When taxation is the primary means of financing health care, everyone receives the same level of coverage regardless of their ability to pay, their level of taxation, or risk factors..
In compulsory insurance models, healthcare is financed through a "sickness fund", which can receive income from a number of places such as employees' salary deductions, employers' contributions, or top-ups from the state.
Most developed countries currently have partially or fully publicly funded health systems. For some examples, see the United Kingdom's National Health Service (NHS), or the Medicare systems in Canada and in Australia. In the United States, the role of the government in healthcare provision is a source of continued and sharp debate. According to the Institute of Medicine at the National Academy of Sciences, the United States is the only wealthy, industrialized nation that does not provide universal health care.
Even among these countries, different approaches exist to the funding and provision of medical services. Systems may be funded from general government revenues (as in the United Kingdom and Canada), or through a government social security system (as in France, Belgium, Japan, and Germany) with a separate budget and hypothecated taxes. The proportion of the cost of care covered also differs: in Canada, all hospital care is paid for by the government, while in Japan patients must pay 10 to 30% of the cost of a hospital stay. Services provided by public systems vary. For example, the Belgian government pays the bulk of the fees for dental and eye care, while the Australian government covers only eye care.
Publicly funded medicine may be administered and provided by the government, as in the United Kingdom; in some systems, though, medicine is publicly funded but most health providers are private entities, as in Canada. The organization providing public health insurance is not necessarily a public administration, and its budget may be isolated from the main state budget. Some systems do not provide universal healthcare, or restrict coverage to public health facilities. Some countries, such as Germany, have multiple public insurance organizations linked by a common legal framework.
Innovations in health care can be very expensive. Population aging generally implies more health care, at a time when the taxed working population decreases.
Almost every country that has a publicly funded health care system also has a parallel private system, generally catering to private insurance holders. While one goal of public systems is to provide equal service to all, this egalitarianism is often partial. Every nation either has parallel private providers or its citizens are free to travel to a nation that does, so there is effectively a two-tier healthcare system that reduces the equality of service.
From the inception of the NHS model (1948), public hospitals in the United Kingdom have included "amenity beds" which would typically be siderooms fitted more comfortably, and private wards in some hospitals where for a fee more amenities are provided. These are predominantly used for surgical treatment, and operations are generally carried out in the same operating theatres as NHS work and by the same personnel. These amenity beds do not exist in other publicly funded systems, such as in Spain. From time to time, the NHS pays for private hospitals (arranged hospitals) to take on surgical cases for which NHS facilities do not have sufficient capacity. This work is usually, but not always, done by the same doctors in private hospitals.
Supporters of publicly funded health care claim that publicly funded health care has several advantages over free market provisions.
According to a 2000 study of the World Health Organization, publicly funded systems of industrial nations spend less on health care, both as a percentage of their GDP and per capita, and enjoy superior population-based health care outcomes. However, conservative commentators have criticized the WHO's comparison method for being biased; the WHO study marked down countries for having private or fee-paying health treatment and rated countries by comparison to their expected health care performance, rather than objectively comparing quality of care.
Overall, Canadians are quite satisfied with the quality of health care they receive. In a regularly conducted opinion poll, 70% of Canadians reported that they were either very satisfied or somewhat satisfied with the quality of care they receive compared to 30% being somewhat dissatisfied or very dissatisfied. The main factor of dissatisfaction is waiting times. A 2006 study by Nadeen Esmail and Michael Walker of the Fraser Institute found that Canadians are more likely than citizens of most other developed countries to experience long waiting lists for medical care, and that access to doctors is comparatively difficult; the study criticized the Canadian model of universal health care.
Public health care varies significantly from country to country. Many countries allow for private medicine in addition to the public health care system. Some countries, e.g. Norway, have more doctors per capita than the United States. Also, the US does not have any official record for waiting lists, but a 2005 survey by the Commonwealth Fund of sick adults in six nations found that only 47% of US patients could get a same- or next-day appointment for a medical problem, worse than every other country except Canada.
Another possible criticism of publicly-funded systems cites the fairness of paying for people's poor individual decisions (smoking, drinking, taking drugs, etc.) as they relate to health care costs. It is argued that these costs should be incurred solely by those making those poor decisions. Some American commentators have opposed publicly-funded health systems on ideological grounds, as they argue that public health care is a step towards socialism and involves extension of state power and reduction of individual freedom.
The cost and quality of care in the United States are frequently the two major issues of discussion. The United States performs worse than the average developed country in health measures such as infant mortality , maternal death, and life expectancy , although some studies claim the data collected regarding infant mortality and life expectancy do not lend themselves to fair comparison. Access to advanced medical treatments and technologies is greater than in most other developed nations and waiting times may be substantially shorter for treatment by specialists.
The United States does spend more on health care, as an absolute dollar amount and per capita, than any other nation. It also spends a greater fraction of its national budget on health care than Canada, Germany, France, or Japan. In 2004 the United States spent $6,102USD per person on health care, 92.7% more than any other G7 country, and 19.9% more than Luxembourg, which, after the US, had the highest spending in the OECD. Risk factors specific to the US population, such as a relatively high prevalence of obesity, may partially explain increased health care spending; however, many other industrialized nations do share these problems to some extent. Although the US Medicare coverage of prescription drugs began in 2006, most patented prescription drugs are significantly more costly in the US than in most other countries. Factors involved are the absence of U. S. government price controls, enforcement of intellectual property rights limiting the availability of generic drugs until after patent expiration, and the monopoly purchasing power seen in national single-payer systems . Some US citizens obtain their medications, directly or indirectly, from foreign sources, to take advantage of lower prices.
The United States system already has substantial public components. Of every dollar spent on health care in the US, 45 cents comes from some level of government. The federal Medicare program covers the elderly and people with disabilities, the federal-state Medicaid program provides coverage to the poor, the State Children's Health Insurance Program (SCHIP) extends coverage to low-income families with children, merchant seamen are covered by the Public Health System, and retired railway workers and military veterans are also covered by the government. Government also affects private sector medicine through licensing and regulatory barriers to entry into health professions.
Various health care analysts have asserted that market failure occurs in health care markets, but some have suggested that it is a result of too much government involvement rather than too little.
The consumers of health care often lack basic information compared to the medical professionals they buy it from, and fully informed choices (particularly in emergencies) are often not plausible. Meanwhile, health insurance companies and care providers also suffer from information asymmetry, as patients are almost always more aware of their particular family histories and risky behaviors than the firms are. Price theory dictates that the risk cost associated with this lack of information gets passed on to consumers. Demand is likely to be inelastic. The medical profession potentially may set rates that are well above ideal market value, and they are controlled by licensing requirements, with some degree of monopoly or oligopoly control over prices. Monopolies are made more likely by the variety of specialists and the importance of geographic proximity. Private insurance has been perhaps the only stabilizing force as they pay a contractually fixed cost for a given procedure. With no more than one or two heart specialists or brain surgeons to choose from, competition for patients between such experts is limited so contractually pre-arranged pricing helps reduce supply-limited pricing.
There is much conflicting information about the role of preventive medicine in controlling medical costs and improving the health of citizens. Advocates of publicly funded medicine claim that preventive care saves money and prolongs life, but opponents assert that it does neither.