1. Introduction to Health Systems
The country with the best health system is…

2. Outline What is a health system? Comparing systems around the world
The medical care triad
Issues in medical systems

3. What is a health system? World Health Organization
A health system consists of all organizations, people and actions whose primary intent is to promote, restore or maintain health.
This includes efforts to influence determinants of health as well as more direct health-improving activities.

4. Functions, Performance, and Impact
Does health care uphold our values as society?
Both level and distribution

5. Layers of a Health System
Social interventions (education)
Other health interventions (cigarettes, motor vehicle safety)
Medical care

6. The Structure of a Medical System

7. The Continuum of ‘Horizontal’ and ‘Vertical’ Programs

8. An example of a vertical health programs
Supervision
Program
Supervision
Program
Supervision
Program
Supervision
Maternal
Health
Child Health
Tuber-culosis
HIV/
AIDS
Local Health Center

9. An Example of an Integrated Medical System

10. Example: India vs. the US
Public sector
Hospitals (excellent academic hospitals  small community health centers)
Great but hard to access
Waiting lines
Absenteeism
Private sector
Some legit but lots of untrained and unregistered practitioners
Short visits and very high rate of Rx prescriptions
Much of it is a waste of money
United States
Most of population is insured (increasingly so)
Public and private (employer-based)
High cost sharing inhibits use even for insured
Provision is almost entirely private
High quality but not coordinated
Efficiency suffers

11. Health care resources: Dollars
US is 1/7 of world health spending

12. Health care resources: People
Physicians: average = 14 / 10,000
24 MDs/10,000
.1 MD/10,000

13. Nurses & midwifes per 10,000

14. The Economics of Medical Systems

15. Most Markets Buyer (patient) Seller (provider) Goods Money
QR24, Fall 2005, Lecture 10
Most Markets
Buyer (patient)
Seller (provider)
Goods
Money

16. The Medical Care Triad Insurer Patient Provider
QR24, Fall 2005, Lecture 10
The Medical Care Triad
Insurer
Patient
Provider

17. Why Involve Insurance Risk Help with management
Medical spending is large and unpredictable
Help with management
Advice about what to get,
where to get it, who to do it
In some cases, insurance
is informal (e.g., family
or village)

18. Distribution of Medical Spending

19. Functions of a Medical Care System
QR24, Fall 2005, Lecture 10
Functions of a Medical Care System
Insurer
Revenue collection (Get money from people to insurers)
Payment rules
(Determine how providers are paid)
Patient
Provider
Access rules
(Determine what providers people are allowed to see.)

20. Methods of funding medical care
QR24, Fall 2009
Methods of funding medical care
General taxation 
Private health insurance
Out-of-pocket payments
Charity

21. Tax and insurance systems are fundamentally similar$
Tax, or insurance premium net of subsidy
Avg medical costs
$6,000
What people earn

22. Importance of Different Financing Methods by National Income

23. Out of Pocket Spending

24. Premiums (private) and
US v. Canada
Revenue collection
Premiums (private) and
taxes (public)
Taxes
Coverage
~10% uninsured
Universal coverage

25. Ways to Pay Doctors (Or Anyone Else)
QR24, Fall 2005, Lecture 10
Ways to Pay Doctors (Or Anyone Else)
Degree to which reimbursement reflects costs
(pay for costs) (fixed pay)
Fee-for- Salary Capitation
Service (FFS)
Salary with
bonus

26. US v. Canada Revenue collection Premiums (private) and taxes (public)
Coverage
~10% uninsured
Universal coverage
Payment
Payment per service (FFS);
Salary or capitation (HMOs)
Payment per service (FFS)

27. Access Rules
All goods, everywhere, are rationed. The question is how, and how well is it done.
Very big differences across countries.
US used demand-side rationing (at least historically); other countries used
supply-side rationing.

28. Access Rules “Micro” rules “Demand-side” (applies to patient)
QR24, Fall 2005, Lecture 10
Access Rules
“Micro” rules
“Demand-side” (applies to patient)
The price the patient pays is low or high
Services may be covered or not (Rx drugs)
“Supply-side” (applies to MD)
Need permission to see a specialist?
Are physicians paid for doing things?
“Macro” rules
“Supply-side”: Is access to technology constrained?

29. US v. Canada Revenue collection Premiums (private) and taxes (public)
Coverage
~10% uninsured
Universal coverage
Payment
Payment per service (FFS);
Salary (HMOs)
Payment per service (FFS)
Access
- Micro
Cost sharing (FFS);
Utilization review (HMO)
Few
- Macro
Supply limits

30. Differing Perceptions of Health Systems

31. An Overall Ranking (?) – World Health Organization, 2000
France
Italy
San Marino
Andorra
Malta
Singapore
Spain
Oman
Austria
Japan
Denmark
Dominica
Costa Rica US
Slovenia
Cuba
Brunei

32. Issues in Medical Systems

33. Health Around the World
Developing countries
Developed countries
Combatting infectious diseases (HIV/AIDS)
Dealing with incipient chronic diseases (mental health impairment, obesity, smoking)
Developing a health system
Balancing cost, quality, and access
The mismatch between what can be done and what should be done.
Reforming the health system