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The healthcare industry (also called the medical industry or health economy) is an aggregation and integration of sectors within the economic system that provides goods and services to treat patients with curative, preventive, rehabilitative, and palliative care. It includes the generation and commercialization of goods and services lending themselves to maintaining and re-establishing health. The modern healthcare industry is divided into many sectors and depends on interdisciplinary teams of trained professionals and paraprofessionals to meet health needs of individuals and populations.

The healthcare industry is one of the world's largest and fastest-growing industries. Consuming over 10 percent of gross domestic product (GDP) of most developed nations, health care can form an enormous part of a country's economy.

Contents

 * 1Backgrounds
 * 2Providers and professionals
 * 3Delivery of services
 * 4Systems
 * 4.1Beveridge model
 * 4.2Bismarck model
 * 4.3National health insurance model
 * 4.4Out-of-pocket model
 * 4.5Inefficiencies
 * 5See also
 * 6References
 * 7Further reading
 * 8External links

Backgrounds
For the purpose of finance and management, the healthcare industry is typically divided into several areas. As a basic framework for defining the sector, the United Nations International Standard Industrial Classification (ISIC) categorizes the healthcare industry as generally consisting of:


 * 1) Hospital activities;
 * 2) Medical and dental practice activities;
 * 3) "Other human health activities".

This third class involves activities of, or under the supervision of, nurses, midwives, physiotherapists, scientific or diagnostic laboratories, pathology clinics, residential health facilities, or other allied health professions, e.g. in the field of optometry, hydrotherapy, medical massage, yoga therapy, music therapy, occupational therapy, speech therapy, chiropody, homeopathy, chiropractic, acupuncture, etc.

The Global Industry Classification Standard and the Industry Classification Benchmark further distinguish the industry as two main groups:


 * 1) healthcare equipment and services; and
 * 2) pharmaceuticals, biotechnology and related life sciences.

The healthcare equipment and services group consists of companies and entities that provide medical equipment, medical supplies, and healthcare services, such as hospitals, home healthcare providers, and nursing homes. The latter listed industry group includes companies that produce biotechnology, pharmaceuticals, and miscellaneous scientific services.

Other approaches to defining the scope of the healthcare industry tend to adopt a broader definition, also including other key actions related to health, such as education and training of health professionals, regulation and management of health services delivery, provision of traditional and complementary medicines, and administration of health insurance.

Providers and Professionals
See also: Healthcare provider and Health workforce

A healthcare provider is an institution (such as a hospital or clinic) or person (such as a physician, nurse, allied health professional or community health worker) that provides preventive, curative, promotional, rehabilitative or palliative care services in a systematic way to individuals, families or communities.

The World Health Organization estimates there are 9.2 million physicians, 19.4 million nurses and midwives, 1.9 million dentists and other dentistry personnel, 2.6 million pharmacists and other pharmaceutical personnel, and over 1.3 million community health workers worldwide, making the healthcare industry one of the largest segments of the workforce.

The medical industry is also supported by many professions that do not directly provide healthcare itself, but are part of the management and support of the healthcare system. The incomes of managers and administrators, underwriters and medical malpractice attorneys, marketers, investors and shareholders of for-profit services, all are attributable to healthcare costs.

'''In 2017, healthcare costs paid to hospitals, physicians, nursing homes, diagnostic laboratories, pharmacies, medical device manufacturers and other components of the healthcare system, consumed 17.9 percent of the Gross Domestic Product (GDP) of the United States, the largest of any country in the world. It is expected that the health share of the Gross domestic product (GDP) will continue its upward trend, reaching 19.9 percent of GDP by 2025. ''' In 2001, for the OECD countries the average was 8.4 percent with the United States (13.9%), Switzerland(10.9%), and Germany (10.7%) being the top three. US health care expenditures totaled US$2.2 trillion in 2006. According to Health Affairs, US$7,498 be spent on every woman, man and child in the United States in 2007, 20 percent of all spending. Costs are projected to increase to $12,782 by 2016.

The government does not ensure all-inclusive healthcare to every one of its natives, yet certain freely supported health care programs help to accommodate a portion of the elderly, crippled, and impoverished and elected law guarantees community to crisis benefits paying little respect to capacity to pay. Those without health protection scope are relied upon to pay secretly for therapeutic administrations. Health protection is costly and hospital expenses are overwhelmingly the most well-known explanation behind individual liquidation in the United States.

