The health care sector is large and diverse and the requirements of resources of it are also equally large and diverse. In keeping with it, the lending pool also needs to be as large and as diverse as the sector itself. Typically, resources required for the health care sector is pooled through different systems that are normally funded by the government. These systems usually pool tax revenues from the citizens as well as through diverse range of health insurance schemes. In unison, they pool in contributions from the enrolled individuals.
- This fund is lent out to the health care machinery and systems that use this fund primarily for purchasing but also use it to upgrade their health care services at the same time.
- With an intention to raise the health quotient of the citizens of the country, these health care service providers put in their best efforts.
Ideally, for any given country, health care services can be purchased by different mechanisms such as:
- A social security agency
- The insurance providers
- All individuals and even
- The ministry of health.
There are ideally four different yet important issues on which the design of purchasing mechanisms are dependent on. These are:
The services types
The governments often determine first the type of services that should be purchased. The health insurance providers along with the government work together in this matter and first identify a special benefits package. This package typically specifies the type of health services that they will pay for, either partially or fully. Such benefits packages are typically designed based on the need for such specific health services, its effectiveness as well as the cost of it.
Who it is for
The next thing to consider is who the people are targeted for these specific types of health services. Typically, in any developing country most of the people pay for the health care service from out of their pocket especially at the point of delivery of such services. The governments often make an effort to lower the amount of such out of the pocket expenses in the form of providing subsidies or free health services as well for the different sectors of the population. The unique aspect of such programs and subsidies are that these are particularly aimed for the poor and the vulnerable. The government may not subsidize health services for the high earning individuals. However, they can opt for enrolling in other arrangements such as private health insurance.
Once the governments and the health insurance providers reach to this stage, they focus on the buyers to purchase these services from. Typically, health care should be purchased from private and mostly from public service providers. This may include even drug shops or pharmacies. The governments of some countries may purchase such services entirely from the public providers while the governments in some other countries may encourage participation of private providers and sign a contract with them.
The payments factor
Lastly, it is required to determine how to pay the providers for such services. In this aspect, purchases can be made in two specific forms namely strategic and passive.
In strategic purchasing, the payment mechanisms are deliberately and strategically structured to maximize the outcomes from the health services, lower the cost and at the same time incentivize quality.
On the other hand however, the passive purchasing form is largely based on a pre-determined budget wherein the costs are paid as and when it arises.
There are two common methods of payments that include
- The fee for service mode of payment where the service providers are paid on the basis of the number of services provided as well as the types of it and
- The capitation mode where the providers are paid in advance and such payments are made based on the size of the population entitled or the number of patients treated for a certain service.
In addition to that, there are also different methods to pay the service providers that will easily incentivize both the quality of the services provided as well as the quantity of it.
Overview of health care financing
The need for health care financing in the form of government funds and other lending sources such as Liberty Lending both to the health care practices and most importantly to the individuals is due to the cost of health care. This is the primary factor that is taken into account when it comes to health care lending and health care planning.
The experts think that, it is the high costs of health care in the United States that has put an extra stress and strain on the economy of the nation overall which is also very high as compared to that of the other countries. Many experts even go a step further and term these higher costs of health care as unsustainable.
- When it comes to the different government programs that are aimed for the people to pay for their health care bills includes Medicare and Medicaid
- In addition to that it can also be paid through health insurance plans that are usually taken through employers.
- And it can also by the individual from their own pocket.
When you look at the healthcare scenario of the United States, it is considered to be most technologically advanced but at the same time it is very expensive. It is the inability of the common people to afford for such high cost services that has given rise to different companies and lending source to come up. They now provide better financial products that will help the people to access health care services more freely as they now do not have to worry about paying the bills even if their health insurance plan is not large enough to cover the entire medical bill.
However, since the demand for health care service as well as the type of it varies according to the needs of the people, the lending options should be wide, diverse and adequate. This is what the private money lending sources ensure.