Healthcare Systems Around the World

There are many philosophies shaping healthcare services around the world, and this article glances at some prominent examples. This may help understand why different countries experience healthcare differently.

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Healthcare in the USA

The USA does not have a universal, free healthcare program, unlike most other developed countries. Instead, in line with the free-market-virtue mindset, most Americans are served by a mix of publicly and privately funded programs and healthcare systems.

Most hospitals and clinics are privately owned, with about 60% being non-profits, and another fifth being for-profit facilities. Coverage by federal and state programs is partial, and most insured Americans have employment-based private insurance.

Group plans funded by the employer cover about 150 million Americans.

Private insurance

These include health maintenance organizations (HMOs), which are networks of providers. Insured patients see a primary care physician (PCP), whose refers them to a specialist if necessary.

A more popular option is to use preferred provider organizations (PPOs), which allow patients to see external providers, choose their PCPs, and see a specialist without a PCP referral provided the former is willing.

These are now used by over 55% of insured employees, compared to 25% in HMOs or point-of-service (POS) plans.

With POS plans, patients must have a PCP in the provider network, but can go out of the network for a fee.

Federal insurance

The Indian Health Services and Veteran Health Administration provide care for Native Americans and military veterans, respectively. The Military Health System, operated by the Department of Defense, provides paid care to serving military personnel.

Publicly funded insurance

Public spending accounts for at least half of all healthcare expenditure, while third-party payers pay only 27%.

About a third of the population is covered by three publicly funded programs – Medicare, for people above 65 years and some disabled people, Medicaid, for those living in poverty. and the Children’s Health Insurance programs, which cover children from families that are not eligible for Medicaid, at above 300 percent of the Federal Poverty Level (FPL).

The ACA act of 2010 (“Obamacare’), which was enacted in 2010, revamped health insurance. It created health insurance marketplaces, which cover about 17 million Americans. However, these plans are often small, exclusive, and restricted in provider choice.

At the same time, the expansion of Medicaid under the ACA act has possibly saved many lives at less than $900,000 per life saved, vs $7.6 million under other public insurance plans.

The good and the bad

Among 11 high-income countries, the US healthcare system is the most expensive, with 17% of the GDP being spent on healthcare in 2018. Many American health indicators far surpass world standards.

Its rate of specialized scans (computerized tomography – CT – and MRI) – are among the highest in the world, at double the OECD average. So is its utilization of hip replacements, influenza vaccines, and breast cancer screenings.

However, among developed countries, the American system is among the least accessible, efficient and equitable.  The number of physicians, and rate of physician visits, is among the lowest. Ethnic and disadvantaged social groups suffer massive inequalities.

About 14% of Americans (over 27 million) were uninsured against illness at the end of 2018, causing an estimated 60,000 avoidable deaths. High medical costs have led to bankruptcy for a fourth of senior citizens, says an earlier study.

Preventable and lifestyle conditions such as obesity, hypertension and diabetes are rampant: this indicates poor access to primary care and primary prevention of disease, compared to its peers.

Meanwhile, US suicide rates are highest among all members of the Organization for Economic Co-operation and Development (OECD).

Overall, the US healthcare system allows providers to inflate prices and expensive services, but poorly compensates essential services such as primary care and behavioral advice. It also draws healthcare services away from rural and poor communities.

Nonetheless, the US leads in medical innovation, boasting many of the world’s leading hospitals. For those who can pay, it provides high-quality care.

COVID-19 response

Even though the US healthcare system serves 4% of the world’s population, a quarter of global COVID-19 cases and a fifth of global COVID-19 deaths occurred here. The reasons are not primarily related to the healthcare system, however.

Rather, they include a disjointed, reluctant and often contradictory public health response to the pandemic, driven by political apathy toward the virus threat.

There is no central command and control for healthcare in the country: this obstructs infection spread control.

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UK healthcare system

The UK healthcare system covers the whole population via the National Health System (NHS), which is 79% publicly financed from taxes, and operated by the Department of Health. About 20% is paid for by national insurance, and private patients and copayments make up the rest.

NHS England supervises and funds local Clinical Commissioning Groups. These provide comprehensive care, including preventive screening programs and vaccinations, inpatient and outpatient care in hospitals, maternity care, mental health care and palliative care.

