The best path to universal coverage

July 19, 2006|By STEVEN HILL

A report last month from the Citizens' Health Care Working Group, a nonpartisan advisory panel established by Congress, concluded that the federal government should guarantee basic and universal health care to all Americans. Such a universal system often is equated with a Canadian-style, government-run, single-payer system. But a survey of successful health care systems worldwide shows this is an incorrect assumption.

For example, the World Health Organization rates France as having the No. 1 health care system in the world. It covers everyone. It also is noted for its brief waiting periods, affordability, freedom of physician choice, doctors who still make house calls, exemplary gynecological care and quality health care for immigrants and the poor - all while spending about half what Americans pay to fund a health care system ranked 37th in the world.

Yet France does not have a single-payer system, nor does it have what is commonly referred to as government-run, socialized medicine. Neither do Germany, Japan, Austria, Belgium and the Netherlands, but they also provide universal coverage and quality care at a fraction of what Americans pay.

How do these non-single-payer nations provide such excellent care? They use a system that is a flexible blend of public and private, with most doctors, nurses and other professionals working for private medical groups, not for the government, as in the Canadian-style single-payer system. Many hospitals also are in private hands, while others are public.

The funding for health care in these nations is best described as a shared responsibility: Employees, employers and the government all contribute a predetermined amount. Workers and employers are subject to mandatory payroll deductions, and government chips in any shortfalls for poorer people, depending on income level or employment status.

The contributions from individuals, employers and government are deposited into nonprofit, government-regulated private insurance funds, sometimes known as sickness insurance funds, or SIFs. Additional private insurance can be purchased for premium services, such as a private room in the hospital.

But here's the key part: The SIFs sit down at the bargaining table with the government and representatives from professional associations of doctors and other health care professionals to set fee structures. They negotiate strict cost controls that have prevented expenditures paid by consumers from approaching anywhere near the exorbitant U.S. levels. Cost controls are essential to the success of these shared-responsibility systems.

The knock against a Canadian-style single-payer system is that it leads to long waiting periods for legitimate medical procedures. But research indicates that the shared-responsibility nations have shorter waiting periods for such procedures and better quality of care than either the United States or single-payer nations such as Britain, Canada and Sweden.

Many British citizens take a train through the Chunnel to access quicker treatment in Belgium and France than they can receive at home. A young Swede who works in Brussels told me her health care in Belgium was much better than the single-payer health care in Sweden, where her grandmother had to wait 18 months for hip-replacement surgery.

Interestingly, the efficient health care system of the French, Germans and Belgians shares many similarities with the recent bipartisan health care legislation passed in Massachusetts, which mandates a "shared responsibility" among employees, employers and the government. But the key difference is that the Massachusetts plan does not include cost controls, which understandably are difficult to enact on a state level. Without cost controls, people will be saddled with mandatory monthly premiums that potentially have no ceiling. Over time, Massachusetts could easily face a dilemma of either sticking taxpayers with the bill for escalating medical costs or scaling back the universal coverage.

The evidence is clear that cost controls are extremely important to any successful health care system. And the experiences of the public-private hybrid systems in France, Germany, Belgium, Japan and elsewhere show that it can be done. This is not to say that these countries' health care systems are not facing stresses too, including rising costs. But their public-private hybrids have the built-in flexibility to cope with them.

The lesson for health care reformers is that it is important to expand the debate and recognize that universal health coverage does not necessarily mean single-payer. Shared-responsibility plans can get the job done, but cost controls are fundamental to success.

Steven Hill, a director with the New America Foundation, is the author of "10 Steps to Repair American Democracy." His e-mail is hill@newamerica.net.

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