Posted on 03/20/2010 2:04:07 PM PDT by Conservative Coulter Fan
You are proposing just status quo here. We have health care welfare (Medicaid, SCHIP, public clinics, emergency room treatment, and other programs) for those who cannot obtain insurance or pay for health care services. I would like to see substantial reform of health care welfare to focus on the most needy. I also want co pays and higher taxes on the lower classes to connect those receiving welfare with the costs.
The Democrats are proposing something very different. The Democrats want to impose their view of health insurance on everyone. They want to impose health care rights and price controls. They want to make the most productive individuals pay for the health care of the masses. The Democrat plans will simultaenouse increase demand and decrease supply leading to rationing of limited services.
You know if they simply outlawed preexisting condition as being an exception for health insurance with no individual mandate, they would help collapse the health insurance industry by making their cost necessarily go thou the roof until almost everyone is an out of pocket payer.
Thus reintroducing individual price selection to our health care market.
The problem is this is no more with in the power of the Federal government then any other aspect of health-care law and taxes. It is however within the power of the State governments.
So with that in mind I am against ending the barriers between the States on the health insurance market.
We can uses this against them, by crashing the health insurance market in our State. The only problem then is the Federal tax advantages to having such insurance.
The vast majority of the state’s population would be at a tax disadvantage compared to the rest of the states.
The silver lining being the health-care market in the state would go down in cost over time due to newly active individual price selection and health responsibility.
This works because of the pyramid of where health-care cost are going. The people who will keep the health insurance longest have the highest costs, thus driving up the cost of insurance exponentially, until very little of the population is on health insurance, and most are out of pocket consumers actively involved in price selection and health responsibility. Thus creating price competition again in the overall health-care system.
So unless the Feds want to end the tax benefits to having health insurance or their own insurance programs like Medicare and Medicare. I don’t want them doing anything at all. Cause its otherwise not constitutional and/or not helpful.
Maybe you don’t know what conservatism truly is. Like many others, in this country and in Europe.
I don’t know if this applies to you because I don’t know if you’re a progressive. But most progressives don’t understand precisely why they call themselves that.
Next day BUMP!
Critics of the U.S. health care system frequently
point to other countries as models for
reform. They point out that many countries
spend far less on health care than the United
States yet seem to enjoy better health outcomes.
The United States should follow the lead of
those countries, the critics say, and adopt a government-
run, national health care system.
However, a closer look shows that nearly all
health care systems worldwide are wrestling with
problems of rising costs and lack of access to care.
There is no single international model for national
health care, of course. Countries vary dramatically
in the degree of central control, regulation,
and cost sharing they impose, and in the role of
private insurance. Still, overall trends from national
health care systems around the world suggest
the following:
Health insurance does not mean universal
access to health care. In practice, many countries
promise universal coverage but ration
care or have long waiting lists for treatment.
Rising health care costs are not a uniquely
American phenomenon. Although other
countries spend considerably less than the
United States on health care, both as a percentage
of GDP and per capita, costs are rising
almost everywhere, leading to budget
deficits, tax increases, and benefit reductions.
In countries weighted heavily toward government
control, people are most likely to
face waiting lists, rationing, restrictions on
physician choice, and other obstacles to care.
Countries with more effective national
health care systems are successful to the
degree that they incorporate market mechanisms
such as competition, cost sharing,
market prices, and consumer choice, and
eschew centralized government control.
Although no country with a national health
care system is contemplating abandoning universal
coverage, the broad and growing trend is
to move away from centralized government control
and to introduce more market-oriented features.
The answer then to Americas health care
problems lies not in heading down the road to
national health care but in learning from the
experiences of other countries, which demonstrate
the failure of centralized command and
control and the benefits of increasing consumer
incentives and choice.
Introduction
In his movie SiCKO, Michael Moore
explores problems with the U.S. health care
system and advocates the adoption of a government-
run, single-payer system. Moore
compares the U.S. system unfavorably with
those of Canada, Great Britain, and France.
Economist and New York Times columnist Paul
Krugman also thinks the health care systems
of France, Britain, and Canada are better than
that of the United States. Physicians for a
National Health Program points out that the
United States is the "only industrialized country
without national health care."
These and other critics of the U.S. health
care system note that countries with such systems
spend far less per capita on health care
than the United States does and, by some measures,
seem to have better health outcomes.
These critics contend that by adopting a similar
system the United States could solve many
of the problems that currently afflict its health
care system. As Krugman says, "The obvious
way to make the U.S. health care system more
efficient is to make it more like the systems of
other advanced countries."
There is no doubt that the United States
spends far more on health care than any
other country, whether measured as a percentage
of gross domestic product (GDP) or
by expenditure per capita. As Figure 1 shows,
the United States now spends close to 16 percent
of GDP on health care, nearly 6.1 percent
more than the average for other industrialized
countries. Overall health care costs
are rising faster than GDP growth and now
total more than $1.8 trillion, more than
Americans spend on housing, food, national
defense, or automobiles.
Health care spending is not necessarily bad.
To a large degree, America spends money on
health care because it is a wealthy nation and
chooses to do so. Economists consider health
care a "normal good," meaning that spendingis positively correlated with income. As
incomes rise, people want more of that good.
Because we are a wealthy nation, we can and
do demand more health care.
But because of the way health care costs
are distributed, they have become an increasing
burden on consumers and businesses
alike. On average, health insurance now costs
$4,479 for an individual and $12,106 for a
family per year. Health insurance premiums
rose by a little more than 6 percent in 2007,
faster on average than wages.
Moreover, government health care programs,
particularly Medicare and Medicaid, are
piling up enormous burdens of debt for future
generations. Medicares unfunded liabilities
now top $50 trillion. Unchecked, Medicaid
spending will increase fourfold as a percentage
of federal outlays over the next century.
At the same time, too many Americans
remain uninsured. Although the number of
uninsured Americans is often exaggerated by
critics of the system, approximately 47 million
Americans are without health insurance at any
given time. Many are already eligible for government
programs; many are young and
healthy; many are uninsured for only a short
time. Yet there is no denying that a lack of
insurance can pose a hardship for many
Americans.
Finally, although the U.S. health care system
can provide the worlds highest quality of care,
that quality is often uneven. The Institute of
Medicine estimates that some 44,00090,000
annual deaths are due to medical errors, while
a study in The New England Journal of Medicine
suggests that only a little more than half of
American hospital patients receive the clinical
standard of care. Similarly, a RAND Corporation
study found serious gaps in the quality of
care received by American children.
Many critics of U.S. health care suggest that
the answers to these problems lie in a singlepayer,
national health care system. Under
such a system, health care would be financed
through taxes rather than consumer payments
or private insurance. Direct charges to patients
would be prohibited or severely restricted.
Private insurance, if allowed at all, would be
limited to a few supplemental services not covered
by the government plan. The government
would control costs by setting an overall
national health care budget and reimbursement
levels.
However, a closer look at countries with
national health care systems shows that those
countries have serious problems of their own,
including rising costs, rationing of care, lack of
access to modern medical technology, and
poor health outcomes. Countries whose
national health systems avoid the worst of
these problems are successful precisely because
they incorporate market mechanisms and
reject centralized government control. In other
words, socialized medicine worksas long as it
isnt socialized medicine.
Measuring the Quality of
Health Care across
Countries
Numerous studies have attempted to
compare the quality of health care systems.
In most of these surveys, the United States
fares poorly, finishing well behind other
industrialized countries. This has led critics
of the U.S. health care system to suggest that
Americans pay more for health care but
receive less.
There are several reasons to be skeptical of
these rankings. First, many choose areas of
comparison based on the results they wish to
achieve, or according to the values of the comparer.
For example, SiCKO cites a 2000 World
Health Organization study that ranks the U.S.
health care system 37th in the world, "slightly
better than Slovenia."18
This study bases its conclusions on such
highly subjective measures as "fairness" and
criteria that are not strictly related to a countrys
health care system, such as "tobacco control."
For example, the WHO report penalizes
the United States for not having a sufficiently
progressive tax system, not providing all citizens
with health insurance, and having a general
paucity of social welfare programs. Indeed,
much of the poor performance of the UnitedStates is due to its ranking of 54th in the category
of fairness. The United States is actually
penalized for adopting Health Savings
Accounts and because, according to the WHO,
patients pay too much out of pocket. Such
judgments clearly reflect a particular political
point of view, rather than a neutral measure of
health care quality. Notably, the WHO report
ranks the United States number one in the
world in responsiveness to patients needs in
choice of provider, dignity, autonomy, timely
care, and confidentiality.
Difficulties even arise when using more
neutral categories of comparison. Nearly all
cross-country rankings use life expectancy as
one measure. In reality though, life expectancy
is a poor measure of a health care system.
Life expectancies are affected by exogenous
factors such as violent crime, poverty, obesity,
tobacco and drug use, and other issues unrelated
to health care. As the Organisation for
Economic Co-operation and Development
explains, "It is difficult to estimate the relative
contribution of the numerous nonmedical
and medical factors that might affect
variations in life expectancy across countries
and over time." Consider the nearly threeyear
disparity in life expectancy between
Utah (78.7 years) and Nevada (75.9 years),
despite the fact that the two states have
essentially the same health care systems. In
fact, a study by Robert Ohsfeldt and John
Schneider for the American Enterprise
Institute found that those exogenous factors
are so distorting that if you correct for homicides
and accidents, the United States rises to
the top of the list for life expectancy.
Similarly, infant mortality, a common measure
in cross-country comparisons, is highly
problematic. In the United States, very low
birth-weight infants have a much greater
chance of being brought to term with the latest
medical technologies. Some of those low birthweight
babies die soon after birth, which
boosts our infant mortality rate, but in many
other Western countries, those high-risk, low
birth-weight infants are not included when
infant mortality is calculated. In addition,
many countries use abortion to eliminate
problem pregnancies. For example, Michael
Moore cites low infant mortality rates in Cuba,
yet that country has one of the worlds highest
abortion rates, meaning that many babies with
health problems that could lead to early deaths
are never brought to term.
When you compare the outcomes for specific
diseases, the United States clearly outperforms
the rest of the world. Whether the disease
is cancer, pneumonia, heart disease, or
AIDS, the chances of a patient surviving are far
higher in the United States than in other countries.
For example, according to a study published
in the British medical journal The Lancet,
the United States is at the top of the charts
when it comes to surviving cancer. Among
men, roughly 62.9 percent of those diagnosed
with cancer survive for at least five years. The
news is even better for women: the five year-survival
rate is 66.3 percent, or two-thirds. The
countries with the next best results are Iceland
for men (61.8 percent) and Sweden for women
(60.3 percent). Most countries with national
health care fare far worse. For example, in Italy,
59.7 percent of men and 49.8 percent of
women survive five years. In Spain, just 59 percent
of men and 49.5 percent of women do.
And in Great Britain, a dismal 44.8 percent of
men and only a slightly better 52.7 percent of
women live for five years after diagnosis.26
Notably, when former Italian prime minister
Silvio Berlusconi needed heart surgery last
year, he didnt go to a French, Canadian,
Cuban, or even Italian hospitalhe went to the
Cleveland Clinic in Ohio. Likewise, Canadian
MP Belinda Stronach had surgery for her breast
cancer at a California hospital. Berlusconi and
Stronach were following in the footsteps of
tens of thousands of patients from around the
world who come to the United States for treatment
every year. One U.S. hospital alone, the
Mayo Clinic, treats roughly 7,200 foreigners
every year. Johns Hopkins University Medical
Center treats more than 6,000, and the
Cleveland Clinic more than 5,000. One out of
every three Canadian physicians sends a
patient to the Unites States for treatment each
year, and those patients along with the
Canadian government spend more than $1 billion
annually on health care in this country.
Moreover, the United States drives much
of the innovation and research on health care
worldwide. Eighteen of the last 25 winners of
the Nobel Prize in Medicine are either U.S.
citizens or individuals working here. U.S.
companies have developed half of all new
major medicines introduced worldwide over
the past 20 years. In fact, Americans played
a key role in 80 percent of the most important
medical advances of the past 30 years.
As shown in Figure 2, advanced medical technology
is far more available in the United
States than in nearly any other country.
The same is true for prescription drugs.
For example, 44 percent of Americans who
could benefit from statins, lipid-lowering
medication that reduces cholesterol and protects
against heart disease, take the drug.
That number seems low until compared with
the 26 percent of Germans, 23 percent of
Britons, and 17 percent of Italians who could
both benefit from the drug and receive it.
Similarly, 60 percent of Americans taking
anti-psychotic medication for the treatment
of schizophrenia or other mental illnesses are
taking the most recent generation of drugs,
which have fewer side effects. But just 20 percent
of Spanish patients and 10 percent of
Germans receive the most recent drugs.
Of course, it is a matter of hot debate
whether other countries have too little medical
technology or the Unites States has too much.
Some countries, such as Japan, have similar
access to technology. Regardless, there is no dispute
that more health care technology is invented
and produced in the United States than anywhere
else. Even when the original research is
done in other countries, the work necessary to
convert the idea into viable commercial products
is most often done in the United States.