Like the USA, the UK has public, private profit and nonprofit hospitals. The first type is operated as hospital trusts or foundation trusts, in three tiers: community hospitals, district hospitals, and regional-level hospitals. Dedicated hospitals offer specialized treatment.

General practitioners (GPs) offer primary care to locals through their practices. Many such practices are overtaxed: one alternative is registration-free walk-in centers. GPs refer patients as necessary for secondary care.

All residents of England, as well as anyone with a European Health Insurance Card, are entitled to NHS care: primary care is mostly free. Others receive emergency or infection-selective treatment.

Patients in the NHS can choose a hospital and specialist. Currently, 12% of the population also opts for private health insurance, mainly to avoid the waiting period for elective care, to have a choice of specialists, and better facilities.

Private hospitals typically offer specialized treatments, such as bariatric surgery, and do not offer trauma care, emergency services or intensive care.

The UK spends about a tenth of its GDP on healthcare, with almost 80% being spent on the NHS.

Unlike the American healthcare system, the NHS’s administrative spending is only 16% of healthcare costs.

The good and the bad

Universal free healthcare is widely considered to be good for the country, health-wise as well as economically.

The UK NHS provides free healthcare for all and higher life expectancy than in the USA, at half the cost. Patient satisfaction is relatively high, at 61%, compared to 29% in the US.

Taxes for healthcare may appear higher but are actually equivalent to the total medical expenses in the US. Moreover, drugs are cheaper, and there are no surprise medical costs.

Austerity cuts have led to a reluctance to recruit staff and to upgrade equipment, which may eventually affect the quality of care. Waiting times for consultations and surgeries are long.

A third issue is health tourism, where non-residents exploit the NHS to get high-quality medical care at a lower cost than is available where they live, but without a corresponding contribution through taxes.

Ethnic minorities and the poor face inequality in the healthcare system. Social care measures need to be implemented.

COVID-19 response

When the pandemic hit the UK, the government built seven temporary hospitals to cope with the sudden demand.

Case finding, contact tracing and isolation were woefully inadequate, allowing community spread to occur and forcing local authorities to take over.

Routine medical care was affected by the pandemic. Patients avoided the emergency department for fear of infection. At least 160,000 patients waited a year for diagnoses, vs the standard 18 weeks. Restoration of this standard may take years.

Mental health care, already pressured, is under massively increased stress, with an estimated 10 million new patients influenced by the pandemic.

Many staff were infected or exposed to infection: to compensate, others have been asked to forego or limit planned leave.

The new spike of cases in 2021 has caused more hospitalizations than at the peak in 2020. Additionally, the NHS is required to ensure vaccination of the whole country. Thirdly, it has to arrange long-term follow-up services for people with long COVID.

In order to restructure the NHS to meet all these needs, three areas must be prioritized – capacity, resources and public health.

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Healthcare in the European Union

Each country in the EU has its own healthcare system. However, EU members generally share the same goal as the UK model.

All healthcare systems in Europe automatically include all citizens irrespective of paying capacity. Secondly, all are mostly funded by taxes paid by the employer and by the public. Healthcare is free, except for some elective and specialist services.

Three models

There are fundamentally three models at work within the EU: single-payer, socialized, and privatized-regulated.

In a single-payer system, the government provides universal insurance or coverage, but the actual care is by private practices and hospitals.

Individuals may opt for additional private insurance to cover services that are not covered by public healthcare, but not for those already available. The payment for such providers may be fee-for-service, or capitation, based on the number of patients enrolled.

More recently, lump-sum payments have been adopted to cover all services per year per person enrolled. However, fee-for-service tends to encourage excessive use of manpower and capital resources.

Hospital funds are allocated as diagnosis-related groups (DRGs), per-diem, or as lump-sum payments for all services.

The socialized system is one where the government both provides insurance and runs the hospitals. It is thus the only health insurance provider. The NHS is a version of this model, which is also used in France, Italy, Norway and Sweden.

Patients may opt for supplemental private insurance, to get services not supplied within the public health service, or to see doctors not employed by this service.

