Health Policy in International Perspective

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Health polices of international agencies and individual countries reflect choices involving diverse ethical issues, including rights and responsibilities of individuals versus society, choices over who benefits and who pays for healthcare services, trade-offs between saving identifiable lives and statistical lives, and choices involving interpersonal and intergenerational equity. This entry begins by examining the role of international agencies in providing public health services, ethical issues raised by testing and use of new drugs, and government involvement in purchasing and providing healthcare. It then outlines four generic models for healthcare financing and delivery that many countries have adapted to their unique circumstances. These four healthcare financing and delivery models reflect different choices about an individual's right to basic healthcare services, and views about whether an individual's ability to pay should influence access to certain services.

Public Health and Preventive Services

International agencies play a critical role in health policy, first by setting public health and health-status goals, and then by monitoring an individual country's progress toward these goals. For example, over the past twenty years the World Health Organization (WHO) has established goals and specific targets for the Health-for-All initiative. Two fundamental objectives of this initiative are: (1) making health central to human development and (2) building sustainable health systems (Antezana, et al.). In order to monitor these objectives, Health-for-All in the 21st Century has identified global health targets that each country should meet, such as eliminating certain infectious diseases through childhood immunization and improving access to water, sanitation, food and shelter (Visschedijk and Simeant). In 2000 the WHO began ranking and assessing health systems's performance in 191 countries based on five composite indicators. The WHO hopes to make this assessment a regular activity, which will help policy-makers to monitor their performance in comparison to other countries (WHO, 2000a).

In most countries, public health agencies have the primary responsibility for creating programs that will achieve specific health objectives. International agencies like the World Bank and the United Nations and some affluent countries have programs to assist developing countries. The U.S. Agency for International Development (USAID), for example, operates programs that help developing countries to establish and operate a variety of public health activities.

While there is generally a consensus that government agencies should finance and provide public health and disease-prevention services, policy differences and financial commitments affect the success of specific programs. For example, the childhood immunization rates for six major infectious diseases (diphtheria, pertussis, tetanus, measles, poliomyelitis, and tuberculosis) vary greatly from country to country. In 2000 the immunization rates for diphtheria, pertussis, measles, and poliomyelitis ranged from 55 percent of infants in Africa to over 90 percent of infants in Europe (WHO, 2001). In most countries the WHO's target rate of 90 percent coverage for the year 2000 was not achieved (WHO, 2001).

Another public health activity, the testing and approval of drugs, highlights conflicting ethical values. Beneficence, in terms of concern for public welfare, is reflected when nations employ comprehensive but time-consuming approval processes in order to ensure a safe and efficacious drug supply. The U.S. Food and Drug Administration, for example, has adopted strict regulatory standards that prevent the domestic adoption of new drugs and devices until their safety and efficacy are established beyond reasonable doubt (Sheinin and Williams). In contrast, a respect for autonomy, in terms of individual access to healthcare, is obstructed when the length of the drug approval process delays access to potentially lifesaving treatments—particularly for patients who have exhausted current treatment options and are willing to take experimental drugs.

Since the early 1990s, people with acquired immunodeficiency syndrome (AIDS) have been the most vocal proponents of allowing individuals unrestricted access to unproven medical treatments. Advocates of placing greater weight on beneficence, on the other hand, point to the approval of thalidomide by the United Kingdom in the 1960s, while it was still in testing stages in other countries. The drug was never approved in other countries and was pulled from the British market after it became apparent that severe congenital deformations resulted from maternal use of the drug (Burger).

The principle of justice can be jeopardized when drug trials are carried out in developing countries by investigators and sponsored by agencies from developed countries (Beyrer and Kass; Council for International Organization of Medical Sciences [CIOMS]). Some developing nations have used drugs not approved in industrialized countries. Lower costs of unapproved drugs make them a relatively affordable medical treatment option for poorer nations. In some cases, individuals in low-income nations benefit from access to various drugs, while in other cases individuals are harmed by access to unsafe or inefficacious therapies. For example, HIV/AIDS accounts for about 20 percent of all deaths in Africa, which creates urgent need for new drugs and effective vaccines for HIV infection (Creese, et al.). This urgency is being used to lower the ethical standards of international research and result in ethically controversial actions (e.g., not providing drugs after the conclusion of the clinical trial or make the drugs available at unaffordable prices) (Greco, Stolberg, Okie). In order to assist the efficient purchase of safe and efficacious drugs by developing nations, the WHO and other international agencies have established essential drug lists that identify drugs satisfying the healthcare needs of the majority of the population, and are revised every two years (WHO, 2000b).

