Author T.R. Reid studied world health care systems for his PBS documentary Sick Around the World.
In an excerpt from his upcoming book, he explains that there are four basic models of health care in use around the world, and how they compare to the US "system".
These four models should be fairly easy for Americans to understand because we have elements of all of them in our fragmented national health care apparatus. When it comes to treating veterans, we're Britain or Cuba. For Americans over the age of 65 on Medicare, we're Canada. For working Americans who get insurance on the job, we're Germany.
For the 15 percent of the population who have no health insurance, the United States is Cambodia or Burkina Faso or rural India...
The United States is unlike every other country because it maintains so many separate systems for separate classes of people. All the other countries have settled on one model for everybody. This is much simpler than the U.S. system; it's fairer and cheaper, too.
The Frontline documentary I referenced above is fascinating and illuminating (you can watch the full program online.) In my opinion it should be required viewing for everyone who wants to weigh in on the health care debate. (Luckily I'm not the only one who feels that way - more on that later!)
It turns out that the options are much more diverse and nuanced than simply the dysfunctional US system that we currently have versus the cliche of "socialized medicine" that we have heard about so often.
Here's how Reid summarizes the 4 basic health care models:
THE BEVERIDGE MODEL
Many, but not all, hospitals and clinics are owned by the government; some doctors are government employees, but there are also private doctors who collect their fees from the government. In Britain, you never get a doctor bill. These systems tend to have low costs per capita, because the government, as the sole payer, controls what doctors can do and what they can charge.
Countries using the Beveridge plan or variations on it include its birthplace Great Britain, Spain, most of Scandinavia and New Zealand.
THE BISMARCK MODEL
...this system of providing health care would look fairly familiar to Americans. It uses an insurance system -- the insurers are called "sickness funds" -- usually financed jointly by employers and employees through payroll deduction.
Unlike the U.S. insurance industry, though, Bismarck-type health insurance plans have to cover everybody, and they don't make a profit. Doctors and hospitals tend to be private in Bismarck countries...
The Bismarck model is found in Germany, of course, and France, Belgium, the Netherlands, Japan, Switzerland, and, to a degree, in Latin America.
THE NATIONAL HEALTH INSURANCE MODEL
...It uses private-sector providers, but payment comes from a government-run insurance program that every citizen pays into. Since there's no need for marketing, no financial motive to deny claims and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style for-profit insurance.
...National Health Insurance plans also control costs by limiting the medical services they will pay for, or by making patients wait to be treated.
The classic NHI system is found in Canada, but some newly industrialized countries -- Taiwan and South Korea, for example -- have also adopted the NHI model.
THE OUT-OF-POCKET MODEL
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 that the rich get medical care; the poor stay sick or die.
In rural regions of Africa, India, China and South America, hundreds of millions of people go their whole lives without ever seeing a doctor. They may have access, though, to a village healer using home-brewed remedies that may or not be effective against disease.
Reid also gives some examples of 5 capitalist democracies and how they do it. Below I quote the highlights - you can read the whole article for more details.
NOTE: For comparison purposes, current estimates put U.S. health care spending at approximately 15.2% of GDP.
UNITED KINGDOM
Percentage of Gross Domestic Product (GDP) spent on health care: 8.3
Average family premium: None; funded by taxation.
Co-payments: None for most services; some co-pays for dental care, eyeglasses and 5 percent of prescriptions. Young people and the elderly are exempt from all drug co-pays.
What is it? The British system is "socialized medicine" because the government both provides and pays for health care.
JAPAN
Percentage of GDP spent on health care: 8
Average family premium: $280 per month, with employers paying more than half.
Co-payments: 30 percent of the cost of a procedure, but the total amount paid in a month is capped according to income.
What is it? Japan uses a "social insurance" system in which all citizens are required to have health insurance, either through their work or purchased from a nonprofit, community-based plan. Those who can't afford the premiums receive public assistance.
GERMANY
Percentage of GDP spent on health care: 10.7
Average family premium: $750 per month; premiums are pegged to patients' income.
Co-payments: 10 euros ($15) every three months; some patients, like pregnant women, are exempt.
What is it? Germany, like Japan, uses a social insurance model. In fact, Germany is the birthplace of social insurance, which dates back to Chancellor Otto von Bismarck. But unlike the Japanese, who get insurance from work or are assigned to a community fund, Germans are free to buy their insurance from one of more than 200 private, nonprofit "sickness funds." As in Japan, the poor receive public assistance to pay their premiums.
TAIWAN
Percentage GDP spent on health care: 6.3
Average family premium: $650 per year for a family for four.
Co-payments: 20 percent of the cost of drugs, up to $6.50; up to $7 for outpatient care; $1.80 for dental and traditional Chinese medicine. There are exemptions for major diseases, childbirth, preventive services, and for the poor, veterans, and children.
What is it? Taiwan adopted a "National Health Insurance" model in 1995 after studying other countries' systems. Like Japan and Germany, all citizens must have insurance, but there is only one, government-run insurer. Working people pay premiums split with their employers; others pay flat rates with government help; and some groups, like the poor and veterans, are fully subsidized. The resulting system is similar to Canada's -- and the U.S. Medicare program.
SWITZERLAND
Percentage of GDP spent on health care: 11.6
Average monthly family premium: $750, paid entirely by consumers; there are government subsidies for low-income citizens.
Co-payments: 10 percent of the cost of services, up to $420 per year.
What is it? The Swiss system is social insurance like in Japan and Germany, voted in by a national referendum in 1994. Switzerland didn't have far to go to achieve universal coverage; 95 percent of the population already had voluntary insurance when the law was passed. All citizens are required to have coverage; those not covered were automatically assigned to a company. The government provides assistance to those who can't afford the premiums.
As I said, this is fascinating stuff, and really should be common knowledge for everyone who wants to join the dialog about how to fix our broken US health care "system".
Now, here's he really encouraging part: Senate Finance Committee Chairman Max Baucus, who recently proposed a health care plan, is well acquainted with T.R. Reid's work.
As Baucus tells it, he was channel surfing(!) one night and happened to come across a showing of Reid's Frontline documentary. He liked it so much he invited Reid to come speak to the Senate Finance Committee last June. Reid also showed them an abbreviated version of the documentary. You can watch the session online here.
UPDATE: Something else I learned from Reid that is worth emphasizing: Many countries have changed their health care systems in only the last 10-15 years. We can learn not just from what they have now, but from how they got there.
For example, the Swiss created LAMal in 1994:
[LAMal is a law] requiring all citizens to buy health insurance -- with the state paying for the poor. In return, the new law guarantees a comprehensive package of medical care for all. At the time the law was passed, Switzerland's health care system resembled America's: Medical insurance was voluntary and generally linked to employment. Losing your job meant you could lose coverage -- and many did.
PBS has posted interviews with experts and leaders from the 5 example countries, many of which include discussion of their transtions into their current plans:
Great Britain: http://www.pbs.org/...
Japan: http://www.pbs.org/...
Germany: http://www.pbs.org/...
Switzerland: http://www.pbs.org/...
Taiwan: http://www.pbs.org/...