The medical care system under national health insurance: four models

This paper presents a critical evaluation of four national health insurance models in light of their ability to counteract incentives in the present system that are dysfunctional in terms of costs and quality of care. The feasible models are labelled as: major risk insurance, alternative delivery systems under universal coverage; the public utility allocation model (alias the British system); and the public utility hospital model. It is concluded that substantial changes in the existing structure of the medical care system will be very difficult to achieve politically. Further, those models most politically feasible, the present medical care system with universal third party financing, and public utility process controls with universal third party financing, are the ones most likely to aggravate present cost-quality difficulties. Therefore, the recommended procedure for implementing national health insurance is unabashedly incremental: i.e.; to experiment with cost-sharing, alternative delivery systems, other provider incentive mechanisms and public utility regulation-budget allocation approaches, before wholesale adoption of national health insurance is entertained.