A two-tier healthcare system (also called dual-tier, or dual-level systems) refers to a framework where two distinct tiers of healthcare coexist, differing in quality and accessibility. Typically, there exists a basic level of publicly-funded healthcare accessible to all citizens, alongside a supplementary tier offering superior quality or expedited access for those with greater financial means. This model is commonly observed in nations where both public and private healthcare services or facilities operate at the same time, showcasing qualitative disparities.
Introduction to Two-Tier Healh Care Systems
In countries with robust publicly-funded universal healthcare systems (such as Italy or U.K.), private sector involvement tends to be marginal, typically constituting less than 20% of total healthcare expenditure. In these contexts, private insurance may serve as a complementary option, enabling individuals to circumvent waitlists in the public sector or access amenities such as private hospital accommodations. On the other hand, in economically disadvantaged nations where public healthcare infrastructure is inadequate, the private sector often provides higher-quality services or specialized treatments to those capable of affording them.
Are Two-Tier Systems a Consequence of Universal Healthcare?
A very common misconception about two-tier healthcare systems, is that their presence is an inherent consequence of universal healthcare implementation. Rather, it primarily depends on how healthcare funds are administered within a given country, region, or jurisdiction. While the United States exemplifies a predominantly single-tier system, with healthcare predominantly delivered by the private sector, other nations with universal healthcare, like Japan or Canada, also operate within a single-tier framework.
Advocates of dual-tier healthcare argue that individuals should have the freedom to access enhanced services by paying additional fees. Critics, instead, consider the very foundation of thi model as ethically dubious, asserting that the quality of healthcare received should remain consistently high regardless of the patient’s financial status. Some governments actively discourage the utilization of two-tier healthcare services to guarantee equity within the healthcare system. For instance, Canadian authorities have enacted legislation limiting dual practice by physicians and prohibiting extra billing and private insurance for publicly insured services to deter queue jumping. Nonetheless, affluent individuals may resort to healthcare tourism, seeking superior treatment abroad.
Advantages and Disadvantages of Two-Tier Healthcare Systems
In certain nations like Italy, Singapore, and the U.K., overreliance on private healthcare contracting due to public sector underfunding has generated challenges often wrongly attributed to the dual-tier system itself. Singapore, for instance, tried to increase the accessibility of primary care services to improve the care provided to vulnerable demographics like the elderly. However, primary care in this country is provided predominantly through private sector channels. Subsidization schemes for low- to middle-income households aim to reduce the high costs associated with dental and medical care in private clinics.
However, reliance on private facilities to compensate for public sector deficiencies leads to a distortion in public perception. As a consequence, instead of simply regarding private healthcare becomes as a luxury accessible only to the richer people, public healthcare may end up being stigmatized as an inferior service associated with poverty. This normalization of private healthcare could lead to a commodification of care, where convenience and perceived quality overshadow healthcare as a fundamental right. For instance, in urban centers like London, emergency ambulance demands have surged over the years, underscoring growing reliance on healthcare services. Similarly, in nations like South Korea, where the private sector thrives, out-of-pocket expenditures exceed the OECD average, indicative of a shift towards private healthcare reliance.
Furthermore, even the purported benefits of the dual-tier system may simply stem from misinterpretation of data. For instance, those in favor of introducing private providers to public health care systems, argue that private practice may alleviate pressure on public systems and reduce wait times. However, in countries where two-tier systems represented the standard for decades, like Italy and New Zealand, reductions in wait times occurred only when systemic healthcare reforms were introduced, and were never linked with integration with private care.
Final Thoughts
Healthcare by itself is more than the parts that constitute it. It is not just its infrastructure and the provision of medical services, but encompasses a broad range of policies, decisions, and actions aimed at ensuring optimal health outcomes and a good, lenghty and healthy life for all people in a country.
Various models of healthcare funding and provision exist, each with distinct advantages and disadvantages, all existing within the constraints of that country’s resources and the expectations of the society as a whole.
Article edited and fact checked by our editorial team.
About the author:
Dr. Claudio Butticè, Pharm.D., is a former Pharmacy Director who worked for several large public hospitals in Southern Italy, as well as for the humanitarian NGO Emergency. He is now an accomplished book author who has written on topics such as medicine, technology, world poverty, human rights, and science for publishers such as SAGE Publishing, Bloomsbury Publishing, and Mission Bell Media. His latest books are “Universal Health Care” (2019) and “What You Need to Know about Headaches” (2022). A data analyst and freelance journalist as well, many of his articles have been published in magazines such as Cracked, The Elephant, Digital Journal, The Ring of Fire, and Business Insider. Dr. Butticè also published pharmacology and psychology papers on several clinical journals, and works as a medical consultant and advisor for many companies across the globe.
References:
- Butticè, Claudio (2019). Universal health care. Health and medical issues today. Santa Barbara, California: Greenwood. ISBN 978-1-4408-6844-3.
- World Health Organization (November 22, 2010). The world health report: health systems financing: the path to universal coverage. Geneva: World Health Organization. ISBN 978-92-4-156402-1.
- Wouters, O., & McKee, M. (2016). Private Financing of Health Care in Times of Economic Crisis: a Review of the Evidence. Global Policy, 8, 23-29. doi: 10.1111/1758-5899.12211
- Abiiro, G., & De Allegri, M. (2015). Universal health coverage from multiple perspectives: a synthesis of conceptual literature and global debates. BMC International Health And Human Rights, 15(1). doi: 10.1186/s12914-015-0056-9
- Flood, Colleen M. and Hardcastle, Lorian. A Two-Tier Health Care System: The New Zealand Story (July 7, 2015). Ottawa Faculty of Law Working Paper No. 2015-30. http://dx.doi.org/10.2139/ssrn.2627709