Stanford Progressive

The European Alternatives

By Michael Albada, published January, 2010


The American healthcare system is head ing for the E.R. Despite spending far more on health care per capita than any other country in the world, American healthcare continues to fall behind other wealthy coun tries on objective measures of performance. A recent study by the Commonwealth Fund found that despite spending twice as much per capita, the U.S. ranks last or nearly last on basic measures of performance such as quality, access, efficiency, service, equity, and healthy lives.

Furthermore, the American system suf fers from uneven quality of care, inade quete coverage, and soaring costs which are becoming a growing liability to America’s fiscal stability. Demand for the reform has opened the debate on what form that should take, and many have appropriately begun to look to Europe for an alternative. The rest of the world has something to teach us, and we should be listening.

All other wealthy, industrialized in the world, as well as many developing nations, provide universal healthcare for their citi zens, something the U.S. still does not do. While there is considerable variation in how these countries accomplish this task, it is usually done in one of two ways.

The first model is known as a “single payer” system, in which a national health agency directly pays for healthcare for its citizens. This model is used in countries such as Britain, Canada, and Sweden. The other model, embraced by Germany, the Netherlands, and Switzerland, requires citi zens to buy private health insurance.

Great Britain, the largest single-payer system in the world, offers an important point of comparison. Britain’s National Health Service (NHS) provides a higher overall level of health to its population at a much lower cost than the American sys tem, but it suffers from a range of prob lems. The lack of emphasis on preventive care in particular limits its effectiveness. In Britain, annual physicals are not insured, and screening programs are far less wide spread. Furthermore, some expensive life-saving treatments and drugs are not offered because they don´t pass through the NHS´s cost-benefit analyses. Yet while Britain´s NHS does struggle with issues, it nonethe less provides the British with better levels of health and higher life expectancy than the American system at nearly half the cost per capita.

France’s healthcare system, on the other hand, has proved to be an enormous suc cess. France employs a unique hybrid sys tem that combines both public and private coverage, and the results are clear: its 62 million citizens are significantly healthier than Americans, per capita spending is roughly half, and the system still allows significant degree of choice and freedom that single-payer systems do not. With the French system, every citizen is provided with basic healthcare coverage through a national insurance fund, which is provided by both employers and employees. Citizens are then free to purchase supplementary private insurance for benefits that aren’t covered, which 90% of French citizens do. Thus wealthier citizens are still free to use expensive new medicines that the basic insurance won´t provide. The government also provides insurance to the unemployed. A national system of price controls deter mines the reimbursement amounts to be paid both by the government and by pri vate insurers. This system is thus able to provide universal coverage without elimi nating private choice, squelching private medical practices, or depending wholly on the state. The proof is in the pudding: for a significantly healthier population, France spends a mere $3,500 per capita, compared to America´s $6,100 every year.

President Barack Obama has made clear his intention to revamp healthcare, and both sides of the aisle agree with that sentiment. A large segment of the business world, including such major corporations as Safeway, PepsiCo, and Aetna, have also recognized the importance of a good health system to allow them to compete on the global market and are now calling for ma jor reforms. Even America´s health insurers have announced their willingness to accept major changes in the health system and in surance markets. Though normally strongly opposed to insuring those with pre-existing conditions, major firms have stated their willingness to accept everyone, should the government require citizens to purchase coverage. Both Democratic and Republi can Congressional proposals include this measure, which done properly would move America toward the German and Dutch models of universal private insurance. This solution offers significant potential for im proving care, reducing costs and providing for the 47 million uninsured in America.

Regardless of which system policymak ers eventaully choose, they need to move quickly. As Barack Obama´s director of Management and Budget ominously stated, “that ‘long term’ keeps getting closer and closer.”


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