Health Care Reforms in Industrialized Democracies: Sweden and Germany

Introduction

As industrialized democracies have well advanced in its post-modernization, there has been growing concern regarding the well being of their citizens, in which special attention has gone to the health care system. Due to its sensitivity and inclination to market failures, health care has long been the domain where the governments have their extensive control (Chernichovsky 1995). There are different paths in health care system design that the governments can follow, which can be divided into two categories—National Health Service financed by state budget, and Social Insurance System contributed by individual payrolls. It is noteworthy that each type of health care system has its own strengths and weaknesses, and there is no pure form of either National Health Service or National Insurance System existing. Different historical contexts with their distinct political and socio-economic traits call for different hybrid forms. Reforms of health care system, therefore, are of essential importance.

On the same topic, this essay aims at providing insights into the health care reforms of the developed countries. First of all, in the first part, it acknowledges that health care systems are variable across borders, yet classifiable due to their generally identical ends. Afterwards, the second part presents an attempt to define the underlying forces behind the reform process. The third part goes into greater details of health care reform in terms of their directions, and analyse the cases of Germany and Sweden for a better understanding of such processes in case of National Health Service and National Insurance System. Finally, the essay ends with some general remarks and proposals for the future of health care reforms.

Health Care Systems in Industrialized Democracies: The Premise

Along with the spread of democracy and welfare state after the Great Wars, the establishment and development of health care systems have become one of the main concerns among the developed countries. Heath care systems are highly subject to specific national characteristics, and typically tailored according to countries’ differentiated priority in ensuring citizens’ wellbeing. Its variability across borders has been reinforced as health care, due to its encompassing scope and growing importance, become an arena of national political and economic struggles over scarce resources. There is no single universal fit-for-all model of health care system; nevertheless, differentiated heath care systems gear towards identical ends of equity, quality and cost containment by means of creating medical public funds and organizing the delivery of such funds (Blank & Burau 2004).

Classification of health care systems, therefore, needs to integrate both ideological—private versus public, as well as conceptual—market versus centrally planned, dimensions. Following this argument, health care systems in industrialized democracies move long a continuum with private and market orientation at one end, and public and state orientation at the other (Chernichovsky 1995). Towards the public and state direction is the model of National Health Services as in case of the UK, Italy and Sweden, while the model of Social Insurance Systems representative of France or Germany positions in the private and market area. National Health Service (NHS) is a tax-based system which aims at universal coverage through the guarantee of public entities such as health authorities or local governments. Social Insurance System (SIS), in contrast, emerges from payroll contribution, creating segmented coverage based on regional, occupational or workplace-related sickness funds with the participation of private facilities and practitioners. Both heath care schemes manifest the classic economic tradeoff between equity and efficiency, implying different challenges to users as well as policy-makers. NHS, while promoting financial equity, often fails in service quality due to its long waiting lists, questionable facilities’ quality, inefficient management and limitation of choices. SIS, despite its flexibility and patient-oriented approach, tends to create inequity, cost pressure, oversupply and overconsumption (Freeman 1998). The public and policy makers, as a result, have long expressed dissatisfaction over both systems (Cutler 2002). Systematic improvement and even reconstruction of heath policies have become an urgent need in many countries.