France, cited by some as having among the best healthcare systems in the world, has a significant private healthcare system as well as statutory health insurance, offering a wide choice of coverage.

However, recent amendments to the law made it mandatory for employees to pay half of the insurance sponsored by their employers. This is especially so for dental and vision expenses, not covered by the state health insurance.

This system strongly resembles the American Medicare, Medicaid and Veteran Affairs schemes.

The privatized but regulated healthcare systems within the EU are exemplified by Germany. Here, though all citizens earning below a threshold must take health insurance, their unemployed spouses and dependents are also covered without any extra cost.

Above this threshold, employees may buy private insurance. However, other than self-employed and government servants, most people prefer not to.  

In Switzerland and the Netherlands, health insurance is mandatory and provided exclusively by private providers. The government subsidizes the premiums through taxes, making it possible for even low-earning citizens to afford health insurance.

All insurers are legally required to accept any applicant. This costs the patient much less than it would in the US,  the system is easier to navigate, and the coinsurance is capped at a reasonable ceiling.

Thus, European healthcare provides primary and some secondary medical care, with some places allowing private companies to sponsor more insurance for their employees.

Privatized programs allow for specialized care, cut down the waiting time for a procedure, or expand the patient’s choices.

The EU average for healthcare expenditure is about 8% of the GDP, but Cyprus and Latvia are at 3.5%, with other East European nations at 5%. Public spending in this sector typically makes up about 15% of the total government budget.

The good and the bad

Most EU members enjoy the approval of the majority of their people for their healthcare systems, with less than 5% of people in four-fifths of European countries reporting unmet needs.

National health systems tend to control costs better. The introduction of internal markets may increase the healthcare economy and efficiency.

Nonetheless, funding pressures are likely to go up as patients expect more advanced treatments and as technology develops. The graying of Europe may impede fund flows to these programs, given that about 70% of the funding comes from the public sector in most countries.

At the same time, aging is associated with different patterns of disease, typically conditions that are both preventable and care-intensive. As age increases, however, social welfare tends to absorb more of the costs.

Audits of spending efficiency will be crucial to enhancing the spending power of each euro. “The OECD estimates that one fifth of health expenditure makes little or no contribution to improving people's health.”

Inequalities in health status and inequity in healthcare finance and delivery continue to plague the system in many EU nations.

COVID-19 response

While many countries set up smoothly functioning mechanisms to deal with the emerging pandemic,  the EU was, generally, unprepared. The stockpiles of equipment, medicines and ventilators were inadequate in many places.

This hampered these countries from buying testing kits and setting up contact tracing, for example, early in the pandemic, which further slowed down virus containment efforts.

Crisis management plans fell short of reality, forcing healthcare staff to improvise and innovate, as well as overwork, to compensate. The need to share resources, and hospital capacity, internationally, could also be significant.

Thus, logistics, preparedness, coordination, and continuing with routine healthcare, are areas that need future improvement.

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Healthcare systems in Asia

Asian healthcare systems are a mélange of public and privately managed programs.

Singapore

Singapore uses the 3Ms system: a public statutory insurance system, MediShield Life for large hospital bills, and some high-end outpatient treatments as well, but not primary care, or specialist care at the outpatient level.

The premiums are subsidized to help even low-earning people to pay them, and working-age people pay more to allow older people to enjoy lower premiums.

A compulsory national health savings account called MediSave helps pay for hospital care and some outpatient treatments. MediFund is a social welfare program for poor citizens who cannot pay for out-of-pocket expenses even with MediSave.

Thus, the government, healthcare providers, and patients all share the responsibility for healthcare coverage – a multipayer financing system. While competition and market forces enhance the quality of healthcare, the government strictly regulates the costs when they begin to rise beyond affordable rates.

The Ministry of Health also plans for workforce strength, training and land allotment for healthcare facilities, along with preventive health interventions. The system’s centralized nature keeps administrative costs low and simplifies procedures.  

Singapore spends about 4.5% of its GDP on healthcare, about 40% by the government, with 30% being out-of-pocket expenses.

China

China has almost universal publicly funded medical insurance, with urban employees enrolled in employment-based programs. Others enroll voluntarily, for basic subsidized medical insurance. Comprehensive healthcare is covered, but deductibles and copayments apply. There is also a ceiling on reimbursement.

