Healthcare Economics Assignment 2022

Running head: HEALTHCARE ECONOMICS
Healthcare Economics
Name of the Student
Name of the University
Author note

2HEALTHCARE ECONOMICS
Introduction
Healthcare funding is an essential aspect of healthcare management in any nation. It
includes the government funding, public and private funding as well as insurance facilities.
These healthcare financing and reimbursement also highly associated with the healthcare equity
that ensures the equal rights of having healthcare service facilities for the entire population. The
purpose of this paper is to analyse the current healthcare funding system of Demark with the
contrast of the Canadian healthcare funding system. Hence, the health and financial status of
Denmark has been discussed followed by the current healthcare finding policies in the Denmark.
After that, the impact of these policies will be analysed considering the current measures of
managing the healthcare failures such as adverse selection and moral hazards. The equity of
healthcare has been also measured with the advancement strategies.
Public and private financing and provisioning in healthcare
Currently the healthcare of Denmark is financed mainly through the publicly financial
systems and supported by private insurance systems. In 2015, public expenditure accounted for
84.2% of overall wellness expenditure, comprising 10.6% of GDP in 2015 (Annual Report.,
2014). As per the regulation Danish welfare system, all registered Danish residents are
automatically enrolled to publicly financed healthcare systems that are accessible by any citizen
with free of cost. Health care is financed mainly through a national health tax, set at 8 percent of
taxable income. On the contrary, the healthcare system of Canada is funded by both the
provincial and federal levels (OECD.Stat., 2015). The financing of health care is provided via
taxation both from personal and corporate income taxes. In Denmark, In 2013, personal
expenditure accounted for almost 16% of healthcare expenditure, and personal healthcare

3HEALTHCARE ECONOMICS
accounted for about 12% of complete personal expenditure (M. Olejaz, Juul Nielsen &
Rudkjøbing, 2014). However, in Canada Private health insurance schemes are typically provided
in many businesses as portion of employee benefit packages. Usually, incentives include sight
and dental care. Alternatively, private insurance companies can buy insurance plans from
Canadians. About three quarters of all financing comes from government outlets, while the rest
comes from personal outlets such as companies and private insurance (Canadian-healthcare.org,
2018).
Current cause of market failure
In healthcare economics, market failure occurs when the target consumers do not get
enough potential benefit from the healthcare financial support and provisions. At the same time,
it cal also lead to waste of funding and provisioning. The Danish healthcare system is universal,
which is based and the principle of free and equal access for all citizens. The quality and of the
Danish healthcare services are majorly financed by general taxes. Because of this free and equal
access the public service commission of Denmark does not have proper updated data about the
health and lifestyle of a large number of insurance holders. Life expectancy of Denmark has
increased from 78 years to 81 years within 2010 to 2015 (Diderichsen et al., 2016). Therefore the
number of potential market consumers has also increased significantly where the increasing
number of adverse selections and moral hazards can be found in current publicly funded health
insurances. On the contrary, Canada has more open healthcare funding policies where the people
have better opportunity to receive more continent and different types of health insurances. Lack