The market based approach to healthcare financing is premised on the idea that healthcare is like other consumer products and should be sold in the open market. According to this approach, only those with resources have access to health care. Unlike the market based approach, the government-financed approach offers access to all the members of the population, though to a basic standard of healthcare (Rita & Michael 156).
The government-financed approached has more coverage compared to the market-based financing of healthcare. This has a lot to do with the fact that market-based approach to financing is more expensive compared to government financed approach. Hence their products only cover areas that have good socioeconomic status. Unlike this, the government based approach offers a basic level of care that covers the entire country.
- Payment for Services
In the government-financed approach, the payment for the services is done through taxation and other charges levied on the citizens. Through such monies, the government either provides care by itself or contracts private organizations to provide care on its behalf. Unlike this approach, payment of services in the market based system is made by the recipient, either through direct payment for services rendered or through insurance premiums.
Reimbursements in the government approach to financing are made to the healthcare providers contracted by the government to offer care to the populace. However, such reimbursements have to be approved first before they are available to doctors and patients. For instance, the diagnostic kits for cancer are available to doctors and patients for use in the market-based approach before they are available in the government-financed healthcare. Reimbursements in the market-based approach are made by the care providers like insurance firms and medical practitioners. The rate of reimbursement is speed compared to the government based approach because it is governed by policies in the insurance program one purchases.
- Limitations on care
The government-financed approach has a wide reach compared to the market-based approach. Thus, the approach has limitations on care so that the running costs can be kept at a minimum. In the market-based care, any limitations on care are usually caused by inadequate resources. This is because one can buy any standard of healthcare as long as they have the resources required.
- Decision making
Decision making by patients in the market-based approach is guided by the need for the best care. Thus, patients will look for doctors who can offer the best care. The same goes for insurance carriers. In the government-financed approach, decision making is guided by lesser factors like proximity and the level of the facilities. This is because the level of healthcare provided is basic and the same across the board.
- Quality of services
The market-based approach offers betters services to the patient compared to the government-financed approach. This is attributable to the power of competition among care providers in the market-based approach. Competition is absent in the government-financed approach, hence the tendency for lower standards of quality compared to the market-based approach.
- Competitive options
Competitive options are available in the market-based approach to healthcare options. This is because practitioners and healthcare providers attempt to edge out their rivals in order to get increased business. As such, they will design products that are aimed at attracting the patient. This is not the case in the government-financed approach where the standard of care is the same in all the facilities.
- Emphasis of prevention and wellness
There is a more serious emphasis on prevention and wellness in the government-financed approach when compared to the market-based approach. This is because emphasis on prevention and wellness is a way of reducing healthcare costs for the government-financed approach. As for the market-based approach, any emphasis on prevention or wellness is motivated by the need to sell their products, like vaccines and wellness programs.
- Management and control of healthcare costs
In the government-financed approach, healthcare costs are managed through departmental budgets. For instance, during the federal budget, a certain amount is provided for provision of healthcare. Those who are entrusted with this money by the virtue of the offices they hold are expected to account for its usage at the end of the financial year or as otherwise determined. In the market-based approach, the main concern is the revenue collected vis-à-vis the costs incurred as indicated by profit margins (Hillestad & Eric 45).
- Generation of medical advances
Market-based systems give financial incentives for the development of medical advances. There is usually a greater progress compared to that in the government-financed approach. In addition, new medical advances are availed to the patients sooner than those in government-financed approaches. In line with cost cutting policies, new medical advances in government-financed approaches to healthcare take long to be sanctioned and reimbursed and by extension availed to patients and physicians.
- Established of healthcare reform
Any reforms in the government-financed approach are established through policies by the incumbent government or legislation by congress. Such reforms might also affect market-based approaches to some extent. Nonetheless, reforms in the market-based approach are largely influenced by forces in the market and advancements in the medical fraternity.
The government-financed approach is advantageous in that it caters even for the disadvantaged and vulnerable populations. Additionally, it is relatively cheaper compared to the market-based approach and it has a wider coverage and increased access. The market-based approach is advantageous because it offers a better standard of care compared to the government-financed approach. Additionally, this approach is in touch with advancements in the medical fraternity and not only avails but also offers incentives for the development of new medical advances.
The government-financed approach needs to reform the standards of quality of care that are provided in the facilities. This approach would provide healthcare that is accessible to all if the quality of care in the facilities is continually improved and guided by the advancements in healthcare provision. Besides the plethora of other services above basic care, the other reason why people opt for market-based systems is because they offer unparalleled quality in healthcare. This would require them to review and sanction new advances so that the citizens can get improved services (Lu & Egon 175).
The market-based approach should reform its service delivery system in order to reach to different cadres of people, economically speaking. There are different niches in the economic environment. Instead of primarily focusing on financially affluent individuals, this approach can design products that are favorable to different niches. This way, healthcare will be accessible to people from all social economic groupings.
Hillestad, Steven G, and Eric N. Berkowitz. Health Care Market Strategy: From Planning to Action. Burlington, Mass: Jones & Bartlett Learning, 2013. Print.
Lu, Mingshan, and Egon Jonsson. Financing Health Care: New Ideas for a Changing Society. Weinheim: Wiley, 2008. Print.
Rita, Numerof & Michael, Abrams. Healthcare at a Turning Point: A Roadmap for Change. Boca Raton .CRC Press. 2012. Print.