How the US Healthcare System Compares to Other Large Democracies

Comparison of Large Democracy Health Systems

Continuing the informed conversation on health systems from the previous post[1], this table shows how the US compares to several large democracies with national healthcare systems which include private insurance and clinics.

Criteria	France	Germany	Australia	USA
National mandate for healthcare access and insurance protection	Insurance is provided to up to 99% of residents; hospitals are owned by the government; clinics can be public or private; health insurance is required, through three government run companies; workers pay up to 8% of income and employers pay 13% as a wage tax	Insurance is mandated for all and residents pay up to 8% of gross income into the nonprofit state-run insurance program;employers and employees contribute to a comprehensive health, long term care, and accident protection program; insurance may be either public or private; group healthcare was standardized here in 1883	Has a national healthcare system called Social Security, which provides hospital coverage, but not  all of outpatient care; financed by 1.5% tax on gross income (2.5% if you lack private supplemental insurance)	Hodge podge system, VA and private insurance varies widely by region; medical insurance was mandated under the PPACA but was reversed by Trump; Medicare is paid by a 1.45% payroll tax on workers and employers; lack of hospital price transparency
Public versus private care hospital overview	62% are Public 24% are private nonprofit and 12% are for-profit hospitals	50% are Public hospitals and the rest are a mix of nonprofit and for profit	66% are public hospitals, 33% private; public hospital care is free to residents	20.% government owned hospitals, 58.5% are nonprofit and 21.3% are for profit
Specialty care is readily available	Yes, doctors even make house calls	Yes	Yes, in western Australia, less so elsewhere	Yes, if you have the money to pay
Hospital bill per discharge	$11,149	$6,122	$10,874	$21,186
Private insurance is available	Yes	Yes	Yes	Yes, and is a must if you want care
Cost of healthcare per capita	$4,600	$5,551	$4,708	$9,892
Cost of care born by government	86%	85%	69%	51%
Average cost of health care paid by residents per month	10€ or $11, very small co-payments; referrals may be required for specialists in order to get max benefits	Germany limits cost-sharing to a 2% max of income, which is a little over $100 per month; All Germans contribute to the healthplan, roughly 400€ or $500	$167/person is the average cost for private insurance/person; co-payments are limited to $25	CMS estimates Americans spend $267 in out of pocket expenses and over $500 for insurance premiums
Per capita spend for insurance administration	$272	$255	$123	$787

Conclusions

The American people pay a much higher percentage of total health system costs than residents in the other democracies. And residents of the US are not getting better quality care for that huge disparity. Considering the average cost for unreimbursed care and the typical insurance contribution born by an American worker, totals $9,200 per year, this money could be invested for a healthy retirement savings or to purchase a home. Voters of millennial-age are realizing this rip-off, which is why they support transformation in the government through Bernie Sanders and Elizabeth Warren. It has taken a few decades but the majority of Americans are finally realizing the current system of healthcare in the US is failing them.

And this is the healthpolicymaven signing off, encouraging you NOT to sign blanket releases when you have inpatient procedures done, do indicate that for which you consent and that for which you decline. If you are intimidated by medical jargon and administration procedures, bring an advocate.

References

Institute for Quality and Efficiency in Health Care. (2018). Health Care in Germany; The German Health Care System. NCBI, NLM,National Institutes of Health.gov. Informed Healthcare.org. Retrieved September 30, 2019, from https://www.ncbi.nlm.nih.gov/books/NBK298834/

Petersen-Kaiser Health System Tracker. (2019, September 30). Petersen-Kaiser Health System Tracker. Retrieved from Henry J. Kaiser Foundation.org: https://www.healthsystemtracker.org/indicator/access-affordability/percent-insured/

The Commonwealth Fund.org. (2019, September 30). International Health Care System Profiles. Retrieved from The Commonwealth Fund.org: https://international.commonwealthfund.org/countries/

Tikkanen, R. (2019, September 30). Multinational Comparison of Health Systems Data, 2017. Retrieved from Commonwealth Fund.org: https://www.commonwealthfund.org/sites/default/files/documents/___media_files_publications_chartbook_2017_multinational_comparisons_of_health_systems_data_2017_rtikkanen_pdf.pdf

Transferwise.com. (2019, September 30). Healthcare in France: A Guide to the French Healthcare System. Retrieved from Transferwise.com: https://transferwise.com/us/blog/healthcare-system-in-france

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[1] https://healthpolicymaven.blogspot.com/2019/09/debunking-myths-about-national.html

Debunking the Myths About National Healthcare

An analysis of the Myths of National Healthcare Constipating Real Reforms

Myth #1 A government run healthcare program eliminates your private insurance

 No, this is incorrect and a good example of a government run healthcare program is Medicare, which has been around for over 50 years. Medicare is made up of several parts; Part A which is for inpatient coverage, Part B, which requires a monthly premium provides outpatient coverage, Part C, which is the Medicare Advantage Plan-a somewhat integrated health plan, and Part D, the prescription drug coverage added by President George W Bush. This was back in the day when Republicans wanted to provide benefits for people rather than take them away. Private insurance companies’ partner with Medicare to lower cost-sharing for seniors, improve drug coverage, and increase access to specialty care, and these are known as Medicare supplements. Though this may seem a convoluted way to get the various components of healthcare met, it does work. Medicare also is very effective for several reasons.

