ABSTRACT

This book aims to explain why health care reforms in major countries are converging and moving towards the “Third Way”. Using classification methods of two-dimensional coordinate, it defines the “Third Way” of healthcare reform as mandatory private health insurance, which is neither social insurance nor commercial insurance. Introducing mechanism design theory framework, it builds model of trilateral healthcare market, deduces the function of private health insurance in modern healthcare system and inner mechanism of how private health insurance companies control the incnease in expenditure on health. Proceeding from the limitations of voluntary private health insurance, the book discusses how to combine organically mandatory and private insurance, and realize universal coverage of basic healthcare. The book gives further analysis of the major countries' road to mandatory private health insurance, points out how political left /right vacillating adjustment mechanism in a representative democratic system leads to compromise and integration of two conflicting healthcare welfare thoughts, and results in the middle road. China's healthcare reform should transcend left and right, avoid dwelling on quarrels about government failure and market failure, and explore ways to implement mandatory private health insurance.