Global Health Care Delivery Systems and Governance

Five Global Health Care Delivery Systems

The structure and organization of the resources that make it possible to provide healthcare services to target populations is referred to as a health care system. The variety of healthcare systems is very wide, with strong evolutionary histories tied to governments, religious organizations, charitable organizations, labor unions, and for-profit market participants.

T.R. Reid set out around the world to study healthcare systems in countries across the globe. He identified five distinct healthcare delivery systems: (1) the Bismarck model; (2) the Beveridge model; (3) the national health insurance model; (4) the out-of-pocket model; and (5) the American model for health.

Otto von Bismarck is credited with establishing the first form of this model, which is followed in Germany. Private companies and private initiatives provide the medical services and insurance coverage under this model. The insurance companies are non-profits and must enroll all German citizens unconditionally. With the exception of a very wealthy minority, all German citizens and people living or working in Germany under special visas are required to sign up for health insurance coverage. Cost control is dependent on the central role that the German government takes in determining the payments permitted for various medical and health services.

This British model is very similar to socialized medicine, as most healthcare providers are government employees. In essence, the British government acts as a single payer for all medical and health services in the United Kingdom. Patients currently do not incur any out-of-pocket costs, but the system is experiencing substantial pressure as medical and healthcare costs continue to rise.

This Canadian model functions like the system in Britain, with the government acting as a single payer for medical and healthcare. Most medical and healthcare providers are private entities, unlike in the British system where the government is a major employer of healthcare providers. Costs are relatively low, enabling the system to provide healthcare to all citizens. However, waiting times for elective procedures are incredibly long, and this continues to be the major flaw in the way this system is currently implemented.

Most underdeveloped and poor countries follow this model of healthcare. No widespread private or public systems of health insurance exist in countries operating under this model. Healthcare and medical services are paid for directly by citizens — hence the reference to "out-of-pocket." The consequence of this type of system is that poor, marginalized, or underprivileged people are unable to obtain essential healthcare, resulting in very low life expectancy rates and high infant mortality rates.

The model used in the United States is a composite of different aspects of the international healthcare and medical care systems described above. The American model applies to working citizens under the age of 65 in much the same way that the Bismarck model does in Germany and Japan. The primary difference is that health insurance companies in America can operate as for-profit businesses. The American model assumes operations similar to the Beveridge system for citizens who are in the military, are veterans, or are Native Americans — in these cases, the federal government acts as both the payer and the provider of healthcare and medical care services.

For American citizens over 65, the American model approximates the Canadian single-payer system, since the federal government is essentially the insurer while medical services are delivered by the private sector. For Americans without health insurance, the closest delivery model is the out-of-pocket version experienced by people in underdeveloped and poor countries. Since people in this category are expected to pay for their medical care and healthcare services out of pocket, the high costs of medical facilities and treatment put most care beyond their reach — they are forced to go without healthcare and very often forgo necessary and critical medical care.

Leadership Effectiveness and Board Governance

The literature identifies 13 primary attributes of effective governing boards (Adams, 2005). These attributes are as follows: (1) trustees who are dedicated to their roles and responsibilities; (2) power is exercised by the board as a group; (3) strategic planning is carried out regularly and periodically; (4) monitoring for ethical performance is conducted on an ongoing basis; (5) specific financial policies are formulated; (6) decisions are made regarding the quality of care; (7) trustees are educated in governance; (8) a governance information system is implemented; (9) crisis prevention and crisis management policies are articulated; (10) self-assessments are conducted regularly and periodically; (11) regular audits are conducted; (12) the board is led by an effective chairman; (13) an operation that is disciplined and organized is established; and (14) trustees are dedicated to their roles and to the organization (Adams, 2005).

The Governance Institute conducted a survey of trustees to identify the top five factors viewed as very important to effective board governance (Jaklevic, 2003). The trustees identified the following variables: (1) board endorsement of additional education for trustees (92%); (2) conducting a formal CEO performance review (91%); (3) board composition of mostly outside independent directors (81%); (4) chairman of the board is an outside director (80%); and (5) regular board and trustee performance evaluation (76%) (Jaklevic, 2003).

Classification of Health Services System Types

Healthcare service systems can be classified according to payer/provider configurations: (1) the system acts as payer; (2) the system acts as both payer and provider; and (3) the system acts as provider only. The international models described in the preceding section provide explicit examples of systems in each of these categories.

U.S. Healthcare Governance and Responsibility

The Center for Healthcare Governance is a nationally recognized organization that functions as one of the foremost voices in hospital and health system governance. Its declared purpose is to advocate for and support healthcare governance that is accountable, innovative, and excellent. The center is affiliated with the American Hospital Association.

The responsibilities of medical and healthcare organizational governance include performance in the areas of finance, payer relationships, quality of care, quality of services, strategic planning, and governing board quality (Adams, 2005). Boards of directors are not convened to assist staff or to perform pro forma approval of staff intentions and plans (Adams, 2005). The board must not function in a manner that simply confirms its own committee decisions (Adams, 2005). Rather, board committees should function in a manner that informs the board and increases the collective level of knowledge regarding the options, forces, and variables relevant to each substantive decision (Adams, 2005). This means that board committees must not eliminate or remove difficult decisions from the board's agenda, and must avoid assuming the prerogatives of the full board (Adams, 2005). Effective boards of directors are responsible for the collective contemplation and deliberation of issues of importance to the healthcare system, organization, and consumers (Adams, 2005).

The primary issues for outcomes with regard to systems and management concern the tension between quality of care and cost of service delivery. For-profit systems are at one end of the continuum and charitable systems are at the other. Money is always a variable in healthcare systems — if it were not, wealthy people would not elect to pay for care on a private, non-group basis. All too often, boards of directors act as rubber stamps to staff initiatives and plans, or they act as agents of shareholders. Ethics should always be paramount in healthcare; all too often, ethical considerations are sacrificed in the pursuit of profitability. The quality, provision, and accessibility of care are well demonstrated in the international models discussed above.

Return on investment (ROI) is a financial ratio that reports the performance achieved through monies invested in a firm, organization, or initiative. ROI is used to demonstrate the benefit — or lack thereof — of directing resources at a particular effort. For instance, ROI is used to demonstrate the effectiveness of a marketing campaign: the extent to which spending on advertising, marketing, and media resulted in higher profit margins or increased sales revenue. In the same manner, ROI can be used to demonstrate improved quality of healthcare services in relation to the resources directed at that purpose. In other words, does spending on staff training in evidence-based practice result in better patient care?