Healthcare Lessons From Other Nations

Flag of the United Nations

Our American healthcare system is distinguished from other free market democracies in four ways:

1.  Our population and our wealth are almost three times larger than the next largest nation – Japan,
2.  Over 20 million Americans are uninsured,
3.  We spend per person over twice the average of all other nations ($9,892 vs. $4,003) and
4.  Our average life expectancy lags because of our infant mortality and lifestyles under age 65.

Thus, our key questions of other nations are:

1.  How do they save so much money?
2.  How do they lower their mortalities under 65?
3.  How do they meet the needs of all citizens?

If we could provide healthcare for all Americans at the OECD’s average cost per person, we could save over $1.6 trillion per year to invest elsewhere in a more prosperous and happy society.

Spain’s and Italy’s Success

Spanish flagItalian flagOf ten leading industrialized democracies, Spain and Italy are least expensive. Their annual costs per capita in 2016 were $3,248 and $3,391. They spend only 9% of their GDP’s on healthcare vs. America’s 18%. They are inexpensive because their governments own hospitals and pay providers from general tax revenues. Patients are not billed. Waiting times are short, patients are happy, and in 2000 the World Health Organization ranked both Italy and Spain in the world’s top five health care systems. Their secrets to success are government control and simple payments from a single source rather than complex clerical bureaucracies. They prove that single payer models can be efficient and productive in small nations.

What Is Britain Doing?

British flagBritain is also a “single payer” model. Her administrative simplicity holds its cost a $4,192 per capita per year, or 8.5% of GDP. Despite challenges of Britain’s advanced scientific technology, costs are controlled in two ways. One is by assigning “gate-keeper” responsibilities to primary care providers so specialty and hospital care are paid for only when considered necessary and referred by general practitioners. The other is by funding hospitals and doctors only to the extent that all emergencies are treated instantly but elective procedures, e.g. joint replacements, often wait for months. To escape waits, about 3% of British citizens purchase private insurance to pay for medical care and prompt elective surgical procedures outside the NHS.

Most Britains are willing to wait in queues so long as no one cuts in line. Most complaints occur when everyone’s access is delayed when slow economic growth restricts NHS budgets and patients back up on stretchers in hospital corridors. This is an inherent risk when a single payer system has no alternative to its prescribed budget and is forced to limit services. In America, this problem occurs occasionally in the Department of Veterans Affairs when demands for care outstrip budget.

How Is Canada Handling Health Care?

Canadian flagCanada’s health care model called “Medicare”, was invented in 1962 to provide universal, affordable, non-profit care. The thirteen provinces and territories have small roles in distribution of care, and one third of Canadians buy small private insurance policies to cover items, e.g. prescription drugs and private hospital rooms, deemed not necessary by Medicare. The system is almost “single payer” because the national government decided what is covered, collects most of the money from its general tax revenues, and through provinces pays for hospital and physician services. Patients are free to choose their private practitioners and specialists. Costs are controlled by bidding for drugs, by digital records, and by primary care general practitioners serving as “gate keepers” to specialty and hospital care. Costs of care are average for free market democracies (10.2% of GDP, $4,753 per capita) and quality is judged by independent agencies as being among the world’s top ten nations. Canadians’ chief complaint is waiting for elective surgery, especially joint replacements, but this problem is not as bad as conservative American adversaries make it out to be. The cause of waits is not government bureaucracy but too few physicians whose incomes are below American averages.

Can We Learn From Australia?

Australian flagAustralia is a relative newcomer among the free market democracies with which we are make comparisons. Its population is relatively small and widely dispersed. Its urban universities and hospitals are excellent, but their quality may not reach all people on Australia’s frontiers. Health care for most Australians is free, paid by Australian Medicare from tax revenues, but many smaller agencies play roles and private insurance is encouraged. Average costs are reasonable (9% of GDP and $4,708 per capita), but because of its novelty and dispersion, there appear few lessons for America to learn from Australia.

France’s Health Care System Is Ranked the Best in the World

French flagFrench people brag about their health care system, ranked best by the World Health Organization. Patients are seen immediately, and coverage includes luxuries, such as massages in spas. Doctors and most hospitals are private entities. Mandatory insurance premiums are large, paid mostly by employers. Funds are collected, and bills paid by provinces within a week. Detailed fee schedules are negotiated between doctors’ unions and the nation’s Ministry of Health. Fees allowed are generous. As a result, the French system is expensive, spending 11.6% of its national GDP on health care. Liberty, Equality and Fraternity remain a peculiarly high French priority, producing a system more generous and expensive than American tax payers would be willing to extend to our poor and unemployed.

