Critics of the American health care system often offer to reform it by using foreign models. They point out that in many countries health care costs are much lower than in the U.S., and the efficiency of health care services is higher. The United States, therefore, should adopt a foreign experience, and create a universal health care system.
However, a careful study of the situation shows that the health care systems in almost all countries of the world are faced with rising costs and problems of unavailability of medical care for the population. There is no universal model of health care organization that would be suitable for everyone. The level of centralization, regulation, distribution of costs among all citizens, and the role of private insurance in health services in different countries vary greatly. However, the overall trends of the national health care systems in the world lead to certain conclusions. This paper discusses the most popular arguments in favor of the national health care system, as well as the arguments against it. The most common “pros” in this debate include the arguments that under this system “everyone will be insured”, “people will be healthier” and that the centralized national system has definite benefits. “Cons”, on the other hand, include the statements about “limited abilities”, “long waiting list”, “unfair system”, “growing costs”, etc. In order to better analyze these arguments, this paper addresses the experience of other countries.
The Concept of Universal Health Care
First of all, a national or universal health care is a very vague concept, and in practice it is implemented in different ways. The health care system in each country is a product of its unique characteristics, history, political process, and the national character of the people. Many of these systems are experiencing major reforms.
In some countries, such as France and Japan, the share of consumers in health care funding is pretty large. In this way, they are trying to avoid unnecessary calls for medical assistance and excessive growth of the cost of those needs. In other states, the sums paid by patients are sharply limited. In some places, citizens are allowed to freely choose medical institutions, while in other states these features are greatly curtailed. In some countries, there is a widespread tradition of acquisition of alternative or complementary policies from private insurers, and in some countries private insurance is prohibited or very poorly developed.
Resource allocation and prioritization also vary widely. In Japan, for example, they invest heavily in new technology, but compensation for the surgery is limited, and France is characterized by an unusually high level of prescription drugs.
The practical results are also quite different. In Canada, UK, Norway and Spain health care services are strictly rationed, or patients have to wait in line a long time for treatment, and in Switzerland people can generally avoid such queues. At the same time, France, Italy and Germany are experiencing difficulties, because of rising healthcare costs, which become a heavy burden on the state budget, and Canada and the UK manage to cut these costs successfully. In some countries, such as Greece, the universal health insurance exists only on paper.
Availability of health insurance is not the same as the universal access to health services. In practice, in many countries everyone has an insurance, but medical services within its framework are metered, or people have to wait in line for treatment for a long time. The increase of costs of the health care system is a widespread phenomenon. While in other countries these costs make a much smaller percentage of the total GDP and GDP per capita, they are increasing almost everywhere, creating a budget deficit, tax increases and cuts in social benefits.
In the countries with an emphasis on state control of health care, citizens are more likely to face a waiting list, rationing of services, restrictions on the choice of doctor and other obstacles in the area of health care. Countries, where health systems are most effective, achieve such result by eliminating the centralized state control and reliance on market forces competition, separation of costs, market prices and freedom of choice for the consumer. Thus, the way to solve the problems of American health care is not in governmentalizing, but in adopting the experience of other countries, which is the evidence of the failure of centralized command system and the benefits of providing consumers with better incentives and freedom of choice.
In his film SiCKO (2007), Michael Moore discusses the problems of American medicine and offers to implement a state system based on the principle of single payer. Moore compares the American health care system with the Canadian, British and French systems and makes a conclusion in favor of the latter. He, as well as other critics of the U.S. health care system, argues that in the countries where this system is in the state’s hands health care costs (in terms of GDP per capita) is much lower than in the U.S., and the quality of the services provided is higher in some parameters. They claim that by adopting such a model the United States would be able to solve many of the problems currently existing in health care.
Undoubtedly, the U.S. spends much more money on health care than all other countries, both as a share of GDP and per capita income. The U.S. spending on health care now accounts for almost 16% of GDP, which is about 6% more than the average for other industrialized countries. The total costs of health care in this country grow faster than GDP, and now account for more than $1,8 trillion. Americans spend less money on housing, food, national defense, or cars.
However, the high costs of health care may not always be considered as a negative phenomenon. America spends money on health care, because it is a rich country, and considers it necessary to do so. The economists consider health care as a normal goods, which means that the cost of it has a positive correlation with the level of income. As the aforementioned income increases, the demand of people for this product increases as well. America is a rich country and has the right to demand a larger volume of medical services.
At the same time, an unacceptably large number of Americans are left out of health insurance. Although critics of the system often use an exaggerated data on the number of uninsured people, about 47 million people have no health insurance. However, many of these people are in principle eligible for public programs, another large part of them are young people in good health, and finally, some of them do not have insurance for a short period of time. However, it is undeniable that the lack of insurance can create serious problems for many Americans.
Many critics of the U.S. health care system believe that the answer to these questions lies in the creation of the system of single payer. In such a system, health care should be financed by taxes rather than patients or private insurance. Direct charge to the patient should be banned or severely restricted. Private insurance, if maintained, would cover only a small set of additional services not included in the state health plan. The state will control the costs of medical care by developing a national budget for health care and compensation levels.
