In most countries around the world, there is no organized health insurance system. Many smaller countries and communities rely on leaders, matriarchs, and lay healers for healthcare. Within organized systems, there are three rules:

“1. No matter how good the health care in a particular country, people will complain about it. 2. No matter how much money is spent on health care, the doctors and hospitals will argue that it is not enough. 3. The last reform always failed.” - T.R. Reid

Health systems can generally be characterized into four main models, each reflecting different approaches to financing and delivering care. The US doesn’t fit neatly into one health system model, but combines elements from all four.

Out-of-Pocket Model: Healthcare is paid directly by individuals out of pocket. It is the primary model in countries with limited healthcare infrastructure or government support. Access is based on ability to pay, often leading to inequity.

• Examples: Many low-income countries
• US: For the uninsured, healthcare often operates as an out-of-pocket system.

Beveridge Model (National Health Service Model): Healthcare is provided and financed by the government through tax revenues. Most hospitals and clinics are owned by the government, and medical professionals are often government employees. Care is free at the point of use.

• Examples: United Kingdom, Spain, New Zealand, Scandinavia
• US: The U.S. has a Beveridge-like system for specific populations, such as veterans, who receive healthcare through the Veterans Health Administration (VA).

Bismarck Model (Social Health Insurance): Healthcare is financed through employer-employee payroll deductions and mandatory insurance. Insurers (sickness funds) are not-for-profit and must cover everyone. Providers are private, but the government regulates pricing by setting guardrails for negotiations.

• Examples: Germany, Japan, France, Belgium, Switzerland
• US: Employer-sponsored insurance resembles the Bismarck model in that workers and employers pay into private insurance plans, which are regulated but for-profit in most cases.

National Health Insurance Model: Combines elements of Beveridge and Bismarck. Healthcare is delivered privately, but the government operates a single-payer system to finance care through taxes or premiums. This model reduces administrative costs significantly.

• Examples: Canada, South Korea, Taiwan
• US: Traditional Medicare reflects the National Health Insurance model. The government acts as a single payer, funding care through taxes.

Other models within the US

Maryland All-Payer Model: A unique system where all payers, including Medicare, Medicaid, and private insurers, pay the same rates for hospital services (similar to Traditional Medicare). Hospitals operate privately, but the state sets uniform payment rates and uses global budgets to cap hospital revenue, ensuring predictable funding. This reduces cost-shifting, encourages efficiency, and incentivizes hospitals to focus on quality care and population health rather than service volume.

• The Maryland All-Payer Model, initiated in 2014, has effectively controlled hospital cost growth and enhanced care quality. By establishing uniform payment rates across all payers and implementing global budgets for hospitals, the state achieved significant Medicare savings, reduced hospital readmissions, and improved patient outcomes.