December 26, 2018
Dear Friends and Family,
Healthcare is a meaty subject to cover in one segment particularly if it is on a global basis. To get a reasonable understanding; I recommend that after you read the excerpts you click on both PDF links – first on the extended set of excerpts and second on the U.S. Healthcare Insurance statistics to put our healthcare systems in relative perspective. Universal healthcare insurance is a socialistic policy with central planning and income redistribution.
My Takeaways:
Throughout the world there are four basic healthcare models in existence today:
Of the three models, the Bismarck model seemingly yields the best results. Key elements of the model, as applied, include non-profit insurance companies (their whole mission is to pay bills including streamlining the administration functions) with no severe negatives in providing client services or healthcare provider pay. Some keys to success include:
The United States: Interestingly, the U.S. has elements of all four models in our convoluted healthcare apparatus which is a primary reason (but not the only one) that we spend one and a half times more per person on healthcare than any other country, but we are not any healthier because of the spending. For example, on the models:
In 2016 the U.S. census bureau reported that 91.2% of the population had an insurance policy, broken down as follows:
From a cost perspective, having three different healthcare systems vs. one is one reason for the high cost versus other countries. Of greater significance is probably (1). the 20% administrative costs for private insurers in the U.S. versus a reported 5% for other countries, (2). the private insurers profit in the U.S., (3). the total lack of transparency for medical pricing, and (4). far more medical malpractice suits than anywhere else in the world. On the administrative costs, for instance, we have nothing close to medical “smart” cards. On private insurers profit, most of the private insurers in other countries are non-profit. Interestingly, at one time we had non-profit insurers (Blue Cross/Blue Shield as an example, who were bought out by for-profit insurers and change to for-profit). On the transparency issue, as a patient I never know in advance how much a treatment or test is going to cost and I am not sure the provider does either, so any consideration on my part for the economic aspects can’t be considered in any decisions I make. The one pricing system in existence, the “Chargemaster,” is a bogus pricing system merely in place to “soak” non-insured patients. Further on medical malpractice; insurance malpractice insurance is reportedly about 100 times other countries vs. some states, then add on top of that the cost of litigation for such suits, and importantly the added tests physicians run to “cover their ass” so as to minimize losing such suits. Net, there are many ways the politicians could dramatically lower healthcare costs without limiting coverage.
Is Free-Enterprise a Possibility vs. Reforming Various Socialistic Policies?
The only light I see on the horizon (and unfortunately it is a dim one) is what I have read about going on in Pittsburgh. There, two different organizations have formed an integrated healthcare system – the Geisinger Health System and the University of Pittsburgh Medical Center (UPMC). As I understand it, both have an insurance component, medical facilities (hospitals, clinics, and equipment), their own medical staff, a physical therapy staff, their own laboratories, and probably a legal organization (although that is speculation on my part). So they compete with each other for patients with an integrated healthcare organization plus flat-based pricing. Net, you potentially have a capitalistic, free enterprise healthcare situation. In my judgment, the opportunities going forward for the expansion of such a system are enormous from cost, quality of care, pricing, and convenience standpoints. I encourage you to read the last couple of pages of the long set of excerpts so you can form your own conclusion.
Next:
The next three segments will focus on the United States primary and secondary school systems including how it is built on a socialistic platform.
Happy Learning,
Harley
Dear Friends and Family,
Healthcare is a meaty subject to cover in one segment particularly if it is on a global basis. To get a reasonable understanding; I recommend that after you read the excerpts you click on both PDF links – first on the extended set of excerpts and second on the U.S. Healthcare Insurance statistics to put our healthcare systems in relative perspective. Universal healthcare insurance is a socialistic policy with central planning and income redistribution.
My Takeaways:
Throughout the world there are four basic healthcare models in existence today:
- The Bismarck Model which uses private insurance, usually financed by employers and employees. The private insurance companies are non-profit and cover everybody. This model is utilized by France, Germany, Japan, Switzerland, Belgium and to a degree in Latin America.
- The Beveridge Model: This is a system where total healthcare is provided and financed by the government through taxation. Medical treatment is a public service like the fire department or the public library. All healthcare professionals work for the government in government owned facilities and patents receive no bills. Countries using this model include Great Britain, Italy, Spain, and most Scandinavian countries.
- National Healthcare Insurance (NHI): The healthcare providers in this system are private, but the payer is a government-run insurance program wherein all fees are paid via taxes. It is a single-payer insurance which covers everyone. NHI countries include Canada, Australia, Taiwan, and South Korea. This is termed Universal Healthcare or Medicare for All. Historically, such countries have controlled costs by limiting and/or controlling medical services which often results in patients waiting for treatment.