By the same token, not only do thousands of
foreign-born doctors come to the United States
to practice medicine, but foreign pharmaceutical
companies fleeing taxes, regulation, and
price controls are increasingly relocating to the
United States. In many ways, the rest of the
world piggybacks on the U.S. system.
The United States
drives much of
the innovation
and research on
health care
worldwide.
Obviously there are problems with the U.S.
system. Too many Americans lack health
insurance and/or are unable to afford the best
care. More must be done to lower health care
costs and increase access to care. Both patients
and providers need better and more useful
information. The system is riddled with waste,
and quality of care is uneven. Government
health care programs like Medicare and
Medicaid threaten future generations with an
enormous burden of debt and taxes.
Health care reform should be guided by the
Hippocratic Oath: First, do no harm. Therefore,
before going down the road to national health
care, we should look more closely at foreign
health care systems and examine both their
advantages and their problems.
Many of the countries with health systems
ranked in the top 20 by the World Health
Organization, such as San Marino, Malta, and
Andorra, are too small to permit proper evaluation,
or their circumstances clearly limit the
applicability to the U.S. health care system.
Accordingly, this study will look at 12 countries
that appear to hold lessons for U.S. health
care reforms: 10 ranked in the top 20 by the
WHO and 2 others frequently cited as potential
models for U.S. health care reform.
Types of National Health
Care Systems
National health care, or universal health care,
is a broad concept and has been implemented in
many different ways. There is no single model
that the rest of the world follows. Each countrys
system is the product of its unique conditions,
history, politics, and national character, and
many are undergoing significant reform.
Single-Payer Systems
Under a single-payer health care system, the
government pays for the health care of all citi-zens. It collects taxes, administers the supply of
health care, and pays providers directly. In
effect, this replaces private insurance with a
single government entity. Typically, the government
establishes a global budget, deciding
how much of the nations resources should be
allocated to health care, and sets prices or reimbursement
rates for providers. In some cases,
providers may be salaried government employees.
In others, they may remain independent
and be reimbursed according to the services
and procedures they provide. In the strictest
single-payer systems, private insurance and
other ways to "opt out" of the system are prohibited.
This is the type of system advocated by
Michael Moore, Paul Krugman, Dennis
Kucinich, and Physicians for a National Health
Program, among others.
Employment-Based Systems
Countries with employment-based systems
require that employers provide workers with
health insurance, often through quasi-private
"sickness funds." These insurance funds may
operate within or across industry sectors, with
benefits and premiums set by the government.
Often premiums are simply a form of payroll
tax paid directly to the fund. Providers remain
independent and reimbursement rates are
negotiated with the funds, sometimes individually,
sometimes on a national level. Germany
has long been the model for an employmentbased
system.
Managed Competition
Managed competition leaves the provision
of health care in private hands but within an
artificial marketplace run under strict government
control and regulation. In most cases,
the government mandates that individuals
purchase insurance, though this is often paired
with a requirement for employers to provide
insurance to their workers. Individuals have a
choice of insurers within the regulated marketplace
and a choice of providers. Although the
government sets a standard benefits package,
insurers may compete on price, cost sharing,
and additional benefits. Switzerland is the
clearest example of a managed-competition
approach to universal coverage, although the
Netherlands has also recently adopted a similar
system. The 1993 Clinton health plan, the
2006 Massachusetts health care reform, and
most of the proposals advocated by the current
Democratic presidential candidates are variations
of managed competition.
Within these broad categories are significant
differences. Some countries, such as
France and Japan, impose significant cost sharing
on consumers in an effort to discourage
overutilization and to control costs. Other
countries strictly limit the amount that consumers
must pay out of pocket. Some countries
permit free choice of providers, while others
limit it. In some countries there is widespread
purchase of alternative or supplemental private
insurance, whereas in others, private insurance
is prohibited or used very little. Resource allocation
and prioritization vary greatly. Japan
spends heavily on technology but limits reimbursement
for surgery, while France has exceptionally
high levels of prescription drug use.
Outcomes also vary significantly. Canada,
Great Britain, Norway, and Spain all heavily
ration health care or have long waiting lists for
care, while France and Switzerland have generally
avoided waiting lists. At the same time,
France, Italy, and Germany are struggling with
rising health care costs and budget strain, compared
with Canada and Great Britain which
have done better at containing growth in
expenditures. And some countries such as
Greece have fallen far short of claims of universal
coverage.
With all of that in mind, consider the following
prominent national health care systems.
France
Some of the most thoughtful proponents
of national health care look to France as a
model of how such a program could work.
Jonathan Cohn of theNew Republic has written
that "the best showcase for what universal
health care can achieve may be France." Ezra
Klein of the American Prospect calls France "the
closest thing to a model structure out there."
Some countries,
such as France
and Japan,
impose
significant cost
sharing on
consumers in an
effort to
discourage
overutilization
and to control
costs.
The French system ranks at or near the top of
most cross-country comparisons and is ranked
number one by the WHO.
Although the French system is facing looming
budgetary pressures, it does provide at least
some level of universal coverage and manages
to avoid many of the problems that afflict
other national health care systems. However, it
does so in large part by adopting market-oriented
approaches, including consumer cost
sharing. Other aspects of the system appear to
reflect French customs and political attitudes
in such a way that would make it difficult to
import the system to the United States.
France provides a basic level of universal
health insurance through a series of mandatory,
largely occupation-based, health insurance
funds. These funds are ostensibly private entities
but are heavily regulated and supervised by
the French government. Premiums (funded
primarily through payroll taxes), benefits, and
provider reimbursement rates are all set by the
government. In these ways the funds are similar
to public utilities in the United States.
The largest fund, the General National
Health Insurance Scheme, covers most nonagricultural
workers and their dependents,
about 83 percent of French residents. Separate
insurance plans cover agricultural workers, the
self-employed, and certain special occupations
like miners, transportation workers, artists,
clergy, and notaries public. Another fund covers
the unemployed. These larger insurance
schemes are broken down into smaller pools
based on geographic region. Overall, about 99
percent of French citizens are covered by
national health insurance.
The French health care system is the worlds
third most expensive, costing roughly 11 percent
of GDP, behind only the United States (17
percent) and Switzerland (11.5 percent). Payroll
taxes provide the largest source of funding.
Employers must pay 12.8 percent of wages for
every employee, while employees contribute an
additional 0.75 percent of wages, for a total payroll
tax of 13.55 percent. In addition, there is a
5.25 general social contribution tax on income
(reduced to 3.95 percent on pension income and
unemployment benefits). Thus, most French
workers are effectively paying 18.8 percent of
their income for health insurance. Finally, dedicated
taxes are assessed on tobacco, alcohol, and
pharmaceutical company revenues.
In theory, the system should be supported
by these dedicated revenues. In reality, they
have not been sufficient to keep the programs
finances balanced. The National Health
Authority sets a global budget for national
health care spending, but actual spending has
consistently exceeded those targets.
In 2006, the health care system ran a 10.3
billion deficit. This actually shows improvement
over 2005, when the system ran an 11.6
billion deficit. The health care system is the
largest single factor driving Frances overall
budget deficit, which has grown to 49.6 billion,
or 2.5 percent of GDP, threatening
Frances ability to meet the Maastricht criteria
for participation in the Eurozone. This may
be just the tip of the iceberg. Some government
projections suggest the deficit in the health
care system alone could top 29 billion by
2010 and 66 billion by 2020.
In general, the funds provide coverage for
inpatient and outpatient care, physician and
specialist services, diagnostic testing, prescription
drugs, and home care services. In most
cases, the services covered are explicitly specified
in regulation. However, some "implicit" benefit
guarantees occasionally result in conflicts over
what benefits are and are not fully covered.
Most services require substantial copayments,
ranging from 10 to 40 percent of the
cost. As a result, French consumers pay for
roughly 13 percent of health care out of pocket,
roughly the same percentage as U.S. consumers.
Moreover, because many health care
services are not covered, and because many of
the best providers refuse to accept the fee schedules
imposed by the insurance funds, more
than 92 percent of French residents purchase
complementary private insurance. In fact, private
insurance now makes up roughly 12.7 percent
of all health care spending in France, a percentage
exceeded only by the Netherlands (15.2
percent) and the United States (35 percent)
among industrialized countries.
The combination of out-of-pocket and
sources account for roughly 20 percent
of all health care spending, less than half the
amount spent in the United States but still
more than most countries with national
health care systems.
The private insurance market in France is in
many ways less regulated than the U.S. market.
For example, while 20 U.S. states require some
form of community rating or put limits on
health insurance premiums, private health
insurance in France is largely experience rated.
No regulations specify what benefits must be
included in coverage or mandate "guaranteed
issue"; and pre-existing conditions may be
excluded. The only significant restriction
requires "guaranteed renewability" after two
years of coverage. More than 118 carriers currently
offer some form of private health insurance
coverage.
In general, French patients pay up front for
treatment and are then reimbursed by their
government health insurance fund and/or private
insurance. The amount of reimbursement,
minus the copayment, is based on a fee
schedule negotiated between health care
providers and the national health insurance
funds. These fee schedules operate similarly to
the diagnostic-related groups (DRGs) under
the U.S. system.
Although reimbursement levels are set by
the government, the amount physicians charge
is not. The French system permits providers to
charge more than the reimbursement schedule,
and approximately one-third of French
physicians do so. In some areas, such as Paris,
the percentage of physicians who bill above
reimbursement schedules runs as high as 80
percent. In general, however, competition
prevents most physicians from billing too far
outside negotiated rates; and physicians
employed by hospitals, as opposed to those in
private practice, do not have the same ability to
charge more than the negotiated rate.
The government also sets reimbursement
rates for both public and private hospitals,
which are generally not allowed to bill beyond
the negotiated fee schedules. While fees are
restricted, private hospitals (called cliniques),
which account for 37 percent of all short-stay
hospital beds and half of all surgical beds, control
their own budgets, whereas public hospitals
operate under global annual budgets
imposed by the Ministry of Health.
Health care technology that the National
Health Authority has categorized as "insufficient
medical service rendered" cannot be purchased
by public hospitals, and its use at cliniques
is not reimbursable through national insurance
schemes. Yet in denying reimbursement for
such technology, the French government
admits that when a product with an insufficient
medical service rendered is de-listed from reimbursement,
this does not imply that it is not efficient
for a given pathology, but simply that the
government prefers to commit its resources to
other reimbursements which it deems more
useful from a collective point of view."
In general, the quality of French health care
is high, but there are problem areas. Until very
recently, the French have generally had quick
access to their primary care physician of
choice. Now, a growing problem, nomadisme
medical, wherein patients go from one doctor
to another until they find one whose diagnosis
they prefer, is driving up costs to the system.
The government has responded by
increasing copayments and attempting to
limit physician reimbursements.
Much of the burden for cost containment
in the French system appears to have fallen on
physicians. The average French doctor earns
just 40,000 per year ($55,000), compared to
$146,000 for primary care physicians and
$271,000 for specialists in the United States.
This is not necessarily bad (there is no "right"
income for physicians) and is partially offset by
two benefits: 1) tuition at French medical
schools is paid by the government, meaning
French doctors do not graduate with the debt
burden carried by U.S. physicians, and 2) the
French legal system is tort-averse, significantly
reducing the cost of malpractice insurance.
The French government also attempts to limit
the total number of practicing physicians,
imposing stringent limits on the number of
students admitted to the second year of medical
school.
The private
insurance market
in France is in
many ways less
regulated than
the U.S. market.
However, French physicians have shown
growing resistance to efforts at limiting
physician reimbursement with several recent
strikes and protests. In the face of growing
budgetary problems, future conflict may well
be brewing.
More significantly, the government has
recently begun imposing restrictions on access
to physicians. A 2004 study by the High
Council on the Future of Health Insurance
raised questions about "the legitimacy of the
complete freedom enjoyed by health professionals
in setting up their private practice."
And in 2005, the government adopted a system
of "coordinated care pathways." Under the new
system, which operates very much like managed
care in the United States, patients are
encouraged to choose a "preferred doctor" and
to follow the "pathway" suggested by that doctor.
The effect is both to lock patients into a
choice of primary care physician and to establish
a "gatekeeper" who limits access to specialists,
tests, and some advanced treatment options.
So far, the new system has been more of a
gentle push than a mandate. If the new system
is not used, copayments may be slightly higher
or reimbursements slightly lower, much like
going "out of network" in the United States.
But if costs continue to rise, the new system
may be extended and made more rigorous.
Of more immediate concern, global budgets
and fee restrictions for hospitals have led
to a recurring lack of capital investment, resulting
in a shortage of medical technology and
lack of access to the most advanced care. For
example, the United States has eight times as
many MRI units per million people and four
times as many CT scanners as France. This
partially reflects the more technology-reliant
way of practicing medicine in the United
States, but it has also meant delays in treatment
for some French patients. Also, strong
disparities are evident in the geographic distribution
of health care resources, making access
to care easier in some regions than others.
