In democratic form of governance, people expect Governments to take care of all problems faced by them. One such problem for which they look towards Government is the provision of Medical Care. Every Government attempts to deal with this issue in its own manner. The more traditional way is to provide for a Government funded program of Healthcare, a system followed by many Governments like Britain. A somewhat more radical way is to leave it to the market, while creating regulations that put in to place Medical Insurance systems.
Medical care financing is too complex to suggest such simple solutions.Payment by Government means payment by the taxpayers, or the people only. Thus the burden remains with the people. The problem is that while the costs fall on them, there is no incentive to control those costs.
Limitations of Government Financing
If all payments for medical care are made by the government, then no individual has any reason what so ever to see that the charges for her medical care are appropriate or inflated. In that case, the medical care provider will have almost full liberty to inflate her expenses or even prescribe unnecessary services, investigations and treatment in the belief that the patient is not going to bear the burden. Economists call it 'supplier driven demand'.
Another major problem with government payingfull cost is that the individuals don't feel responsible for their health. After all how do you convince a smoker to quit smoking when he knows that his hospital bills will be picked up by the government, irrespective of his own behavior. While it may sound a little strange, in today's money-minded world, the best health practices also need to be supplemented by financial rewards to get adopted.
Lastly, one may look at the example of those countries where the government finances all medical care. In all such countries, either there is a mandatory social insurance that every-one needs to subscribe to, or else the government runs the whole medical care system. The most familiar case is UK, and the long waiting periods for patients seeking non-emergency care clearly shows the pitfalls of this approach.
The solution is not to have all costs borne by taxpayers, but to have a reasonable 'co-payment' proportion to be paid by the patient herself, and a liberal subsidized 'social insurance' that may be within reach for everyone and that may provide basic medical care to everyone, willing to pay the co-payments.