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Definition of private healthcare

Updated March 23, 2017

Private health care is when doctors, dentists, and other health care providers are paid for through private insurance and (occasionally) out of private bank accounts. This is in contrast with a public system, in which they are paid by the government.

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For Profit

The biggest distinguishing feature of private health care is that it is run with the goal of making money. This is in opposition to public health care systems, which, while individual practices and hospitals may make money, the system as a whole is government-run.

Insurance

Since health care is a service that people do not consume often, but is very expensive when they do, most people are on insurance plans. In private health care systems, this is how most people pay for their health care. In the United States, most of these insurance plans are provided by employers.

Efficiency

Due to the fact that private health care demands multiple insurance providers, doctors offices and hospitals spend up to 10 per cent of their annual revenue on administrative overhead, and doctors spend an average of 142 hours a year dealing with insurance administrative staff. This drives the cost of medicine higher for insurance companies, doctors, and consumers.

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About the Author

Sam Grover

Sam Grover began writing in 2005, also having worked as a behavior therapist and teacher. His work has appeared in New Zealand publications "Critic" and "Logic," where he covered political and educational issues. Grover graduated from the University of Otago with a Bachelor of Arts in history.

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