In the framework of the health care system built on the principle of single payer health care services are provided to all citizens and financed by the state. It collects taxes, manages the provision of medical care, and pays it directly. In general, it is about replacing private insurance by a fully nationalized system. As a rule the government is developing the overall budget for health care, deciding what part of the country’s resources should be allocated for this purpose, and also sets the price or amount of compensation to those who provide health care services. In some cases, doctors are government employees who receive a salary. In others, they are independent and are compensated based on the volume of services provided and medical actions conducted. In the framework of the strictest versions of single-payer system private health insurance and other ways of getting more medical care are prohibited. This is the option favored, for example, by aforementioned Michael Moore.
However, a careful examination the situation in the countries where the universal health system already exists makes it clear that there are more serious problems, including rising costs, rationing of services, lack of modern medical technology, and low efficiency. The countries in which universal health care systems succeeded in avoiding the serious problems of this kind are successful precisely because they reject state control and adopt market mechanisms.
Some of the most knowledgeable supporters of the universal health care system consider France as the country, where this system has proven its effectiveness. According to the majority of comparative studies, the French health care system gets the highest or one of the highest scores and in the WHO ranking it takes the 1st place. Although, according to all estimations, the French health care system in the nearest future will become a serious burden the state budget, it does provide a universal health insurance – at least to a certain extent, and allows avoiding many of the problems faced by the socialized medicine in other countries. However, this is achieved largely through the market approach, including the division of the costs with the consumer. French health care system is the third largest in the world in terms of costs: about 11% of GDP and by this indicator France is second only to the U.S.
More pressing is another problem – a common budget and limit tariffs for medical services, according to which the hospitals work, lead to chronic underfunding of basic funds, and the result is a shortage of advanced medical technology and unavailability of most ‘advanced’ services. Thus, for example, there are eight times more units for magnetic resonance imaging in terms of a million people in the United States than in France. It is just a small example, but it can prompt a larger picture.
Although the French are satisfied with the current state of their health care system, in future it may become a problem for them. In particular, they recognize the need for greater control over costs in this area. As a result, the usual controversy arises, associated with the services provided by the state – most people do not want to pay more (either by raising taxes or directly out of their pocket), and at the same time citizens are concerned that measures to contain costs in future may result in a poor quality of service. As Colleen M. Flood puts it,
The important question is how to achieve a balance between the benefits of competition (technical efficiency, dynamic efficiency, and responsiveness) and the benefits of government planning (equity and cost control) (Flood 36).
This is the reality – there is no health care system in the world that would provide health care services on an unrestricted basis without premiums, deductibles, or equity and also with complete freedom in choosing a doctor. There is no country in the world with a universal health care system in which the state would regularly pay for the experimental or unproven medical procedures.
It is also important to understand that no foreign system can be directly transplanted to the United States. Americans are unlikely to agree with regulated or limited medical services and technology, by which other countries try to cut their spending. American doctors will not want to reduce their incomes to the level observed, for example, in France or Germany. In addition, the political life, economy and national culture of other countries are often very different from the U.S. one. The citizens of other countries in many cases have more confidence in the actions of the state and are suspicious of the free market. Finally, the polls show that the people of many countries, when it comes to health policy, put the social solidarity and equality over a higher quality and freedom of choice. Americans see things quite differently:
We go to great lengths to save individual lives at enormous cost and with great compassion, but we care much less about policy initiatives that save many more anonymous lives and at much lower cost (Mechanic 17).
The experience of other countries offers a number of important lessons. Universal health insurance is not the same as universal access to health services. In practice, in many countries, where such access is declared, there is rationing of medical services or extremely long queues for treatment. In addition, the presence of the public health system does not necessarily mean that health insurance covers all citizens. In some countries, where such a system is formally in action, the actual achievement of this goal is very far, and in most of the other countries at least a small portion (1-2%) of the population has no medical care. In the U.S., of course, there are more uninsured citizens, but these examples show how difficult it is to achieve both goals – the universal coverage and universal access to health care.
Growth in health spending is not a purely American phenomenon. Basically, other countries spend considerably less for this purpose, both in relation to the total GDP and GDP per capita. This is often due to the fact that their starting level of spending was lower. However, these costs are rising all over the world, resulting in budget deficits, increased tax burden and/or cuts in social spending. In short, the only free cheese is in the mousetrap.
As a matter of fact, the countries where the system of single-payer was established, or which have a strong element of government control over health care, often face rationing of medical services, waiting lists, limited choice of doctors and other barriers in the access to health care. However, in the countries where the universal health systems are more efficient, for example, in France, the Netherlands and Switzerland, this result was caused primarily by the use of market mechanisms such as competition, financial discipline, market prices and freedom of choice for consumers, and rejection of centralized state control.
All in all, within the framework of universal health care one problem cannot be solved – the problem of rising costs. In many cases, the attempts to control costs through state regulation lead to problems with access to health services – either to delays in the provision of care or to direct standardization. Trying to solve this dilemma, many countries weaken government control and introduce market mechanisms, in particular, patients paying their share, market prices for goods and services and greater competition among insurers and providers.
Moreover, increasing the state’s share of total health expenditure, which took place from the end of World War II until the mid-1980s has stopped, and in many countries the share of the private sector started growing, in some cases substantially. Therefore, there are indications that in the sphere of medical services there is a growing shift from the public to private providers. While in the United States for the last few decades there has been a tendency for the Europeanization of the health care system, the Old World, however, is moving towards the American way.
Thus, the U.S. can take a lesson from the experience of the national health care systems in other countries. America does not need to move towards nationalization of medicine, but, on the contrary, should strengthen the incentives and consumer control in this area. Lastly, the United States could expand health insurance coverage and access to health care not importing the problems inherent in the universal system.