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The architecture of health systems

This article discusses frameworks for understanding the architecture of health systems: consumption, provision and production.
© University of Warwick
Here we ask the question of how we should compare the broad architecture of health systems and what the key dimensions might be. The paper by Claus Wendt and colleagues (2009) shows that there are many approaches to making comparisons, although one of the most influential is the taxonomy developed by Michael Moran (2000). A starting point for Moran is the idea that any healthcare system can be described in terms of the governance of three arenas: consumption, provision and production (technology).


The governance of consumption is arguably the most important arena and is concerned with the total resources that a country allocates to healthcare and how access to healthcare services is determined. As we saw in the previous step, spending (as a proportion of GDP) on healthcare varies massively between countries. In terms of access, the key issue is how far different health systems have applied universalistic principles in which (degrees of) access to services is guaranteed regardless of an individual’s ability to pay.
In more developed systems, this universal (or near-universal) access is achieved through some kind of insurance scheme. These schemes, in turn, might follow different models. In a so-called ‘Bismarckian’ system (Germany, continental Europe), insurance contributions are linked directly to earnings and vary according to the ability to pay. By contrast, in the ‘Beveridge’ or ‘national health service’ model (pioneered in England, Scandinavia and Italy) healthcare is a direct entitlement of citizenship, funded directly from taxation and free at the point of delivery. Lastly, in a market system (the US) consumption is determined through contributions to commercially-run insurance schemes – Health Systems Institutional Characteristics.
In practice, most countries deploy a combination of all three of these funding models. Governments also play a key role both in the direct funding of healthcare (NHS models) and in the legal regulation of insurance schemes that are organised by other third party agencies such as private and non-profit insurance organisations.
However, the degree to which these different kinds of insurance (including taxation) cover all the healthcare needs of populations varies from country to country. This means that to a greater or lesser extent, in all health systems a proportion of healthcare costs must be funded directly by patients, essentially ‘out of pocket’. In some countries this is very low, for example, in NHS systems such as the UK, where only 8.9% of total healthcare is out of pocket. In others, however, it can be very high indeed, for instance over 80% in Vietnam.


To understand a health system one must also look at the provision of services, how it is organised and by whom. In terms of the overall structure of provision, two key dimensions are important: a) the split between different forms of ownership; and b) the broad division between different types or levels of services.
Starting with ownership, in most countries the state is the main source of funding for healthcare and is often also the main provider. However, in others the role of the private and third sector is also important, with services delivered through a ‘mixed economy’. Hence, while in the UK, 96% of total acute-care beds are in publicly-owned hospitals, in Germany, where the private and non-profit sectors are more developed, the figure is only 49%.
The architecture of health systems also varies in terms of the split between different types of services. A key division here is the way resources are distributed between primary and secondary care services. While the former includes a wide diversity of community-based services including, in many countries, general practitioners (or family doctors), the latter is focused mainly on hospital services. Historically the latter have featured more prominently in terms of the public imagination and absorb the lion’s share of resources. This pattern, however, is changing with moves to extend the role of more preventative, community-based services and to extend ‘ambulatory’ or outpatient care services. The latter, which are already highly developed in some health systems (such as Germany), allow for medical care to be provided on an outpatient basis, including diagnosis, observation, consultation, treatment, intervention and rehabilitation services.
According to Moran, another, even more important, aspect of provision concerns the role of clinical professionals, especially medicine. In all health systems, doctors (and to a lesser extent, other clinicians) have considerable autonomy to shape provision through the choices they make with regard to diagnosis and treatment. This discretionary power impacts on the flow of resources, the work routines of associated professions (such as nurses) and even the design of health systems more generally (for example, the split between primary and secondary services). This dominance is underpinned by the power that doctors have as a profession to regulate their own practice and – in many countries – effectively determine the criteria for entering the occupation and standards of training. In most parts of the world, clinical autonomy is a cherished principle, very hard to challenge.
These forms of professional monopoly (or closure) are in the public interest, helping to maintain high technical and ethical standards. However, the downside is that the ability of governments, third party insurers and managers to shape or influence the nature and quality of healthcare provision is limited. This is especially true in situations (such as the US or Germany) where doctors (and other clinical professionals) are not salaried employees of publicly-run health organisations but are effectively self-employed contractors paid on a fee-for-service basis.


