How Does US Health Care Compare to 5 Industrialized Countries

Over the last few decades, health care has become a major point of debate in the United States. Politicians from both parties argue over the cost of health care, Medicare for all, but, though everyone seems to agree that something isn’t working, no one seems to have a clear idea of exactly how to fix it.

In the US, we say everyone is entitled to education, everyone is entitled to legal protection, but we don’t say that everyone is entitled to health care.

In The Healing of America, T.R. Reid examines the health systems of 5 industrialized countries — England, France, Germany, Japan, and Canada.

When I was traveling the world on my quest, I asked the health ministry of each country how many citizens had declared bankruptcy in the past year because of medical bills. Generally, the officials responded to this question with a look of astonishment, as if I had asked how many flying saucers from Mars landed in the ministry’s parking lot last week. How many people go bankrupt because of medical bills? 

In Britain, zero. In France, zero. In Japan, Germany, the Netherlands, Canada, Switzerland: zero. In the United States, according to a joint study by Harvard Law School and Harvard Medical School, the annual figure is around 700,000.

T.R. Reid

There are four types of international health care systems.

1. The Bismarck Model

In the Bismarck model, the insurance system is financed jointly by employers and employees through payroll taxes, called “sickness funds.” These taxes are directly deducted from paychecks. This system provides free choice of insurance and treatment with minimal waiting and a high standard of quality. 

Both Germany and the United States have adopted a form of the Bismarck model of health care. The difference between these insurance companies and the American insurance companies is that the later make health care a profitable business whereas the German insurance companies are not for profit organizations.

In Germany, rich opt-out and choose private insurance but about 90% of the citizens stick with national health insurance. It’s great for patients. Germany keeps the cost low by keeping profit out of the business and pay less to doctors. 

2. The Beveridge Model

The Beveridge Model is a nationalized health care system. Similar to how public libraries and police forces are financed by the government, health care is controlled through citizen tax money. Citizens of countries who utilize this health care plan do not directly pay for their medical or other health-related bills. The goal of this plan is to provide quality health care regardless of people’s ability to pay for their care. This is how health care works in Britain.

The majority of hospitals and staff are considered government property and employees. Health care is paid for through tax payments, which means the government pays for all health care costs. Even doctors who practice privately collect their fees from the government. 

There are no out of pocket expenses in this system. The British don’t pay medical bills, but they pay pretty high taxes, suffer long wait times for non-urgent conditions, and endure pretty stiff regulation (NICE) of what treatments and procedures they can get.

3. The National Health Insurance Model

This system has elements of the Bismarck as well as the Beveridge model. This health system adopted by Canada keeps health care costs low and yet provides health care to all. Long waiting periods to access health care is one of the drawbacks of this system. Countries like Australia, Taiwan and South Korea have adopted variations of this model.

Canada’s system covers everyone, with a national insurance plan that pays private doctors and hospitals. But Canada’s system is in decline with a serious doctor shortage and long waiting times. In fact, it could a year just to get an orthopedic consult for his shoulder.

The health care system in Japan provides health care services with the patient accepting responsibility for 30% of these costs while the government pays the remaining 70%. Payment for personal medical services is offered by a universal health care insurance system that provides relative equality of access, with fees set by a government committee.

To keep spending low, the Japanese government puts strict controls on payments to doctors and hospitals. Everything in Japan from a doctor’s visit to minor surgeries, to MRIs, is negotiated and set by a government committee. It’s the same price anywhere in Japan.

Japan has the oldest population in the world, and the Japanese go to the doctor more than anybody — about fourteen office visits per year, compared with five for the average American. And yet Japan spends about $3,400 per person on health care each year; we burn through $7,400 per person.

The tradeoff is a system of aging hospitals and relatively low doctor salaries. 50% of Japan’s hospitals are under deficit. Since the price is fixed and low, hospitals may go bankrupt. Unlike the US, where patients go bankrupt.

4. The out-of-pocket model

Countries that do not have established national health care systems make up the majority of the world. In third-world countries and rural areas of South America, Africa, and Asia, many people go without receiving care from doctors.

All health care costs are taken care of by the individual himself. In the US, nearly 50 million uninsured Americans do the same. The difference, of course, is that the US can afford a better system, but it has chosen not to pay for one. So in sum, compared to these other industrialized countries, the US leaves more people uninsured, spends more, and has poorer health outcomes. 

Conclusion

As per Reid, there is no perfect system. There are always tradeoffs. Using the learnings from some of the developed countries, we could build a better health care system that would provide quality care and affordable health insurance for all. This can be achieved with the following core principles:

  1. Insurance companies must accept everyone and they can’t profit from basic care.
  2. Everybody is mandated to buy the same insurance, and the government has to pay for the poor.
  3. Doctors and hospitals have to accept one set of fixed prices, set and negotiated yearly among government officials, doctors, and companies.

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