Thus, while the French system has generally
avoided the waiting lists associated with other
national health care systems, limited queues
do exist for some specialized treatments and
technologies. In some cases, hospitals in danger
of exceeding their budgets have pushed
patients to other facilities to save money.
Finally, the government has tried to curtail
the use of prescription drugs. The French have
long had an extremely high level of drug consumption.
French general practitioners (GPs)
prescribe on average 260,000 worth of drugs a
year. However, the National Health Authority
has begun de-listing drugs from its reimbursement
formulary. Many French patients have
responded by switching to similar, reimbursable
drugs, but some patients may not be
getting the medicine they need. For example,
one study found that nearly 90 percent of
French asthma patients are not receiving drugs
that might improve their condition.
Government regulation and bureaucracy
have also been blamed for rigidity in the
French system, preventing it from reacting
quickly to changing circumstances. For example,
mismanagement and the inability of the
system to cope with emergencies were blamed
in part for the deaths of 15,000 elderly individuals
in the summer of 2003 during the
European heat wave; and a shortage of hospital
beds occurred in 2004 when a nationwide
flu and bronchitis epidemic broke out.
Although the changes made so far do not
amount to rationing, 62 percent of French
citizens report that they "have felt the effects"
of the new restrictions. Slightly less than
half consider the waiting time between diagnosis
and treatment to be acceptable.
Valentin Petkantchin, a scholar with the
Institut Economique Molinari, warns that
France is in danger "of joining the group of
countries [such as] the UK and Canada, where
the existence of rationing of health care and
waiting lists raises serious questions of access
to treatments by those who need them." And
some French health professionals have suggested
that waiting times for care have begun
to lengthen.
The impact of all these cost containment
measures is alleviated to some degree by the
ability of French patients to privately contract
for care outside the public system. If a drug is
removed from the national formulary, patientsmay still purchase it if they are willing to pay
for it themselves. The same is true for technology.
Likewise, patients may ignore the "coordinated
care pathway" and accept higher prices,
paying more for immediate access.
In addition, the added resources from
payments by private insurance have
increased the supply of health care technology
and services. By increasing the overall
amount of capital available for investment
above and beyond the restrictions imposed
by the government system, private insurance
payments increase the number of hospital
beds and the amount of technology available
within the system. The capital infused
through private insurance may also increase
the number and training of physicians.
In essence, the French system avoids widespread
rationing because, unlike true singlepayer
systems, it employs market forces. Even
the OECD says that the "proportion of the
population with private health insurance"
and the degree of cost sharing are key determinants
of how severe waiting lists will be:
Waiting lists for elective surgery generally
tend to be found in countries which
combine public health insurance (with
zero or low patient cost sharing) and
constraints on surgical capacity. Public
health insurance removes from patients
the financial barriers to access leading to
high potential demand. Constraints on
capacity . . . prevent supply from matching
this demand. Under such circumstances,
non-price rationing, in the form
of waiting lists, takes over from price
rationing as a means of equilibrating
supply and demand.
And Ezra Klein praises the French because
[Frances ability to hold down health
care costs] is abetted by the French systems
innovative response to one of the
trickier problems bedeviling health-policy
experts: an economic concept called
"moral hazard." Moral hazard describes
peoples tendency to overuse goods or
services that offer more marginal benefit
without a proportionate marginal cost.
Translated into English, you eat more at
a buffet because the refills are free, and
you use more health care because insurers
generally make you pay up front in
premiums, rather than at the point of
care. The obvious solution is to shift
more of the cost away from premiums
and into co-pays or deductibles, thus
increasing the sensitivity of consumers
to the real cost of each unit of care they
purchase.
However, the benefits of private insurance
are not equally distributed. The wealthy are
more likely to be able to pay privately to escape
the government system, creating in essence a
two-tier system. That has resulted in a disparity
in health outcomes based on income.
While this is certainly the case in the United
States and elsewhereand there is nothing
wrong with the wealthy being able to pay more
to receive better careit demonstrates that the
professed goal of entirely equal access is largely
unattainable even under this government-run
health system.
A 2004 poll showed that the French had the
highest level of satisfaction with their health
care system among all European countries.
This is partly because their hybrid system has
avoided many of the biggest problems of other
national health care systems. Yet it also stems
from French social character. For example, by a
three-to-one margin, the French believe the
quality of care they receive is less important
than everyone having equal access to that
care.85 This means the French experience may
not be easily transferable to the United States,
which has a far less egalitarian ethic.
While satisfied with their care today, the
French do express concern about the future.
In particular, they acknowledge the need for
greater cost control. This leads to the standard
contradiction inherent in government
services: most people are opposed to paying
more (either through higher taxes or out of
pocket), yet they worry that cost-control
measures will lead to a deterioration of care
in the future. There is no consensus on what
French health care reform would look like.
Still, some 65 percent of French adults
believe that reform is "urgent," and another
20 percent believe reform is "desirable."
Moreover there is growing dissatisfaction
with the French welfare stateof which the
health care system is a significant partand
the level of taxes necessary to support it. The
recent election of French president Nicolas
Sarkozy is widely regarded as a reflection of
this new attitude. Indeed, the new French
government has made a crackdown on health
care spending one of its top priorities..
To sum up: the French health care system
clearly works better than most national health
care systems. Despite some problems, France
has generally avoided the rationing inherent in
other systems. However, the program is threatened
by increasing costs and may be forced to
resort to rationing in the future.
The French system works in part because it
has incorporated many of the characteristics
that Michael Moore and other supporters of
national health care dislike most about the
U.S. system. France imposes substantial cost
sharing on patients in order to discourage
over-utilization, relies heavily on a relatively
unregulated private insurance market to fill
gaps in coverage, and allows consumers to pay
extra for better or additional care, creating a
two-tier system.
This is clearly not the commonly portrayed
style of national health care.
Italy
Italys national health care system is rated
second in the world by the WHO. Yet a closer
examination shows the system to be deeply
troubled, plagued with crippling bureaucracy,
mismanagement and general disorganization,
spiraling costs, and long waiting lists.
Generally, the Italian system is similar to
the British National Health Service but enjoys
more decentralization. The central government
sets goals on how money should be
spent, monitors the overall health status of the
nation, and negotiates the labor contracts of
medical staff. The Italian Constitution was
changed in 2001 such that the national government
now sets the "essential levels of care"
regions must meet, but regional governments
still control their own autonomous budgets
and distribute resources to the local level.
In theory, under the "fiscal federalist" provisions
of this reform, discretionary central
transfers should have dropped sharply, local
tax bases and tax sharing should have
increased, and "equalizing" transfers should
have been standardized and linked to objectives
for controlling costs and increasing quality.
However, poorer regions and powerful special
interests have strongly resisted these
changes. Reform therefore remains incomplete,
and financial transfers from the central
government are still based on historical spending
patterns.
Thus, while the national Ministry of Health
continues to outline funding needs based on
weighted capitation and past spending, recent
reforms have shifted more and more power
and responsibility to regional governments
who set their own budgets. The regions establish
one or more Local Health Authorities,
which are responsible for the provision of care
either through government-run hospitals and
clinics or by contracting with private providers.
It should be noted that governance in
Italy is often as much art as science, and
regions frequently fail to implement rules,
guidelines, reimbursement schedules, and
budgets set by the central government.
Financing comes from both payroll taxes
and general revenues. Payroll taxes have a
regressive structure, starting at 10.6 percent of
the first 20,660 of gross income and decreasing
to 4.6 percent of income between 20,661
and 77,480. The remainder of funding comes
from both federal and regional general taxation,
including income and value-added
taxes. The central government redistributes
resources to compensate to some degree for
inequalities among regions. Even so, most
regional health authorities run significant
deficits. Overall, regional deficits top 1.8 percent
of GDP.
Although Italy
spends a
relatively low
percentage of
GDP on health
care, expenditures
have been rising
rapidly in recent
years and have
consistently
exceeded
government
forecasts.
Inpatient care and primary care are free at
the point of treatment. However, copayments
are required for diagnostic procedures, specialists,
and prescription drugs. The size of such
copayments has crept steadily upward over the
past decade and now runs as high as 30 percent
for some services. Several attempts have been
made to impose copayments for a broad range
of services, including primary care, but have
collapsed in the face of public protests. In
addition, nearly 40 percent of the population
(the elderly, pregnant women, and children)
are exempt from copayments.
Italians have limited choice of physician.
They must register with a general practitioner
within their LHA. They may choose any GP in
the LHA but may not go outside it. Except for
emergency care, a referral from a GP is required
for diagnostic services, hospitalization, and
treatment by a specialist. Despite these limits,
Italians enjoy more choice of physician than do
the British or Spanish.
Most physicians are reimbursed on a capitated
basis (i.e., according to the number of
patients served over a given time period rather
than the services actually provided), although
some hospital physicians receive a monthly
salary. Hospitals are generally reimbursed
according to DRGs, with rates set by the central
governmentthough regions sometimes
disregard those rates and set their own.
Private health insurance is available in Italy
but is not widespread. Where offered, it is usually
provided by employers. About 10 percent
of Italians have private health insurance, below
the percentage in most OECD countries.
According to the insurance industry, this is
partly because it is not possible to opt out of
the National Health System and because
health insurance premiums are not tax
deductible. Private health insurance allows
free choice of doctors, including specialists,
and treatment in private hospitals. Even without
private insurance, however, many Italians
use private health resources (and presumably
pay out of pocket). Estimates suggest that as
much as 35 percent of the population uses at
least some private health services.
Although Italy spends a relatively low percentage
of GDP on health care, expenditures
have been rising rapidly in recent years and
have consistently exceeded government forecasts.
Between 1995 and 2003, total health
care spending rose by 68 percent. The Italian
government has taken various steps to try to
control costs, such as reducing reimbursement
rates, increasing copayments, reducing capital
expenditures, contracting with private providers,
and limiting prescription drugs. All of
these measures have met with protests, including
physician strikes, and many have been
repealed after only a short time.
The Italian government does not provide
official information on waiting lists, but
numerous studies have shown them to be
widespread and growing, particularly for diagnostic
tests. For example, the average wait for
a mammogram is 70 days; for endoscopy, 74
days; for a sonogram, 23 days. Undoubtedly,
this is due in part to a shortage of modern
medical technology. The United States has
twice as many MRI units per million people
and 25 percent more CT scanners. Ironically,
the best-equipped hospitals in northern
Italy have even longer waiting lists since they
draw patients from the poorer southern
regions as well.
If delays become excessive, patients may
seek permission from the regional government
to obtain treatment from private doctors
or hospitals at NHS expense. A recent
court decision allows patients whose life
would be endangered by delays under the
NHS to seek treatment in private hospitals
even without prior permission from the
regional government.
Italy has imposed a relatively strict drug
formulary as well as price controls, and has
thereby succeeded in reducing pharmaceutical
spending, long considered a problem for
the Italian health care system. In 2006,
Italian drug prices fell (or were pushed) 5 percent,
even as drug prices rose in the United
States and much of the rest of the world.
However, the savings came at a cost: the
introduction of many of the newest and
most innovative drugs was blocked.
Conditions in public hospitals are consid-
They lack not just modern technology, but
basic goods and services; and overcrowding is
widespread. Conditions are frequently unsanitary.
For example, one of the largest public hospitals
in Rome was recently found to have
garbage piled in the hallways, unguarded
radioactive materials, abandoned medical
records, and staff smoking next to patients.
Private hospitals are considered much better
and some regions have contracted with private
hospitals to treat NHS patients.
Dissatisfaction with the Italian health care
system is extremely high, by some measures the
highest in Europe.109 In polls, Italians say that
their health care system is much worse than
that of other countries and give it poor marks
for meeting their needs. Roughly 60 percent of
Italians believe that health care reform is
"urgent," and another 24 percent believe it is
"desirable." In general, Italians believe that
such reform should incorporate market-based
solutions. More than two-thirds (69 percent)
believe that giving patients more control over
health care spending will improve the systems
quality. And 55 percent believe that it should
be easier for patients to spend their own money
on health care.
However, given the general dysfunction of
the Italian political system, and the entrenched
opposition of special interest groups, substantial
reform is not likely anytime soon.
Spain
Spains national health care system operates
on a highly decentralized basis, giving primary
responsibility to the countrys 17 regions.
The Spanish Constitution guarantees all citizens
the "right" to health care, including equal
access to preventive, curative, and rehabilitative
services; but responsibility for implementing
the countrys universal system is being
devolved to regional governments. The degree
and speed of devolution is uneven, however,
with some regions only recently achieving
maximum autonomy.
Coverage under the Spanish system is nearly
universal, estimated at 98.7 percent of the
population. The system provides primary
health care, including general health and pediatric
care, outpatient and inpatient surgery,
emergency and acute care, long-term disease
management, and prescription drugs (although
some drugs may require a copayment).
Many mental health services, particularly outpatient
services, are excluded, as is cosmetic
surgery.