- The Out-of-Pocket Model: Only about 40 out of 200 countries have any established healthcare insurance system. The basic rule in the remaining 160 countries is simple and brutal. The rich get medical care; the poor stay sick and die. You only get treatment that you directly pay for.
Of the three models, the Bismarck model seemingly yields the best results. Key elements of the model, as applied, include non-profit insurance companies (their whole mission is to pay bills including streamlining the administration functions) with no severe negatives in providing client services or healthcare provider pay. Some keys to success include:
- Streamlining administration using such techniques as have every person carrying a “smart medical card” which contains their compete medical history, billing information, etc. which is digitally updated whenever they visit a provider.
- Pricing transparency so the patient and the provider know the negotiated pricing structure and how much each diagnosis and treatment cost, coupled in some cases with the patient having to pay a small portion of the cost (so it is not “totally” free).
- There are several downside consequences that countries have experienced when implementing models 2&3 – the Beveridge Model and National Health Insurance.
- Doctor shortages – either because they left to earn more in a different country or because young people didn’t view being a physician as a lucrative career so not as many went to medical school (e.g. England and Canada)
- Significant Patient Wait Times – because of doctor shortages, doctor productivity (or lack thereof), waiting for administrative approval for a medical procedure associated with controlling costs. (e.g. England, Canada, Sweden)
- Non-Coverage or Lack of Skills/Medical equipment: centralized control of medical treatments – what to provide, what not to provide in terms of treatment and equipment plus who to provide the treatment for and who not to, all under the umbrella of controlling costs by centralized planning. Invariably the plan does not meet the need or the decisions become politicized. (England and Canada)
- Insufficient medical treatment capacity: as the result of huge increases in medical requested treatment because now it is “free.” (Sweden).
The United States: Interestingly, the U.S. has elements of all four models in our convoluted healthcare apparatus which is a primary reason (but not the only one) that we spend one and a half times more per person on healthcare than any other country, but we are not any healthier because of the spending. For example, on the models:
- For most working people under 65, we’re Germany or Japan – a standard Bismarck model were the worker and the employer share the premiums for a health insurance policy.
- For Native Americans, military personnel, and military veterans, we’re Britain. Following the Beveridge model the patients go to a government facility for treatment and the never get a bill.
- For those over 65, we’re Canada. U.S. Medicare is essentially a National Health Insurance scheme, with the near-universal participation and the low administrative costs that characterize such systems.
- For the 28.1 million uninsured some would contend are in the Out-of-Pocket Model: Closer inspection finds that 7 million of those are illegal immigrants and therefore do not qualify; roughly 12 million are people who qualify for one type of insurance or another but feel it is to expensive on a cost vs. benefit analysis (e.g. don’t feel they will need it in the short term), 4 million would qualify for Medicaid if the 20 states who have not expanded the Medicaid program did so, and roughly 3.35 million are children. [Note: I did not research CHIP (Children’s Health Insurance Program), which provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid, to find out why there would be that many children not covered).
- Net, we do not need a new government program to cover those people still left uninsured. Implementing effective cost reduction/control would achieve greater success. Interestingly, however, the politicians have only looked at healthcare improvement from an insurance standpoint (usually just enhancement).
In 2016 the U.S. census bureau reported that 91.2% of the population had an insurance policy, broken down as follows:
- 55.7% with employer-based private insurance
- 16.2% with direct purchased private insurance which includes everyone covered by Obamacare
- 19.4% with Medicaid – insurance for the poor via private insurance with full reimbursement by the government
- 16.7% with Medicare – government insurance
- 04.5% military coverage (VA) – government insurance with government-run facilities [Note: That totals 112.5% -- government math I guess]
From a cost perspective, having three different healthcare systems vs. one is one reason for the high cost versus other countries. Of greater significance is probably (1). the 20% administrative costs for private insurers in the U.S. versus a reported 5% for other countries, (2). the private insurers profit in the U.S., (3). the total lack of transparency for medical pricing, and (4). far more medical malpractice suits than anywhere else in the world. On the administrative costs, for instance, we have nothing close to medical “smart” cards. On private insurers profit, most of the private insurers in other countries are non-profit. Interestingly, at one time we had non-profit insurers (Blue Cross/Blue Shield as an example, who were bought out by for-profit insurers and change to for-profit). On the transparency issue, as a patient I never know in advance how much a treatment or test is going to cost and I am not sure the provider does either, so any consideration on my part for the economic aspects can’t be considered in any decisions I make. The one pricing system in existence, the “Chargemaster,” is a bogus pricing system merely in place to “soak” non-insured patients. Further on medical malpractice; insurance malpractice insurance is reportedly about 100 times other countries vs. some states, then add on top of that the cost of litigation for such suits, and importantly the added tests physicians run to “cover their ass” so as to minimize losing such suits. Net, there are many ways the politicians could dramatically lower healthcare costs without limiting coverage.