Medical Services

Particular attention should be paid to ethical choices in the financing and delivery of medical services, since these services account for a large portion of most countries's total healthcare spending (Organization for the Economic Cooperation and Development [OECD]). The provision of medical-care services requires policymakers to debate myriad ethical values and conflicts, and each country's medical-care system reflects its choices about underlying ethical matters.

Unlike public health activities, which are considered to benefit all members of society, medical-care services are generally considered as private goods, since it is the individual who benefits directly from them. Some countries consider access to medical care a merit good—a good that, although private, benefits society as well. Health insurance is a major determinant of access to care. In most industrialized countries health insurance coverage is universal. In the United States, however, 14 percent of Americans did not have health insurance in 2000 (Mills).

Similar value choices are exemplified by the benefits package that countries's health systems offer. Some countries's health systems cover only hospital and physician care, while others include such items as long-term care, drugs, dental care, home health services, and eyeglasses (Healy). In addition, many European countries incorporate housekeeping, spa vacations and social services into their provision of healthcare services. Cultural norms also affect countries's health systems. Japan, for example, did not establish a formal system of long-term care until recently, in part because of the tradition that the eldest son and his wife have had responsibility for the son's parents (Campbell and Ikegami).

Countries's decisions about government involvement in provider issues can highlight conflicts between the individual liberty of providers and patients's access to care. Some countries, such as Israel, have adopted policies that restrict providers's ability to practice in areas that exceed a certain physician-population ratio and have developed policies that encourage them to operate in underserved locations (Anderson and Antebi). Other policies may limit the total income that can be generated by health professionals, either through restrictions on the salaries that physicians can earn or by limiting the volume of services the physicians may provide (White). In addition, some countries, such as the United Kingdom, permit providers to operate publicly (through a national health service) and have a private practice (Healy). Other countries, like most of the provinces in Canada, require a provider to work completely in the publicly financed plan or completely in the privately financed sector (Flood and Archibald).

Countries use three basic mechanisms, in addition to out-of-pocket payments, to finance medical-care services. One option is to use general tax revenues. With this method, citizens pay for medical services based on the structure of the overall tax system. This option is considered by economists to be the most progressive. For economists, progressive means that the income tax rate increases as the taxpayer's income rises. A second basic method to generate funds for medical-care services is through a payroll tax earmarked for the health system. This is referred to as a proportional or flat tax since the tax rate does not vary with income. The third basic method to finance medical-care services is through health-insurance premiums. This method is considered to be regressive by economists because the rate falls as income rises.

A related financing and access issue is that of the cost sharing by individuals. Cost sharing, such as coinsurance, copayments, and deductibles, is introduced when health insurance systems want to give patients a financial incentive not to use certain health services—especially services they believe to be only marginally beneficial. However, the patients' ability to make appropriate choices is debatable especially when they are poor (Fuchs). Poor patients's demand for care depends more on whether they have money at the time than on their own judgment of the seriousness of the condition (White). Some countries, such as the United Kingdom, Canada, and Germany, operate with no or nominal deductibles and coinsurance (Glaser, U.S. General Accounting Office 1991a, 1991b). Other countries have substantial cost-sharing requirements. For example, 10 to 20 percent coinsurance requirements are typical in the United States and France, and 20 to 30 percent coinsurance requirements are typical in Japan and Korea (U.S. General Accounting Office 1991b, Anderson).

Four Healthcare Financing and Delivery Models

As individual countries design their own healthcare financing and delivery systems, they make a number of policy decisions that are based upon ethical considerations. These decisions involve choices regarding who is covered, the method of financing the medical-care delivery system, and whether the delivery system is public or private. These healthcare financing and delivery systems are categorized below into four models and specific countries are identified that exemplify each type of model. It is important to recognize, however, that no country fits any model precisely, and that healthcare systems are dynamic. The four generic models are national health service, national health insurance, social insurance, and private voluntary health insurance.