The federal government provides each
region with a block grant. The money is not
earmarked: the region decides how to use it.
The block grant itself is based primarily on a
regions population with some consideration
given to other factors such as the populations
demographics. Regions may use their own
funds to supplement federal monies.
Not surprisingly, health care spending
varies widely from region to region. The differences
in expenditures, as well as in spending
priorities, lead to considerable variance in the
availability of health resources. For example,
Catalonia has more than 4.5 hospital beds per
1,000 residents, while Valencia has just 2.8.
Spanish patients cannot choose their physicians,
either primary care or specialists. Rather,
they are assigned a primary care doctor from a
list of physicians in their local community. If
more specialized care is needed, the primary
care physician refers patients to a network of
specialists. Unlike U.S. managed care, it is not
possible to go "out of network" unless the
patient has private health insurance (see
below). This has sparked an interesting phenomenon
whereby sick Spaniards move in
order to change physicians or find networks
with shorter waiting lists.
Waiting lists vary from region to region but
are a significant problem everywhere. On average,
Spaniards wait 65 days to see a specialist,
and in some regions the wait can be much
longer. For instance, the wait for a specialist in
the Canary Islands is 140 days. Even on the
mainland, in Galacia, the wait can be as long as
81 days. For some specialties the problem is far
worse, with a national average of 71 days for a
gynecologist and 81 days for a neurologist.
Waits for specific procedures are also lengthy.
Spanish patients
cannot choose
their physicians,
either primary
care or
specialists.
The mean waiting time for a prostectomy is 62
days; for hip replacement surgery, 123 days.
Some health services that U.S. citizens take
for granted are almost totally unavailable. For
example, rehabilitation, convalescence, and
care for those with terminal illness are usually
left to the patients relatives. There are very few
public nursing and retirement homes, and few
hospices and convalescence homes.
As with most other national health care systems,
the waiting lists and quality problems
have led to the development of a growing private
insurance alternative. About 12 percent of
the population currently has private health
insurance. (This amounts to double coverage
since opting out of the government system is
not allowed.) In larger cities such as Madrid
and Barcelona, the number of privately insured
reaches as high as 25 percent. Overall, private
insurance payments account for 21 percent of
total health care exenditures. More commonly,
Spaniards pay for care outside of the
national health care system out of pocket. In
fact, nearly 24 percent of health care spending
in Spain is out of pocket, more than any
European country except Greece and Switzerland,
and even more than the United States.
Here again, a two-tier system has developed,
with the wealthy able to buy their way
around the defects of the national health care
system, and the poor consigned to substandard
services.
There are also shortages of modern medical
technologies. Spain has one-third as many
MRI units per million people as the United
States, just over one-third as many CT units,
and fewer lithotripters. Again, there is wide
variation by region. For example, two regions,
Ceuta and Melilla, do not have a single MRI
unit. The regional variation is important
because Spaniards face bureaucratic barriers in
trying to go to another region for treatment.
All hospital-based physicians and approximately
75 percent of all other physicians are
considered quasicivil servants and are paid a
salary rather than receiving payment based
on services provided. Compensation is based
on years of practice or the attainment of certain
professional credentials, with across-theboard
annual increases unrelated to merit,
performance, or patient satisfaction.
As a result, Spain has fewer physicians and
fewer nurses per capita than most European
countries and the United States. The lack of
primary care physicians is particularly acute.
Even so, Spaniards are generally happy
with their system. Nearly 60 percent describe
their system as good, the second highest favorability
rating in Europe. (France was first.)
Accordingly, health care reform does not rank
high on the average Spaniards political agenda.
One observer described health care as
"conspicuous by its absence as a major issue"
in recent elections. Only about 46 percent of
Spaniards describe the need for reform as
"urgent," while 35 percent see reform as "desirable."
And Spaniards are less inclined toward
market-based reforms than most other
European countries. Only 42 percent of
Spaniards believe that it should be easier for
patients to spend their own money on health
care, and only 58 percent believe that giving
patients more control over spending will
improve quality. However, Spaniards do want
more choice of doctors and hospitals, and
they want the government to do a better job of
dealing with waiting lists.
Japan
Japan has a universal health insurance system
centered primarily around mandatory,
employment-based insurance. On the surface,
Japans national health insurance program
defies easy description, comprising some
2,000 private insurers and more than 3,000
government units. However, in a broader
sense, the system encompasses four principal
insurance schemes.
The Employee Health Insurance Program
requires companies with 700 or more
employees to provide workers with health
insurance from among some 1,800 "societymanaged
insurance" plans. Nearly 85 percent
of these plans cover a single company and
can be thought of as similar to the self-insurance
plans operated by many large U.S com-
panies. Most of the rest are industry-based.
About 26 percent of the population participates
in these plans.
Such plans are financed through mandatory
employer and employee contributions,
effectively a payroll tax. The total contribution
averages around 8.5 percent of wages. It
is generally split evenly between employer
and employee, although some companies
assume slightly more than half the contribution.
As a result, workers contribute about 45
percent of payments overall. It should be
noted that studies have found that the
majority of the burden of the employers contribution
to health insurance is borne by the
employees in the form of reduced wages.
These contributions are frequently insufficient
to operate the insurance plans. In
2003, more than half lost money. A number
of companies have responded by dissolving
their individual plans and entering larger
industry-based plans. However, growing
costs continue to pressure many businesses.
Workers in businesses with fewer than
700 workers must enroll in the governmentrun,
small-business national health insurance
program. This plan covers about 30 percent
of the population and is funded primarily
through mandatory contributions,
around 8.2 percent of wages, and supplemented
by government funds.
The self-employed and retirees are covered
under the Citizens Insurance Program administered
by municipal governments. Funding
comes primarily from a self-employment tax,
but additional revenues come from an assessment
on the society-managed insurance programs
discussed above and the small business
program. General revenue contributions from
the national government are used to plug
shortfalls.
Finally, the elderly are covered through a
fund financed by contributions from the other
three schemes, as well as contributions from
the central government. The elderly do not pay
directly into this plan, known as the Roken, but
contribute to the plan they were enrolled in
while employed. The Roken is simply a costsharing
mechanism.
A number of small programs exist to handle
special populations such as farmers, fishermen,
and government workers. The unemployed
remain under their former employers
plan, although they are not required to continue
contributing. Private supplemental insurance
exists, but very few Japanese carry it.
Private health insurance pays for less than 1
percent of total Japanese health care spending.
Benefits under all four schemes are
extremely generous, including hospital and
physician care, as well as dental care, maternity
care, prescription drugs, and even some transportation
costs. There are no restrictions on
hospital or physician choice and generally no
preauthorization or gatekeeper requirements.
Significant copayments accompany most services,
ranging from 10 percent to, more commonly,
30 percent (capped at $677 per month
for a middle-income family). As a result, the
average Japanese household pays about $2,300
per year out of pocket. Overall out-of-pocket
expenditures amount to roughly 17 percent of
total health care spending.
The vast majority of hospitals and clinics in
Japan are privately owned, but because the government
sets all fee schedules, the distinction
between privately and publicly owned is irrelevant
for patients. Reimbursement for both
hospitals and clinics is on a fee-for-service
basis, with the government setting fees and
prescription prices.
The fee schedule is identical for inpatient
and outpatient treatment. Because hospitals
must absorb both physician and capital costs
from the same level of reimbursement, the tendency
has been to shift patients to outpatient
services. Recently, some attempts have been
made to introduce alternate reimbursement
mechanisms for hospitals, including DRGs
and Diagnosis and Procedure Combinations
classification systems that tie reimbursements
more closely to the resources that a particular
patient consumes. But the medical establishment
has resisted, and only about 80 hospitals
participate in the experiment.
Hospital physicians are salaried employees.
Nonhospital physicians work in the private
sector, and the government sets their reim-
bursement schedules. Generally, reimbursement
is on a fee-for-service basis, although
recently some chronic conditions have been
"price bundled" into a single fee. Reimbursement
schedules are set within the context of an
overall global budget on health spending, but
the division of resources is the subject of extensive
negotiation with providers.
The fee schedule reflects both the Japanese
style of medicine and attempts to contain
costs. For example, because of a strong cultural
bias against invasive procedures, surgery
tends to be reimbursed at a much lower rate
than nonsurgical procedures.
The fee-setting system has had serious corruption
problems. Because the fees for each of
more than 3,000 procedures or services are set
individually and adjusted every two years on an
individual basis, it is possible to manipulate
particular fees without attracting much attention.
In 2004, a group of dentists was indicted
for bribing the fee-setting board.
In addition, the reimbursement schedule
for physicians creates an incentive for them to
see as many patients as possible. The result is
assembly line medicine. Two-thirds of patients
spend less than 10 minutes with their doctor;
18 percent spend less than 3 minutes.
On the other hand, the Japanese, like
Americans, practice a very technology-intensive
style of medicine. Capital investment in
technology has been given high priority, and
the Japanese have at least as much access to
technology such as MRI units, CT scanners,
and lithotripters as patients in the United
States. Because the government imposes
uniform fee schedules on hospitals, there is no
price competition. Instead, hospitals attempt
to lure patients by having the best technology.
While this can benefit patients, it has also led
to queues at the best hospitals and a black
market with "under the table" payments for
faster access.
Some restrictions have been added in the
last few years, capping the number of diagnostic
imaging procedures that a hospital can
perform in a calendar month, as well as reducing
the fees for those services. These
changes have not led to visible rationing yet
but could in the future.
To date, Japan has done a fairly good job
of controlling costs without resorting to the
rationing common in many universal care
systems. This is due in part to factors outside
the health care system, such as generally
healthy lifestyles, low vehicle accident rates,
low crime rates, low rates of drug abuse, and
other cultural factors. One study estimated
that 25 percent of the difference in health
care spending between the United States and
Japan is attributable to a lower incidence of
disease and 15 percent to less aggressive practice
styles. But rationing has also been
avoided through the management of the
health care system and the imposition of significant
consumer cost sharing.
Nonetheless, spending is beginning to
escalate, especially in government-managed
programs such as the Roken, where there has
been less of an attempt at cost sharing and
cost containment. As one observer explained:
We Japanese have a tendency to go to the
hospital even when we have only minor
ailments such as the flu, headaches, or
stomach aches. If medical expenses are
not high and we do not feel well, then
why not go see a doctor and get some
medication. . . . The result, of course, is
that waiting rooms of clinics and hospitals
are full of people. Everyone is welcome
and there are, in fact, regular customers.
Sometimes elderly people come
to see a friend and the hospital waiting
room becomes a sort of salon.
This problem is aggravated by the demographics
of a rapidly aging society. By some
estimates, the elderly are responsible for 90 percent
of the aggregate increase in Japans health
care costs. If current trends continue, Japan
will almost triple its government spending on
health care in the next 20 years. And the situation
will only grow less stable with time.
Japan is expected to lose 35 million workers by
2050, with 35 percent of its population in
retirement. This raises questions of how a
system that relies on payroll taxes for funding
can continue to fund rising costs even as its
payroll base shrinks.
Norway
Norway has a universal, tax-funded, singlepayer,
national health system. All Norwegian citizens,
as well as anyone living or working in
Norway, are covered under the National Insurance
Scheme. Norwegians can, however, opt out
of the government system by paying out of
pocket. In addition, many Norwegians go
abroad for treatment to avoid the waiting lists
endemic under the government program.
The system is financed through general
tax revenues, with no earmarked or dedicated
tax for health care. Thus, health care
becomes one large contributor to a tax burden
that consumes 45 percent of GDP.
Among industrialized countries, only Sweden
has a higher tax burden.
Benefits are extensive and include inpatient
and outpatient care, diagnostic services,
specialist care, maternity services, preventive
medicine, palliative care, and prescription
drugs. At public hospitals, there are no
charges for stays or treatment, including
drugs. However, small copayments may be
charged for outpatient treatment and for
treatment by a general practitioner, psychologist,
or psychiatrist. The program also provides
"sick pay" and disability benefits. As
Michael Moore has noted, the Norwegian system
will even pay for "spa treatments" in
some cases.
Although the central government retains
overall responsibility for and authority over the
system, some management and funding
responsibilities have devolved to regional and
municipal governments. In general, municipal
governments are responsible for primary
health care, while four regional health authorities
are responsible for specialist care. Prior
to 2002, public hospitals were run by local or
county governments. In the face of chronic
problems, notably long waiting lists and rising
costs, the central government took direct control
of all public hospitals in January 2002. A
small number of private hospitals do exist outside
the public system.
The government sets a global budget limiting
overall health expenditures, and setting
capital investment expenditures for hospitals.
Most general practitioners and physician specialists
outside hospitals receive a fixed salary,
although some specialists working on a contract
basis receive both an annual grant and
fee-for-service payments. Reimbursement rates
are set by the government and balance-billing
is prohibited. Most other health care personnel
are salaried government employees.
Patient choice of physician is constrained.
