PROVISION OF MEDICAL CARE
Three basic systems of medical care exist in the world today: public assistance, private market-based health insurance, and national health-service systems funded by taxation. As of mid-2003, the first is dominant in 108 countries, constituting 49 per cent of the world’s population; these countries are located in Asia, Africa, and Latin America. For the great majority of the people in these countries, whatever medical care is available is provided through a means-tested public-assistance system for the poor. This includes government hospitals and health centres financed by general taxation. The system and its facilities are generally under-financed, overcrowded, and understaffed. In addition to such systems administered by health departments, programmes may exist that are operated by social security agencies for industrial and white-collar workers. Where they exist, these programmes usually cover only a small part of the population. In all these countries a small stratum of landowners, businesspeople, officials, and professionals use private doctors and hospitals for their care.
Private health insurance funds free-market delivery of medical care in 23 countries, constituting 18 per cent of the world’s population. In many of these countries private health insurance supplements a national system of health care delivery funded by taxation. In industrialized nations with capitalist economies in Western Europe, Australia, Japan, and Israel a mix of governmental and non-governmental insurance exists.
The system of national health services is dominant in 14 countries, constituting 33 per cent of the world’s population. They include countries in Europe, Australasia, and Cuba; all are either industrialized or undergoing rapid industrialization. Although most of the countries fund national health programmes through social security taxes on employees and employers, a considerable portion of the cost is borne by general taxation. National health services cover the entire population. Services are provided by a mix of private practitioners contracted to government service for primary care and salaried doctors and other health personnel who work in government hospitals and health centres. Practically all services are included and provided free of charge, and administration is unified by health departments. Regional integration of facilities, which is almost impossible to realize under private health insurance programmes, is one of the important achievements of national health services.
In countries without a national health service, such as the United States, health care is financed by private insurance and government health schemes such as Medicare and Medicaid (for the elderly and poor respectively). Most private health-insurance programmes in industrial nations are based on fee-for-service practice. Non-salaried private practitioners contract with patients or with authorized sick funds to provide primary and hospital care. In developing countries with private health insurance, government pays only for basic health care while more advanced facilities are purchased by the wealthy. Rich countries spend around 8 per cent of their gross national product (GNP) on health care—poor countries less than 1 per cent of a far lower GNP. In China traditional and modern medicine are integrated with a strong emphasis on preventive medicine (see Medicine, Chinese); in Chile a 40 per cent reduction in infant mortality was achieved through a special health programme. In the developed world, health finance problems are increasingly focused on the rising costs of high-technology medicine and the management of increasing levels of chronic illnesses in ageing populations.
The rapid expansion of East Asian economies such as Japan, Taiwan, and South Korea since World War II was achieved by a largely youthful population imbued with Confucian beliefs in the importance of self-reliance, individual success, and hard work for the benefit of the community. The rate of expansion together with age of the population meant that social welfare and protection were largely secured through full and increasingly affluent employment. Mainly low levels of unionization meant that organized labour was absent as a political force pressing for welfare reform.
In the 1960s Japan began to expand its social protection programmes through the introduction of welfare for the mentally disabled, national health insurance and a national pension scheme, public assistance for the aged, and maternal and child welfare. A campaign to improve the “quality of life” in the 1970s saw further expansion of these programmes and increasing public concern over issues such as pollution and traffic accidents. Feminist groups also began to emerge in the 1960s that highlighted the issue of discrimination by both employers and the state. The move towards welfare expansion was halted in 1974, however, following the economic crises experienced by most industrial societies resulting from the rise in crude oil prices. Between 1975 and 1985 unemployment in Japan expanded threefold resulting in an increase in public expenditure that provoked a backlash in the 1980s. A new political rhetoric in the 1980s concerned with the “reconsideration of welfare” stressed the cost of social welfare to the competitiveness of the economy. A political consensus between the ministry of health and welfare and the finance ministry agreed that social expenditure had to be curtailed. In 1981 fiscal reforms reduced the levels of state social expenditure shifting the burden of welfare costs back to the individual by placing surcharges on health care for the elderly, reducing the level of coverage of health insurance, increasing the age of eligibility for pensions from 60 to 70 for men and 55 to 60 for women, and imposing a 3 per cent indirect salesThe prospect of increasingly ageing populations has raised the question of social welfare to a higher political priority. At the beginning of the 21st century Japan anticipated that the number of its retired people would more than double over the following two decades with 25 per cent of its population being over 65 by 2020; in the same period the number of people over 80 is expected to treble. Although savings levels in Japan, Taiwan, and South Korea are very high, such a major demographic transition poses serious questions for future social expenditure. Recently the Japanese government has attempted to address some of these questions by re-asserting the value of volunteer activity as a return to traditional, that is, Confucian, methods of welfare provision. The government encouraged the development of “residential participation organizations” such as quasi-state-funded, voluntary mutual-aid service banks run by the government and local communities to help increase both individual and local community participation in welfare organization and provision.
The worldwide trend is towards tax-funded health service systems. Among the industrial capitalist nations Britain in 1948 was the first to establish such a service (see National Health Service). The entire population is covered; hospital specialists are government employees, but general practitioners are still not salaried doctors working in community health centres. Instead they work as solo doctors or in small partnerships, usually in their own offices, and have a contractual relationship with the government. In developing countries, transition towards a national health service model is facilitated by the fact that both the public assistance and the social security health systems in these countries generally have developed on the basis of government hospitals and clinics employing salaried doctors. In Latin America two models of welfare states emerged towards the end of the 20th century offering a range of neo-liberal and social democratic options for social and health care policy. During the 1980s, international financial conditions encouraged the dominance of a neo-liberal financial hegemony among some Latin American governments, such as Chile and to a lesser extent Argentina, which led them to pursue market-determined, individualistic models of social policy. However, as the social costs of inequality upon social cohesion began to take effect, other Latin American governments, such as Brazil and Costa Rica, took up social democratic, market-correcting social policy and health care programmes. Costa Rica, for example, is now moving towards merging the two systems to form a complete national health service.