RUNNING HEAD: HEALTHCARE FINANCING 1

Healthcare Financing

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Comparing the healthcare systems of the United States and the United Kingdom

The healthcare systems that exist in the United States and the United Kingdom are

actually a close representation of two extremes with the former known for its largest private

sector for healthcare provisions, the latter known for its equally large public sector system of

healthcare system (Bolnick, 2003). The United States is possibly the only country that spends

the kind of money that is does spends on healthcare more than any other global nation. On the

other hand, however, England is placed at the bottom ranks on healthcare spending among all the

industrial nations. “England has made major investments in its health care system, raising the

total expenditure to 8.4% of the GDP in 2007, as compared with 16% in the United States (Scott,

2009).”

With respect to the issue of referrals to see a specialist doctor, many claim that the same

is a nightmare as far as the US is concerned. While the underlying fact is that as primary care

doctors do not have much time to spend on individual cases, they just refer the patients to

specialists. However, the reality is not as simple as it might presumably look because many

industry specialists and people from within the policy making realm feel that this system of

referrals is highly convoluted because of a wide range of multiple factors that eventually are

dictating the way 21st century American medicine practice is happening. In order for tests like

ECG or Cardiac Calcium Scan, among others to be covered under the insurance, the primary care

doctor should enter the referrals to all these tests (Pelzman, 2018).

In case of the UK, the NHS scheme permits patients to ask for a referral when the case

might require a specialist treatment. However, whether a patient would obtain a referral or not is

solely dependent on the decision of the General Practitioner (GP) because if the GP feels that

such a specialist treatment is clinically required, only then would the patient obtain a referral.
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On the other hand, patients wanting to seek care from private hospitals are free to do so, but the

complete cost of treatment would have to be borne by the patients (NHS, 2018).

Pre-existing conditions in the US are mandated to be covered by the insurance policy

starting from all coverages that are issued after January 2014 as this was not the case earlier. In

UK, pre-existing conditions are not covered under the NHS scheme but patients could go in for

private medical insurance (PMI) that cover pre-existing conditions because not all policies do

offer a cover for such conditions.

As already mentioned earlier, healthcare in the United States is delivered almost entirely

through private players. Almost all healthcare establishments in the US are owned either by

profit companies or by non-profit and/or charitable institutions. Roughly 84 % of the complete

US population has access to quality healthcare through a blend of private health insurance, and

the government schemes named the Medicare and Medicaid. The rest of the 16 % is mostly

uninsured, majority of them belonging to the low-income or below poverty line families and they

have to rely on their own sources of healthcare financing in order to obtain healthcare services.

These people also often depend on what is known as the charity care that would help take care of

their medical needs (Bolnick, 2003).

While UK also offers world-class services in terms of its healthcare delivery, the nation

has considerably lesser disparities in terms of the health outcomes across its populace when

compared to what can be observed in the case of the United States. On aspects of financial

fairness, UK is ranked better than the US and this kind of an outcome can be directly attributed

to the national tax based system of healthcare that UK follows in stark opposition to the system

of private financing for healthcare which is largely risk-based in the US (Wax, 2019). Besides,

the healthcare costs in the UK are far less when compared to not only the US but also many other
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developed nations of the world (Gulland, 2017). In fact, the healthcare system of UK is the best

among the world’s 11 most developed nations, and this regardless of the country known to be

having possibly the lowest levels of healthcare funding. The Commonwealth Fund had ranked

the UK number one, which was closely followed by Australia, the Netherlands, New Zealand,

Norway, Switzerland, Sweden, Germany, Canada, France, and the US (Gulland, 2017).

Interestingly, this is the second time in a row that Great Britain has held to the top place in these

rankings that are usually done once in every three years.

Healthcare provisions for the unemployed are far better in UK when compared to the US

because in the UK, everybody in the country are entitled for healthcare provisions at the point of

use without having to take on any additional costs and the whole thing is sponsored by the

government unlike in the US where health insurance is largely private and comes with high costs

thus leaving people scared of getting sick as not many of the policies available are eligible to

take on the huge costs of healthcare. In the US, there are not many great health insurance

policies that make inclusions for prescriptions, unlike in the UK where prescriptions are either

completely free or capped at a nominal cost (Still, 2019). In the case of retiree, there are

provisions in UK where the government offers free healthcare for all UK residents, people living

in the UK with a legal resident status irrespective of their nationality or INC contributions as

long as they have an NHS number or have some property within the country in their name

(Expatica, 2019).

