Financing

There are generally five primary methods of funding health care systems
1. direct or out-of-pocket payments,
2. general taxation to the state, county or municipality,
3. social health insurance,
4. voluntary or private health insurance, and
5. donations or community health insurance.
Most countries' systems feature a mix of all five models. One study based on data from the OECD concluded that all types of health care finance "are compatible with" an efficient health care system. The study also found no relationship between financing and cost control.
The term health insurance is generally used to describe a form of insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a government-sponsored social insurance program, or from private insurance companies. It may be purchased on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers. In each case, the covered groups or individuals pay premiums or taxes to help protect themselves from high or unexpected health care expenses. Similar benefits paying for medical expenses may also be provided through schemes organized by the government and funded through contributions from users.
By estimating the overall cost of health care expenses, a routine finance structure (such as a monthly premium or annual tax) can be developed, ensuring that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization, most often either a government agency or a private or not-for-profit entity operating a health plan.
Many forms of commercial health insurance control their costs by restricting the benefits that are paid by through deductibles, co-payments, coinsurance, policy exclusions, and total coverage limits and will severely restrict or refuse coverage of pre-existing conditions. Many government schemes also have co-payment schemes but exclusions are rare because of political pressure. The larger insurance schemes may also negotiate fees with providers.
Many forms of government insurance schemes control their costs by using the bargaining power of government to control costs in the health care delivery system. For example by negotiating drug prices directly with pharmaceutical companies, or negotiating standard fees with the medical profession. Government schemes sometimes feature contributions related to earnings as part of a scheme to deliver universal health care, which may or may not also involve the use of commercial and non-commercial insurers. Essentially the more wealthy pay proportionately more into the scheme to cover the needs of the relatively poor who therefore contribute proportionately less. There are usually caps on the contributions of the wealthy and minimum payments that must be made by the insured (often in the form of a minimum contribution, similar to a deductible in commercial insurance models). In health care delivery system (primary health care) there are also providers in different ways, for example Government, private, NGOs and traditional medicine.