NATIONAL HEALTH SERVICE. National health service systems usually collect revenues from general taxation, mandate the use of public facilities, and have limited cost sharing. As a result, countries with national health service generally offer the greatest equality in access to care and employ the most progressive financing methods. However, some critics have expressed concern that national health services may be relatively inefficient and unresponsive to individuals's healthcare service preferences (Enthoven).

The United Kingdom's National Health Service (NHS) is the archetypal example of this model. Since its creation in 1948, the guiding principal of the NHS has been equity—equal access to healthcare services for all inhabitants. The NHS offers a comprehensive array of government-provided services, a national benefits package, and is financed by general tax revenues. During the early 1990's, the concerns about inefficiencies and customer service led to introducing some market incentives and development of a system of competition within the NHS (Enthoven). However, subsequent reforms initiated by the Labor government largely abolished the quasi-market and emphasized the idea of collaboration with a return to strong elements of command and control (Le Grand).

NATIONAL HEALTH-INSURANCE PROGRAM. National health-insurance systems usually generate revenues from general taxation, have private providers and facilities, allow the government to set payment rates for healthcare providers, and may have limited cost sharing. The major difference between national health insurance and national health service is the ownership of the facilities.

The Canadian health system is an example of a national health-insurance system. Revenues are generated from general taxation, the government sets payment rates for the providers who participate in the system, and there is no cost sharing. Healthcare professionals must choose between participating in the national health-insurance system and opting out of the system entirely to work in the privately financed sector (Flood and Archibald).

SOCIAL INSURANCE. In social insurance systems, revenues are generated from payroll taxes, the private sector provides health insurance, private facilities are common, and the government sometimes sets payment rates for providers. Although insurance is compulsory, and thus accessible to all, the scope of healthcare benefits may vary by plan.

Social insurance, the first type of health insurance to be developed, was introduced in Germany by Otto van Bismarck [1815–1898] in 1883. Germany has continued to use the social insurance system, and several European nations and other countries like Japan and Korea have modified the basic social insurance model to meet their own needs (Glaser, Powell and Anesaki, Anderson).

PRIVATE VOLUNTARY HEALTH INSURANCE. In the private voluntary health insurance system revenues are generated by a variety of sources including premiums, payroll taxes, and general taxation, private facilities are the norm, the government may or may not set provider payment rates, and coinsurance is common (Maxwell, Storeygard and Moon). This system is likely to have the greatest disparity in access to healthcare services, since access is based upon ability to pay. In addition, it is common for a proportion of the population to be uninsured. In theory, this system should be more efficient than government-run health systems, because free-market competition should result in greater efficiency (Enthoven and Kronick). However, it is believed by many that free-market principles, such as a free flow of product information and price sensitivity among consumers, do not fully apply to the healthcare sector, and consequently competition and greater efficiency do not always occur (Rice et al.). The United States and many low and middle-income countries use a system of voluntary private health insurance.


Health financing and delivery systems are influenced by divergent views on a number of ethical issues. Countries must resolve ethical dilemmas such as (1) whether access to basic healthcare services is one of the fundamental rights of every human being, and (2) how scarce resources should be allocated between the old and the young, between medical and preventive care, and between healthcare and other social needs, as they develop their healthcare systems.

gerard f. anderson

stephanie l. maxwell (1995)

revised by gerard f. anderson

varduhi petrosyan

stephanie l. maxwell

SEE ALSO: Access to Healthcare; Aging and the Aged: Healthcare and Research Issues; AIDS; Beneficence; Children; Economic Concepts in Healthcare; Freedom and Coercion; Future Generations, Reproductive Technologies and Obligations to; Healthcare Resources, Allocation of; Human Rights; International Health; Justice; Labor Unions in Healthcare; Managed Care; Medicaid; Medicare; Patients' Rights; Pharmaceutical Industry; Public Health; Research Policy


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