The ACA helps the US citizens by giving subsidies to the under privileged people in the

country as they cannot afford the premium insurance plans offered by different firms in the

country. The amount of subsidy given by the firm depends on the income of the individual. The

NHS offers free healthcare services in most of the medical services of the nation and the NHS
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provides healthcare services to the residents and the non-residents as well. United Kingdom also

offers free public healthcare to those who really need it. The public healthcare system covers

most part of the healthcare services, but dental care, ophthalmology and spinal problems are paid

treatments. Out of all the healthcare services offered in UK, the dental services are the most

expensive services. Usually, the NHS helps accommodate most of the common ailments but in

case of an emergency, the treatment is done immediately. And in such an emergency, the patients

need to take care of their medical expenses. Apart from the emergencies and the common

ailments, there are long waiting lists at the hospitals for non-life-threatening issues (Inter Nations

GO, 2019).

the healthcare system of the United States of America and that of the United Kingdom

have great differences. Both governments have a different way of approaching people in their

healthcare industry. It is strongly believed that the healthcare industry of the United States of

America is technologically advanced but at the same time it is quite expensive. Apart from being

very expensive, the American healthcare industry has different programs for different classes of

the people. A survey conducted in the United States of America shows that most of the American

citizens have a health insurance story to tell and many Americans have health insurances in order

to access expensive medical care (BBC Story Works, 2018). However, the scenario in UK is

completely different. The UK government has implemented the NHS scheme for offering free

medical care to its citizens. Unlike in the case of US, the NHS is a government scheme covering

almost all the common ailments while also offering a majority of the medical services at

affordable prices to its citizens.

It was reported that in the year 2013, 56 million Americans were struggling to pay their

healthcare related costs. This translates to 20% of the American adults and out of these 20%
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about 10 million were known to have had insurance but were struggling to pay the cost of

deductibles. Amongst these debt-struck people, about 16% took more than a year to pay them of

while about 9% could never pay them. What this translate to is that 73% of these people

skimped on groceries or other expenses in order to be able to take care of the healthcare costs

while 60% of them used all their savings. On the other hand, 25% of them stopped taking their

prescribed medications (Amadeo, 2019). On the contrary, the UK’s NHS manages to keep its

healthcare costs low when compared to healthcare systems in other developed nations of the

world. The primary reason for this is because of the cash-limited central budget. The NHS is far

better in all aspects when compared to the co-pay model of insurance-based healthcare that is

offered in the United States.

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References

Amadeo, K. (2019, June 25). Healthcare Costs Facts. Retrieved from The Balance:

https://www.thebalance.com/healthcare-costs-3306068

BBC Story Works. (2018, April). NAVIGATING THE US HEALTHCARE SYSTEM. Retrieved

July 10, 2019, from BBC: http://www.bbc.com/storyworks/specials/moving-to-

america/navigating-the-us-health-

system.html?cid=PPG0043236&gclid=EAIaIQobChMI3q64o9ip4wIVWA4rCh3srQKrE

AAYASAAEgJ1vfD_BwE&gclsrc=aw.ds

Bolnick, H. J. (2003). Designing a World-Class Health Care System. North American Actuarial

Journal, 7(2).

Expatica. (2019, January 19). Planning your retirement in the UK. Retrieved from Expatica:

https://www.expatica.com/uk/finance/retirement/planning-your-retirement-in-the-uk-

1040740/#Healthcare

Gulland, A. (2017). UK has best health system in developed world, US analysis concludes.

British Medical Journal, 358.

Inter Nations GO. (2019, July 18). Health Insurance and the Healthcare System of the UK

Explained. Retrieved July 10, 2019, from https://www.internations.org/go/moving-to-the-

uk/healthcare

NHS. (2018). Referrals for specialist care. Retrieved from NHS: https://www.nhs.uk/using-the-

nhs/nhs-services/gps/referrals-for-specialist-care/
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Pelzman, F. L. (2018, April 17). The referral system to specialists: It’s a nightmare. Retrieved

from KevinMD: https://www.kevinmd.com/blog/2018/04/referral-system-specialists-

nightmare.html

Scott, D. J. (2009). British Lessons on Health Care Reform. The New England Journal of

Medicine.

Still, J. (2019, January 16). As an American living in the UK, here are 5 ways Britain's National

Health Service is superior to US healthcare. Business Insider. Retrieved July 18, 2019,

from Business Insider: https://www.businessinsider.in/As-an-American-living-in-the-

UK-here-are-5-ways-Britains-National-Health-Service-is-superior-to-US-

healthcare/articleshow/67549194.cms

Wax, C. M. (2019, January 29). Medical Economics. Retrieved July 10, 2019, from Modern

Medicine Network: https://www.medicaleconomics.com/med-ec-blog/what-healthcare