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Financing Health Care Organizations

Financing health care organization in the 21st century has mainly been through revenue collection and pooling of the collected revenue to cater for every member of the pool. The health financing has been embodied in three style model: National Health Service, social insurance and private insurance.

The National Health Service involves national revenue collection for the health sector and national ownership of health sector input. Social insurance involves creation of a pool of funds financed by employees and employers through contribution to non-profit insurance funds with public and private ownership of health sector input.

Private insurance involve a pool of fund financed privately by individuals through contribution to private health insurance and involve use of privately owned health sector inputs. In the 21st century the health care organizations have been faced with the challenge of increased health care costs while the financing remains constant.

U.S health consumers continue to demand quality health care services while on the other hand public policy offer lower payment for services rendered driving many health care organizations to the brink of bankruptcy. The rising cost of health care provision has been due to various factors including: a complex payment system, heavy investments in health technology, an increasingly aging population, emergence of chronic diseases that are costly to treat and increased number of the uninsured.

 In order to meet these increasing costs, health care organizations are moving toward capital financing. Health care organizations are seeking capital financing with the objective of investing in profitable projects or services that will attract debt and equity financing in the future. With new capital funds, many health care organizations are able to offer new services, support medical research and subsidize unprofitable health services.


Robert A. (2003), Financial Management in Health Care Organizations, retrieved on October 12, 2010, from Http://   
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