Who should provide healthcare: the government or the market?

The provision of health care has become a prominent and intensely debated issue throughout rich countries in recent years. In the United States, the Obama administration enacted the most wide-ranging reform of the country’s health care system in decades, only to see parts of these reforms revoked once Donald Trump came to office and Republicans took over Congress. Similar debates and attempts at remodeling problematic health care system are visible in other countries. Germany, to pick but one example, began to slim down its health care system in the early 2000s in the context of highly controversial reforms intent to make the country’s welfare state more effective.

What lies beneath many of the debates surrounding these issues is the question what form health care should actually take – and, in particular, what role the government should play in the provision of health care. The Danish sociologist Gøsta Esping-Andersen has provided a helpful framework to structure this debate. On the one side of the spectrum are “liberal regimes” that rely on markets, private companies, little government interference and voluntary participation in health care. This model is exemplified by the United States. On the other side of the spectrum are “social democratic regimes” in which the government plays a prominent role, health care is universal and mandatory, and the costs are spread out over society as a whole. This model is exemplified by countries like Sweden.

This debate asks which of these two models is superior for the provision of health care in the 21st century. In order to allow for a debate with clear positions, and even though this simplifies a much more complex reality, this debate does not concern itself with hybrid systems that combine elements from both sides. Furthermore, the debate approaches this question from the perspective of developed countries. Health care, in this context, is understood to refer only to the prevention, diagnosis and treatment of health problems. The scope of the debate does not include related but separate issues such as the government’s role in pharmaceutical research.