Publicly funded medicine is a level of medical service that is administered and provided by the government and paid wholly or in majority part by public funds (taxes).

Publicly funded medicine is often referred to as "socialized medicine" by its opponents. It is the primary provider of medical services in most industrial societies, including in Europe, Canada, Australia, New Zealand, Israel, and Japan. The United States is a notable exception. Even among countries that have publicly funded medicine, different countries have different approaches to the funding and provision of medical services.

  • In 1948, the United Kingdom passed the National Health Service Act that provided free physician and hospital services to all citizens. Most doctors and nurses are on government payroll and receive salaries, a fixed fee for each patient assigned, and enhanced payments for specialized treatments or skills. The National Health Service has been amended from time to time, but is largely intact. Currently, prescription medicines and spectacles(eyeglasses) are no longer free but are available at a subsidized rate. Funding comes from a hypothecated health insurance tax and from general taxation. Private health services are also available.

  • In Sweden, the publicly funded medicine system is compulsory. Physician and hospital services are free to all citizens, but are funded through the general taxation scheme.

  • Canada has a federally-sponsored publicly funded medical system, but each province may opt in or out. A private health service also operates in Canada.

  • In Israel, the publicly funded medical system is universal and compulsory. Payment for the services are shared by labor unions, the military, and the treasury.

Proponents of publicly funded medicine cite several advantages: universal access to high quality care, equality in matters of life and death, reduction in the percentage of societal resources devoted to medical care (in other words public systems cost less than private systems), because of the removal of the profit percentage, the reduction of contractual paperwork, and the creation of uniform standards of care. Proponents often support these arguments by comparing the state of health of the population after adoption of publicly funded medicine with the state prior to such adoption. The political popularity of National Health Services demonstrates that these advantages (particularly the universal availability of high quality care) are widely seen as overwhelming by those who have experienced them.

Critics of publicly funded medicine fall into differing groups each citing different disadvantages. One group criticizes the lack of egalitarianism espoused by proponents by pointing to the existence of parallel private providers (either locally or internationally) that remove the equality of service. Since private providers are typically better paid, those medical professionals motivated by remunerative concerns migrate to the private sector. According to the critics these are the best practitioners, creating an inequality in quality of care. These critics note studies that show many Canadians go to the United States for care, but the opposite is not true. This ignores the fact that Americans would find it difficult, if not impossible, to qualify for healthcare in Canada without establishing themselves as Canadian residents first, whereas it is relatively easy for Canadians to buy healthcare in the US.

These critics also tend to ignore the fact that in many cases doctors are so well paid, whichever system is in use that prestige is often more important to them than remuneration. This is very much the case in the United Kingdom where private medicine is seen as less prestigious than public medicine by much of the population. As a result the best doctors tend to spend the majority of their time working for the public system, even though they may also do some work for private healthcare providers. The British in particular tend to use private healthcare to avoid waiting lists rather than because they believe that they will receive better care from it.

Another group of critics opposes publicly funded medicine on doctrinal grounds, espousing the view that the government has no place in health care much less mandating and managing it. This group points to the advantages that capitalism has provided in advancing medical technology and practice; that competition is good and allows consumers to decide what they wish to provide; and to the long waits for procedures that occur in some publicly funded medical systems. This group of critics ignores the fact that only wealthy consumers have any effect on decisions, owing to the high cost of medical care pricing the majority of the population out of the healthcare market.

Another group of critics focuses on the cost-benefit decisions inherently made by the publicly funded medical boards. Because these decisions invariably affect humans and their medical well-beings, they are particularly controversial. This group points to decisions by various boards based on value judgments not to provide certain services, such as circumcision, cosmetic surgery, contraception, abortion, mental health care, immunizations, often with serious negative consequences. This criticism ignores the fact that such decisions will be made whichever system is in use: in the public case by people; in the private case by money or the lack of it.

Both proponents and critics of publicly funded healthcare have serious arguments in their favour, and their relative weights depend partly on circumstances, and on individual values. As a result, most countries end up with some kind of compromise between public and private health provision.

See also: Health science.