Journal of Public Health Policy and Planning

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Opinion Article - Journal of Public Health Policy and Planning (2024) Volume 8, Issue 5

Understanding health financing: a key to sustainable healthcare

Reda Salah *

Business Administration Department, Faculty of Commerce, Kafrelsheikh University, Kafr el-Sheikh, Egypt

*Corresponding Author:
Reda Salah
Business Administration Department, Faculty of Commerce, Kafrelsheikh University, Egypt
E-mail: rdaslh@gmail.com

Received: 02-Sep -2024, Manuscript No. AAPHPP-24-150674; Editor assigned: 26- Sep -2024, PreQC No. AAPHPP-24-150674 (PQ); Reviewed:08- Sep -2024, QC No. AAPHPP-24-150674; Revised:15- Sep -2024, Manuscript No. AAPHPP-24-150674 (R); Published:23- Sep -2024, DOI:10.35841/aaphpp-8.5.252

Citation: Salah R: Understanding health financing: a key to sustainable healthcare. J Public Health Policy Plan .2024;8(5):252

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Abstract

    

Introduction

Health financing is a crucial element of any healthcare system, encompassing the methods and mechanisms used to fund healthcare services and ensure they are accessible and sustainable. Effective health financing is not only essential for providing equitable access to care but also for improving health outcomes and achieving broader socio-economic goals. This article explores the importance of health financing, the various models used, and the challenges and opportunities associated with it [ [1].

Health financing plays a vital role in ensuring that individuals have access to necessary healthcare services without facing financial hardship. It involves mobilizing resources to fund healthcare systems and services, managing those resources effectively, and ensuring that the distribution of funds aligns with public health priorities. Effective health financing contributes to several key objectives [2].

Proper health financing mechanisms ensure that all individuals, regardless of their economic status, can access essential healthcare services. This is particularly important in achieving universal health coverage, where the goal is to provide quality health services to everyone .Adequate funding allows for the procurement of medical supplies, maintenance of healthcare facilities, and payment of healthcare professionals. This, in turn, enhances the quality of care provided and improves health outcomes [3].

Proper health financing mechanisms ensure that all individuals, regardless of their economic status, can access essential healthcare services. This is particularly important in achieving universal health coverage, where the goal is to provide quality health services to everyone .Adequate funding allows for the procurement of medical supplies, maintenance of healthcare facilities, and payment of healthcare professionals. This, in turn, enhances the quality of care provided and improves health outcomes [4].

Health financing mechanisms protect individuals and families from the financial burden of medical expenses. This is achieved through insurance schemes, subsidies, and other financial protection strategies that reduce out-of-pocket payments.Various models are employed globally to finance healthcare systems. Each model has its strengths and weaknesses, and the choice of model often depends on a country's economic capacity, health needs, and political context. Here are some common health financing models [5].

In this model, healthcare is funded through general taxation. The government collects taxes from individuals and businesses, which are then allocated to healthcare services. This model promotes equity, as everyone contributes according to their ability to pay and benefits according to their need. Countries like the United Kingdom and Sweden use this model effectively [6].

Under this model, individuals contribute to health insurance schemes through payroll taxes or mandatory contributions. The pooled funds are used to provide healthcare services to contributors and their families. This model is used in countries like Germany and Japan. It can offer a high level of coverage and financial protection but may also create inequities if not properly regulated.Private health insurance involves individuals purchasing insurance coverage from private companies. This model is prevalent in countries like the United States. While it offers flexibility and a range of choices, it can lead to significant disparities in access to care based on individuals' ability to pay and the quality of insurance plans [7].

In some countries, individuals pay for healthcare services directly at the point of care. This model is often used in low-income settings where government resources are limited. While it provides flexibility and immediate access, it can lead to financial hardship and reduced access to care for those who cannot afford to pay.Many health financing models struggle with inequities in access to care. For example, private insurance models can leave vulnerable populations without adequate coverage, while tax-based systems may face issues with underfunding in low-income areas [8].

Efficient use of resources is crucial to avoid waste and ensure that funds are used effectively. Inefficient management can lead to higher costs and reduced access to care.In many countries, political and economic instability can disrupt health financing systems and lead to inconsistent or inadequate funding for healthcare services.Exploring new financing mechanisms, such as health bonds, public-private partnerships, and global health funds, can provide additional resources and improve access to care.Investing in health system strengthening, including improving management, reducing inefficiencies, and enhancing governance, can lead to more effective use of funds and better health outcomes [9].

Efforts to expand health coverage and reduce out-of-pocket payments through innovative insurance models or subsidies can help improve access and financial protection.International cooperation and knowledge sharing can help countries develop more effective health financing strategies and address common challenges. Ensuring that health financing systems are sustainable over the long term is a significant challenge. Economic downturns, demographic changes, and rising healthcare costs can strain financing systems and lead to reduced quality of care [10].

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