by T.R. Reid
Rating: 4.6
Highly recommended, though written 1 year before the adoption of ACA, which should address some of the problems of U.S. health care covered by this book.
The author sets out to explore the differences between health care in the United States and other developed countries. The book was published in 2009 before the passage of ACA (Obamacare), so may have contributed to the case for that landmark legislation. All references to U.S. health care are pre-Obamacare.
Reid debunks many American myths about medicine outside of the U.S. as he sets out to provide a balanced assessment of the strengths and weaknesses of each system. His premise is that the U.S. does not necessarily need to change to one of these other systems, but that it can learn from each of them and modify its own health care to achieve some of the success that other countries seem to enjoy.
He cites extensive studies by the WHO (world health organization) and many American organizations that all seem to agree that the U.S. ranks dead last among developed nations in terms the the cost, quality and fairness health care. In short, we do everything wrong, plus it costs more.
The most striking difference between health care in the U.S. versus other countries, is that the U.S. does not have a single system. Veterans have one system, native American tribes have another system. Everyone over 65 gets medicare. Poor children under 16 get coverage, but poor people over 16 don’t. Those with renal failure get full care paid for by the U.S. government. Prisoners get free medical care. Insurance companies all have different rules, and in fact the ‘death panels’ that fear-mongers warn about don’t actually exist in Europe, though one could argue that they do exist among American private insurance companies. Within the insurance industry, when they pay a claim they record it as a ‘medical loss’, meaning that any payout for claims reduces their bottom line, which all corporations try to minimize. He states that 700,000 Americans file bankruptcy each year due to medical bills.
As a foreign correspondent for the Washington Post, the author travels extensively and visits doctors in many countries to see how they will handle his injured shoulder. He names each physician and paints a vivid picture of their daily practice, their income, their motivations, their complaints. He also describes these systems from the perspective of patients, again detailing accessibility, affordability and quality of care in each country. For any American who has dealt with the frustrations of medical care in the U.S., or attempted to traverse the bureaucratic maze that is our insurance industry, the stories of care in other countries appear as a patient’s utopia.
France:
France is ranked as the best overall system in the world by the WHO study. It is not the cheapest care as a measure of GDP, though it has very low out-of-pocket costs for patients, quality is considered excellent and French citizens are very proud of their system (although as with everything else, they complain about it incessantly).
France is one of several countries that use the Bismark system, named after the German leader Otto von Bismarck. In the19th century Bismarck consolidated the Germanic principalities into a modern nation and instituted a national health care system. He did this partly out of charitable kindness (what he called ‘applied Christianity’), though mostly to build solidarity in his new nation, and to boost the health of its citizens. The plan became immediately popular and has remained in effect for 125 years, surviving world wars, Soviet occupation and countless political upheavals.
In France, physician pay is mediocre, but they accept this and appreciate that they don’t need to practice defensive medicine or worry about lawsuits or billing. Any French citizen can visit any hospital or doctor in the country. Unlike the U.S., all prices are posted for all procedures.
The author visits an orthopedist and sees that his consultation will cost $33. He will submit that cost to the insurance company and be reimbursed about 70% of that, and won’t need to worry if his insurance will pay. Everything is covered, so all procedures will be reimbursed. In the U.S. that consultation would have cost at least 4 times as much, and the patient would often be uncertain as to whether the insurer would pay, plus the patient could only visit a doctor that is approved by the insurance company. The patient in the U.S. would need to complete lots of paperwork, some of which would deal with liability, and the patient would need to answer the same medical history questions every time he visits a new doctor. U.S. doctors don’t have access to the patient’s medical records. On the bright side, in the U.S. the doctor’s office would be a bright, clean, spacious and nicely decorated facility. In France, most offices and hospitals are dingy, spartan affairs.
All French citizens have a health card with a microchip that contains all of their medical records. They can visit any doctor in the country, give him their card and the doctor has instant on-screen access to the patient’s entire medical history. France medical costs are about 11% of GDP (2005).
One further difference between France and the U.S., is that the French system covers a much wider range of treatments, including spa treatments, herbal remedies and acupuncture. Croissants and jam are not covered. Sacrebleu!
Britain
In Britain they have the Beveridge system, also called the NHS (national health system) in which all medical care is free for everyone. There is no insurance and no co-pay, no bills whatsoever other than in the very small private sector. The government decides what procedures and medicines it will pay for and how much it will pay. Doctors and hospitals are private, though prices for every possible procedure are set by the government. Further, the government does not cover all procedures nor all medicines - only the ones they consider necessary and cost-effective.
