by Spiral » Fri May 27, 2016 8:40 pm
Here is a look at various health care systems from the developed world. We'll look at France, Japan, Norway, Netherlands, Great Britain, Switzerland, Germany and Canada.
France
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.
The French health care system is the world’s 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.
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.
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.
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.
Japan
Japan has a universal health insurance system centered primarily around mandatory, employment-based insurance. On the surface, Japan’s national health insurance program defies easy description, comprising some 2,000 private insurers and more than 3,000 government units.
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-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.
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.
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.
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 Germany’s. Dutch workers with annual incomes below 32,600 euros 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 new Dutch system operates on the theory of managed competition like Switzerland. 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.
Great Britain
Almost no one disputes that Britain’s National Health Service faces severe problems, and few serious national health care advocates look to it as a model.
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 pounds, according to government figures, and as much as 1 billion pounds, according to outside observers. This comes despite a 43 billion pound 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.
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.
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.
The Swiss system is based on the idea of managed competition, the same concept that underlay the 1993 Clinton health care plan and Mitt Romney’s 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.
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 lower than 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.
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.
Germany
National health insurance in Germany is part of a social insurance system that dates back to Bismarck. All German citizens with annual incomes under 46,300 euros (roughly 60,000 dollars) 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 three quarters 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.
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.
Canada
Few serious advocates of universal health care look to Canada as a model because as Jonathan Cohn puts it, “Nobody in the United States seriously proposes recreating the British and Canadian system here—in part because, as critics charge . . . they really do have waiting lines.”
Although Canada is frequently referred to as having a “national health system,” the system is actually decentralized with considerable responsibility devolved to Canada’s 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] universality—available to all provincial residents on uniform terms and conditions;
2] comprehensiveness—covering all medically necessary hospital and physician services;
3] portability—allowing residents to remain covered when moving from province to province;
4] accessibility—having no financial barriers to access such as deductibles or copayments; and
5] public administration—administered 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.
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 Quebec’s 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.
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.