For-profit private insurance is also available for services not covered by public insurance. Patients share costs for physician visits, inpatient care and prescription drugs, which are uncapped.

China spends about 6.6% of its GDP on healthcare, with 28% being funded by central and local governments, 28% out-of-pocket, and 44% by public or private insurance, and social health donations. These form part of a medical assistance program for the poor.

Wide inequalities in public health services have been reported. Most residents feel that their insurance is as helpful, at least, as the basic public health services.

India

India provides universal free outpatient and inpatient care at government clinics and hospitals. States are in charge of organizing their healthcare services.

However, government facilities are notoriously understaffed and ill-equipped, so that most people pay out-of-pocket for private healthcare. The National Health Protection Scheme (Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana, or PM-JAY) was recently launched to attempt to address this: it supersedes the earlier under-performing National Health Insurance Program (Rashtriya Swasthya Bima Yojana, or RSBY).

The PM-JAY program is financed by taxes and enables free secondary and tertiary care at private hospitals. PM-JAY envisages grassroots Health and Wellness Centers while providing cashless hospital care for the 40% of people (approximately 100 million) who live below the poverty line.

Government workers and most formal employees have their own health insurance schemes. A few private health insurance providers also exist, with limited uptake. Less than 40% of Indians are insured.

The situation is worsened by the poor quality of public healthcare services and the shortage of doctors and equipment. Corruption, as in many developing countries, along with accessibility issues, exacerbates these drawbacks.

India spends less than 4% of its GDP on healthcare, with a quarter being funded by the public sector. Out-of-pocket payments at private hospitals make up 75% of the total expenditure, in stark contrast to other poor countries.

COVID-19 response

The overall strategy in east Asia’s advanced economies was to suppress the spread of the virus using conventional containment measures.

Careful case tracking, contact tracing, and quarantine helped contain the virus in Singapore, Hong Kong and South Korea, for instance.

Even in less economically advanced countries like India, the Philippines, and Vietnam, public health education and preexisting community values proved useful.

These commonly shared values allowed people to take more easily to non-pharmaceutical interventions (NPIs) such as masking up, staying at home, and social distancing.

In India, the lockdown was a key weapon against the spread of the virus. This was coupled with a ramping up of production of personal protective equipment, ventilators and testing kits.

Yet, extreme and widespread poverty, weak healthcare systems and the high population density make tracking and countering the pandemic a difficult task in India, as in other developing Asian countries.

Healthcare systems in Australia

Australia has a tax-funded universal free public health insurance program, called Medicare. All citizens get free care for public and many physician services and drugs at public hospitals.

About 50% of Australian citizens also take out private insurance to pay for private hospital care or dental care. This is encouraged by the government, and high-income families pay a tax penalty for not buying private insurance.

The total expenditure on healthcare is about 10% of GDP, with 67% being from the public sector. It is jointly run by federal, state and territorial governments, and is among the best in the world.

Pros and cons

While free universal care is an undoubted advantage, funding may be challenging as the population ages, reducing tax inflow. Meanwhile, medical technology costs go up, making it difficult to keep up.

There is a disparity in access and care quality between the non-indigenous and the aboriginal population. Research is not well-aligned with national priorities. Urbanization continues to pose an obstacle to healthy living.

COVID-19 response

The Australian response to the pandemic included building transparency between the government and citizens, to ensure public trust. This in turn resulted in a high level of compliance to lockdowns, masking up and quarantine, as well as rapid testing.

Secondly, the decision-making process was driven by reliable data interpreted by experts and performed in an agile and iterative manner. Both political and public health leaders were seen to be cooperating and trustworthy.

Thirdly, the pandemic response was based on a collaboration across health and economic boundaries. The public health response was both willing and strong, which certainly helped to achieve the goal of virus containment.

This resulted in low mortality and infection rates, as well as a rapidly rebounding economy. Localized outbreaks still occur, and are handled on a crisis level. This has come at the cost of many stranded Australians abroad who cannot return home due to the cap on the number of returning passengers.