Since the health of each citizen will directly impact the nation’s fiscal health, their system is strongly biased toward preventive care and doctors are rewarded for having a large number of healthy patients. They call this the ‘capitation system’ and there are specific payments made to doctors based on a complex set of criteria. There is no incentive for their doctors to perform unnecessary procedures as in the U.S. Their infrastructure is very old, though the quality of the care is described as excellent. They historically had a problem with long wait times, though have greatly reduced that in the past decade. One example of the power of NHS is that men are not given routine prostate exams as in the U.S. The NHS has determined that this test is not cost-effective. To pay for this system taxes are high in the U.K. Sales tax is 17.5% and prices are generally very high for most things. But the Brits love their health care system and no sane politician would try to dismantle or reduce it.
Canada
Canada uses the National Health Insurance model, introduced in Canada by Tommy Douglas in 1944. As a six year old boy in Scotland, Tommy fell, bumped his knee badly and was handicapped, potentially for life. His family moved to Canada in 1910 and Tommy was randomly selected by a local surgeon who wanted to show off his new orthopedic surgical procedure. Tommy was miraculously cured, though felt that the randomness of his luck was unfair to countless others who needed medical attention. In 1944 Tommy became Premier of Saskatchewan and instituted a government funded single-payer system for all Saskatchewan residents. The system was extremely popular and was later adopted by other provinces and eventually became a national system in 1961.
In the NHI model, all citizens pay monthly premiums to their provincial insurance company. Providers (physicians and hospitals) are private, though prices are strictly regulated by the government. Citizens who can not afford the monthly premiums are covered by the government. For most Canadians most of the time, other than monthly premiums there are no out-of-pocket costs. The major problem in Canada is a shortage of doctors and seriously long wait times. However no one in Canada, rich or poor ever dies of a curable disease, and no Canadian ever goes bankrupt from medical bills.
Taiwan, Korea and other countries have copied the Canadian model, and the U.S. medicare system for seniors also is modeled after Canada. Even the name ‘medicare’ came from Tommy Douglas. There is some flight to the U.S. among wealthy Canadians who don’t want to wait, though these numbers are small. Costs are rapidly rising in Canada, though still far cheaper than the U.S.
Germany
Germany is of course under the Bismarck system, where all providers and insurers are private, though under strict price controls and required to include all citizens and even guest workers, whether legal or not. The insurers are non-profits yet still are very competitive. They are required to pay all legitimate claims, so they don’t waste any effort on trying to deny claims. The package of benefits is generous, including doctors, dentists, opticians, physical therapists, prescriptions, nursing homes and even spa visits if recommended by a doctor.
The premium that workers pay is a percentage of pay, very similar to U.S. social security, in which the employee and employer contribute the same amount to the fund. Wealthy Germans can opt out of the system, which about 7% do. There are private, for-profit insurers and hospitals to cater to this wealthy sector, although that practice is controversial.
Like all other countries, costs are rising rapidly, so Germany instituted a co-pay policy in 2006 where patients must pay $13 per visit, up to a maximum of $13/quarter. People of course were outraged, but by now have probably gotten used to the idea.
Government pays the tuition for medical school, and the cost of malpractice insurance is extremely low. As costs rise, physician pay is getting squeezed, so many doctors earn extra income by performing cosmetic procedures that are not covered by the insurance system.
Supply of hospitals and providers is ample, so wait times are very short, generally shorter than in the U.S. Quality of care is considered excellent, among the top in the world. Only downside seems to be cost, with German health care consuming 11% of GDP. That’s higher than most of the world, with the exception of course of the U.S. (17%).
Germany recently adopted a digital health card similar to the one used in France, which saves on admin costs and improves efficiency. Patients can use any of 200 private insurers and see any doctor in the country. So compared to the U.S. they have more choice and better care at less cost, and without the fear of being dropped by their insurance or denied coverage for pre-existing condition.
Japan
Japan also uses the Bismarck system. Hospitals, doctors and insurance is private, but prices and coverage rules are strictly regulated by the government. All citizens have coverage, generally paid for by employee and employer, with the unemployed covered by the government. Prices are extremely low, so Japan spends only 8% of GDP on health care. The group who suffers from this is doctors, who earn only moderate incomes (100K-150K) and hospitals that are underfunded and thus not investing in upgrades.
