The out-of-pocket model is often not considered a system, rather the result of a lack of structure when it comes to health care. This results in citizens paying for health care through out-of-pocket payments (OOPs). These are direct payments at the point of use of a medical service which is not covered by any cover that has been prepaid. As a consequence of this, the gap between the rich, who can afford sufficient health care, and the poor, who cannot, is often amplified.
Why does the out-of-pocket model exist?
The poorest countries in the world are usually where the out-of-pocket model is put in place. Frequently in these countries, the range of health insurance schemes is small and at the same time there is a large population that cannot afford medical cover. Therefore when the poorest get ill they have to find the money to pay the bill on the spot or they simply do not receive medical attention.
As a result of this, in some of the countries where the out-of-pocket model exists, over three quarters of the population have to pay upfront OOPs for health care. Consequently, the average life expectancy of these countries are some of the lowest globally, most of which lying on the African continent.
What about the USA?
In the USA, like most real life examples, there is a mixture of health care systems at play. Overall, the American system is usually described as an out-of-pocket model, although the percentage of citizens who are insured is higher than other countries. However there were still over 27 million uninsured Americans under the age of 65 in 2016 and this will most likely only get worse if president Trump's plans to reverse Obamacare play out.
Obamacare was the expansion of the medicare and medicaid programmes, which incorporates a single payer-like system into the American health care. Medicare provide taxpayer-funded public insurance available for those over 65 and in a similar way medicaid provides assistance for low-income households. [Click here to find out more about Obamacare]
As well as this, there is also a Beveridge style system, providing publicly funded hospitals and hospital staff for veterans provided by the Department of Veterans Affairs (VA). It's the largest integrated health care system serving 9 million enrolled veterans each year.
Where can the out-of-pocket model be found?
The out-of-pocket model is found across rural regions of Africa and South America as well as in Asian countries such as China and India.
References:
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Emilia Chen, Oxford