Is Free-Enterprise a Possibility vs. Reforming Various Socialistic Policies?
The only light I see on the horizon (and unfortunately it is a dim one) is what I have read about going on in Pittsburgh. There, two different organizations have formed an integrated healthcare system – the Geisinger Health System and the University of Pittsburgh Medical Center (UPMC). As I understand it, both have an insurance component, medical facilities (hospitals, clinics, and equipment), their own medical staff, a physical therapy staff, their own laboratories, and probably a legal organization (although that is speculation on my part). So they compete with each other for patients with an integrated healthcare organization plus flat-based pricing. Net, you potentially have a capitalistic, free enterprise healthcare situation. In my judgment, the opportunities going forward for the expansion of such a system are enormous from cost, quality of care, pricing, and convenience standpoints. I encourage you to read the last couple of pages of the long set of excerpts so you can form your own conclusion.
Next:
The next three segments will focus on the United States primary and secondary school systems including how it is built on a socialistic platform.
Happy Learning,
Harley
SOCIALISM – SEGMENT 8
UNIVERSAL HEALTH CARE INSURANCE - EXCERPTS
THERE ARE FOUR BASIC HEALTH CARE ARRANGEMENTS IN THE WORLD:
1. The Bismarck Model which uses private health insurance, usually financed by employers and employees. They cover everybody, and they don’t make a profit. Tight regulation of medical services and fees gives the system much of the cost-control of the single-payer Beveridge Model. This model is utilized by France, Germany, Japan, Switzerland, Belgium and to a degree in Latin America.
2. The Beveridge Model: Britain’s National Health Service is a system where health care is provided and financed by the government through tax payments. There are no medical bills; rather medical treatment is a public service like the fire department or the public library. Countries using this model include Great Britain, Italy, Spain, and most of Scandinavia. Although this welfare-state approach to health care seems thoroughly European the two purest examples are Cuba and the U.S. Department of Veteran Affairs (V.A.). In both of the latter two systems, all health care professionals work for the government in government-owned facilities and patients generally receive no bills.
3. The National Health Insurance Model (NHI): This system has elements of both Bismarck and Beveridge. The providers of health care are private, but the payer is a government-run insurance program that every citizen pays into. As a single-payer covering everybody, this plan tends to have considerable market power to negotiate prices and has lower administrative costs since it has no marketing, no expensive underwriting to deny claims, and no profit. NHI countries also control costs by limiting the medical services they will pay for or by making patients wait to be treated. Canada, Australia, and some newly industrialized countries; e.g. Taiwan and South Korea have adopted variations of the NHI Model.
4. The Out-of-Pocket Model: Perhaps forty of the world’s 200 countries have any established health care payment systems. Most of the nations on the planet are too poor and too disorganized to provide any kind of mass medical care. The basic rule in such countries is simple and brutal: The rich get medical care; the poor stay sick and die. In rural regions of Africa, India, China, and South America, hundreds of millions or people go their whole lives without ever seeing a doctor. A hallmark of these no-system countries is that most medical care is paid for by the patients, out of pocket, with no insurance or government plan to help.
MORE ON #1 - THE BISMARK MODEL:
France does a better job than almost any other country both in encouraging health and in treating those who get sick. France’s health care system is largely a system of private doctors treating patents who buy health insurance – from a government health plan with private insurers – to cover most of the costs. Patients generally have to pay a fee, or co-pay at the time of treatment. The French patient will later, have most or all of this copay reimbursed by the insurance fund. For the most part, French workers don’t have a choice of health insurance. Because the insurance plans are nonprofit entities, their main concern is not providing a return to investors but, rather, paying for people’s health care. French insurance plans routinely keep administrative costs below 5%. (Note: in the U.S. administrative costs are about 20%). As a general rule, the French do not have to wait in line to see a general practitioner or a specialist. There’s almost no limitation on a patient’s choice. Any patient can go to any doctor or specialist, and hospital or clinic, and the insurance system must pay the bill. The National Health Ministry essentially dictates what providers can charge for most types of treatment and what price will be paid for each prescription. Just as Aetna and United Health negotiate with doctors, hospitals and drug companies in the U.S., the French government does the same. The difference is that the French negotiations are completely transparent. That’s why you see a highly detailed list of authorized fees in the medical waiting rooms in France. French patients are informed up front, down to the last euro, how much they will pay for each medical procedure and what they will get back from insurance.
