There are many ways that a healthcare system can operate. The type of system that is best suited for a population may be dependent on many factors, including the population size, demographics, and various other economic, political and cultural considerations as well. 

Here we discuss some potential approaches to healthcare system organization and major considerations in health care reform. In large, because healthcare is a service that is paid for, the specific payment model represents a large consideration in the way the system works. Another big consideration is whether the services are paid for publicly or through private enterprises (like private insurance companies). Additional “middle-men”, such as pharmacy benefit managers (PBMs), health insurance companies, supply manufacturers and distributors, etc. can further complicate both price-setting, health care delivery, and patient outcomes. 

Many different countries have elected vastly different ways to govern health care. Some, like the UK, rely on a more centralized (public) model to deliver care and services, whereas others, like the US have historically relied more on privately funded providers and health services. In many cases, specialized entitlement programs (like Medicare and Medicaid) that are subsidized by the US Government can help specific patient populations gain access to the services they need at an affordable price. Also, although there are federal guidelines, in the US, states can also enact specific legislation to help people living in their state, by having specific state-run programs for the retired and low-income, as well as policy changes, like co-payment caps on state-regulated health plans for prescription medications like insulin. 

To Centralize… Or Not?

Some hail the benefits of a centralized, one-for-all, affordable, publicly-funded health care system (also referred to as a single payer system). After all, affordable and quality health services are a cornerstone of our well-being as a society. One of the biggest concerns brought about by critics is the lack of competition this could create, resulting in potentially fewer available resources (e.g., providers, supplies, services) and poorer quality of care as a result. In addition, this can also translate to longer wait times to receive health care services. 

As many individuals continue to struggle to afford health care in the US and other parts of the world, more people are pushing for a more comprehensive, centralized public health care system that could provide affordable services to more people. 

Current Payment Models Shape Outcomes

A large factor within a healthcare system is what the payment model to the providers looks like. An expert summary by the MMA Work Group to Advance Health Care Reform explains that there are several main models, each with its potential pros and cons. 

The fee-for-service payment system is one where reimbursement to the providers corresponds directly to the specific services rendered. This is the primary model that is used in healthcare models in the US. One major problem with this system is that getting reimbursement for each service or treatment can create a conflict of interest for providers, resulting in the potential to overtreat patients, losing focus on patient wellbeing, including preventative strategies. Also, this may limit comprehensive care for patients, as different providers may be less likely to coordinate care. On the other hand, this model can encourage productivity. It also offers a relatively direct way of reimbursement for various services. 

On the opposite side of the spectrum, capitation, refers to a carefully managed coordination of reimbursement for services. American College of Physicians explains:

“Capitation is a fixed amount of money per patient per unit of time paid in advance to the physician for the delivery of health care services. The actual amount of money paid is determined by the ranges of services that are provided, the number of patients involved, and the period of time during which the services are provided. Capitation rates are developed using local costs and average utilization of services and therefore can vary from one region of the country to another. In many plans, a risk pool is established as a percentage of the capitation payment. Money in this risk pool is withheld from the physician until the end of the fiscal year. If the health plan does well financially, the money is paid to the physician; if the health plan does poorly, the money is kept to pay the deficit expenses.”

This type of model may allow for more flexibility with respect to care delivery, including potentially more innovative and effective services. It may also allow for more collaboration between providers and benefit patients due to potentially shifting more focus to eliciting overall well-being as a goal. On the other hand, setting up this type of system is a complicated and arduous process, and may also limit access for high-risk patients, and possibly reduce patient options, including the providers and services available to them. 

There are multiple variations of coordinated payments within this broad spectrum, and more proposals are continuously being drawn up by various organizations. Some examples include pay-for-coordination, pay for performance, bundled payments, and various forms of comprehensive care.

Importantly experts warn of the potential effects of these systems on patients, as illustrated below –

Opinions Vary

What kind of system will work best to serve the public in a timely manner without sacrificing quality, while also being affordable? The verdict is still out, and there will likely never be a consensus. Lessons learned from different countries, and on a more local level, will likely continue to shape the dialogue and direct (typically slow-moving) policy changes. 

Some feel strongly that universal healthcare is a right, and not a privilege. Others worry that such a system will decrease the quality of services, increase wait times, and thus negatively affect the patients and their health outcomes. Some believe there is no one-size-fits-all, and that specific systems must be driven from the ground up at a very local level. 

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What do you think? How is healthcare organized where you live and do you think it is an effective model? How do you think policy has affected your diabetes-related care? How do we go about effecting significant policy changes, when and where they’re needed?  

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