Health Care Payment System Overview

Patient Privacy

Privacy is an integral right of any person fixed by the main legislative statutes of all developed democracies. In the case of healthcare, this concept acquires additional importance due to the delicate nature of issues faced within this context. In the clinical setting, the range of private information of a person extends to encompass personal health plans and records. Accordingly, patient privacy protection is an indispensable objective of any health service provider, as the lack thereof would undermine people’s trust in the entire system, leaving a negative impact on public health. However, in the 21st century, private data has become a reason for concern, as the range of situations, in which it becomes disclosed, grows.

Payment for Healthcare

Payment is another important part of the health care delivery process, as these services are costly. The nature of the healthcare payment system serves to defend the interests of the service providers. Bodenheimer and Grumbach (2020) distinguish between three main sources of financing for healthcare payments. First of all, an out-of-pocket model exists, implying that the patient pays for the services directly. Evidently, it is not frequent due to the considerable expenses associated with healthcare. The majority of Americans use private insurance services, which may be either individual or group (for example, employment-based). Finally, certain cases are eligible for financing from the government.

Payment Privacy Criteria

Overall, the healthcare payment system as it is becomes a reason for heated debates across the country. Moreover, patient privacy may often become compromised because of the certain payment needs of providers and insurers. The existing law protects patients’ confidentiality, but certain cases allow the medical institution to disclose a portion of private data. Usually, this information does not include any health plan-related information, mostly being limited to such data, as an address, phone number, and payment details. The information is disclosed by a medical organization through reimbursement procedures conducted with its insurer. Furthermore, if the latter involves another organization, it is deemed as a business associate, enabling further data sharing.

Data Privacy Implications

The overview of the situation in regards to patient privacy and the healthcare payment system reveals certain tendencies. First of all, it becomes evident that out-of-pocket payment enables the highest level of personal data privacy. This model excludes the participation of any third party in the payment process, alleviating the possibility of private data disclosure. On the contrary, medical insurance remains the most popular way of health service payment, but this scenario often implies the insurer’s access to the patient’s information. Therefore, a certain change in the system is required to ensure the continuous protection of patient data in the clinical environment. However, any privacy-driven change should not compromise the quality or accessibility of healthcare, meaning that it is required to strike the right balance.


Bodenheimer, T. S., & Grumbach, K. (2020). Understanding health policy: A clinical approach (8th ed.) McGraw Hill Professional.

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