Health Care Systems: Types & Concept

Lesson Transcript
Instructor: Deborah Teasley

Deborah has 4 years of teaching experience and a master's degree in program development & management.

A health care system is designed to maintain the health of a community, provide services for the ill and injured, and try to reign in costs. Learn about the concept of the health system, and explore various health care models, including the Beveridge and Bismarck models, the national health insurance model, and the out-of-pocket model. Updated: 09/15/2021

Health Care Systems Explained

A health care system is constructed for three reasons. First, the system maintains the health of the community. It also provides services to the sick and wounded. Additionally, it helps curb the costs of expensive medical bills

Currently, we recognize four different types of health care systems. Some countries base their system upon one model, while others choose a combination. The choices they have to choose from include:

  1. The Beveridge Model
  2. The Bismark Model
  3. The National Health Insurance Model
  4. The Out-of-Pocket Model.

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  • 0:01 Health Care Systems Explained
  • 0:32 The Beveridge Model
  • 1:39 The Bismarck Model
  • 2:45 National Health…
  • 4:01 Out-of-Pocket Model
  • 5:05 Lesson Summary
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The Beveridge Model

Kevin lives in Britain and recently got in a car accident. After several weeks in the ICU, he was released but referred to a physical therapist to help him rehabilitate. Upon leaving the hospital, he was not presented with a bill despite the extreme amount of medical care he received. This is because Britain follows the Beveridge Model.

The Beveridge model was created by social reformer, William Beveridge, who designed Britain's National Health System. With this model, the government is responsible for financing and providing health care through taxes. This means that if you are a British citizen and you need to see a doctor for some reason, you won't receive a bill. The reason behind this is that most doctors are government employees. Even the few doctors that are privately owned still collect their payments from the government. Since the funding comes from one source, the government has control over what doctors can charge. As a result, health care systems that follow this model tend to have low costs.

In the United States, the health care that veterans receive closely resembles this model as the government funds it through taxes. Other countries that have implemented this model alongside Great Britain include New Zealand, parts of Scandinavia, Spain, Hong-Kong, and Cuba.

The Bismark Model

Antoine lives in France and works at an accounting firm. He is responsible, along with his employer, for contributing to his insurance policy. He doesn't mind this because it is a relatively low cost and he still receives quality care. No matter what pre-existing conditions he may have, his insurance must take him, no questions asked. This is because France follows the Bismarck Model.

The Bismarck model was named after the Prussian Chancellor, Otto von Bismark, who implemented it during the unification of Germany. The system uses private insurance agencies, also known as sickness funds. They are run as nonprofits and are required to accept all citizens without discrimination. As a result, even though both employees and employers are contributing to an insurance policy, the insurance company is not benefiting financially.

In addition to Germany, France, the Netherlands, Belgium, and Japan have also adopted versions of this model. This model might also be familiar to people living in America because of the use of private insurance agencies. Many Americans receive health insurance through their jobs. The main difference between that and the Bismarck model is that American private insurance companies are for-profit businesses.

The National Health Insurance Model

Min-Ji lives in South Korea and visits the doctor frequently. She was diagnosed with asthma at a young age, and it requires her to take a lot of medicine. Despite having to see a doctor on a regular basis, Min-Ji pays very little for her medical and prescription bills. Additionally, even though asthma is considered a pre-existing condition, it does not affect her insurance payments or policy in any way. This is because South Korea has based their system on the national health insurance model.

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