Private Participation in Health Care

The private sector focuses on the financial and delivery aspects of the system. Healthcare costs are paid by a health insurance plan, private, or government, and the enrollee of the plan. Approximately 34% of the 2009 healthcare expenditures were paid from private health insurance, insurance offered by a private insurance company such as Blue Cross; private out-of-pocket expenses or payments, funds paid by the individual, were 14%; and federal, state, and local governments paid 40%. Out-of-pocket payments are considered the individual’s cost share of his or her healthcare costs. Approximately 57% of private healthcare financing is through employer health insurance, a type of voluntary health insurance set up by an individual’s employer. The delivery of the services provided is through legal entities such as hospitals, clinics, physicians, and other medical providers (National Center for Health Statistics [NCHS], 2011). The different providers are an integral part of the medical care system and need to coordinate their care with the layers of the U.S. government. In order to ensure access to health care, communication is vital between public and private components of healthcare delivery.

Figure 1-1 The Iron Triangle of Health Care

Source: Reproduced from Kissick, William, MD, DR, PH, Medicine’s Dilemmas, p. 3. New Haven, CT: Yale University Press, 1994. Reprinted by permission.

ASSESSING YOUR HEALTHCARE SYSTEM USING THE IRON TRIANGLE

Many healthcare systems are evaluated using the Iron Triangle of Health Care—a concept that focuses on the balance of three factors: quality, cost, and accessibility to health care (see Figure 1-1 ). This concept was created in 1994 by Dr. William Kissick (Kissick, 1994). If one factor is emphasized, such as cost reduction, it may create an inequality of quality and access because costs are being cut. Because lack of access is a problem in the United States, healthcare systems may focus on increasing access, which could increase costs. In order to assess the success of a healthcare delivery, it is vital that consumers assess their health care by analyzing the balance between cost, access, and quality. Are you receiving quality care from your provider? Do you have easy access to your healthcare system? Is it costly to receive health care? Although the Iron Triangle is used by many experts in analyzing large healthcare delivery systems, as a healthcare consumer, you can also evaluate your healthcare delivery system by using the Iron Triangle. An effective healthcare system should have a balance between the three components.