Economic Perspective: Alternative Healthcare Models

MARY WALDEN:

“Today’s program looks at alternative healthcare models. Mike, healthcare is still a major issue in the country. With the candidates already emerging for the 2020 presidential election, there’s been an increased discussion on how healthcare should be provided. What are the alternatives?”

MIKE WALDEN:

“Well if you look around the world there are about four basic models that governments use to deliver healthcare to their citizens. The first is a private system. This is where we have private providers. We have private decisions made by consumers, and for the most part those consumers purchase their own healthcare, health insurance or maybe it’s provided as a benefit through their employers. The government may get involved, and in fact, in the U.S. the government does get involved in helping low-income people get healthcare as well as supporting senior citizens. But it’s fundamentally a private system.”

“The second system is what’s called a single payer, and some have called this Medicare for All. This is where the provision of healthcare is still in private hands. You have privately operated hospitals. You have private doctors working for themselves, et cetera, except that now the government pays for health insurance for everyone. And this is what some in our country want to move to.”

“The question here is, and this has already been raised, would that mean there would be no private insurance? And in a pure version of this there would be no private insurance although you could have a mix.”

“The third system is a private system like we essentially have in the U.S., but the government imposes price controls or price regulations. And some favor going to this system especially in terms of prescription drugs.”

“And the last version is probably the biggest in terms of the impact of governments, and this is a national healthcare system like they have in the United Kingdom where virtually the government controls everything. That is the providers, the hospitals, the doctors, the nurses, they’re all government employees just like people in the post office. The government pays for everything. If you have healthcare problem and you’re a citizen you just show up, and everything is taken care of.”

“There are potentially some issues there, but that is the model. So these are really the four versions of healthcare delivery systems that we can choose from.”

Mike Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.