Trends in the development of health expenditure and the choice of a financingsystem: comparison of Beveridge and Bismarck models

General Medicine, 2023, 25(4), 45-50

D. Semkov, N. Atanasov, R. Dimova

Department of Health Management and Health Economics, Faculty of Public Health, Medical University ‒ Plovdiv

Abstract. Introduction: Globally, health care costs have more than quadrupled over the past 50 years. In Europe, public funds for health care are collected in two main ways – through health insurance contributions (Bismarck model) and through taxation (Beveridge model). Under Beveridge, funding is at the expense of the state budget and to a greater extent centralized and integrated. It follows that it must be relatively “more economical”. The aim of this study is to make a retrospective analysis and comparison of the statistics indicators for the size and dynamics of total health cost in the two systems – Beveridge and Bismarck. According to the aim the hypothesis that the Beveridge health care financing model could be associated with less grow of the total health costs compared to Bismark model was tested for 10 years. Materials and methods: Methods of analysis used included graphical presentation of data, descriptive statistics, and regression analysis of temporal functions. Based on the Eurostat data, according to the different ways of organizing revenue, two subgroups ‒ Beveridge and Bismarck were formed out from a total of 30 observed European countries. Results: Beveridge’s group included 14 countries with the lowest share of health insurance schemes of less than 1.5% of GDP. The remaining 16 countries were included in the group representing the Bismarck model. After the distribution, the average percentage of total health expenditure for the respective model relative to the countries’ GDP for the period from 2010 to 2019 according to OECD data was derived. Regression analysis of time functions constructed within the period with the dependent variable the average share of health expenditure to nominal GDP shows similarity in slope coefficient estimates (βBismarck = -0.016; βBeveridge = -0.015). Conclusions: The hypothesis that the Beveridge funding model could be associated with lower expenditure growth was not confirmed.

Key words: health care, financing models ‒ Beveridge and Bismarck, public health expenditure, social health insurance, government budget

Address for correspondence: Dimitar Semkov, MD, e-mail: dimitar.semkov@phd.mu-plovdiv.bg