All Norwegian citizens must choose a general
practitioner from a government list. The GP
acts as a gatekeeper for other services and
providers. Patients may switch GPs, but no
more than twice per year and only if there is no
waiting list for the requested GP. Specialists
may only be seen with a referral from the GP.
The Norwegian health care system has experienced
serious problems with long and growing
waiting lists. Approximately 280,000 Norwegians
are estimated to be waiting for care on
any given day (out of a population of just 4.6
million). The average wait for hip replacement
surgery is more than four months; for a
prostectomy, close to three months; and for a
hysterectomy, more than two months.
Approximately 23 percent of all patients referred
for hospital admission have to wait longer than
three months for admission.
The Norwegian government has responded
by repeatedly and unsuccessfully attempting to
legislate waiting lists out of existence. For example,
under the 1990 Patients Rights Act,
patients with a condition that would lead to
"catastrophic or very serious consequences"
have a right to treatment within six months, if the
treatment is available. In 2001, after several
government reports had documented repeated
violations of this policy, the government passed
a new mandate requiring that a patients medical
condition be at least "assessed" within 30
days. Despite these paper guarantees, waiting
lists have not been substantially reduced.
Moreover, such delays may represent only
the tip of the iceberg when it comes to
rationing care in Norway. In some cases, care
may be denied altogether if it is judged not to
be cost-effective. As Knut Erik Tranoy,
Professor Emeritus at the Centre for Medical
Ethics of the University of Oslo and an original
member of the governments Health Care
Priorities Commission, explains:
It is important to see (a) that, in a public
health service of the Nordic type, any
given amount of resources always has
alternative uses. And (b) it is neither
medically nor morally defensible to put
scarce resources to uses which will foreseeably
yield less favorable outcomes
than other usessave fewer lives, cure
fewer patients.
Tranoy differentiates between Norwegianstyle
systems of national health care and "a
health care system where patients buy services
in a market, and where justice means
equality of opportunity to buy what you
need. Decisions about alternative use are
then (largely) patients decisions."
While Norwegians generally report that
they are "fairly satisfied" with the way their
health care system is run, there has been growing
discontent over such issues as the ability to
choose a health care provider, involvement in
decisions regarding care or treatment, and
waiting timeswhich has been an ongoing
issue in Norwegian politics. However, at this
time there doesnt appear to be any widespread
movement for larger reform.
Portugal
The Portuguese health care system is a classic,
universal, centrally run National Health
System, a single-payer system funded through
taxes with comprehensive benefits provided
free or with little cost at the point of service.
Also, a number of occupation-related health
insurance schemesoriginally intended to be
integrated into the NHSnow coexist with it.
The primary source of care is the NHS,
which is funded primarily through general tax
revenues, accounting for approximately 13 percent
of all government expenditures. In theory,
the NHS operates within an annual global
budget for health care spending. In reality, it
regularly exceeds this budget by a wide margin,
necessitating supplemental funding. Portugal
is one of the few OECD countries where public
health care spending has been rising as a proportion
of total health spending, up more than
four percentage points since 1997.
Theoretically, benefits under the NHS
include all necessary inpatient and outpatient
health care services including specialists, diagnostic
tests, mother and child care, and prescription
drugs. On paper, no health-related
expense is specifically excluded from coverage
by the NHS, though in reality services such as
dental care and rehabilitation therapy are seldom
provided. Copayments are required for
diagnostic tests, hospital admissions, consultations
with specialists, and prescription
drugs, where copayments can run to 40 percent
or higher.
Primary care physicians and hospitalbased
physicians are public employees, paid
directly by the NHS. However, NHS doctors
are permitted to practice privately as well,
and roughly half do so. Specialists are
often in private practice and are reimbursed
by the NHS on a contractual basis.
About 25 percent of the population, mostly
government workers, military, telecommunication
workers, and their families, remain
under a series of industry or occupation-based
insurance schemes, known collectively as "subsystems,"
which are a legacy of the countrys
pre-NHS health care system. These plans
were originally intended to be incorporated
into the NHS, but their powerful constituencies
have prevented that from occurring.
Participants in the subsystems pay a premium
equal to approximately 1 percent of their
salary. Benefits are generally superior to those
offered through the NHS. Not surprisingly,
premiums fall far short of what is needed to
finance benefits. The resulting shortfall is
shifted to the NHS.
In addition, approximately 10 percent of
the population has private insurance, usuallythrough their employer.179 Private insurance
generally pays for hospital and specialty care
but not for primary care physicians. Policies
are medically underwritten and have no
requirement for renewability, meaning insurers
can raise premiums or drop customers
with extremely high claims.
Choice of provider is heavily constrained
under the NHS. Every citizen must choose a
primary care physician from a list of those
available within a specified geographic area.
This area is usually based on the persons
area of residence but may be based on the
area of employment. The average general
practitioner serves as many as 1,500 people,
though some may have more than 2,000
patients, leading to long waits and difficulties
in getting appointments. People may
change GPs only by applying in writing to
the NHS and explaining their reasons.
Access to specialists or hospital care, except
in emergencies, requires referral from the
patients GP. Since this is often difficult to
secure in a timely manner, patients often seek
care through hospital emergency rooms. By
some estimates, at least 25 percent of emergency
room patients do not need immediate
treatment.
Despite guarantees of "universal coverage,"
access to care remains a serious problem.
Waiting lists are so long and so prevalent that
the European Observatory on Health Systems
says that they veer toward "de facto
rationing." Currently, more than 150,000
Portuguese are on waiting lists for surgery, out
of a population of just 10.6 million. However,
that may understate the problem in poorer
and rural areas, which have fewer health
resources and less access to care. Modern
health technology is far less available than in
the United States. The United States has
almost seven times more MRI units per million
people, and 20 percent more CT scanners.
To avoid waiting lists, Portuguese patients
frequently pay out of pocket to see physicians
in private practice. In some cases, Portuguese
patients have crossed the border to receive
treatment in Spain.
While there appears to be a consensus in
Portugal that the system needs some kind of
reform, weak governments and strong structural
interest groups have combined to prevent
the development of any consensus over
the direction reform should take. For the
moment, Portugal drifts.
Greece
Although ostensibly an employer-based system,
the Greek system operates more like a single-
payer system in that it is highly centralized
and regulated. Virtually every aspect of health
care financing and provision is strictly controlled
by the Ministry of Social Health and
Cohesion. Some attempts have been made
to decentralize decisionmaking, with 17 regional
organizations having some responsibility for
implementing policy and managing the delivery
of health care, but most power remains
with the central government.
Greek employers must enroll their workers
in one of 35 "social insurance funds,"
funded in part through a payroll tax and in
part through general tax revenues. Unlike
Germany, where employers have a choice
among competing sickness funds, Greek
social insurance funds are specific to industry
sectors. The range of benefits offered by
each fund, the contribution rates, and the
types of providers that the insured can access
are all determined by the Ministry of Social
Health and Cohesion.
Certain funds known as "noble funds," primarily
used by government workers, the banking
sector, and public utility workers, offer
more extensive benefits and require smaller
worker contributions. The powerful unions
representing workers from these sectors have
consistently blocked attempts to merge these
funds with other social insurance funds or to
allow buy-ins from other industry sectors.
Social insurance funds reimburse doctors in
two ways. Some providers are employed directly
by the funds at fund-operated clinics and are
effectively salaried employees. Others practice
privately but contract with funds to provide
care. Contract physicians are reimbursed on afee-for-service basis, but reimbursement rates
are extremely low. Balance-billing is prohibited.
In theory, funds provide first-dollar coverage,
with no deductibles and low copayments
for only a few services. However, as discussed
below, most physicians demand "informal"
payments in exchange for treatment.
In addition to the social insurance funds,
the National Health Service employs physicians
and operates hospitals. The NHS operates parallel
to the social insurance funds, acting essentially
as a back-up mechanism, although it may
be the principal provider of health services in
some rural areas. It also provides health care for
the uninsured and the elderly.
In addition to NHS hospitals, other public
hospitals contract with the social insurance
funds. In both cases, the Ministry of Social
Health and Cohesion determines not only the
hospitals budget, but the number of personnel,
the specialties of the personnel, salary levels,
number of beds, and the purchase of technology.
Budgets are rigidly monitored and hospital
administrators have little leeway.
Hospitals are reimbursed on a per diem payment
system, a type of a fixed charge.
NHS hospitals in particular are considered
substandard. Most suffer from severe staffing
shortages caused by low pay and poor living conditions
in rural areas. It has been estimated that
less than half of authorized medical positions are
actually filled. Low salaries have also led to personnel
shortages in public hospitals associated
with social insurance funds.
A series of reforms implemented in 2005
imposed a referral requirement for hospital
admissions. Patients seeking free treatment in
a public NHS hospital must have a referral
from a general practitioner, who acts as a gatekeeper.
Private practice physicians may not
make referrals to public or NHS hospitals.
Unfortunately, general practitioners are in
severely short supply. Greece needs an estimated
5,000 general practitioners to meet demand.
In actuality it has only around 600.
Despite overlapping health plans, the Greek
system falls short of universal coverage. About
83 percent of the population is covered for primary
care (on par with the United States), and
about 97 percent for hospital care. In theory,
the uninsured can always receive treatment by
walking into an NHS clinic or hospital. Only
about 8 percent of Greeks have private supplemental
health insurance, although this percentage
has risen substantially in the past few
years and further growth is predicted.
Accurate information on waiting lists is
difficult to come by. According to the WHO,
"although patient registries at the hospital
level do exist, there is no systematic data processing
available at any level of care," to provide
adequate analysis. However, most
observers agree that waiting lists are a severe
problem at almost every level of care, and particularly
bad at both NHS and public hospitals.
An examination of waiting lists at Athens
hospitals by the Ta Nea newspaper found the
wait for surgery was as long as six months; for
an outpatient appointment with either the
hypertension or neurology departments, 150
days. Even simple blood tests required a
month-long wait.
The Greek system has developed a level of
endemic corruption as patients have sought
ways around the systems rationing, bureaucracy,
and inefficiencies. For example, Greeks routinely
provide physicians with "informal" payments
for seeing a patient from a sickness fund
that has not contracted with the doctor, for
moving a patient up in the queue, or for providing
treatment outside government guidelines.
In addition, physicians actively attempt
to persuade patients to move from a doctors
sickness fund contract to the doctors private
practice. Patients who switch pay out of pocket
but receive faster and better care. Even NHS
physicians see private patients on the side.
(This practice was illegal until 2002 but went
on despite the prohibition). Physicians also
receive payments for referrals to private hospitals
or diagnostic centers. Such informal outof-
pocket payments made up 42 percent of
total health expenditures in 2002, fully 4.5 percent
of GDP. Essentially, the Greek health
care system is funded through payroll taxes,
general tax revenue, and bribery.
In addition, the health care bureaucracy has
become highly politicized. Every staff appoint-
ment in the public health sector must be
approved at the ministry level. All hospital
administrators and other health officials are
appointed on the basis of political affiliation
with the governing party, often with little regard
for relevant training or other qualifications.
Not surprisingly, Greece has far less modern
health care technology than the United
States. The United States has more than twice
as many MRI units per million people and 20
percent more CT scanners. Much of the
state-of-the-art equipment that does exist is
clustered in the countrys small number of private
clinics and hospitals. Indeed, the vast
majority of high technology biomedical tests
are performed by the private sector.
One study summed up the problems with
the Greek health care system this way:
The Greek health system does not yet
offer universal coverage and has fragmented
funding and delivery. Funding is
regressive, with a reliance on informal
payments, and there are inequities in
access, supply and quality of services.
Inefficiencies arise from an over reliance
on relatively expensive inputs, as evidenced
by the oversupply of specialists
and undersupply of nurses. Resource
allocation mechanisms are historical and
political with no relation to performance
or output; therefore providers have little
incentive to improve productivity.
That would appear to be a fairly accurate
summary.
Netherlands
Aside from Switzerland, the Netherlands
has perhaps the most market-oriented national
health care system in Europe. That was the
case even before 2006, when a series of reforms
introduced even more market mechanisms.
The old pre-2006 Dutch system resembled
Germanys. Dutch workers with incomes
below 32,600 were required to enroll in one of
30 government-controlled "sickness funds."
Those with higher incomes had the option of
enrolling in the funds if they wished, or opting
out of the government system and purchasing
private insurance. Sickness funds were
financed through a payroll tax and a flat-rate,
per-capita premium.
The funds provided a uniform package of
benefits including physician and hospital
care, specialist care, diagnostic tests, prescription
drugs, and dental care for children.
While consumers could switch funds annually,
there was little competition between funds
and few consumers actually switched.
The new Dutch system operates on the theory
of managed competition like Switzerland
(see below). Both the social health insurance
program and the alternative private health
insurance option were replaced by a requirement
that all Dutch citizens purchase a basic
health insurance plan from one of 41 private
insurance companies. Although a fine may be
imposed for failure to comply, there is no
comprehensive system for identifying citizens
who do not meet the mandate. An estimated
1.5 to 2 percent of the population is currently
uninsured.
