An ideal type implies such a simplification of reality that in practice it could not exist. It is like trying to describe an irregular geometric form to someone who cannot see it. This is difficult because in general, we tend to describe a real image as a regular form, a sphere, an ellipse, a rectangle, etc.
In the specific case of health systems it may be said that an explanation of ideal types involves:
1. Identifying the distinctive features of a health system.
2. Verifying the structural character of such aspects (i.e., dealing with aspects that, if they were changed, the whole system would function in a different way).
3. Verifying the representative nature of the traits identified as distinctive of the ideal type.
4. Describing the ideal types in a stylized manner, i.e., so that it focuses the characterization of the system on the selected aspects and omits others.
No country has a pure, unique system model, but in some one form of health organization and financing clearly dominates and characterizes the model. When such dominance does not exist, the identification of the models becomes more difficult.
Recourse to ideal types usually involves a historic review of actions taken. In point of fact, a classification much utilized in social security systems in Latin America developed by Mesa Lago (1985) distinguishes between pioneering countries, intermediate ones and late-comers in incorporating social security (first as retirement income and later as health insurance). In a more recent work, Fleury Teixeira (1992) claims that similarities exist between the ways in which countries went through their transition to capitalism and the social and health protection mechanisms that they developed. Following Fleury Teixeira's contributions in the classification presented below, which is a simplified adaptation for this book, four ideal types of health protection plans may be distinguished:
• Social assistance
• Social insurance
• Social security
• Private insurance
1.1.1. SOCIAL ASSISTANCE MODEL
The first ideal type of social protection of health relates to the provision of public goods and services to impoverished urban populations and to the creation of mechanisms to monitor and control social conditions, which have been implemented since the beginnings of capitalism. Although social assistance schemes still exist, their incorporation constitutes the first chapter of the historic evolution of health systems. They correspond to the phase of capitalism termed competitive, which began in the first half of the Nineteenth Century. Their objective was to assist the poor, disinherited masses who were without the professional skills necessary to undertake the new urban occupations.
At the present time the term asistencialismo [social assistance] refers to a social protection scheme focused on excluded, needy or more vulnerable sectors. The classic liberal mind-set conceived of health as an individual issue. From that point of view, it was not the responsibility of the State to assume functions related to the provision, financing or regulation of the sector. As opposed to the universalist model, from the liberal perspective, health was not people's right but an obligation of citizens themselves. The so-called "Minimum State" would therefore only concern itself with offering assistance to those incapable of assuming individual responsibility for caring for their own health. Actions would then totally focus on the most vulnerable, needy groups. In turn, by definition, health actions would be limited in their variety and quantity, since the simple act of providing for health by the State could constitute an incentive for people not to make themselves responsible for their own health.
1.1.2. SOCIAL INSURANCE MODEL
With the development of a working class majority in recently industrialized societies, administrative and financial mechanisms begin to appear, giving such benefits as pensions, on-the-job accident insurance, health care for the worker and his family, day-care, child allowance, savings plans, etc. Such arrangements expand through the initiative of the workers themselves - in an autonomous form referred to as mutualism - as well as in conjunction with the employers and the State - tripartite plans.
The social insurance model involves a social protection scheme whose main characteristic is its link to the world of work. From a historic perspective, the universalist [social security] modality corresponds to the classic forms of unions and cooperative associations. The movement began with the setting up of trade and craft unions in the Middle Ages but in reality these organized forms of social protection had been growing and maturing until the age of transition from the competitive phase of capitalism to the monopoly phase. That is when in effect unions and professional associations began to emerge.
At the present time the concept of social insurance implies an assurance association from which the participants cannot withdraw, i.e., where participation (and therefore contribution) is compulsory. The model is characterized by a minor role for the State, a much more decentralized management and an organization based more on regulation than on planning. Financing is from assessments and contributions from the employers as well as the workers. Contributions in general are obligatory and administered by the interested parties themselves. The management of resources and the organization of the services are carried out by non-government intermediary organizations that contract services with private or public providers. By definition, they cover only contributors and their family groups although, in recent years, coverage has tended to become universal.
1.1.3. THE SOCIAL SECURITY MODEL
As the formal labor market grew, social insurance as a scheme of protection was expanded and redefined. From the unification of Germany, in the 1870s, to the decade between 1930 and 1940, an economic dynamic took place that promoted great formalization of the labor market, so that around 90% of the economically active European population belonged to the formal salaried sector.
Strictly speaking, the "social insurance" system is differentiated from the "social security" system. In countries such as Italy, Spain and Brazil that have incorporated reforms to their health systems and advanced from a "social insurance" to a "social security" system the distinction is in current use. However, in the majority of Latin American countries the two terms are usually used interchangeably.
The universalist model, or social security, involves the adoption of the Welfare State, first legally formulated in the report by Lord Beveridge (1942) and resulting laws in England.29It is characterized by public financing with resources originating in taxes and universal access to the services that, generally, are supplied by public providers. Professional and non-professional workers depend on the State. There are frequently other sources of financing in addition to taxes, such as direct payments by the users and other contributions. The same thing happens in its organization and management, which are assuming more participative and communal forms. Nevertheless, States continue to bear the brunt of social security financing, organization and management. In comparison with other models, this one emphasizes the role of the State as provider (González García et Tobar, 1999).
29. The celebrated Beveridge report Social Insurance and Allied Service, was published in 1942. It served as a model in the United Kingdom and in many other countries for the organization of health services after the Second World War. The Beveridge Plan enshrined the principle of health as a right of citizens and a duty of the State. It proposes a single, general social assistance model. The uniformity of payments should respond to the uniformity of contributions, except in matters of health and family, the benefits of which ought to be shared by the nation. It is also considered necessary to implement a National Health Service financed publicly with free access for all.
1.1.4. PRIVATE INSURANCE MODEL
While mutual protection schemes evolved toward social security on the one hand, i.e., toward a compulsory contribution model with State regulation, entrepreneurs, on the other, developed competitive health insurance initiatives as a service to people.
The upsurge of a private service to intermediate between users (patients) and providers (health services) is based on some of the characteristic weaknesses of the health market. The organization of insurance allows the individual risks of illness to be diluted in collective risks. Insured parties can thus be guaranteed rapid access to quality services without such access generating unexpected, often unsupportable, expenses for the patient. The administrative technology that allows such a system to function was the development of actuarial calculation that produces estimates of the amounts to be paid monthly in the form of insurance premiums. This is the prepayment system (Medici, 1997).
The United States of America is the country where the private health insurance system is most developed. The existence of more than 1,500 private insurance companies reveals fragmentation as an organizational characteristic.
At the present time, when we speak of private or competitive health insurance the reference is to a scheme of health protection chosen and financed by the individual. The public sector is absent from the model, neither financing the insurance nor providing it. The organization is typically fragmented, decentralized and has few public regulations, although the latter tendency is changing. In comparison with other models, the private insurance model limits the action of the State to unified regulations (González García and Tobar, 1999).