Privatized healthcare services are generally funded by a combination of health insurance providers, patients, and corporate funding. This is markedly different from universal coverage (healthcare coverage for all citizens) which is typically primarily funded by income taxation on the entire working populace. In privatized healthcare, there are two major benefits for consumers: choice and efficiency. Under universal coverage, for example, non-life-threatening conditions, illnesses, and injuries may take longer to treat. Physicians may be obligated to perform less expensive services first, even if they are known to be less effective than a more expensive procedure. With privatized healthcare services, patients have the ability to pursue the treatments that they need as soon as possible. Shorter queue times mean greater overall efficiency for patients looking to treat their conditions as quickly as they can.
Whereas with privatized healthcare services consumers are free to choose the physicians they want, universal coverage may require that patients utilize certain local physicians that are considered to be in-network. This practice guarantees revenue for the physicians, but may mean longer queue times for patients depending on the healthcare services they are seeking. As one might imagine, the increased choice and lower queue times of some privatized healthcare plans equates to greater out-of-pocket costs. Affordability, efficiency, and effectiveness of treatment form the corners of the healthcare triangle. Ideally, patients would like to have all three, but generally, as consumers in the current marketplace, we can only pick two.
Though privatized healthcare supposedly grants a greater degree of efficiency and effectiveness of treatment, in recent years health insurance companies have undermined healthcare providers’ treatment protocols in an attempt to curb costs. For example, if soft tissue damage is suspected in a patient, health insurance companies may require physicians to utilize less effective imaging exams (like X-rays, which are normally used to observe bone fractures) rather than magnetic resonance imaging (MRI), which is a more expensive imaging exam but is much more effective at diagnosing specific soft tissue conditions. In other words, private health insurance companies are increasingly instituting protocols similar to those in countries with universal coverage. Effectiveness of treatment may be reduced in order to save health insurance companies costs which they would otherwise have to absorb.
While privatized healthcare can provide (at least in some cases) greater efficiency and effectiveness, substantial out-of-pocket costs may make private health insurance companies completely unaffordable to a vast number of citizens. Private healthcare systems also do little to address the costs incurred in treating uninsured individuals (who often are uninsured because they could not afford private premiums in the first place). These costs are often absorbed by hospitals in the form of higher baseline prices for healthcare services, and by individuals in the form of massive medical debt. The Affordable Care Act of 2010 was meant to address some of these discrepancies by mandating that employers with 50 or more full-time employees provide health insurance to their full-time staff.