ABSTRACT
In the USA there are fundamentally two types of health care system. The privatised health care system, encompassing 80% of the population, is financed by premium payments. The other system, covering 20% of the population, is financed by the government schemes: Medicare and Medicaid. In the Medicare system free inpatient medicines and hospital treatment are provided to those aged 65 and over and the disabled. It excludes several types of treatment and nursing homes. The Medicaid programme provides medical cover for poor people aged under 65 years who cannot afford to pay insurance premiums. In the privatised systems, a premium is paid based not on the ability to pay but on the services required and the probability of being sick. With insurance schemes a health premium is paid to an insurance company and the individual is free to go to any doctor or hospital for treatment. Insurance companies pay the bill. This has the disadvantage of high costs for the insurance company as there is no direct control on the provider of health care. In health maintenance organisations (HMOs) the health insurance company and the provider of health care have a contract with each other. The individual is restricted to the doctors and hospitals nominated by the insurance company. HMOs have subsequently become managed care organisations (MCOs) (see later).