Delivery of Services
See also: Gatekeeper physicians

The delivery of healthcare services—from primary care to secondary and tertiary levels of care—is the most visible part of any healthcare system, both to users and the general public. There are many ways of providing healthcare in the modern world. The place of delivery may be in the home, the community, the workplace, or in health facilities. The most common way is face-to-face delivery, where care provider and patient see each other in person. This is what occurs in general medicine in most countries. However, with modern telecommunications technology, in absentia health care or Tele-Health is becoming more common. This could be when practitioner and patient communicate over the phone, video conferencing, the internet, email, text messages, or any other form of non-face-to-face communication. '''Practices like these are especial applicable to rural regions in developed nations. These services are typically implemented on a clinic-by-clinic basis. '''

Improving access, coverage and quality of health services depends on the ways services are organized and managed, and on the incentives influencing providers and users. In market-based healthcare systems, for example such as that in the United States, such services are usually paid for by the patient or through the patient's health insurance company. Other mechanisms include government-financed systems (such as the National Health Service in the United Kingdom). In many poorer countries, development aid, as well as funding through charities or volunteers, help support the delivery and financing of healthcare services among large segments of the population.

The structure of healthcare charges can also vary dramatically among countries. For instance, Chinese hospital charges tend toward 50% for drugs, another major percentage for equipment, and a small percentage for healthcare professional fees. China has implemented a long-term transformation of its healthcare industry, beginning in the 1980s. Over the first twenty-five years of this transformation, government contributions to healthcare expenditures have dropped from 36% to 15%, with the burden of managing this decrease falling largely on patients. Also over this period, a small proportion of state-owned hospitals have been privatized. As an incentive to privatization, foreign investment in hospitals—up to 70% ownership has been encouraged.

Healthcare Systems
Main article: Health system

Healthcare systems dictate the means by which people and institutions pay and receive health services. Models vary based on the country, with the responsibility of payment ranging from public and private insurers to the patients themselves. These systems finance and organize the services delivered by providers. The American Academy of Family Physicians define four commonly utilized systems of payment:

The Beveridge Model
Named after British economist and social reformer William Beveridge, the Beveridge model sees healthcare financed and provided by a central government. The system was initially proposed in his 1942 report, Social Insurance and Allied Services—known as the Beveridge Report. The system is the guiding basis of the modern British healthcare model enacted post-World War II. It has been utilized in numerous countries, including The United Kingdom, Cuba, and New Zealand.

The system sees all healthcare services— which are provided and financed solely by the government. This single payer system is financed through national taxation. Typically, the government owns and runs the clinics and hospitals, meaning that doctors are employees of the government. However, depending on the specific system, public providers can be accompanied by private doctors who collect fees from the government. The underlying principal of this system is that healthcare is a fundamental human right. Thus, the government provides universal coverage to all citizens. Generally, the Beveridge model yields a low cost per capita compared to other systems.

The Bismarck System
The Bismarck system was first employed in 1883 by Prussian Chancellor Otto von Bismarck. In this system, insurance is mandated by the government and is typically sold on a non-profit basis. In many cases, employers and employees finance insurers through payroll deduction. In a pure Bismarck system, access to insurance is seen as a right solely predicated on labor status. The system attempts to cover all working citizens, meaning patients cannot be excluded from insurance due to pre-existing conditions. While care is privatized, it is closely regulated by the state through fixed procedure pricing. This means that most insurance claims are reimbursed without challenge, creating low administrative burden. Archetypal implementation of the Bismarck system can been seen in Germany's nationalized healthcare. Similar systems can be found in France, Belgium, and Japan.

The National Health Insurance Model
The National Insurance Model shares and mixes elements from both the Bismarck and Beveridge models. The emergence of the National Health Insurance model is cited as a response to the challenges presented by the traditional Bismarck and Beveridge systems. For instance, it is difficult for Bismarck Systems to contend with aging populations, as these demographics are less economically active. Ultimately, this model has more flexibility than a traditional Bismarck or Beveridge Model, as it can pull effective practices from both systems as needed.

