Health Policy

Health Policy

Choice, Equality and Cost

David Reisman

This lucid and comprehensive book explores the ways in which the State, the market and the citizen can collaborate to satisfy people’s health care needs. It argues that health care is not a commodity like any other. It asks if its unique properties mean that there is a role for social regulation and political management. Apples and oranges can be left to the buyers and the sellers. Health care may require an input from the consensus, the experts, the insurers, the politicians and the bureaucrats as well. David Reisman makes a fresh contribution to the debate. He argues that the three policy issues that are of primary importance are choice, equality and cost.

Chapter 9: Insurance: private and public

David Reisman

Subjects: politics and public policy, public administration and management, social policy and sociology, health policy and economics


Insurance can take a variety of forms. It can be provided by a variety of agencies. Section 9.1 on ‘Private health insurance’ and section 9.2 on ‘National health insurance’ discuss prepayment options in the two sectors. Section 9.3, ‘The National Health Service: payment and provision’, examines the double-barrelled structure that marries up the two sides of the circular flow. Finally, section 9.4, ‘Payment beyond insurance’, is a reminder that the money can be found even if there is no third party to share the risk. Not all insuring agencies in the non-State sector are commercial and for-profit. Some are linked to private charities, professional associations, trade unions, consumer co-operatives and hospitals. Some large employers operate their own insurance funds. All are subject to financial regulation to ensure that their capital is sufficient and their investments sound. Often that is the sum total of the regulator’s involvement. Individuals apply for private cover either because they have no core protection or because they want incremental options. The fact that the individual applies does not, however, mean that the application will be accepted. Each one-off is a mystery. Adverse selection is always a threat. A person who has made a calculated choice to spend money in the hand on an unforeseeable outcome in the bush must always be regarded with suspicion. Individual plans are always higher-priced plans because of the chance that the applicant is secretly anticipating an above-average claim.

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