Abstract

The United States spends nearly twice as much per capita on health care as several OECD countries. Based on previous research, universal health care decreases the total health care expenditure due to the single-payer system; it is still unknown whether a mixed health care system has superiority. In this study, we compare and evaluate both quality of care and administrative costs among six developed countries, upon three groups: single-payer universal health care system (Australia and Canada), two-tier health care system (France and Japan), and insurance mandate health care system (Switzerland and the US). The results show that both single-payer system and two-tier system are superior to insurance mandate system on health insurance administration costs. Also, regarding insurance mandate system, the healthcare system in Switzerland is more efficient than that in the US. So, we conclude that it is possible for the US to choose a diverse healthcare system, instead of focusing on one system, to trim the healthcare administration cost and improve the quality of care for the entire country.

Highlights

  • In 1991, Woolhandler and Himmelstein [1] reported that people in the United States spent about $450 per capita on healthcare administration in 1997, whereas Canadians spent one third as much

  • The results show that both single-payer system and two-tier system are superior to insurance mandate system on health insurance administration costs

  • Health administration cost is expressed in terms of US$ Purchasing Power Parities (PPP) in order to take into account differences in prices and purchasing power across countries

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Summary

Introduction

In 1991, Woolhandler and Himmelstein [1] reported that people in the United States spent about $450 per capita on healthcare administration in 1997, whereas Canadians spent one third as much. Single payer system healthcare is a system in which the state, rather than private insurers, pays for all healthcare costs. The government is still the major fund source to support the states, and health professions, subsiding primary care providers through different programs. The federal government funds Medicare, a universal public health insurance program providing free or subsidized access to care for Australian citizens and residents [7]. We treat these two countries as the representative of single-payer system due to two reasons: 1) government is the major funding source; 2) public financed healthcare services are free to residents.

Literature Review
Data and Econometric Model
Empirical Results
Conclusions
Discussion
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