Financial resources

Providers

Healthcare providers are institutions or individuals providing healthcare services. Individuals including health professionals and allied health professions can be self-employed or working as an employee in a hospital, clinic, or other health care institution, whether government operated, private for-profit, or private not-for-profit (e.g. non-governmental organization). They may also work outside of direct patient care such as in a government health department or other agency, medical laboratory, or health training institution. Examples of health workers are doctors, nurses, midwives, dietitians, paramedics, dentists, medical laboratory technologists, therapists, psychologists, pharmacists, chiropractors, optometrists, community health workers, traditional medicine practitioners, and others.

Financial resources

There are generally five primary methods of funding health systems:
 1.general taxation to the state, county or municipality
 2.national health insurance
 3.voluntary or private health insurance
 4.out-of-pocket payments
 5.donations to charities

Most countries' systems feature a mix of all five models. One study based on data from the OECD concluded that all types of health care finance "are compatible with" an efficient health system. The study also found no relationship between financing and cost control.

The term health insurance is generally used to describe a form of insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a social insurance program, or from private insurance companies. It may be obtained on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers. In each case premiums or taxes protect the insured from high or unexpected health care expenses.

By estimating the overall cost of health care expenses, a routine finance structure (such as a monthly premium or annual tax) can be developed, ensuring that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is typically administered by a government agency, a non-profit health fund or a corporation operating seeking to make a profit.

Many forms of commercial health insurance control their costs by restricting the benefits that are paid by through deductibles, co-payments, coinsurance, policy exclusions, and total coverage limits and will severely restrict or refuse coverage of pre-existing conditions. Many government schemes also have co-payment schemes but exclusions are rare because of political pressure. The larger insurance schemes may also negotiate fees with providers.

Many forms of social insurance schemes control their costs by using the bargaining power of their community they represent to control costs in the health care delivery system. For example, by negotiating drug prices directly with pharmaceutical companies negotiating standard fees with the medical profession, or reducing unnecessary health care costs. Social schemes sometimes feature contributions related to earnings as part of a scheme to deliver universal health care, which may or may not also involve the use of commercial and non-commercial insurers. Essentially the more wealthy pay proportionately more into the scheme to cover the needs of the relatively poor who therefore contribute proportionately less. There are usually caps on the contributions of the wealthy and minimum payments that must be made by the insured (often in the form of a minimum contribution, similar to a deductible in commercial insurance models).

In addition to these traditional health care financing methods, some lower income countries and development partners are also implementing non-traditional or innovative financing mechanisms for scaling up delivery and sustainability of health care,such as micro-contributions, public-private partnerships, and market-based financial transaction taxes. For example, as of June 2011, UNITAID had collected more than one billion dollars from 29 member countries, including several from Africa, through an air ticket solidarity levy to expand access to care and treatment for HIV/AIDS, tuberculosis and malaria in 94 countries.

Payment models

In most countries, wage costs for healthcare practitioners are estimated to represent between 65% and 80% of renewable health system expenditures.There are three ways to pay medical practitioners: fee for service, capitation, and salary. There has been growing interest in blending elements of these systems.

Fee-for-service

Fee-for-service arrangements pay general practitioners (GPs) based on the service. They are even more widely used for specialists working in ambulatory care.

There are two ways to set fee levels:

• By individual practitioners.
• Central negotiations (as in Japan, Germany, Canada and in France) or hybrid model (such as in Australia, France's sector 2, and New Zealand) where GPs can charge extra fees on top of standardized patient reimbursement rates.

Capitation

In capitation payment systems, GPs are paid for each patient on their "list", usually with adjustments for factors such as age and gender. According to OECD, "these systems are used in Italy (with some fees), in all four countries of the United Kingdom (with some fees and allowances for specific services), Austria (with fees for specific services), Denmark (one third of income with remainder fee for service), Ireland (since 1989), the Netherlands (fee-for-service for privately insured patients and public employees) and Sweden (from 1994). Capitation payments have become more frequent in "managed care" environments in the United States."

According to OECD, "Capitation systems allow funders to control the overall level of primary health expenditures, and the allocation of funding among GPs is determined by patient registrations. However, under this approach, GPs may register too many patients and under-serve them, select the better risks and refer on patients who could have been treated by the GP directly. Freedom of consumer choice over doctors, coupled with the principle of "money following the patient" may moderate some of these risks. Aside from selection, these problems are likely to be less marked than under salary-type arrangements."

Salary arrangements

In several OECD countries, general practitioners (GPs) are employed on salaries for the government. According to OECD, "Salary arrangements allow funders to control primary care costs directly; however, they may lead to under-provision of services (to ease workloads), excessive referrals to secondary providers and lack of attention to the preferences of patients."There has been movement away from this system.