Germany: In 1883, Germany enacted the world’s first national health care system. It was a program of mandatory medical insurance, with premiums paid jointly by employers and workers. Today, this health care system guarantees medical care to just about all 82 million Germans. The quality of care is world-class; Germany stands at or near the top in all comparative health care studies. Because the supply of hospitals and doctors is ample, there’s no “queue” for treatment. And every German has a choice among some 200 different private insurance plans, which compete vigorously even though the prices for insurance are fixed. The insurance plans are private entities. The practitioners who make up the bulk of Germany’s medical profession are also private businesspeople. There is a growing business in private, for-profit hospital chains. The private insurance plans negotiate prices with the private medical clinics and the hospitals; these are private commercial agreements, with little government input. In many areas of medical practice, there’s less government control of medical care in Germany than in the U.S. But there’s one downside. Providing free choice of insurance and treatment, in a system with minimal waiting and a high standard of quality costs money. Germany has one of the world’s more expensive health care systems, consuming nearly 11% of the nation’s hefty GDP. That’s significantly higher than in more other European countries. Still, the German system is a bargain-basement operation compared to the United States, where we spend about 17% of GDP on a health care system that provides less choice and less coverage.
Japan: The Japanese system provides care to every resident of Japan, for minimal fees, with no waiting lists and excellent results. Despite universal coverage and prodigious consumption, Japan spends a lot less for health care than most of the developed nations: with costs running at about 8% of GDP, it spends about half as much as the U.S. The prices are low: the Japanese system has a rigid cost-control mechanism that favors the patient, at the expense of doctors and hospitals. It squeezes costs by sharply limiting the income of medical providers – doctors, nurses, hospitals, labs, drug markets. Health care in Japan is paid for through insurance plans generally, the patient has to pay 30% of the doctor bill as a co-pay and the insurance company picks up the remaining 70%. There’s a monthly limit on a patient’s payments, however; nobody has to pay more than $650 a month. The insurance plans must accept everyone who applies, regardless of preexisting conditions and they must pay every bill submitted by a physician or hospital. Everyone is Japan is required to sign up with a health insurance plan.
Switzerland: In the 1980s the big Swiss insurance firms started buying the old mutual health plans and converting them into profit-making businesses. By the early 1990s, Switzerland’s health care system was the closest in the world to the American model. Costs were high – Switzerland ranked secondly to the U.S. in per-capita spending on healthcare. Just as in America, the insurance companies refused to cover anybody with a preexisting condition, on the logical theory that covering sick people would cost more and eat into profits. The health insurance market began to undermine solidarity. Some Swiss people could afford to see a doctor when they were ill; others could not. By 1993 nearly 400,000 Swiss citizens had no health insurance – about 5% of the population. For the Swiss, leaving 5% of their fellow citizens outside the health care system was an unacceptable violation of the core national values: solidarity, community, equality. The Bismarck systems of neighboring France and Germany – relying on private but nonprofit health insurance plans was closer to the Swiss ideals. In 1993 they passed legislation that required insurance companies to offer a basic package of benefits to all applicants, and insurers could not make a profit on basic health coverage. Insurers were allowed to make a profit on supplemental coverage – that is, they could sell additional insurance to pay for cosmetic surgery, private rooms in the hospital and so on.
MORE ON #2: THE BEVERIDGE MODEL:
Britain: The British National Health Service (NHS) is dedicated to the proposition that nobody should ever have to pay a medical bill. In the NHS, there is no insurance premium to pay, no co-payment, no fee at all. The doctor’s bill is paid by the government, and the patient never even thinks about it. The Brits do pay for medical care, of course. They pay through a network of taxes that would make Americans cringe; the sales tax in the UK is 17.5% on anything you buy, while income and social security taxes are higher than America’s in every income bracket. The Brits pay by forgoing treatments and medications that the NHS won’t provide. They pay by waiting in lines for care in a system that is sometimes overstretched. The Beveridge Model of health care has been adopted, with variations, by nations around the world, democracies and dictatorships alike. A system in which government owns the hospitals, pays the doctors, buys the medicine, and covers all the bills would probably come pretty close to what American politicians have in mind when they deplore “socialize medicine.” The most notorious cost-control tool in Britain’s system is the dreaded “queue” – that is, the waiting list. Even when the gatekeeper agrees that you need to see a consultant, it can take weeks or months to get an appointment. The NHS also controls its budget by controlling the range of medications, tests, and procedures it will pay for. The decisions about what treatment will be available – decisions that are literally life-and-death choices for many patients – are public. Because the NHS budget covers everybody, the money saved on one patient can be used to treat another. Declining to operate on a sick grandmother means there is more money available to treat sick children. Accordingly, protests about denied coverage tend to be muted. In British law any doctor who can show that he was following the guidelines approved by the NHS for a particular treatment is immune from a malpractice claim. The result is that doctors in the UK spend much less for malpractice insurance than their peers in the U.S. and are less inclined to practice “defensive medicine” to avoid a lawsuit.
