The role of government in health care policies

Written by josh fredman
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The role of government in health care policies
Health care systems are one of the most basic indicators of a society's vitality and prosperity. (health care concept image by Stasys Eidiejus from

In a liberal democracy, government has the power to determine its role in health care policy. The government's judgment is checked by the voting public, which elects leaders to represent the public interest. The "correct" role of government in health care policy is therefore a question of the political ideology of individuals.

Health care Coverage

A health care system either supplies universal coverage, where by law all residents are provided with health care, or non-universal coverage, where this is not the case. The first role of government in health care policy is to decide whether to supply universal coverage to its population. Universal care is a popular choice for countries that can afford it; universal health care exists in every industrialised nation except the United States, as well as in many of the more prosperous developing countries.

Health care Financing

There are four main ways to pay for health care costs: general taxation, insurance, self-payment and charity. Self-payment, where individuals pay for their own health care expenses out of their own pockets, is problematic because treating serious health problems can cost from tens of thousands of dollars up into the millions, which is likely to bankrupt a person who is paying out of pocket. No country relies on self-payment to finance its health care system. Charity can provide health care to those who are in a state of extreme need. There isn't enough charity to go around, however, and so it remains a niche solution. Overwhelmingly, taxation and insurance are the key financing instruments of a health care system. The second role of government in health care policy is to decide how health care costs can be paid.

Public versus Private Financing

In a public health care system, doctors, nurses and pharmacists are reimbursed by the government. The government pays for this by collecting taxes, by selling public health insurance or by some combination of both. In a private health care system, health care providers are reimbursed by private insurers. They pay for this by charging premiums and other fees to their customers. It is the third role of government to decide whether the universal system will be funded publicly or privately. Often, a combination of both is used.

Second-Tier Healthcare

Most industrialised nations with publicly funded universal health care have a supplementary private health care system on top for people who wish to pay more money for higher-quality service. It is the fourth role of government to decide how extensive this supplementary private system will be. The existence of a second-tier system draws dollars away from the main health care system by allowing the affluent to spend their money more directly on themselves, leaving disproportionately less money to go to the broader public. In the United States, there is no universal public system underneath the private one; a significant percentage of the population has little or no access to health care, while those who are able to afford it can buy into the second tier and receive high-quality care.

Health care Philosophy

The fifth and most important role of government in health care policy is to decide what health care "is." The key point of contention is whether health care is a commodity or a human right. Those who see it as a commodity typically hold that government should generally defer to the private sector so that free enterprise might develop the most profitable health care system and individuals might purchase health care according to their ability to pay. Those who see health care as a human right typically hold that government should intervene to make health care available to everyone, regardless of the profit margins and regardless of individuals' ability to pay.

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