Although health services are labour intensive they also depend heavily on the production of new technologies, linked to research and innovations in drugs, treatments and facilities. These technologies are funded and regulated by governments, for example, through direct (financial) and indirect support for research and development. However, a key role here is also played by universities and the commercial sector. Over time, the interests of governments and large commercial technology and pharmaceutical firms become closely intertwined and are sometimes inseparable. This situation has both benefits and risks. On the positive side, the ‘co-production’ of new technology by government funders and commercial firms helps to maintain a constant flow of new innovation, often with significant benefits for health and well-being. However, at the same time, there is a risk that pressure to innovate and develop new technologies becomes an end in itself, driving up public expenditure on new drugs and treatments regardless of their benefits to patients or value for money.

Families of healthcare systems

Based on these three dimensions (governance of consumption, provision and production), Moran (2000) defines four ideal type families of ‘healthcare states’ (or healthcare systems): the ‘entrenched command and control state’, the ‘supply state’, the ‘corporatist state’ and the ‘insecure command and control state’.

Entrenched Command and Control

In these countries, the government has a system of control in place over all three dimensions. A large majority of medical provision occurs through government owned and run institutions, and a universal coverage philosophy predominates. Consumption is regulated by ‘gatekeepers’ in government employment (typically primary care providers, such as GPs). The introduction of new technologies also depends on budgeting and political decisions by the state and is heavily regulated (see for example, the National Institute for Clinical Excellence in the UK). Examples of command and control systems include Scandinavia and the National Health Service in the UK.


This is a system dominated in all three areas by suppliers. The provision of healthcare is deeply influenced by a large independent medical profession and private institutions (e.g. hospitals). Consumption is also regulated by private health insurers whose interests align mainly with suppliers as opposed to consumers. The introduction and diffusion of technology lie mostly in the hands of the producers (commercial firms) who have lobbied the government and insurance industry to ensure that they do not interfere. The archetypal example of this form is the United States. Moran notes that in Europe, so far only Switzerland shares some supply state features.


This relates to the Bismarkian model described earlier. Healthcare provision is a mix of public, independent non-profit and private institutions. Consumption is dominated by public-law bodies (typically ‘sickness funds’) that are non-profit and are formally separate from the state. The regulation of new technology is often very weak and heavily influenced by supply companies who lobby providers and sickness funds. The largest corporatist system is Germany, with elements of this model found in the Netherlands, Belgium, Poland and, to a lesser extent, France.

‘Insecure’ Command and Control

These are systems which have been set up in the mould of the classical command and control systems (NHS), but have not become entrenched in society due to a number of factors, including survival of a strong private provision system, the undermining of the government gatekeeper system by political clientalism and corruption and a breakdown of universal coverage due to economic pressures. This family is mostly Mediterranean, including Greece, Italy, Spain and Portugal, and to some degree Romania.
An obvious limitation of this framework is that it is very abstract and may not be sufficiently detailed to explain health systems in other parts of the developing world, or systems that fall between different categories (hybrids). However, as a general framework, it offers a useful starting point for understanding the ‘big picture’. Specifically, it helps us to think about how the organisation and funding of different health systems can vary between countries and how key actors (professions, governments and commercial firms) can be instrumental in shaping what healthcare is delivered and to who.


Moran, M. (2000) Understanding the welfare state: the case of health care. British Journal of Politics and International Relations, 2 (2): 135-160.
Paris, V., M. Devaux & Wei, L. (2010) Health Systems Institutional Characteristics: A Survey of 29 OECD Countries. OECD Health Working Papers, 50, [online]. Available from: DOI:
Wendt, C., Frisina, L. and Rothgang, H. (2009), Healthcare System Types: A Conceptual Framework for Comparison. Social Policy & Administration, 43: 70–90. [Online]. Available from: DOI 10.1111/j.1467-9515.2008.00647.x
© University of Warwick
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