The Short Guide to Social Policy by John Hudson & Stefan Kuhner & Stuart Lowe

Author:John Hudson & Stefan Kuhner & Stuart Lowe [Hudson, John & Kuhner, Stefan & Lowe, Stuart]
Language: eng
Format: epub
Tags: Public Policy, Social Services & Welfare, Social Policy, Political Science, General
ISBN: 9781447325680
Google: mCOMCgAAQBAJ
Goodreads: 25102806
Publisher: Policy Press
Published: 2008-06-03T00:00:00+00:00

Figure 5.1: Public and private expenditure on healtha

Key delivery mechanisms

In examining the key delivery mechanisms in the healthcare sector, it makes sense to break the discussion into two distinct parts: one dealing with service funding mechanisms and the other dealing with service provision mechanisms. As indicated in the previous section, the state influences both these dimensions of healthcare, although different countries can adopt quite different roles in each. We will begin our discussion by looking at funding mechanisms before going on to look at service provision.

The most basic of service funding mechanisms is for governments to simply use general taxation to fund healthcare policies. In such instances, the government does not establish any special funds to cover the costs of health services or ask citizens to make any specially differentiated tax or social insurance payments towards health services; instead, the government merely treats healthcare as one of many different policy areas competing for a share of its regular tax revenues. Such an approach gives the government a great degree of flexibility over the allocation of funds, allowing it to increase or decrease the amount of monies allocated to the health budget without having to make special adjustments to dedicated healthcare taxes. It also allows the government to easily move funds between different areas of policy if priorities change without, for instance, explaining why it wants to remove surplus funds from a dedicated national healthcare account. This, of course, is not necessarily a strength of the approach: it certainly has the potential to politicise health spending and can make it easy for a hostile government to restrict the funding of health services. On the other hand, it also makes it easy for a sympathetic government to expand funding. For the most part, this is how the UK’s National Health Service (NHS) is funded.

However, in many nations, there are tighter restrictions on the state’s control over healthcare funds. Indeed, in much of Western Europe, services are funded by dedicated social health insurance funds. In such cases, a proportion of a citizen’s earnings must be paid into health insurance funds (eg in Germany, a general rate of 8.2% of earnings has been paid since January 2009), with the state and the citizen’s employer usually making a significant contribution too (a common rate of 7.3% of earnings is currently paid by German employers). Although, in effect, a form of taxation – contributions have to be made by law and the government usually sets the contribution levels as part of its regular budgeting process – the allocation of these funds is not usually at the discretion of the government because the contributions have been earmarked for healthcare expenditure. Indeed, in some countries, the funds are managed by non-governmental agencies. While the loss of flexibility in such systems is sometimes bemoaned, there are advantages to such an approach, not least the fact that citizens can see where a substantial part of their tax payments are being directed; indeed, for a government looking to increase welfare expenditure,

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