The required plan, which covers minimum
benefits set by the government,
includes general practitioner and specialist
care, hospital stays, some dental care, prenatal
care, some medicines, and travel expenses.
In one interesting innovation, most of the
required benefits are specified in terms of
"functions of care" rather than by provider
category. Thus, "rehabilitation care" is
required, but no particular type of rehabilitation
provider is mandated. This may mean
that the benefits package will be less susceptible
to manipulation by provider interest
groups, but it is much too early to tell.
The Health Ministry sets premiums, which
average around 100 per month for an individual.
Insurance companies can offer varying
deductibles, ranging from 150 to 1,000 per
year, allowing for a small level of price competition.
Policies can also offer rebates of up to
225 if a policyholder uses no health services
in a given year beyond seeing a primary care
physician. About 90 percent of the popula-tion also buys supplemental insurance covering
services over and above the required standard
benefits package.
Employers generally pay half of insurance
premiums, with individual workers picking up
the other half. Individual premiums are tax
deductible. Subsidies, or care allowances, that
help low- and middle-income income workers
purchase the basic insurance plan are extensive
and reach well into the middle class. Currently, 5
million Dutch citizens qualify for some level of
subsidy on a sliding scale based on income.
Those subsidies are financed through a tax on
salaried workers. Because of the high levels of
subsidy, the Dutch government remains a large
source of health spending, one area of significant
difference with the Swiss system.
Insurers negotiate quality, quantity, and
price of services with providers. Notably,
many insurers require providers to document
the quality of the care they provide, frequently
relying on evidence-based guidelines
and performance metrics.
Some insurers provide care directly, using
their own staffs and their own facilities, such
as primary care centers and pharmacies.
Other insurers contract with a network of
providers similar to U.S. preferred provider
organizations (PPOs). Patients can go out of
network but will receive only partial reimbursement.
Most insurers require a referral
from a primary care provider before a patient
can see a specialist. Pharmaceutical prices
are capped nationwide at the average price of
medicines in a therapeutic class. Individuals
may choose more expensive drugs but must
pay the difference out of pocket.
The new system has been in place for only
two years, which is not enough time to permit
a thorough evaluation. However, preliminary
indications suggest that it is an
improvement over the pre-2006 system.
Dutch consumers appear to have embraced
the reforms. Consumer organizations
are participating in negotiations with providers,
insurers, and lawmakers. The system is
becoming more transparent, with far greater
information available regarding both price
and quality. Consumers seem willing to make
decisions and change insurers on the basis of
price and quality.
Price competition under the new system has
increased significantly and at least 20 percent of
Dutch consumers have switched insurers.
When the system was initiated, the Dutch government
predicted premiums would cost
1,106 on average. However, competition has
forced the average premium down to 1,028,
097.6 percent below the prediction. Overall,
the new system is estimated to have increased
the purchasing power of Dutch households by
as much as 1.5 percent. However, not everyone
has been a winner. The community rating
requirement has resulted in steep increases in
premiums for younger workers who were more
heavily subsidized under the old system.
Under the old system, waiting lists were
widespreadfor example, more than three
months for a hip replacement and two months
for a prostectomy or hysterectomy. One
study estimated that at least 100 heart patients
died each year while on waiting lists. Early
evidence suggests that some improvement has
come as a result of the 2006 reforms.
Hospitals are beginning to compete by
expanding services such as neurosurgery and
radiation therapy. Although some experts
have expressed concern that smaller hospitals
offering these services may not have sufficient
utilization rates to ensure quality and efficacy,
the expanded availability of services will likely
increase access to care and reduce queues.
The new system may even be having a positive
impact on health care costs. Since the
new system took effect, health care costs have
been growing at an annual rate of just 3 percent,
compared to more than 4.5 percent in
the year before the reforms.
The jury is still out, and the Dutch system
still falls well short of a true free market, but
the Netherlands appears to have taken a big
step in the right direction.
Great Britain
Almost no one disputes that Britains
National Health Service faces severe prob-lems, and few serious national health care
advocates look to it as a model. Yet it appears
in Moores movie SiCKO as an example of
how a national health care system should
work, so it is worth examining.
The NHS is a highly centralized version of
a single-payer system. The government pays
directly for health care and finances the system
through general tax revenues. Except for
small copayments for prescription drugs,
dental care, and optician services, there are
no direct charges to patients. Unlike many
other single-payer systems such as those in
Canada and Norway, most physicians and
nurses are government employees.
For years, British health policy has focused
on controlling spending and in general has
been quite successful, with the system spending
just 7.5 percent of GDP on health care.
Yet the system continues to face serious financial
strains. In fiscal year 2006, the NHS faced
a deficit of £700 million, according to government
figures, and as much as £1 billion,
according to outside observers. This comes
despite a £43 billion increase in the NHS
annual budget over the past five years. By
some estimates, NHS spending will have to
nearly triple by 2025 just to maintain the current
level of services.
And that level of services leaves much to be
desired. Waiting lists are a major problem. As
many as 750,000 Britons are currently awaiting
admission to NHS hospitals. These waits are
not insubstantial and can impose significant
risks on patients. For example, by some estimates,
cancer patients can wait as long as eight
months for treatment. Delays in receiving
treatment are often so long that nearly 20 percent
of colon cancer patients considered treatable
when first diagnosed are incurable by the
time treatment is finally offered.
In some cases, to prevent hospitals from
using their resources too quickly, mandatory
minimum waiting times have been imposed.
The fear is that patients will flock to the most
efficient hospitals or those with smaller backlogs.
Thus a top-flight hospital like Suffolk
East PCT was ordered to impose a minimum
waiting time of at least 122 days before
patients could be treated or the hospital would
lose a portion of its funding. As the Daily
Telegraph explained:
In a real competitive market, increased
demand can allow prices to rise, thus
increasing profits, which allow the market
to grow. Efficient producers can then
reduce their unit costs and their prices,
and so give a better deal to the consumer.
The prevailing logic is that the
more customers who are servedor
products that are soldin a given period
of time, the better the business does.
But PCTs have budgets that are
predetermined by Whitehall spending
limits, and there is no way for
them to conjure extra revenue out of
the air or to grow their market. As a
result, the hospitals that are most
successful in providing prompt treatment
are running through the finite
resources of their PCTs at an unacceptably
rapid rate.
The problem affects not only hospitals.
There are also lengthy waits to see physicians,
particularly specialists. In 2004, as a cost-cutting
measure, the government negotiated low
salaries for general practitioners in exchange
for allowing them to cut back the hours they
practice. Few are now available nights or
weekends. Problems with specialists are
even more acute. For example, roughly 40
percent of cancer patients never get to see an
oncology specialist.
The governments official target for diagnostic
testing is a wait of no more than 18
weeks by 2008. In reality, it doesnt come
close. The latest estimates suggest that for
most specialties, only 30 to 50 percent of
patients are treated within 18 weeks. For trauma
and orthopedics patients, the figure is only
20 percent. Overall, more than half of British
patients wait more than 18 weeks for care.
Explicit rationing also exists for some
types of care, notably kidney dialysis, open
heart surgery, and some other expensive procedures
and technologies. Patients judged
too ill or aged for the procedures to be costeffective
may be denied treatment altogether.
Recently, the British government introduced
some tiny steps toward market-based
reforms. Under the experimental London
Patient Choice Project, patients who have been
waiting longer than six months for treatment
are offered a choice of up to four alternate
providers. This experiment has been extended
nationwide for coronary heart patients who
have been waiting longer than six months.
Some proposed solutions are far more radical.
David Cameron, leader of the Conservative
Party, has proposed that the NHS be allowed
to refuse treatment to individuals who dont
practice healthy lifestyles, for example, who
smoke or are overweight. Then again, he has
also proposed that the government pay for
gym memberships and subsidize the purchase
of fresh fruit and vegetables.
A small but growing private health care system
has emerged in the UK. About 10 percent
of Britons have private health insurance. Some
receive it through their employer, while others
purchase it individually. In general, the insurance
replicates care provided through the NHS
and is purchased to gain access to a wider
choice of providers or to avoid waiting lists.
Private health insurance is lightly regulated
and risk-rating is allowed. The British government
treats health insurance more or less the
same as other types of insurance.
The British public is well aware of the need
for reform. Nearly two-thirds of Britons (63
percent) say that the need for reform is
"urgent," while another 24 percent believe it is
"desirable." Fully 60 percent of Britons believe
that making it easier for patients to spend their
own money on health care would improve
quality. Yet Britons are also extremely proud
of their health care system and wary of any
reforms that would "Americanize" it.
Switzerland
Of all the countries with universal health
care, Switzerland has one of the most market-
oriented systems. Indeed, the Swiss government
actually pays for a smaller amount
of total health care expenditures than the
U.S. government, 24.9 percent versus 44.7
percent. (See Figure 3.)
The Swiss system is based on the idea of
managed competition, the same concept that
underlay the 1993 Clinton health care plan and
Mitt Romneys reforms in Massachusetts.
Managed competition leaves the provision of
health care and health insurance in private
hands but creates a highly regulated artificial
marketplace as a framework within which the
health care industry operates.
Swiss law requires all citizens to purchase a
basic package of health insurance, an individual
mandate. Coverage is close to universal, estimated
at 99.5 percent. This level of compliance is due
in part to the Swiss national character and may
not be replicable in the United States where the
record of complying with mandates is much
more mixed (even if such a mandate were desirable).
For example, nearly 100 percent of Swiss
drivers comply with their countrys mandate for
automobile insurance, compared with only 83
percent of U.S. drivers.
The term "basic benefits package" is
somewhat misleading since the required benefits
are quite extensive, including inpatient
and outpatient care, care for the elderly and
the physically and mentally handicapped,
long-term nursing home care, diagnostic
tests, prescription drugs, and even complementary
and alternative therapies.
Insurance is generally purchased on an individual
basis. Few employers contribute to the
purchase or provide insurance. The policies
are provided by private insurers. Currently,
some 93 insurers operate in Switzerland,
although not every insurer operates in every
canton, or region. Originally, insurers were
required to be nonprofit entities, but that
restriction was eliminated in 2002.
Insurers cannot reject an applicant on the
basis of health status, and all policies are community
rated within a geographic area, meaning
that the healthier pay higher premiums to
subsidize the less healthy. One exception to
community rating is for nonsmokers, who can
receive premiums as much as 20 percent lowerthan smokers. A formula adjusts premiums
based on sex and age. The geographic variation
can be significant, with premiums differing
as much as 50 percent between cantons.
Unable to compete on the basis of managing
and pricing risk, and required to offer
nearly identical basic benefits packages,
insurers compete primarily on price. Since
they cannot reduce costs by risk management
or benefit design, they generally manage
prices by varying the level of deductibles
and copayments. Individuals can purchase
expensive policies with very low deductibles
and copayments, or far less expensive policies
with high deductibles or extensive copayments.
Thus, premiums vary according to
their cost-sharing attributes and plan type,
running from $1,428 per year for a plan with
a deductible of approximately $2,000 to
$2,388 for a plan with a $250 deductible.
Because employers do not pay for workers
health insurance, the Swiss are exposed to the
full cost of their insurance purchases. As a result,
many Swiss have opted for high-deductible
insurance. Thus, with high deductibles and
extensive copayments, the Swiss pay out of
pocket for 31.5 percent of health care, twice as
much as in the United States. (See Figure 4.)
Recently, there has also been a growing
market in managed care plans that, like those
in the United States, offer lower premiums in
exchange for limitations on access to specialists
and other services. Premiums for such
plans run around $1,900 per year.
The Swiss government offers subsidies to
low-income citizens to help them purchase a
policy. Subsidies are based on both income
and assets, and the maximum available subsidy
covers the cost of an average premium in
the individuals canton. These subsidies are
designed to prevent any individual from having
to pay more than 10 percent of income
on insurance. They do not, however, pay the
entire cost of insurance because the Swiss do
not want to create an incentive for subsidized
individuals to choose the most expensive
plan with the lowest deductibles and copayments.
Roughly one-third of Swiss citizens
receive some form of subsidy, and approximately
19 percent of all health insurance premiums
are paid with government funds.
Swiss insurers operate as cartels to negotiate
provider reimbursements on a cantonal basis.
Providers must accept the negotiated payment,
and balance-billing is prohibited. If insurers and
providers are unable to reach agreement on a fee
schedule, canton governments are empowered to
step in and impose an agreement. There are no
restrictions on where physicians may set up practice,
so to some degree providers can vote with
their feet, moving to cantons that offer higher
reimbursements, a practice that has led to physician
shortages in some areas.
The system includes both public and private
hospitals. Private hospitals negotiate
reimbursement with insurance cartels and
physicians in the same manner. Public hospitals
are operated by cantons, which negotiate
reimbursement rates with insurers and provide
subsidies to the hospitals. In some cantons,
individuals with only the basic insurance
plan must use public hospitals; supplementary
insurance (see below) is required for
admission to private hospitals.