There is however, one very valuable lesson to be learned from France. It is the Carte Vitale, a plastic credit card containing a digital chip in which each examination, test, diagnosis, treatment and bill – is recorded and shared with the Ministry of Health. Patients present their cards during office and hospital visits. Rewards are continuity, safety, very low administrative costs, and useful date for quality and cost control.

Japan’s System Is Radically Different

Japanese flagJapan is distinguished in OECD’s comparative graph as having the world’s longest average life span at least cost per capita. Long life in Japan is the result of healthy genes, life styles and healthy diet. Japan has such an abundance of private hospital rooms that their average stay is 38 days. They have more physicians per capita than any other nation in the world. They compete freely. People have free choice of doctors and no waits for care. Health insurance is mandatory in one of 3200 insurance companies. Premiums are paid 70% by employers and 30% by individuals. The low cost of such abundance is due to the Ministry of Health’s tight control of allowed payments. Doctors’ average incomes ($110,000 per year) are the lowest of all industrialized nations. They choose their profession for prestige and honor, and because medical education is free. Such incentives are not likely to succeed in America, but Japan’s results are benchmarks for all other nations.

Germany’s Capitalistic, Free-Enterprise Approach

German flagGermany’s health care model was invented in 1866 by Chancellor Bismarck as a device for unifying German states. It has been copied by many other nations and shows that a successful system can be unifying for America. It is a free-enterprise, capitalist system in which enrollment is mandatory in one of two insurance plans, or “sickness funds”. Ninety-two percent of Germans chose a “standard fund” with premiums based on their incomes. Eight percent chose a “private fund” with premiums based on age and risks. Premiums are paid 80% by employers and 20% by employees, with the eleven states or regions paying premiums for their unemployed citizens. Budgets and allowed fees are determined annually by the Ministry of Health in consultation with regional governments.

Germans are free to choose their doctors and hospital with minimal waiting. Costs (11.2% of GDP and $5,500 per capita) are slightly higher than other nations but are sustainable when the national economy is strong, drug prices under control and primary care doctors willing to work for one-third less than those in America. If Germany’s health budget were spent before its year was out, payments for elective services might be suspended. It is a risk inherent in all budgeted systems, but probably less where there are multiple payers.

What Lessons Can We Learn From Other Nations?

Many of the foregoing observations are drawn from T.R. Reid’s The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, The Penguin Press, N.Y. 2009. Data are updated from OECD, the World Health Organization, The United Nations, et al. Data are available from many smaller nations but are not cited because their sizes are not comparable to ours.

So What Lessons Might America Learn from These Observations?

The most obvious lesson is that average life expectancy can be increased by preventing diseases and accidents among poor, unemployed citizens with unhealthy life styles or at risk of catastrophic illness. To achieve this, a system must be “universal.” Participation to some extent must be mandatory, its cost shared by all citizens.

A second lesson is that public services provided to all must be limited by national consensus to those that are necessary and effective for useful survival. Each nation providing universal care assigns consensus on limits to its expert agencies. For an agency’s decisions to be effective, it must be regarded with such respect that it is immune to commercial or political bribery. America’s ultimate politically immune experts are member of the National Academy of Medicine, advised as needed by National institutes of Health, the Centers for Disease Control, et al.

A third lesson is that primary care providers, such as family physicians, general internists, pediatricians, and their assistants must play vital roles in applying rules of necessity. They must be accountable to patients rather than to specialists and hospitals. They serve this function best when they or their groups work independently for the national health service for fees determined by the number and risks of the patients they enroll. They are most effective when their referrals are required for pre-approval of fee-for-service specialty and hospital care. This “gatekeeper” function is acceptable where outcomes demonstrate quality and economy.

A fourth lesson is that multiple payer (employer, employee, private insurance, government, etc., as in Germany and Japan) systems can function well, but clerical complexity tends to make them more expensive than single payers (eg. Britain, Spain and Italy). In fact, no nation’s system is purely single or multiple payer. Some roles in administration of health care may be assigned to states or provinces, as in Canada, but at some loss of cost effectiveness.

A fifth lesson and increasingly accepted fact is that universal, standardized electronic health records are essential for safety, quality and economy. Their feasibility is supported by France’s Carte Vitale.

A sixth lesson is that a nation’s universal health care system must evolved incrementally. A successful system cannot be installed instantly in one congressional session. Evolution is best where a nation’s public or basic system is supplemented by private, for-profit health insurance corporations that satisfy demands of citizens who can afford their premiums. They must be regulated to assure adequate funding and dependability for delivering their promised benefits. They should otherwise be free to sell diversity, innovation and even hopeful whims to their customers so long as their capital is sufficient to deliver on their contracts.