Source: The Healing of America by T. R. Reid.
After British and Canadians socialized their healthcare industries and imposed price ceilings on doctors’ salaries, there was a massive “brain drain,” as highly educated medical professionals migrated to countries like the U.S. where they could earn a better living. In Britain more than one million people are waiting to be admitted to hospitals at any one time. An investigation by a British newspaper found that delays in treatment for colon cancer patients were so long that 20% of the cases were incurable by the time they finally received “treatment.” The same was true of lung cancer patients; and 25% of British cardiac patients die waiting for treatment.
In Sweden, the government actually instructed doctors to “prioritize” patients according to their status as future taxpayers.
Source: The Problem with Socialism by Thomas J. DiLorenzo.
Sweden: On the ten-year anniversary of Sweden’s compulsory health insurance, U.S. News & World Report said, “… The present system is proving anything but, a clear-cut success. The average patient here finds his situation is worse rather than improved. It is more difficult for him to get a doctor. He must wait longer to get into a hospital. And he may be forced to leave the hospital before he is medically ready for discharge. The shortage of nurses is acute. Overburdened doctors must turn away thousands of patients annually – many of them old people who badly need medical care … these crippling shortages are the result of vast increased demands for medical services since the start of Medicare, Swedish authorities say. They point out that since 1950, the total number of practicing doctors has doubled, the number of nurses has nearly doubled. The number of hospital beds has increased by more than 25%. During the same span, population has gone up less than 1%. Yet shortages grow worse … Everyone, young and old, is demanding more medical services, now that it is free …”
MORE ON #3: NATIONAL HEALTH INSURANCE MODEL:
Canada: Today in Canada, the public health insurance system covers all medical and psychiatric care, in or out of the hospital. Canada has better health statistics overall than the U.S., a longer healthy life expectancy, and a lower rate of infant mortality. And it achieves all that for about half the cost per capita of the U.S. system. As it approaches its fiftieth birthday Canadian health care today is not particularly healthy; it is limping along like a poor boy with a broken knee. In 2007, Canada spent about 10% of GCP on health care, far below the U.S. rate. With that level of spending, it can’t keep up with the rapidly rising cost of medicine. The result is a health care system that is “under-doctored” as the Canadians put it. Since the system is in a constant state of scrimping and saving, medicine is a less desirable profession in Canada that it once was; fewer Canadian college students want to become nurses of physicians. If your medical problem is not urgent enough to require immediate treatment, Canada will almost always keep you waiting.
Source: The Healing of America by T. R. Reid
If one conducts an Internet search of “hospital shortages in Canada,” one discovers that the Canadian government is constantly issuing warnings to the public about nursing shortages, drug shortages, hospital bed shortages, medicine shortages and doctor shortages.
Source: The Problem with Socialism by Thomas J. DiLorenzo
MORE ON #4: OUT OF POCKET MODEL: In much of the underdeveloped world, the “health care system” is brutally simple: The rich, the military, and sometimes other government employees get medical care: everybody else stays sick or dies. In countries where almost all resources are needed to provide food, water, and shelter, medical care is a luxury, and a scarce one at that. Because most people can’t get treatment or medication, there are millions of deaths each year in Africa, south Asia, and Latin America from diseases that have disappeared in the developed world: polio, malaria, leprosy, etc. Since the out-of-pocket countries have fewer trained doctors than the richer nations, they tend to rely far more on traditional medicine and methods. For a couple of billion people in the developing world, a village healer may be the only “doctor” they’ll ever see. In some African countries, 80% of all medical care is provided by traditional healers.
THE UNITED STATES: We are like no other country, because the United States maintains so many separate systems for separate classes of people, and because it relies so heavily on for-profit insurance plans to pay the bills. All the other countries have settled on one model for everybody, on the theory that this is simpler, cheaper, and fairer. With its fragmented array of providers and payers and overlapping systems, the U.S. health care system doesn’t fit into any of the recognized models. We have elements of all four models in our convoluted national health care apparatus. For example:
The health care reform bill that Congress passed in 2010 (Obamacare) made significant changes in the existing U.S. health care system. But the law does nothing to simplify the “crazy quilt” structure of different systems for different populations groups; if anything, American health care will be even more complicated and difficult to navigate when “Obamacare” takes full effect. To put it simply, the U.S. does well when it comes to providing medical care; but has a rotten system for financing that care.
Source: The Healing of America by T. R. Reid
The most fundamental fact at issue in the health care debate – the datum most cited by supporters of healthcare nationalization – is that the United States spends about 15% of GDP on healthcare, while other countries such as Canada and Germany spend about 10%. We spend one and a half times more per person on healthcare that any other country, but we aren’t any healthier for it.