Recently some providers have begun operating
outside the negotiated fee schedules. A
separate supplemental insurance market is
starting to develop to cover the cost of these
providers, which are presumed to offer higher
quality or more advanced services. Supplementary
insurance also allows access to private
hospitals in those cantons that do not
permit access under the basic insurance plan.
Even within public hospitals, supplementary
insurance can be used to pay for services such
as private rooms that are not covered under
the basic plan. By some estimates as many as
40 percent of Swiss citizens have purchased
supplemental insurance.
The Swiss do not impose a global budget
on their health care system and have therefore
avoided the waiting lists common in other sys-
tems. In addition, the Swiss have a high degree
of access to modern medical technology, but it
has come at a cost. The Swiss spend 11.5 percent
of GDP on health care, second only to the
United States.
Since Swiss health care consumers are
exposed to the cost consequences of their
health care decisions, this trade-off between
access and cost can be presumed to reflect the
desires of Swiss patients. They have chosen
high quality care even though it costs them
more. Given that economists consider health
care to be a "normal good"that is, consumption
rises along with incomeand Switzerland
is a wealthy nation, such a decision seems
entirely reasonable.
At the same time, it is notable that Swiss
health care spending remains below that of the
United States for nearly comparable care.
Strong evidence suggests that the exposure of
Swiss consumers to the cost consequences of
their health care decisions has made them more
conscious consumers and helped limit overall
health care costs. As Regina Herzlinger and
Ramin Parsa-Parsi of Harvard have concluded,
"Cost control may be attributed to the Swiss
consumers significant role in health care payments
and the resulting cost transparency."
The transparency of the system also makes it
responsive to consumer preferences. The WHO
survey ranked Switzerland second only to the
United States in terms of responsiveness to
patients needs for choice of provider, dignity,
autonomy, timely care, and confidentiality.
The Swiss generally seem pleased with their
system. Earlier this year, Swiss voters overwhelmingly
rejected a proposal to replace the
current system with a single-payer plan; more
than 71 percent of Swiss voters turned down
the proposal in a nationwide referendum.
Nonetheless, the Swiss system has its own
problems, most of them predictable outgrowths
of the individual mandate and the regulation
inherent in managed competition. In most markets,
consumers impose a certain discipline on
prices because they can refuse to buy a product
if it costs too much. The individual mandate
removes this power since consumers must purchase
the product (in this case, insurance) even if
they believe the cost outweighs the value.
Moreover, the establishment of a governmentdefined
benefits package is an open-ended invitation
to special interests representing various
health care providers and disease constituencies,
who can certainly be expected to lobby for the
inclusion of additional services or coverage.
Public choice dynamics are such that
providers (who would make money from the
increased demand for their services) and disease
constituencies (whose members naturally have
an urgent desire for coverage of their illness or
condition) will always have a strong incentive to
lobby legislators for inclusion under any minimum
benefits package. The public at large will
likely be unaware of the debate or see resisting
the small premium increase caused by any particular
additional benefit as unworthy of a similar
efforta simple case of concentrated benefits
and diffused costs.
That is exactly what has happened in
Switzerland, leading to a growing expansion
of the basic benefits package. In particular, a
powerful hospital and physician lobbying
coalition known as the "Blue Front" was able
to demand a significant expansion in covered
benefits in exchange for a relaxation of "any
willing provider" laws so as to permit managed-
care contracts.
The expansion of benefits has driven up
the cost of insurance, a cost only partially offset
by larger deductibles. Although the proportion
of health expenditures paid out of
pocket remains high, it has decreased by
roughly 10 percent in the past decade.
Moreover, the growth in covered benefits
has helped drive up costs for the system as a
whole, as the Swiss become more insulated
from the costs of their health care purchasing
decisions. If that trend continues, it could
undermine the cost transparency that is at
the heart of the Swiss system." As Uwe
Reinhardt has noted, "Over time, the growth
in compulsory benefits has absorbed an
increasing fraction of the consumers payment,
thus compromising the consumer-driven
aspects of the Swiss system."
Evidence shows that the community rating
requirements are creating distortions within
the Swiss market, leading to the over provision
of care to the healthy and the under provision
of care to the sick. In addition, the prohibition
on risk management discourages the
development of new and innovative products.
Peter Zweifel of the University of Zurich, a
member of the Swiss Competitive Committee
which oversees insurance regulation, believes
that a return to some degree of risk-rating is
essential to the long-term success of the Swiss
system. As Zweifel puts it, "Let competition
work its magic. Let those who are bad risks get
the message that they need to become better
risks, if possible. If not possible, [they would]
still get a subsidy which [keeps their costs]
down to little more than 810 percent of taxable
income."
Third, the cartel structure for negotiating
reimbursement schedules can create a number
of distortions. Effectively monopsony
purchasers, the cartels have enormous leverage
when it comes to negotiations. Not surprisingly,
physicians have tended to set up
practice in cantons with the highest levels of
reimbursement, leading to shortages in other
areas. Reimbursement rates have reportedly
created wasteful incentivesfor example, hospitals
shifting patients from outpatient to
inpatient care. And the combination of
increased demand and low reimbursement
has led to the first signs of queues for the
most complex surgeries.
In addition, the negotiations freeze in
place a pricing structure that inhibits the
development of innovative approaches that
do not tie payments to specific benefits. This
includes both managed care approaches and
health services integration.
Finally, Switzerland has some of Europes
strongest regulation of nonphysician health
care professionals. As a result, patients are
often forced to use more expensive providers
where a less expensive professional would do.
All of the above combine to undermine the
consumer-driven nature of Switzerlands
health system. Despite these problems, the
Swiss system provides a useful lesson for the
United States about the value of consumerdirected
health care. In particular, we can see
that when the cost of insurance becomes more
transparent, consumers shift their purchasing
preferences toward true insurance (spreading
catastrophic risk), rather than purchasing prepayment
for routine, low-cost services. That
gives consumers an overall incentive to make
cost-versus-value decisions when purchasing
health care, resulting in reduced costs while
maintaining individual choice and quality
care.
Germany
Germany ranked 25th in the WHO ratings.
Despite that low ranking, however, the
country is worth examining because it is frequently
cited as a model by advocates of
national health care.
National health insurance in Germany is
part of a social insurance system that dates
back to Bismarck. All German citizens with
incomes under 46,300 (roughly $60,000) are
required to enroll in one of approximately 250
statutory "sickness funds." Those with higher
incomes may enroll in the funds if they wish, or
may opt out of the government system and
purchase private insurance. About threequarters
of workers with incomes above the
statutory limit choose to remain in the sickness
funds, which currently cover approximately
90 percent of the population. Overall,
insurance coverage is nearly universal.
However, the number of uninsured has been
rising, roughly tripling in the last 10 years to
300,000 people. About 9 percent of the population
purchases supplemental insurance to
cover items that are not included in the standard
benefits package.
Sickness funds are financed through a payroll
tax split equally between the employer and
employee. The size of the tax varies depending
on which fund the worker has chosen, but
averages around 15 percent of wages. Sickness
funds are supposed to be solvent and selfsupporting,
but in reality the system ran a 7
billion deficit in 2006. The German government
has proposed a 1 percent increase in the
payroll tax, split evenly between employer and
employee, starting next year. In addition,
general tax revenues finance capital costs for
acute care hospitals and many rehabilitative
services, especially for retirees.
Benefits are extensive, covering physicians,
hospital and chronic care, diagnostic
tests, preventive care, prescription drugs, and
part of dental care. In addition to the medical
benefits, sickness funds provide sick pay to
those who cannot work due to illness, ranging
from 70 to 90 percent of the patients last
gross salary, for up to 78 weeks.
The central government and state governments
split the regulation of the health care
system. The central government establishes
the national global budget for health care
spending, defines any new medical procedures
to be included in benefit packages, and sets
reimbursement rates for physicians. Some of
this is accomplished through legislation, while
the rest is handled through negotiations
between the National Association of Sickness
Funds and the National Association of
Physicians. At the state level, state associations
of sickness funds and physicians negotiate
overall health budgets, reimbursement contracts
for physicians, procedures for monitoring
physicians, and reference standards for
prescription drugs. The bargaining power
in these negotiations clearly lies with the sickness
funds backed by the government, allowing
them to effectively impose fee schedules
and other restrictions on providers. The purchasing
power of a German physicians wages
is now about 20 percent that of a U.S. physician.
This has led to physician strikes as
recently as 2005.
Although Germany spends less on health
care than the United States, both as a percentage
of GDP and per capita, expenditures have
been rising at an alarming rate in recent years.
Friedrich Breyer, an economist from Konstanz
University, estimates that health care spending
could reach 30 percent of GDP by 2020 unless
significant changes are made.
The German government has responded by
beginning to cut back on benefits. In 2004,
sickness funds stopped covering eyeglasses,
lifestyle medications, and all over-the-counter
drugs. Copayments were imposed for the first
time, such that Germans now pay 10 per
quarter to see a general practitioner, 10 per
day of hospital stay, 10 per prescription, and
for certain specialty services. The highest
copayments are 10 percent for prescription
drugs. Overall, Germans pay out of pocket for
about 13 percent of total health care spending,
only slightly less than Americans. Preliminary
evidence suggests that the introduction
of cost sharing has slightly reduced utilization
and spending.
In 2006, Chancellor Angela Merkel proposed
a sweeping set of health care reforms
that included creating a centralized health
fund, shifting financing in part from payroll
taxes to general revenues, trimming benefits,
imposing greater cost sharing, and making the
system more transparent. She was forced to
abandon the package in the face of public and
political opposition.
The degree of health care rationing in
Germany is the subject of considerable debate.
Unlike many OECD countries, the German
government does not compile data on waiting
lists. One frequently cited study suggests
that Germans are no more likely than Americans
to wait more than four weeks to see a specialist.
The WHO says, "Waiting lists and
explicit rationing decisions are virtually
unknown."
However, at least one study concludes that
rationing is occurring for the elderly and those
with terminal illness, and concludes that "the
question remains as to whether lives at
advanced ages could be saved if age rationing
were discontinued and maximum medical
treatment were to be applied to everyone, irrespective
of their age." In addition, a survey of
German hospitals reported that "waiting times
were prolonged" due to both a lack of capacity
and hospital target budgets that make the
treatment of sickness fund patients with serious
conditions financially unattractive.
Also, Germans have less access to modern
medical technology than Americans. The
United States has four times as many MRI
units per million people and twice as many
CT scanners. The situation would undoubt-edly be worse without the existence of the
small private insurance sector. Although
small as a proportion of total health spending,
private insurance puts competitive pressure
on sickness funds, pushing them to
expand their quality and services. At one
time, CT scanners were even rarer in the public
system, available only under exceptional
circumstances and after long waits, yet relatively
common in the private sector.
Competition forced the public sector to add
more CT scanners.
Some analysts blame price restrictions
and reimbursement rates for increasing
bureaucratic interference in how German
physicians practice medicine. Physicians trying
to work within the maze of reimbursement
caps and budget restrictions have no
financial incentive to provide more than the
minimally necessary care. That has led to
questions of quality assurance, and the government
has responded with ever greater
micromanagement of practice standards.
The result has been a huge increase in red
tape for physicians and a general loss of innovation.
Germans seem aware of the need to
reform their health care system. In a 2004
poll, 76 percent of Germans thought health
care reform was "urgent," while an additional
14 percent thought it was "desirable."
However, Germans are split nearly down the
middle about what that reform should be.
Roughly 47 percent would like to see an
increase in private health care spending,
whereas 49 percent would not. Similarly, 45
percent of Germans believe that more patient
choice would improve health care quality,
whereas 50 percent do not. The reluctance to
fully embrace market reforms undoubtedly
stems from a long-standing German belief in
social solidarity. By a margin of 81 to 18 percent,
Germans believe that equal access to the
same quality of care for everyone is more
important than their own access to the best
possible care.
Costs and demographics will eventually
force changes in the German system.
However, given the failure of Chancellor
Merkels reforms, change is unlikely in the
near future.
A Few Thoughts on Canada
Canada is another country that did not
make the top 20 health care systems in the
WHO rankings (it finished 30th), and few serious
advocates of universal health care look to
it as a model. As Jonathan Cohn puts it,
"Nobody in the United States seriously proposes
recreating the British and Canadian system
herein part because, as critics charge . . .
they really do have waiting lines." However,
since the press still frequently cites it as an
example, it is worth briefly examining.
Although Canada is frequently referred to
as having a "national health system," the system
is actually decentralized with considerable
responsibility devolved to Canadas 10
provinces and 2 territories. It is financed
jointly by the provinces and the federal government,
similar to the U.S. Medicaid program.
In order to qualify for federal funds,
each provincial program must meet five criteria:
1) universalityavailable to all provincial
residents on uniform terms and conditions;
2) comprehensivenesscovering all medically
necessary hospital and physician services;
3) portabilityallowing residents to remain covered
when moving from province to province;
4) accessibilityhaving no financial barriers
to access such as deductibles or copayments;
and
5) public administrationadministered
by a nonprofit authority accountable to the
provincial government.
