I feel like we are in a bit of limbo when it comes to making progress on improving our health care system. While I think the ACA put some band-aids on the system, it was a milquetoast attempt at solving the underlying issues of out of control costs and lack of universal coverage. On the other hand, the GOP has not only shown that they have no viable alternative, they have worked the last several years at actively hindering the legislation. These efforts have resulted in preventing millions of people from obtaining health insurance and caused premiums to greatly increase. Now it seems the GOP has all but given up on providing any alternatives and that has produced a vacuum that has been filled with proposals from the left of varying flavors of single payer or universal health care.
Naturally, the right opposes any flavor of these plans, simply labeling them as “Socialized Medicine” or some other variation of the “socialism” misnomer. From many discussions with conservative leaning people (and liberals as well), I’ve come to realize there are a lot of misconceptions or basic misunderstandings regarding the health care systems of other nations. I hope I can help provide a clear, basic overview of each type of system that other developed nations incorporate with the ultimate goal of showing that they are not the boogiemen or abject failures that conservative media likes to portray. So let’s dive right in.
When we look at health care systems around the world, we see at the least two common denominators with every other developed nation. They provide universal coverage and they are drastically cheaper. We are the only country in the world that does not provide universal coverage and we are the most expensive country by a significant amount. For the most part, the health care models in the developed world can fit into four different categories: the national health care system model, the national health insurance model, the social insurance model, and the United States’ model. Go US!
National Health Care System
The national health care systems are models where health care is both funded and provided by the government. Funding is typically sourced through general taxation similar to other government services rather than at the point of care. The UK’s National Health Service is one such system. In the NHS, hospitals are mostly owned by the government and the providers that work at those hospitals are NHS employees. However, the majority of GPs are independent contractors that get paid by the government. Coverage is universal and residents are automatically entitled to care. Non-European visitors and illegal immigrants must pay for service unless it’s an ER visit or for an infectious disease. Supplemental, private insurance is purchased by a little over 10% of the population for quicker care for things like elective hospital procedures.
The UK’s system has some of the best rankings when it comes to care process (i.e. prevention, safe care, coordination and patient engagement), access, administrative efficiency and equity. Other countries that employ this model with varying degrees of payment methods are Norway, Sweden, Spain and New Zealand. The most comparable system in terms of structure in the United States would be the Department of Veterans Affairs.
National Health Insurance
The national health insurance model is what is more commonly referred to as a single-payer system. The government is the primary source of health insurance and the health care providers and hospitals are largely private entities. One of the most referred to countries with this model is Canada. In Canada, each province and territory administers its own universal health insurance program, but in order to receive full federal funds, the programs must be “publicly administered, comprehensive in coverage, universal, portable across provinces, and accessible (for example, without user fees).”
For most services such as physician visits, diagnostics and hospital visits, patients do not pay at the point of service. Hospitals and doctors will directly bill their province or territory for services according to a set fee schedule. Some services require out-of-pocket costs such as vision and dental, some pharmaceuticals, home care, private hospitals rooms, etc. However, a majority of people purchase private insurance which covers these expenses. In total, about 12% of total health care costs are for private insurance. In the United States, Medicare and Medicaid would be the closest parallels.
Social Insurance Model
The Social Insurance Model, also known as the Bismark Model, is probably the most similar model to the private insurance system in the United States. In these systems, there are a number of private insurance providers that are typically funded through payroll taxes. Having health insurance coverage is mandatory with a limited number of exemptions. For example, only 30,000 people (<0.2% of the population) in the Netherlands are uninsured. Comparably, about 8.8% of the population in 2018 was uninsured in the United States (down from 16% in 2010).
Depending on the country, hospitals are a mix of state-owned and private. For example, in Germany, about half are state-owned, a third private nonprofit and the remaining are private for-profit. In the Netherlands, most are private nonprofit. The governments tend to play a large role in determining fee schedules and ensure that the cost of insurance is not prohibitive due to health, age or income. So, while the overall structure is similar to the US private health insurance system, once you dig down into the details on costs and coverage, the difference is vast.
United States Model
The United States Health Care Model. Such a unique, special snowflake. We are the only system in the developed world that does not legislatively aim for universal coverage. Prior to the ACA, we were the only developed country that allowed for denial of coverage due to pre-existing conditions. Even after the ACA, we are unique in that medical costs are a significant cause of bankruptcies. Depending on the study, that number is anywhere from 250,000 to 2 million people affected each year by medical bankruptcy. Even taking that lowest number, that’s a ridiculous number of people being financially ruined due to health care costs.
We have such a disparate system that is a hodge-podge of the VA, Medicare, Medicaid, private insurance and no insurance. Prices for the same exact test or procedure can vary wildly depending on provider, insurance or location. For example, the average cost of a knee replacement in New Jersey is $24,000 while in Texas it’s $35,000. Trying to figure out what the cost of a particular procedure will be can be quite frustrating, and even something as seemingly simple as trying to figure out if a particular doctor is in-network can be a pain. This Frankenstein of a system introduces complexity that results in higher costs and inefficiencies that are particularly distinct to the United States.
Show Me The Money
So, all of these other systems that provide universal coverage must cost more than the United States, right? That couldn’t be further from the truth. Every other country in the world spends significantly less per capita on health care expenditures than the United States. But it comes close. No, just kidding. It’s not even close at all.
Every other country except one not even 2/3 the cost of the US. The majority are less than half the cost. Let me repeat that. Most countries are spending half of what we are spending and they are obtaining universal coverage. What in the world is going on? What is stopping us from achieving universal coverage while at the same time reducing costs? At the very least, we should be covering everyone with the insane amount we are spending. It’s like we’re shopping at Wal-Mart while paying Neiman Marcus prices and the rest of the world is doing it right with Costco. So, can we stop being The People of Walmart and get on board with a $1.50 hot dog and coke?
At this point, you might be working feverishly to respond with all of your objections. I look forward to it! I want to know from each of you what your reasons are for opposing a move towards a system that looks more like one of these other models. The costs? The quality? Higher taxes? In the follow-up post, I’ll go through many of the objections I have heard in the past and why I think they aren’t compelling.