Source: The Politically Incorrect Guide to Socialism by Kevin D. Williamson.
The unabbreviated version of the above can be found in the pdf document below.
UNIVERSAL HEALTH CARE INSURANCE - EXCERPTS
THERE ARE FOUR BASIC HEALTH CARE ARRANGEMENTS IN THE WORLD:
1. The Bismarck Model which uses private health insurance, usually financed by employers and employees. They cover everybody, and they don’t make a profit. Tight regulation of medical services and fees gives the system much of the cost-control of the single-payer Beveridge Model. This model is utilized by France, Germany, Japan, Switzerland, Belgium and to a degree in Latin America.
2. The Beveridge Model: Britain’s National Health Service is a system where health care is provided and financed by the government through tax payments. There are no medical bills; rather medical treatment is a public service like the fire department or the public library. Countries using this model include Great Britain, Italy, Spain, and most of Scandinavia. Although this welfare-state approach to health care seems thoroughly European the two purest examples are Cuba and the U.S. Department of Veteran Affairs (V.A.). In both of the latter two systems, all health care professionals work for the government in government-owned facilities and patients generally receive no bills.
3. The National Health Insurance Model (NHI): This system has elements of both Bismarck and Beveridge. The providers of health care are private, but the payer is a government-run insurance program that every citizen pays into. As a single-payer covering everybody, this plan tends to have considerable market power to negotiate prices and has lower administrative costs since it has no marketing, no expensive underwriting to deny claims, and no profit. NHI countries also control costs by limiting the medical services they will pay for or by making patients wait to be treated. Canada, Australia, and some newly industrialized countries; e.g. Taiwan and South Korea have adopted variations of the NHI Model.
4. The Out-of-Pocket Model: Perhaps forty of the world’s 200 countries have any established health care payment systems. Most of the nations on the planet are too poor and too disorganized to provide any kind of mass medical care. The basic rule in such countries is simple and brutal: The rich get medical care; the poor stay sick and die. In rural regions of Africa, India, China, and South America, hundreds of millions or people go their whole lives without ever seeing a doctor. A hallmark of these no-system countries is that most medical care is paid for by the patients, out of pocket, with no insurance or government plan to help.
MORE ON #1 - THE BISMARK MODEL:
France does a better job than almost any other country both in encouraging health and in treating those who get sick. France’s health care system is largely a system of private doctors treating patents who buy health insurance – from a government health plan with private insurers – to cover most of the costs. Patients generally have to pay a fee, or co-pay at the time of treatment. The French patient will later, have most or all of this copay reimbursed by the insurance fund. For the most part, French workers don’t have a choice of health insurance. Because the insurance plans are nonprofit entities, their main concern is not providing a return to investors but, rather, paying for people’s health care. French insurance plans routinely keep administrative costs below 5%. (Note: in the U.S. administrative costs are about 20%). As a general rule, the French do not have to wait in line to see a general practitioner or a specialist. There’s almost no limitation on a patient’s choice. Any patient can go to any doctor or specialist, and hospital or clinic, and the insurance system must pay the bill. The National Health Ministry essentially dictates what providers can charge for most types of treatment and what price will be paid for each prescription. Just as Aetna and United Health negotiate with doctors, hospitals and drug companies in the U.S., the French government does the same. The difference is that the French negotiations are completely transparent. That’s why you see a highly detailed list of authorized fees in the medical waiting rooms in France. French patients are informed up front, down to the last euro, how much they will pay for each medical procedure and what they will get back from insurance.
Germany: In 1883, Germany enacted the world’s first national health care system. It was a program of mandatory medical insurance, with premiums paid jointly by employers and workers. Today, this health care system guarantees medical care to just about all 82 million Germans. The quality of care is world-class; Germany stands at or near the top in all comparative health care studies. Because the supply of hospitals and doctors is ample, there’s no “queue” for treatment. And every German has a choice among some 200 different private insurance plans, which compete vigorously even though the prices for insurance are fixed. The insurance plans are private entities. The practitioners who make up the bulk of Germany’s medical profession are also private businesspeople. There is a growing business in private, for-profit hospital chains. The private insurance plans negotiate prices with the private medical clinics and the hospitals; these are private commercial agreements, with little government input. In many areas of medical practice, there’s less government control of medical care in Germany than in the U.S. But there’s one downside. Providing free choice of insurance and treatment, in a system with minimal waiting and a high standard of quality costs money. Germany has one of the world’s more expensive health care systems, consuming nearly 11% of the nation’s hefty GDP. That’s significantly higher than in more other European countries. Still, the German system is a bargain-basement operation compared to the United States, where we spend about 17% of GDP on a health care system that provides less choice and less coverage.