Federal financing comes from general tax
revenue. The federal government provides a
block grant to each province which amounts
to around 16 percent of health care spending.
However, most funding comes from
provincial taxes, primarily personal and corporate
income taxes. Some provinces also use
funds from other financial sources like sales
taxes and lottery proceeds. And some (British
Columbia, Alberta, and Ontario) charge premiums,
although health services cannot be
denied because of inability to pay. The health
care system is an enormous part of the
Canadian welfare state. On the provincial
level, the health care system amounts to
between one-third and one-half of all social
welfare spending.
Provinces must provide certain benefits,
including primary care doctors, specialists,
hospitals, and dental surgery. Other benefits,
such as routine dental care, physiotherapy,
and prescription drugs, are optional. Some
provinces offer substantial coverage for these
services, some cover them only partially, and
some do not cover them at all. Except for
emergencies, treatment by specialists or hospital
admission requires a referral from a primary
care physician.
Provider reimbursement is set by each
province, and some provinces restrict overall
physician income. In general, however, reimbursement
is on a fee-for-service basis. Hospitals
are paid a specific pre-set amount to cover
all noncapital costs. Capital expenditures must
be approved on a case-by-case basis.
An increasing number of Canadians also
carry private insurance, most often provided
through their employer. Originally this
insurance was designed to cover those few
services not covered by the national health
care system. At one time, all provinces prohibited
private insurance from covering any
service or procedure provided under the government
program. But in 2005, the Canadian
Supreme Court struck down Quebecs prohibition
on private insurance contracting.
Litigation to permit private contracting is
now pending in several other provinces.
In addition to the public hospitals covered
by the government, many private clinics
now operate, offering specialized services.
Although private clinics are legally barred
from providing services covered by the
Canada Health Act, many do offer such services
in a black market. The biggest advantage
of private clinics is that they typically
offer services with reduced wait times compared
to the public health care system.
Obtaining an MRI scan in a hospital could
require a wait of months, whereas it could be
obtained much faster in a private clinic.
Waiting lists are a major problem under the
Canadian system. No accurate government
data exists, but provincial reports do show at
least moderate waiting lists. The best information
may come from a survey of Canadian
physicians by the Fraser Institute, which suggests
that as many as 800,000 Canadians are
waiting for treatment at any given time.
According to this survey, treatment time from
initial referral by a GP through consultation
with a specialist, to final treatment, across all
specialties and all procedures (emergency,
nonurgent, and elective), averaged 17.7 weeks
in 2005. And that doesnt include waiting to
see the GP in the first place.
Defenders of national health care have
attempted to discount these waiting lists, suggesting
that the waits are shorter than commonly
portrayed or that most of those on the
waiting list are seeking elective surgery. A look
at specialties with especially long waits shows
that the longest waits are for procedures such
as hip or knee replacement and cataract
surgery, which could arguably be considered
elective. However, fields that could have significant
impact on a patients health, such as neurosurgery,
also have significant waiting
times. In such cases, the delays could be life
threatening. A study in the Canadian Medical
Association Journal found that at least 50
patients in Ontario alone have died while on
the waiting list for cardiac catheterization.
Data from the Joint CanadaUnited States
Survey of Health (a project of Statistics Canada
and the National Center for Health Statistics)
revealed that "thirty-three percent of
Canadians who say they have an unmet medical
need reported being in pain that limits
their daily activities." In a 2005 decision
striking down part of Quebecs universal care
law, Canadian Supreme Court Chief Justice
Beverly McLachlin wrote that it was undisputed
that many Canadians waiting for treatment
suffer chronic pain and that "patients die while
on the waiting list."
Clearly there is limited access to modern
medical technology in Canada. The United
States has five times as many MRI units per
million people and three times as many CT
scanners. Indeed, there are more CT scanners
in the city of Seattle than in the entire
province of British Columbia.
Physicians are also in short supply.
Canada has roughly 2.1 practicing physicians
per 1,000 people, far less than the OECD
average. Worse, the number of physicians per
1,000 people has not grown at all since 1990.
And while the number of nurses per 1,000
people remains near the OECD average, that
number has been declining since 1990.
In addition, although national health care
systems are frequently touted as doing a better
job of providing preventive care, U.S. patients
are actually more likely than Canadians to
receive preventive care for chronic or serious
health conditions. In particular, Americans are
more likely to get screened for common cancers,
including cancers of the breast, cervix,
prostate, and colon.
Canada has been relatively effective at controlling
spending. The country spends about 9
percent of GDP on health care, a percentage
that has risen only slightly over the last decade.
Relative to average OECD expenditures,
Canadian health expenditures have declined
by 4 percent since 1997. That cost control,
however, has clearly come at the expense of
access to care.
Canadians dissatisfaction with the problems
in their system has been growing for
some time. One survey showed that some 59
percent of Canadians believe that their system
requires "fundamental changes," and
another 18 percent believe the system needs
to be scrapped and totally rebuilt. Still,
Canadians are reluctant to embrace market
reforms that are associated with the U.S.
health care systema system that Canadians
disdainfully reject. As one observer put it:
Anxiety about Americanization and the
constantly reinforced strain of national
pride in Canadian health care coexist[s]
with considerable uneasiness about the
actual state of that care. It is as if, when
Canadians look south across the border
they swell with pride, but when they
look within they shrink back, seeing
many problems and feeling uncertainty
about the future.
Canadians may jealously guard their system
and resist "Americanizing" it, but even
advocates of universal health care are coming
to recognize that it does not provide a valid
model for U.S. health care reform.
Conclusion
The U.S. health care system clearly has
problems. Costs are rising and are distributed
in a way that makes it difficult for some people
to afford the care they want or need. Moreover,
although the number of uninsured Americans
is often exaggerated, far too many Americans
go without health insurance. And while the
U.S. provides the worlds highest quality health
care, that quality is uneven, and too often
Americans dont receive the standard of care
that they should. But the experiences of other
countries with national health care systems
show that the answer to these problems lies
with more pro-market reform, not more government
control.
Of course, there is no single model for
national health care systems in other countries.
Indeed, the differences from country to
country are so great that the terms "national
health care" or "universal coverage" can be
misleadingas if one collective model shows
how other countries deal with health care
and health insurance. Each countrys system
is the product of its unique conditions, history,
politics, and national character. Those
systems range from the managed competition
approach of the Netherlands and
Switzerland to the more rigid single-payer
systems of Great Britain, Canada and
Norway, with many variations in between.
Some countries have a true single-payer system,
prohibiting private insurance and even
restricting the ability of patients to spend their
own money on health care. Others are multipayer
systems, with private competing insurers
and varying degrees of government subsidy
and regulation. Some countries base their sys-
tems around employment, while others have
completely divorced work from insurance.
Some require consumers to share a significant
portion of health care costs through either
high deductibles or high copayments. Others
subsidize virtually first-dollar coverage. Some
allow unfettered choice of physicians. Others
allow a choice of primary care physicians but
require referrals for specialists. Still others
restrict even the choice of primary care doctors.
In fact, about the only system one cannot
find is the type of system described by Michael
Moore, Physicians for a National Health
Program, and other national health care advocates
a system that provides unlimited care
with no premiums, deductibles, or copayments,
from the physician of ones choice. For
example, in SiCKO, Moore lambastes American
insurers for denying coverage for rare and
experimental treatments. And, during the
New Hampshire primary, John Edwards ran
television advertisements highlighting the
tragic death of a teenage girl whose liver transplant
was rejected by her fathers insurer.
These stories play effectively on the emotions
and drive a desire for change. Yet one searches
in vain for a national health care system anywhere
that regularly pays for experimental and
untested procedures.
Likewise, advocates for national health care
tap into the anger many patients (and doctors)
feel for the gatekeepers and prior approval
required under American managed care. But
many if not most foreign systems require similar
gatekeepers. Moreover, copayments and
other forms of cost sharing are commonplace.
It is also important to realize that no countrys
system would translate directly to the
United States. Americans are unlikely to accept
the rationing or restrictions on care and technology
that many countries use to control
costs. Nor are U.S. physicians likely to accept a
cut in income to the levels seen in countries like
France or Germany. The politics, economics,
and national cultures of other countries often
vary significantly from those of the United
States. Their citizens are far more likely to have
faith in government actions and to be suspicious
of free markets. And polling suggests
that citizens of many countries put social solidarity
and equality ahead of quality and choice
when it comes to health policy. American
attitudes are quite different. As pollster Bill
McInturff notes, "Never, in my years of work,
have I found someone who said, I will reduce
the quality of the health care I get, so that all
Americans can get something."
Even so, some important lessons can be
drawn from the experiences of other countries:
Universal health insurance does not
mean universal access to health care. In
practice, many countries promise universal
coverage but ration care or have
extremely long waiting lists for treatment.
Nor does a national health care
system necessarily mean universal coverage.
Some countries with ostensibly
universal systems actually fall far short
of universal coverage, and most leave at
least a small remnant (12 percent of
the population) uncovered. Although
this is certainly wider coverage than the
United States provides, it shows the difficulty
of achieving either truly universal
coverage or universal access to care.
Rising health care spending is not a
uniquely American phenomenon. Other
countries spend considerably less than
the United States on health care, both as
a percentage of GDP and per capita,
often because they begin with a lower
base of expenditures. Nonetheless, their
costs are still rising, leading to budget
deficits, tax increases, and/or benefit
cuts. In 2004, the last year for which data
is available, the average annual increase
for per capita health spending in the
countries discussed in this study was
5.55 percent, only slightly lower than the
United States 6.21 percent. As the Wall
Street Journal notes, "Europeans . . . face
steeper medical bills in the future in their
cash-strapped governments." In short,
there is no free lunch.
Those countries that have single-payer
systems or systems heavily weighted
toward government control are the most
likely to face waiting lists, rationing,
restrictions on the choice of physician,
and other barriers to care. Those countries
with national health care systems
that work better, such as France, the
Netherlands, and Switzerland, are successful
to the degree that they incorporate
market mechanisms such as competition,
cost-consciousness, market prices,
and consumer choice, and eschew centralized
government control.
Dissatisfaction and discontent with a
nations health care system seems to be
universal. Undoubtedly, Americans are
unhappy with the current state of our
health care system. According to the
most recent Commonwealth Fund survey,
an astounding 82 percent of Americans
believe that our system either
requires fundamental change or needs to
be completely rebuilt. Not surprisingly,
polls suggest health care reform is the
top domestic policy issue in the upcoming
presidential election. Yet, that
same Commonwealth Fund study shows
large majorities in every country, ranging
from 58 percent in the Nether-lands to
78 percent in Germany calling for fundamental
reform or complete rebuilding of
their health care systems. Earlier
polling by the Stockholm Network
found similar levels of unhappiness.
Not as bad as in the United States, perhaps,
but certainly no ringing endorsement
of their systems.
Although no country with universal coverage
is contemplating abandoning a
universal system, the broad and growing
trend in countries with national health
care systems is to move away from centralized
government control and introduce
more market-oriented features. As
Richard Saltman and Josep Figueras of
the World Health Organization put it,
"The presumption of public primacy is
being reassessed." Alan Jacobs of
Harvard points out that despite significant
differences in goals, content, and
strategies, European nations are generally
converging toward market practices in
health care.338 Thus, even as Americans
debate adopting a government-run system,
countries with those systems are
debating how to make their systems
look more like that of the United States.
Looking at other countries and their experiences,
then, can provide guidance to
Americans as we debate how to reform our
health care system. National health care is not
a monolithic idea, nor is it as disastrous as
U.S. critics sometimes portray. Some national
health care systems do some things well.
Yet, those systems do have serious problems.
In most cases, national health care systems
have successfully expanded insurance
coverage to the vast majority, if not quite all,
of the population. But they have not solved
the universal and seemingly intractable problem
of rising health care costs. In many cases,
attempts to control costs through governmental
fiat have led to problems with access
to care, either delays in receiving care or outright
rationing.
In wrestling with this dilemma, many
countries are loosening government controls
and injecting market mechanisms, particularly
cost sharing by patients, market pricing
of goods and services, and increased competition
among insurers and providers. As Pat
Cox, former president of the European
Parliament, put it in a report to the European
Commission, "We should start to explore the
power of the market as a way of achieving
much better value for money."
Moreover, the growth of the government
share of health care spending, which had
increased steadily from the end of World War
II until the mid-1980s, has stopped, and in
many countries the private share has begun
to increase, in some cases substantially. Some
evidence shows a growing shift from public
to private provision of health care. If the
trend in the United States over the last several
years has been toward a more Europeanstyle
system, the trend in Europe is toward a
system that looks more like Americas.
Therefore, if U.S. policymakers can take one
lesson from national health care systems
around the world, it is not to follow the road to
government-run national health care, but to
increase consumer incentives and control. The
United States can increase coverage and access
to care, improve quality, and control costs
without importing the problems of national
health care. In doing so, we should learn from
the successesand the failuresof systems in
other countries.
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