Mechanisms Involved in the Choice for Health Providers

Health Economic
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Describe in detail the mechanisms that must be enabled to support consumer choice of insurers and/or health care providers, as well as the advantages or disadvantages of providing such a choice.
Introduction
Every country wishes to create a quality and affordable healthcare system. However, healthcare is expensive because almost every supply side of it is expensive, from patented drugs, expensive machinery, high cost of training, and compensation of medical professionals, among others. When capitalistic interests creep into this industry, healthcare becomes expensive and a reserve of few CITATION Gar161 \l 1033 (Branning & Vater, 2016). Patients consume services out of necessity (not want). Healthcare would be expensive if commercial interests are prioritized and may not necessarily translate to the best quality. Therefore, governments have adopted one of the four dominant systems to fund healthcare; the Beveridge Model, the Bismarck model, the National Health Insurance model, and the out-of-pocket model. Each of these models has its inherent shortcomings, and experts have criticized them for prioritizing different objectives. For example, the Beveridge model has been faulted for long waiting lists and people paying for services they do not need (it is compulsory to pay for taxes that fund. The Bismarck model is mainly faulted that it doesn’t provide universal health coverage since it is employment-based and covers those who contribute to it. National health insurance is often faulted for cost, and some people cannot afford coverage. The out-of-pocket is faulted because it is unaffordable to some people. Therefore, each of these healthcare systems limits consumer choice of insurers and healthcare providers. There is no silver bullet to achieve this goal. However, the convergence of the advantages of each model can come close to delivering healthcare that supports consumer choice of insurers and healthcare providers CITATION Cic94 \l 1033 (Cichon & Normand, 1994).
The best approach would be to borrow the best aspects of each model and create a hybrid model CITATION Cic94 \l 1033 (Cichon & Normand, 1994). In the case of universal health care as a basic human right, the government controls the autonomy of the people, especially on hospitals and specialist costs. It seeks to keep the costs as low as possible because it bears the brunt of reimbursement. On the other hand, the insured has many options through insurance companies. They can take the packages that best address their needs in consumer healthcare. Healthcare is guaranteed for all citizens and permanent residents in the resulting model.
On the other hand, a tightly controlled insurance market offers supplementary benefit packages for the people. One country has crafted this hybrid model, and it has been working very well in the last two decades. It has kept the government expenditure on healthcare very low and has achieved very high rates of private insurance. It has also tightly controlled the operations such that the quality of care is top-notch and efficient. Consumer choice is determined by the package they choose to take through their private insurance plans.
How the system works
Israel has developed a variant of this model to serve the public efficiently. Israel has one of the best healthcare systems globally, which has several advantages drawn from the hybrid system CITATION Ros15 \l 1033 (Rosen, Waitzberg, & Merkur, 2015). It has remained relatively stable for over 2 decades since it was introduced in 1995 by an act of parliament. First, healthcare is offered as a right. All citizens are entitled to it is partly funded by the government. Secondly, not-for-profit insurers offer competitive packages to the people to supplement the universal healthcare system. Thus, the hybrid system draws very little from the taxes for basic healthcare. This helps the government spend far much less than other OECD countries spend on healthcare. Israel spends a very low proportion of its GDP on healthcare (less than 8%) compared to the US (16.4%) and the UK (9.8%) CITATION The18 \l 1033 (Tulchinsky, 2018). A competitive private health insurance plan has also worked well for the country. Israel has one of the highest private health insurance ownership rates in the worldCITATION Fil20 \l 1033 (Filc, Rasooly, & Davidovitch, 2020). The supplementary insurance is offered by four not-for-profit companies that are legally obligated to offer insurance to everyone, covering hospital, primary, specialty, mental health, maternity care, and prescription drugs. The system does not have copayments for primary care visits, preventive care, cancer screenings, or hospital admissions. There are also no quarterly or annual deductibles with NHI coverage, but there are copayments for specialist visits and prescription drugs. Care is partly funded by the national income tax and income-related health tax. This system borrows from Beveridge for the national income tax-funded scheme and income-related health tax borrowed from Bismarck. Since everyone is entitled to primary healthcare, the citizens only supplement the insurance to access services not covered by the benefit package and for greater and faster access to provider choice.