Japan: The Japanese system provides care to every resident of Japan, for minimal fees, with no waiting lists and excellent results. Despite universal coverage and prodigious consumption, Japan spends a lot less for health care than most of the developed nations: with costs running at about 8% of GDP, it spends about half as much as the U.S. The prices are low: the Japanese system has a rigid cost-control mechanism that favors the patient, at the expense of doctors and hospitals. It squeezes costs by sharply limiting the income of medical providers – doctors, nurses, hospitals, labs, drug markets. Health care in Japan is paid for through insurance plans generally, the patient has to pay 30% of the doctor bill as a co-pay and the insurance company picks up the remaining 70%. There’s a monthly limit on a patient’s payments, however; nobody has to pay more than $650 a month. The insurance plans must accept everyone who applies, regardless of preexisting conditions and they must pay every bill submitted by a physician or hospital. Everyone is Japan is required to sign up with a health insurance plan.
Switzerland: In the 1980s the big Swiss insurance firms started buying the old mutual health plans and converting them into profit-making businesses. By the early 1990s, Switzerland’s health care system was the closest in the world to the American model. Costs were high – Switzerland ranked secondly to the U.S. in per-capita spending on healthcare. Just as in America, the insurance companies refused to cover anybody with a preexisting condition, on the logical theory that covering sick people would cost more and eat into profits. The health insurance market began to undermine solidarity. Some Swiss people could afford to see a doctor when they were ill; others could not. By 1993 nearly 400,000 Swiss citizens had no health insurance – about 5% of the population. For the Swiss, leaving 5% of their fellow citizens outside the health care system was an unacceptable violation of the core national values: solidarity, community, equality. The Bismarck systems of neighboring France and Germany – relying on private but nonprofit health insurance plans was closer to the Swiss ideals. In 1993 they passed legislation that required insurance companies to offer a basic package of benefits to all applicants, and insurers could not make a profit on basic health coverage. Insurers were allowed to make a profit on supplemental coverage – that is, they could sell additional insurance to pay for cosmetic surgery, private rooms in the hospital and so on.
MORE ON #2: THE BEVERIDGE MODEL:
Britain: The British National Health Service (NHS) is dedicated to the proposition that nobody should ever have to pay a medical bill. In the NHS, there is no insurance premium to pay, no co-payment, no fee at all. The doctor’s bill is paid by the government, and the patient never even thinks about it. The Brits do pay for medical care, of course. They pay through a network of taxes that would make Americans cringe; the sales tax in the UK is 17.5% on anything you buy, while income and social security taxes are higher than America’s in every income bracket. The Brits pay by forgoing treatments and medications that the NHS won’t provide. They pay by waiting in lines for care in a system that is sometimes overstretched. The Beveridge Model of health care has been adopted, with variations, by nations around the world, democracies and dictatorships alike. A system in which government owns the hospitals, pays the doctors, buys the medicine, and covers all the bills would probably come pretty close to what American politicians have in mind when they deplore “socialize medicine.” The most notorious cost-control tool in Britain’s system is the dreaded “queue” – that is, the waiting list. Even when the gatekeeper agrees that you need to see a consultant, it can take weeks or months to get an appointment. The NHS also controls its budget by controlling the range of medications, tests, and procedures it will pay for. The decisions about what treatment will be available – decisions that are literally life-and-death choices for many patients – are public. Because the NHS budget covers everybody, the money saved on one patient can be used to treat another. Declining to operate on a sick grandmother means there is more money available to treat sick children. Accordingly, protests about denied coverage tend to be muted. In British law any doctor who can show that he was following the guidelines approved by the NHS for a particular treatment is immune from a malpractice claim. The result is that doctors in the UK spend much less for malpractice insurance than their peers in the U.S. and are less inclined to practice “defensive medicine” to avoid a lawsuit.
Source: The Healing of America by T. R. Reid.
After British and Canadians socialized their healthcare industries and imposed price ceilings on doctors’ salaries, there was a massive “brain drain,” as highly educated medical professionals migrated to countries like the U.S. where they could earn a better living. In Britain more than one million people are waiting to be admitted to hospitals at any one time. An investigation by a British newspaper found that delays in treatment for colon cancer patients were so long that 20% of the cases were incurable by the time they finally received “treatment.” The same was true of lung cancer patients; and 25% of British cardiac patients die waiting for treatment.
In Sweden, the government actually instructed doctors to “prioritize” patients according to their status as future taxpayers.
Source: The Problem with Socialism by Thomas J. DiLorenzo.
