Background reading material for Year 2 medical students for PPSD session on 16th August 2006 by Professor Omar Hasan Kasule, Sr.


Expenditure on health is rising in all countries. Health expenditure constitutes a high proportion of GDP. Per capita health expenditure is also very high. There are in addition unrecorded health expenditures such as out-of-pocket payments and payments in-kind. The reasons for rising health care costs are higher demand for care, higher wages of health care workers, more sophisticated, and expensive medical technology. The rising costs of health have forced a review of the issue of access. Managed care is managed costs. Rationing health care and prioritizing coverage have also been considered. In practice the zeal to control costs has serious side effects such as inadequate care, inappropriate care, exclusion of high risk patients like the elderly, and lack of equity in health care delivery



Several methods are used to pay for health services: direct physician payments, national insurance, social insurance, commercial insurance and third party payors. Physician payments may be fee for service or may be on a capitation basis. Insurance and third party payors rely on actuarial principles in pooling risk in order to set the premiums. They protect the consumer from a high risk of catastrophic medical bills.



Issues of justice in health care can be classified as distributive justice or allocative priorities. Distributive justice deals with access to care, affordability of care, and quality of care. Allocation priorities involve differential allocation of scarce health care resources among rural vs urban areas; curative vs preventive medicine; and administrative vs. actual care costs.


Access to good health care is limited by financial, cultural, and distance barriers.  Patients who need care may not get it because it is beyond their ability to pay. Members of minority groups or immigrants may be reluctant to seek care in a health care environment that they perceive to be hostile or that does not respect their cultural and religious sensitivities. Some of the underprivileged members of society in most need of may not have the information about where to seek care. This relates often to their low level of education. For others health care may too far away and they cannot afford or find transportation. The quality of care provided may also be a barrier to access. Patients may decide not to attend healthcare facilities that they perceive to be providing poor health care.


Allocation priorities confront decision makers who have to make hard choices to allocate limited health care resources. It is difficult enough to determine allocation priorities based on objective data of medical need. It is even more difficult to make such decisions in the face of political demands and lobbying by various interest groups. Rural health care is often neglected at the expense of urban areas because urban areas have more vocal advocates. Curative care takes a disproportionately higher budgetary allocation than the more effective preventive care. The huge healthcare bureaucracies with big overhead administrative overhead expenditures may end up using a disproportionate share of the health care budget on administration rather than on direct medical care.


No policy decisions can please everybody but an attempt must be made to allocate health care resources equitably so that all citizens have access to quality care.



  1. For a healthcare jurisdiction that you know, identify 2 barriers of access to health care and suggest ways of overcoming them.
  2. What is your opinion about the following statement ‘Free medical care is a basic human right for every citizen’
  3. What do you understand by the term ‘rationing health care’. How is it carried out? What are the advantages and what are the disadvantages?

Professor Omar Hasan Kasule Sr. August 2006