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Healthcare systems in South America

While medical services tend to be cheaper here, they are also universal and publicly funded in countries like Chile and Columbia. As a result, medical tourism has boomed in these places.

Healthcare systems have progressed since the time when only employees in the formal labor market received public health insurance, to which employers, employees and government contributed.

The rest of the people relied on fragmentary services by the Ministry of Health, the church, and charitable or philanthropic organizations. The rich had private health care. The poor had almost nothing.

A few examples

Colombia

Colombia is a success story in South American healthcare. It covers almost 97% of its population by mandatory universal health insurance. All citizens have access to the same healthcare services, with only 14% out-of-pocket spending. This is lower than that in many OECD countries.

The health system is financed through taxes and employment insurance and fully subsidizes the poor. Both public and private insurers are involved, and providers also belong to both public and private sectors, with a healthy competition between the two.

The FOSYGA; Solidarity and Guarantee Fund, is based on cross-subsidies between rich and poor, young and old, and healthy vs sick.

Participants may choose their provider within their network, and receive a package of primary care, some inpatient care, and emergency care, as well as inpatient care at tertiary level public hospitals. Eventually, the government hopes to eliminate supply-side subsidies and provide uniform coverage for all.

Performance management, accountability and efficiency need to be improved to build on these gains.

Chile

Chile has statutory health insurance for workers, with no employer or government contribution. The health funds are managed by ISAPREs (Social Security Health Institutions).

The rest of the population is covered by a public fund manager, the National Health Fund (FONASA). These cover healthcare payments.

Brazil

Brazil has a government-run universal comprehensive public health system, funded by taxes at federal, state and municipality level. While the federal contribution is about 43% of total public health expenditure, municipalities contribute almost a third.

The system covers all types of healthcare for all citizens and visitors. However, wait times are unreasonably long at all stages, leading to out-of-pocket spending for basic care, while the delays push up treatment costs.

Drug unavailability leads to out-of-pocket spending. About a quarter of people have private health insurance, typically as an employment benefit.

National health expenditure is about 9% of the GDP. Most hospitals are public.

Costa Rica

Costa Rica also has a successful healthcare system, under a single-payer model that combines social security with the medical services offered by the Ministry of Health. About 86% of the population has access to high-quality comprehensive care, which is delivered free. The rest are able to pay for care.

Argentina

Argentina has a healthcare system whereby insurance is provided and managed chiefly by workers’ unions, while over a third of the population is uninsured and depend on public healthcare.

The good and the bad

South American healthcare systems suffer from poor resources, which are badly distributed to cover some areas. The capacity of the systems is low, and drug shortages are common. Corruption vitiates the process of official appointment and hampers reforms.  

Response to COVID-19

The year of COVID-19 has seen over 21 million cases, and 560,000 deaths in South America, along with severe economic stress. Argentina, with a test positivity rate of 60 percent in October 2020 – the highest in the world - reflects both low testing and poor enforcement of non-pharmaceutical interventions.

Brazil has reported 13 million cases with over 330,000 deaths, with intensely divided political and public health messaging leading to it being one of the hardest-hit countries in the world. It is followed by Colombia, with a steadily increasing infection rate. Chile, meanwhile, has among the worst outbreaks in the world, with 1,500 deaths per million inhabitants.

The health response has been marked by its wide variation, with some countries instituting strict lockdowns, closing borders and eventually rolling out millions of vaccinations, while others have done almost nothing meaningful to prevent border crossing.

Limited resources, non-unified health systems, and poor social care, along with pre-existing unemployment and inequities, have led to a less than desirable response to the pandemic in most of Latin America, impacting the disadvantaged most severely, as expected.

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Healthcare systems in Africa

Sub-Saharan Africa has 13% of the world’s population but carries a fourth of the world’s disease burden. However, it spends only 1% of the global health expenditure.

Three out of four Africans have a per capita income of below $2 a day, and almost half spend less than $1 a day. Universal free healthcare is a right that is agreed to by all but is slow to become a reality.

Most Africans that are either low or middle-income turn to the public health system or to traditional healers. Only a few are able to afford high-quality private care, but nonetheless, out-of-pocket expenditures are bound to be high in this two-tier system.

