Decentralization in Healthcare: Rationale & Benefits

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  • 0:00 Background on Decentralization
  • 1:00 Decentralization in Healthcare
  • 1:57 Rationale and Benefits
  • 2:55 Lesson Summary
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Lesson Transcript
Instructor: Dan Washmuth

Dan has taught college Nutrition, Anatomy, Physiology, and Sports Nutrition courses and has a master's degree in Dietetics & Nutrition.

What is decentralization in healthcare? What are the benefits to this type of system? Check out this lesson for the answers to these questions and much more.

Background on Decentralization

Brenda and Megan are both 45-year-old women. Brenda lives in a small, rural town in Oklahoma, while Megan lives in the heart of downtown Atlanta. Due to these two women living in different communities and environments, their ways of life are significantly different. Brenda lives a very slow-paced life, while Megan is constantly caught up in the fast pace of living in a large and busy city. What they eat, how they commute, what they do for fun is drastically different due to where they live.

Which of the following scenarios do you think would be best for these two women in regard to their healthcare?

  1. The national government making healthcare policies that must be followed by both of these women
  2. The local governments for each of these women making their own healthcare policies

If you chose number 2, then you believe that decentralization in healthcare would be more beneficial than a centralized healthcare system.

Decentralization in Healthcare

Centralization in healthcare is a system in which the federal government makes healthcare decisions that must be followed by the entire country. Under a centralized healthcare system, government leaders in Washington, D.C., determine national policies in healthcare that must be followed by all 50 states.

Take the example from the beginning of this lesson. A centralized healthcare system would mean that the federal government would make healthcare decisions that apply to both Brenda and Megan, even though their specific healthcare needs differ drastically because of where they live.

Decentralization in healthcare refers to a system in which most decisions in healthcare are handled by lower levels of government. Instead of the federal government making all healthcare decisions, local governments will make healthcare decisions for the people in their immediate area. Therefore, healthcare decisions for Brenda and Megan will be made by the level of government that knows their healthcare needs the best: their local government.

Rationale and Benefits

As it was just explained, the rationale of decentralization in healthcare functions under the idea that allowing the lower levels of government to control their own healthcare decisions will create systems that better meet the specific needs of their people.

There are several hypothetical benefits to this type of healthcare system, including:

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