services. Recently the private sector has been increasingly used to increase NHS capacity. According to the BMA a large proportion of the public oppose this move.

The NHS is largely funded from general taxation (including a proportion from National Insurance payments). The UK government department responsible for the NHS is the Department of Health, headed by the Secretary of State for Health. Most of the expenditure of The Department of Health (£98.7 billion in 2008-9) is spent on the NHS.

Core Principles of the UK National Health Service

The NHS states the following as core principles:

  • That it meet the needs of everyone
  • That it be free at the point of delivery
  • That it be based on clinical need, not ability to pay

These three principles have guided the development of the NHS over more than half a century and remain. However, in July 2000, a full-scale modernisation programme was launched and new principles added."

The main aims of the additional principles are that the NHS will:

  • Provide a comprehensive range of services
  • Shape its services around the needs and preferences of individual patients, their families and their carers
  •  Respond to the different needs of different populations
  • Work continuously to improve the quality of services and to minimize errors
  • Support and value its staff
  • Use public funds for healthcare devoted solely to NHS patients
  • Work with others to ensure a seamless service for patients
  • Help to keep people healthy and work to reduce health inequalities
  • Respect the confidentiality of individual patients and provide open access to information about services, treatment and performance

Structure and Organisation

The NHS in England is controlled by the UK government through the Department of Health (DH), which takes political responsibility for the service. The DH controls ten Strategic Health Authorities (SHAs), which oversee all NHS operations, particularly the Primary Care Trusts, in their area. These are coterminous the nine Government Office Regions for the most part, with the South East region split into South East Coast and South Central SHAs.

There are a number of types of regional NHS trust:

  • NHS primary care trusts (PCTs), which administer primary care and public health. On 1 October 2006 the number of PCTs was reduced from 303 to 152 in an attempt to bring services closer together and cut costs. These oversee 29,000 GPs and 18,000 NHS dentists. In addition, they commission acute services from other NHS Trusts and the private sector, provide primary care in their locations, and oversee such matters as primary and secondary prevention, vaccination administration and control of epidemics. PCTs control 80 per cent of the total NHS budget.
  • NHS hospital trusts and NHS foundation trusts administer hospitals, treatment centres and specialist care in around 1,600 NHS hospitals (some trusts run between 2 and 8 different hospital sites)
  • NHS ambulance services trusts
  • NHS care trusts, providing both health and social care services
  • NHS mental health services trusts

Some services are provided at a national level:

  • NHS the primary public-facing NHS website, providing comprehensive official information on services, treatments, conditions, healthy living and current health topics
  • NHS Direct provides telephone and email support services
  • NHS special health authorities provide various types of services

Other National schemes

National schemes have the advantage that the pool or pools tend to be very very large and reflective of the national population. Health care costs, which tend to be high at certain stages in life such as during pregnancy and childbirth and especially in the last few years of life can be paid into the pool over a lifetime and be higher when earnings capacity is greatest to meet costs incurred at times when earnings capacity is low or non existent. This differs from the private insurance schemes that operate in some countries which tend to price insurance year on year according to health risks such as age, family history, previous illnesses, and height/weight ratios. Thus some people tend to have to pay more for their health insurance when they are sick and/or are least able to afford it. These factors are not taken into consideration in NHI schemes. In private schemes in competitve insurance markets, these activities by insurance companies tend to act against the the basic principles of insurance which is group solidarity.

Some countries implement national health insurance by legislation requiring compulsory contributions to competing insurance funds. These funds (which may be run by public bodies, private for-profit companies, or private non-profit companies), must provide a minimum standard of coverage and are not allowed to discriminate between patients by charging different rates according to age, occupation, or previous health status. To protect the interest of both patients and insurance companies, the government establishes an equalization pool to spread risks between the various funds. The government may also contribute to the equalization pool as a form of health care subsidy.

Other countries are largely funded by contributions by employers and employees to sickness funds. With these programs, funds do not come from the government, and neither from direct private payments. This system operates in countries such as Germany and Belgium. These countries have so-called social health insurance systems, characterized by the presence of sickness funds, which can be based on professional, regional, religious, or political affiliation. Usually characterization is a matter of degree: systems are mixes of these three sources of funds (private, employer-employee contributions, and national/sub-national taxes). These funds are usually not for profit institutions run solely for the benefit of their members.

In addition to direct medical costs, some national insurance plans also provide compensation for loss of work due to ill-health, or may be part of wider social insurance plans covering things such as pensions, unemployment, occupational retraining, and financial support for students.

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