The four not-for-profit insurance companies are tightly controlled by the government such that it dictates the packages it offers the people. The government has also legislated that insurance companies cannot deny an Israeli citizen coverage CITATION Com20 \l 1033 (Commonwealth Fund, 2020). Over the years, the government has perfected the model and tuned it to serve the needs of the people. It still retains tight control on the supply of hospital beds and access to primary healthcare. It has facilitated an efficient electronic health records system that helps to support the high-tech and well-oiled healthcare infrastructure CITATION Ros15 \l 1033 (Rosen, Waitzberg, & Merkur, 2015). This has translated to quality healthcare at relatively very low costs. However, it is important to note that this proposal is slightly different from Israeli’s model. The Israeli model has some inherent drawbacks that have blurred its industry players' reach,.e. nonprofit health funds sell private insurance, public nonprofit health funds own private for-profit hospitals, and public hospitals sell private servicesCITATION Fil20 \l 1033 (Filc, Rasooly, & Davidovitch, 2020).
Government Oversight
The government can pass some acts of parliament dictating how insurance companies have to operate in the country. In fact, since Israel’s National Health Insurance (NHI) law was passed in 1995, it has been reviewed and amended over 100 times CITATION Ang21 \l 1033 (Angel, Niv-Yagoda, & Gamzu, 2021). It is imperative to have the government as the oversight organization because otherwise, the insurance companies will chase profits at the expense of the insured. If left unchecked, the insurance companies can push the price of benefit packages. While the insured have choices, they cannot afford the best packages for them, or they are eligible for coverage for many reasons. An example of this capitalistic unregulated insurance industry is the US. Many insurance companies have systematically found a way of offering very high premiums and offering very little in return CITATION Gar161 \l 1033 (Branning & Vater, 2016). They also choose who to cover, which often sidelines the most people who need care, i.e., People with preexisting conditions. Thus, if the government seeks to maximize the choices available to the people, it can legislate to regulate the insurance industry.
Israeli’s health insurance industry is strictly not-for-profit. Therefore, the capitalistic moves of some insurance companies that seek to maximize profits are not applicable here. The insurance companies are compelled to operate within the provisions of tightly controlled pricing and the constitution of benefit packages. Secondly, legislation can also be extended to determine the people who can be covered. The Israeli government legislated that no insurance industry player can deny any citizen cover. Therefore, a citizen knows that the insurance cannot turn them down should he/she choose their services, ensuring that insurance companies do not sideline some individuals based on their health history. Additionally, through various advisory bodies, the government oversees the operations of different arms of the healthcare scheme. For example, the Benefits Package Committee provides guidance on the prioritization of new technologies for inclusion in the NHI benefits package and carries out health technology assessments for new medications. Thus, the government has a say in what is included in the benefits package of the healthcare plans. This tight control over the industry ensures that the insurer has a variety of low-cost quality choices for healthcare insurance.
Cost Containment measures
Healthcare is expensive, and if all players in the industry are left to set their prices individually, the cumulative cost will be borne by the consumer. If the healthcare system is largely dominated by private institutions of healthcare and insurance, they will seek profits and increase the cost of healthcare. It is imperative for the government to come in and regulate the industry before it translates to huge costs for the insured. Therefore, the government institutes tight control of resources and expenditures in the model. It is involved in designing and developing benefit care packages for the insured. It is also heavily involved in determining the pricing of the benefits package. The government can also invest in other areas of the industry especially supply factors of human resources, medicine, and the number of beds. For example, through the ministry of health, the Israeli government deploys risk-sharing agreements for some drugs, and the pharmaceuticals fund patients' drugs after a predetermined supply is depleted CITATION Com20 \l 1033 (Commonwealth Fund, 2020).
Additionally, the government brokers deal with the percentage of cost and supply capacity of patented and generic drugs to...