Macpherson N (2016). In New Zealand, co-payments are required for most GP services and some nursing services provided in GP clinics. The NHS is mainly funded from general taxation and National Insurance contributions. Costing of Health Services for Provider Payment: A Practical Manual Based on Country Costing Challenges, Trade-offs, and Solutions. Individuals (or employers on their behalf) take out health care insurance policies from private organisations. Hello I am from England originally, brought over to the US as a child. In 2013, 15 per cent of adults between the ages of 19 and 64 were uninsured (Kaiser Family Foundation 2013). Beveridge systems, where public financing and health care delivery are handled within one tax-financed structure, such as the National Health Service (NHS) in the UK and in some Nordic states. Tax-based financing for health systems: options and experiences [online]. 2 Main mechanisms of health care financing 3 Government funding 3 Health insurance 3 Mandatory health insurance 3 Voluntary health insurance 3 Out-of-pocket payments 4 3 Assessing financing mechanisms 5 Feasibility 5 Equity 5 Efficiency 6 Sustainability 6 4 Key functions of health care financing 7 Revenue collection 8 Sources of funds 9 One example is the vehicle excise duty, which was introduced in 1889 to fund the upkeep of roads but was never spent in full and was often raided for other purposes before being wound up in 1936. introducing these taxes for one public service may add pressure to do the same in other areas of spending, or lead to people wanting to ‘opt out’ of the tax (for example if they are not using a service). NHS England (2014). Also, in the United States, the percentage of gross domestic product (GDP) spent on health care is substantially higher than that in any other nation. This model tends to incur high management and administrative costs due to the resource required to assess risk, set premiums, design benefit packages and assess claims. 13881 March 2008 JEL No. Paris: OECD. This concept of direct exchange between the buyer and the seller is not repudiated by the existence of credit. Available at: (accessed on 8 March 2017). They tend to decline as a share of the total as country income rises and new types of financing mechanisms, such as social and private insurance as well as increased government spending substitute for out of pocket spending. LaingBuisson (2017). Specifically, our analysis started with the concept of health-financing mechanism by McIntyre and Kutzin (2016) as a guide for selecting themes. Often these exemptions apply to people on lower incomes, children or older people, or people with long-term conditions or a disability. London: The King’s Fund. ‘What if people had to pay £10 to see a GP?’ Article. The exemptions in place resulted in 90 per cent of all prescription items in England being dispensed free of charge last year (Health and Social Care Information Centre 2016). A person who wants to buy an automobile pays the dealer for the car. This form of PHI provides coverage for health services that are excluded from government/social insurance schemes. If public spending were constrained by tax receipts, budget deficits would be either impossible or denominated in foreign currency. This content relates to the following topics: Part of Health Care Financing, Efficiency, and Equity Sherry A. Glied NBER Working Paper No. financial strategy will be heavily mediated by the quality of local relationships. For the sake of simplicity, we have limited this analysis to health care; however, it is important to note that most countries face similar challenges in funding social care. Sources: Commission on the Future of Health and Social Care in England 2014a, 2014b; Seely 2011. Introducing these exemptions makes the administration of schemes more complex, and will limit the money such charges can raise. There are trade-offs inherent within all health financing strategies. Health systems in transition, vol 15, no 1. Health financing refers to how financial resources are used to ensure that the health system can adequately cover the collective health needs of every person.1  It is a foundational component that impacts the entire health system’s performance, including the delivery and accessibility of primary health care. Lessons from the RAND health insurance experiment. Available at: med.pdf (accessed on 3 March 2017). As the OECD concluded, ‘There is no health care system that performs systematically better in delivering cost-effective health care’ (OECD 2010). The 2030 Agenda for Sustainable Development emphasizes the importance of achieving universal health coverage (UHC) in reaching its third goal, to ensure healthy lives and promote well-being for all at all ages (United Nations, 2015). This preference is due to the inadequacies of the out-of-pocket model in many low- and middle-income countries such as Nigeria. A basic characteristic of health care systems in all developed countries is that the majority of payments for medical services flows through third parties. Ensuring equity and universal access based on clinical need is a principal objective of SHI systems, and a major benefit is that payment is not related to risk. Mossialos E, Dixon A, Figueras J, Kutzin J (eds.) Finally, in some countries, people are permitted to opt out of government health coverage or statutory social insurance schemes and purchase PHI as an alternative. 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