Private spending accounts for 60% of all payments on healthcare.  However, half of private healthcare expenditure is spent on private providers, and 40% of the lowest-income people in Africa pay for care from for-profit providers.

In Rwanda, national health insurance covers over 90% of the population, whereas less than 9% are covered in other countries.

Ghana has a National Health Insurance Scheme (NHIS), and built a public-private partnership network to reach areas without public health services. Funded through taxation, the NHIS covers most common diseases.

All residents must enroll and pay an annual premium, in return for free care. About a quarter lack any insurance, however. Almost 70% of those insured do not have to pay premiums, and underfunding challenges the working of the scheme.

In Kenya, a similar national health insurance program exists, for salaried employees, and for self-employed if they want to enroll. However, even this cost is inaccessible to most citizens.

So is the case with Tanzania, with its NHIF and CHF, for civil servants who pay 6% of their income, and for indigents and low-income people. In fact, most African countries share this situation, and national free healthcare accessible to those living in poverty is still a pipe dream.

Many countries spend only donor money on healthcare. Many times, international loans intended to improve the healthcare infrastructure had many strings attached. As a result, user fees were imposed on primary care. Drug pricing went up. Preventive and primary care was put out of reach of most low-income Africans.

Medicine became commercialized and privatized, and inequalities became more unequal. Infectious diseases like HIV emerged again. Government spending on health was cut due to required austerity measures.

Vacancies in the public sector increased, worsened by a freeze on recruitment and the flight of health professionals outside Africa. Most physicians went into private practice in urban areas, serving about 15% of the population. Drug shortages were endemic and intractable.

Cumbersome bureaucracy at all levels, inadequate coverage by insurance, low benefits for inpatient care, lack of transparency, and poor accountability, are the chief features of African health systems, in general.

This is worsened by the outflow of doctors to the US and other more lucrative and functional locations, and by ignoring the unique conditions of Africa in favor of western theories and policies. Poor sanitation and potable water facilities contribute greatly to this scenario.

Only six African countries spend 15% of their budgets on healthcare, and these are yet to achieve universal access to reasonable-quality healthcare.

COVID-19 response

African leaders showed solidarity in planning and executing interventions such as cross-border electronic cargo driver test result sharing, to prevent the spread of infections across countries. Lockdowns were implemented along with the closure of borders very early in the course of the spread of the pandemic to Africa.

Case finding, testing, contact tracing and isolation services were set up for free, as well as treatment. Public health education was enthusiastically provided to introduce proven non-pharmaceutical interventions such as masks, hand hygiene and social distancing.

Meanwhile, social support was put in place to support the economically weaker sections of society. Some waived fees on electricity and water and reduced house rents were announced in Ethiopia.

Advanced technology was used in Rwanda, including temperature-taking robots, drones for communication and surveillance, and pooled testing. Governmental transparency has been key to expert-driven decision-making, besides the unity displayed by political and health leaders.

Conclusion

Is there a perfect healthcare system? No, but the features that make for a good one include long-term investments in human resources and infrastructure, and in primary care (as in Israel). A Nordic focus on preventive care to improve population health and build capacity is important.

Public funding to allow the poorest to access healthcare and medication is an excellent model to follow, as in many Commonwealth and EU systems. Patient and community engagement, with an innovative streak, and a rapid response, is essential for maximizing coverage, like Rwanda and India.

Due investment in information technology and in research and development are key to making healthcare systems more accessible and improving health outcomes.

Lastly, attention to aged care, as in Japan, and to mental well-being, a mark of the Australian system, along with providing a choice of providers and services to the patient, seen in France, are fundamental to a healthcare system that follows best practices.

References

Further Reading

Last Updated: Apr 6, 2021

Dr. Liji Thomas

Written by

Dr. Liji Thomas

Dr. Liji Thomas is an OB-GYN, who graduated from the Government Medical College, University of Calicut, Kerala, in 2001. Liji practiced as a full-time consultant in obstetrics/gynecology in a private hospital for a few years following her graduation. She has counseled hundreds of patients facing issues from pregnancy-related problems and infertility, and has been in charge of over 2,000 deliveries, striving always to achieve a normal delivery rather than operative.

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