However the author describes Japanese doctors as the most competitive in the world, advertising their services and being very entrepreneurial in running their practices. Patients pay for service and are reimbursed usually 70% by their insurers (who cannot deny claims). Costs are very low. Since prices are so low, Japanese citizens go to their doctors on average 14 times/year. This compares with an less than 5 times/year for Americans. One result of the low fees is that major surgeries are less common in Japan, since doctors are less likely to recommend them. So Japan has extremely low costs, high usage, total consumer choice and excellent health/life span stats.
Taiwan
In 1994 Taiwan searched for a health care system, consulted with an American health economist, and decided to study systems around the world and find what would work for Taiwan. As a fiercely capitalist nation whose primary supporter (militarily) is the U.S. and since most Taiwanese greatly admire the U.S., their first thought was to adopt the U.S. model. But they spoke with many Taiwanese doctors who practiced in the U.S. and were advised against this. They were told that the U.S. system is really not a system at all - it’s a market, where some who cannot pay don’t get care and others go bankrupt paying for care.
So Taiwan adopted the Canadian model, though insisted on a single, government-run insurer and private hospitals and doctors. This gives them control of costs, with all payments going through the single insurer. All citizens pay a premium through payroll deductions. They also give every citizen an electronic card that contains their medical history and billing info. Government controls prices for every procedure.
Adoption of this plan in 1994 was a hot political issue. Cleverly, the conservatives in power at the time decided to support nationalized care, thus taking some wind out of the sails of the liberals. Sure enough, the plan was adopted and became very popular, helping conservatives to maintain political power. Interestingly, the same year Taiwan adopted their national health plan, President Clinton was making the same attempt in the U.S. That effort went down in flames under heavy lobbying from all of the vested interests.
Taiwan health care is about 6% of GDP.
Switzerland
Was similar to the U.S. in that it was a for-profit system with very high costs and many citizens without access to care. In 1996, despite vigorous lobbying by the medical industry, the Swiss adopted a variation of the Bismarck system (similar to France and Germany). Insurance companies were forced to become non-profits and to offer coverage to everyone, and all citizens were required to purchase coverage, at least for a basic plan.
The insurance companies cannot profit on basic plans, though they still compete by offering upgrades such as private rooms, cosmetic procedures and so on. Despite their restrictions, the insurance industry in Switzerland is thriving, with 70 companies competing for business of 8 million citizens. Cost are about 11% of GDP.
When the Swiss nation debated the health care issue in 1994, the central issue was one of fairness, of solidarity. By contrast, when the issue was debated in the early years of the Clinton presidency, the issue was seen as economic. Fairness was rarely part of the debate.
China
Only nation that seems to have regressed. Under Mao China had national health care, sort of a poor-man’s version of the Beveridge model with universal access and rural clinics. Under Mao, life expectancy increased dramatically and infant mortality dropped. Then in the 80’s after Mao’s death, China scrapped that system for a totally private system. So there are modern hospitals in big cities that cater to wealthy patients, but the vast poor population essentially has no medical care. Out-of-pocket costs are very high at 60%. And predictably, infant mortality rates have increased, life expectancy has remained stagnant while other countries have improved, and some infectious diseases are on the rise.
India
India, like most poor countries, has no health care system, and is thus described as an ‘out-of-pocket’ system. This means that patients pay directly to any provider, which generally means that only the wealthy receive care. 70% of Indian’s population live in poor rural villages and most will never see a doctor in their life.
Cuba
Similar to Beveridge model of national coverage, zero co-pay, though actually based on old Soviet system. Stats are very good for life-span and very low infant mortality, cost is 6% of GDP, though infrastructure is crumbling. Overall ranking on WHO list is 39, just two behind the U.S. ranking of 37.
Review:
Overall a very readable and interesting book, with plenty of anecdotes to illustrate his findings. Well explained although the author has a clear bias toward universal coverage. The statistics he presents regarding all measures of health and cost seem to overwhelmingly support his opinion.
One aspect of a market system that the author barely mentions is when doctors prescribe treatments that are not really necessary. The profit motive surely creates lots of unnecessary procedures, at both great financial and health cost to patients. He also makes scant mention of the downside of defensive medicine, preferring instead to focus on the macro measurements such as life-span, infant mortality and total cost as a percentage of GDP.
If I were assigned the task of supporting the U.S. system (before Obamacare) I would point to the benefits of a free-market economy with a minimal social safety net, to our relatively high employment rate and our status as a land of opportunity and innovation. I would argue that consumer goods in the U.S. are far cheaper than most of the other countries mentioned, that taxes are lower and that opportunity is greater.
And then I would apologize for making these arguments, book a flight to Berlin or Paris or Bangkok and schedule an appointment with a physician.
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