The National Health Insurance model maintains private providers, but payment comes directly from the government. Insurance plans control costs by paying for limited services. In some instances, citizens can opt out of public insurance for private insurance plans. However, large public insurance programs provide the government with bargaining power, allowing them to drive down prices for certain services and medication. In Canada, for instance, drug prices have been extensively lowered by the Patented Medicine Prices Review Board. Examples of the National Health Insurance Model can be found in Canada, Taiwan, and South Korea.

The Out-of-Pocket Model
In areas with low levels of government stability, there is often no mechanism for ensuring that health costs are covered by a party other than the individual. In this case patients must pay for services on their own. Payment methods can vary—ranging from physical currency, to trade for goods and services. Those that cannot afford treatment typically remain sick or die. Receiving care can be so challenging that in rural Asia, Africa, and South America where this model is prevalent, millions of people have never visited a doctor.

Medical Tourism
Main article: Medical tourism

Medical tourism (also called medical travel, health tourism or global health care) is the rapidly growing practice of traveling across international borders to obtain healthcare.

Such services typically include elective procedures as well as complex specialized surgeries such as joint replacement (knee/hip), cardiac surgery, kidney transplantation, liver transplantation, dental surgery, and cosmetic surgeries. However, virtually every type of health care, including psychiatry, alternative treatments, convalescent care and even burial services are available. As a practical matter, providers and customers commonly use informal channels of communication-connection-contract, and in such cases this tends to mean less regulatory or legal oversight to assure quality and less formal recourse to reimbursement or redress, if needed.

'''Over 50 countries have identified medical tourism as a national industry. However, accreditation and other measures of quality vary widely across the globe, and there are risks and ethical issues that make this method of accessing medical care controversial.'''

Inefficient Healthcare Systems
No healthcare system will ever be perfect. There are bound to inefficiencies in any system, something which many governments try to minimize through efficiency measures. The primary goal of efficiency measures is providing an optimized system where quality health services are not compromised. While this is ultimately the goal of every systems, there are cases where glaring inefficiencies emerge, frequently proving detrimental to the country and its population.

National Health Service (United Kingdom)
Main article: National Health Service

The National Health System (NHS) creates excellent patient outcomes and mandates universal coverage. While the system is effective at ensuring relatively high quality care to a large population, it also suffers from large lag times for treatment. Critics argue that reforms brought about by the Health and Social Care Act 2012 only proved to fragment the system, leading to high regulatory burden and long treatment delays. In his review of NHS leadership in 2015, parliament member Sir Stuart Rose concluded that "the NHS is drowning in bureaucracy."

The United States
Main article: Health care in the United States

The cost of Healthcare in the United States is higher than in any other industrial country with similar or better health system performance. The United States spent 17.9% of its GDP on Healthcare expenditures in 2017. Critics identify three large issues in the United States' health care system: insufficient insurance coverage, administrative inefficiency, and under-performing primary care. While federal statutes, like the Patient Protection and Affordable Care Act (ACA), have tried to address these issues by mandating insurance and standardized business practice, critics argue that the ACA lead to the loss of insurance form thousands of families, as well as creating a painful transition period. In addition, there is still debate over whether the ACA reduced or contributed to the national deficit. The plan is still largely unpopular among Republican politicians. Despite several attempts to repeal and replace the ACA, the party has yet to successfully do so.

Inequitable Health Outcomes
Truly equitable health care systems are nearly impossible to create. However, many systems still attempt to ensure that there are minimal outcome disparities. The means by which equity is assured varies on the country and health care system. One of the first determinates of equitable outcomes is access to insurance coverage. In single payer systems, all citizens are insured—meaning that the population doesn't struggle with paying for care on an individual basis. However, in other countries where insurance is not mandated, there can be gaps in coverage—especially among disadvantaged and impoverished communities that can not afford private plans. Governments respond to this as they see fit. For instance in the United States, programs like Medicaid and Medicare (United States) have been instituted to assist in medical payments. However, even if coverage is assured, equitable care can still be heavily affected by other factors. For instance, a study run by the Centers for Disease Control and Prevention (CDC) in 2015 discovered that health outcomes are linked to race, ethnicity, household income, sex, age, and geographic location. These factors can contribute to larger inequities that persist beyond insurance disparities. The same CDC study reported large disparities in access to health care, health behaviors, and exposure to environmental health hazards.