Sweden: On the ten-year anniversary of Sweden’s compulsory health insurance, U.S. News & World Report said, “… The present system is proving anything but, a clear-cut success. The average patient here finds his situation is worse rather than improved. It is more difficult for him to get a doctor. He must wait longer to get into a hospital. And he may be forced to leave the hospital before he is medically ready for discharge. The shortage of nurses is acute. Overburdened doctors must turn away thousands of patients annually – many of them old people who badly need medical care … these crippling shortages are the result of vast increased demands for medical services since the start of Medicare, Swedish authorities say. They point out that since 1950, the total number of practicing doctors has doubled, the number of nurses has nearly doubled. The number of hospital beds has increased by more than 25%. During the same span, population has gone up less than 1%. Yet shortages grow worse … Everyone, young and old, is demanding more medical services, now that it is free …”
MORE ON #3: NATIONAL HEALTH INSURANCE MODEL:
Canada: Today in Canada, the public health insurance system covers all medical and psychiatric care, in or out of the hospital. Canada has better health statistics overall than the U.S., a longer healthy life expectancy, and a lower rate of infant mortality. And it achieves all that for about half the cost per capita of the U.S. system. As it approaches its fiftieth birthday Canadian health care today is not particularly healthy; it is limping along like a poor boy with a broken knee. In 2007, Canada spent about 10% of GCP on health care, far below the U.S. rate. With that level of spending, it can’t keep up with the rapidly rising cost of medicine. The result is a health care system that is “under-doctored” as the Canadians put it. Since the system is in a constant state of scrimping and saving, medicine is a less desirable profession in Canada that it once was; fewer Canadian college students want to become nurses of physicians. If your medical problem is not urgent enough to require immediate treatment, Canada will almost always keep you waiting.
Source: The Healing of America by T. R. Reid
If one conducts an Internet search of “hospital shortages in Canada,” one discovers that the Canadian government is constantly issuing warnings to the public about nursing shortages, drug shortages, hospital bed shortages, medicine shortages and doctor shortages.
Source: The Problem with Socialism by Thomas J. DiLorenzo
MORE ON #4: OUT OF POCKET MODEL: In much of the underdeveloped world, the “health care system” is brutally simple: The rich, the military, and sometimes other government employees get medical care: everybody else stays sick or dies. In countries where almost all resources are needed to provide food, water, and shelter, medical care is a luxury, and a scarce one at that. Because most people can’t get treatment or medication, there are millions of deaths each year in Africa, south Asia, and Latin America from diseases that have disappeared in the developed world: polio, malaria, leprosy, etc. Since the out-of-pocket countries have fewer trained doctors than the richer nations, they tend to rely far more on traditional medicine and methods. For a couple of billion people in the developing world, a village healer may be the only “doctor” they’ll ever see. In some African countries, 80% of all medical care is provided by traditional healers.
THE UNITED STATES: We are like no other country, because the United States maintains so many separate systems for separate classes of people, and because it relies so heavily on for-profit insurance plans to pay the bills. All the other countries have settled on one model for everybody, on the theory that this is simpler, cheaper, and fairer. With its fragmented array of providers and payers and overlapping systems, the U.S. health care system doesn’t fit into any of the recognized models. We have elements of all four models in our convoluted national health care apparatus. For example:
- For most working people under 65, we’re Germany or Japan – a standard Bismarck Model where the worker and the employer share the premiums for a health insurance policy.
- For Native Americans, military personnel, and veterans, we’re Britain. Following the Beveridge Model, Americans in these systems never get a medical bill.
- For those over 65, we’re Canada. U.S. Medicare is essentially a National Health Insurance scheme, with the near-universal participation and the low administrative costs that characterize such systems.
- For the 45 million Americans, we’re Cambodia. These people have access to medical care if they can pay the bill out of pocket at the time of treatment (pre-Obamacare – the uninsured have dropped to 28.1 million or 8.8% since).
The health care reform bill that Congress passed in 2010 (Obamacare) made significant changes in the existing U.S. health care system. But the law does nothing to simplify the “crazy quilt” structure of different systems for different populations groups; if anything, American health care will be even more complicated and difficult to navigate when “Obamacare” takes full effect. To put it simply, the U.S. does well when it comes to providing medical care; but has a rotten system for financing that care.
Source: The Healing of America by T. R. Reid
The most fundamental fact at issue in the health care debate – the datum most cited by supporters of healthcare nationalization – is that the United States spends about 15% of GDP on healthcare, while other countries such as Canada and Germany spend about 10%. We spend one and a half times more per person on healthcare that any other country, but we aren’t any healthier for it.
Source: The Politically Incorrect Guide to Socialism by Kevin D. Williamson.
The unabbreviated version of the above can be found in the pdf document below.
| 8_soc_healthcare.pdf |
| 8_soc_u.s._insurance_stats.pdf |