1.  All seniors, persons age 65 and up are covered on Medicare, which is also a group that private insurance companies are glad to have the government insure. This is a demographic group that is highly likely to need healthcare services and whose access to healthcare would not be possible without government healthcare.

Myth #2 A government run health plan will cost too much

This assertion is also incorrect as every country with a national government run health system spends far less than the United States and boast better results in many clinical areas. For example, according to the Petersen/Kaiser Health System Tracker in 2016 the US spent $10,238 on average per person for healthcare. (Petersen/Kaiser Health System Tracker, 2019) But as we know, many people went without healthcare at all, so this figure, although higher than other industrialized countries by 50% represents the skewing of healthcare services to a much small percentage of the national population. France spent $4,600 per person and everyone has had access to an integrated health system for decades. Japan spent $4,519. The average spent by industrialized countries was $5,198, less than half of what the US spends. Further, an integrated national health system will be less expensive to administer and a good example of that is Medicare and here are some reasons why:

1.  Medicare administration expenses are 6% of total plan expenses as opposed to 12-18% for private sector plans, which means it is less expensive. 
2. Medicare requires Medicare Advantage plans, which are supplemental insurance, to spend at least 80 to 85% of the premiums collected on actual medical claims, which mutes excess profiteering. And CMS requires them to issue customer rebates if they do not meet those loss ratios for benefits paid out. This is similar to the standards private sector insurance must adhere to in Europe. 
3. Medicare already determines what services are approved for reimbursement, which all private sector insurance plans adopt, so it would be efficacious for it to set national standards.

Myth #3 You won’t be able to see your private doctor

This assumption is also incorrect as other countries with government run health systems do have private clinics and private doctors which their citizens enjoy. In fact, the United Kingdom Health System which is a totally government run health system is not the norm. Other countries with national health systems, like France the Netherlands, or Australia use a combination of public and private programs to provide healthcare. The difference is, a much smaller segment is provided by private insurance companies. Of course, the behemoth insurance industry in the US is not going to be in favor of a smaller market share. However, this does NOT mean this position is better for you, the consumer or the patient and I state this as a former insurance broker.

Myth #4 Most Americans have Access to Health Insurance Through Employer Provided Plans

Again, this assertion is false as only half of US employers provide medical plans to their workers. (Kaiser Health Facts, 2019) And of that number, employers are increasingly forcing more of the costs of medical care onto their employees through higher premiums, higher co-payments, and reductions in benefits. Ergo, people already realize they are paying for the cost of their healthcare, and paying more than anyone else in any other nation, but we need to move toward the discussion of value. The question needs to be, is that $1,000 monthly insurance premium and that $5,000 co-payment for surgery less expensive than a national healthcare plan and that answer is profoundly no. No one in any country with a national health system is expected to pay a $5,000 co-payment for medically necessary surgery. In fact, the joint replacement surgery to which I refer could be done for that co-payment price in many European countries. Americans need to start discussing value-what are you getting for that extremely high cost of care.

Further, the Republicans promote the idea that worthwhile residents have health insurance and the others must be lacking in some social value and this is not in keeping with current employment practices. The gig economy includes highly specialized and educated workers from throughout the globe and they work without benefits. It is not only farm workers who lack healthcare, but a huge swath of the workforce. An excellent reference for the impacts of this work force change is Mary Gray and Siddharth Suri’s Ghost Work-How to Stop Silicon Valley from Building a New Global Underclass. (Suri, 2019)

 A Better Approach

A better approach to improving US healthcare needs to consider who is paying for services, not just how much they are paying, because more and more the middle-class workers are being gouged for the cost of their healthcare. This needs to stop and the solution is to reform the US health system into a saner, less expensive, inclusive one, that is used by all other industrialized countries in the world (national healthcare). Some things to consider in streamlining the US healthcare system include things that Medicare is already doing with a national impact:

1.  The Centers for Medicare and Medicaid (CMS) are part of Health and Human Services Agency and are the main fraud detection arm to prevent criminal activity in the healthcare system. It is in the best interest of all patients and tax payers to have an independent government agency monitor and enforce anti-fraud efforts and prevent the use of unapproved medical devices and products in the healthcare system.
2.  Medicare is best suited to bargain with private sector entities for pricing of products and with the largest customer base, also in the best position to get lower prices than anywhere else. Private sector companies exist to make money, which means you pay more. If CMS through Health and Human Services has the power to bargain with pharmaceutical companies, you will see an immediate drop in the cost of your prescription medications. Why should Americans continue to pay more for medications that are sold to patients in Europe, with socialized health systems for significantly less?
3.  Medicare already uses medical evidence to inform changes in approved treatments and these are piloted through demonstration projects. Medicare with its huge patient population can provide excellent data for future health system improvements. An example of this was the move to spend Medicare money to keep seniors in their homes because it was proven to reduce hospitalization costs and improve patient health.

 A national health system for all will eliminate some of the conflicts of health system profit making procedures versus lower cost more efficacious health treatments that are less lucrative. The current health system relies on up-selling of medical imaging, laboratory, and elective surgeries to generate margins and produce financial results. Healthcare should be focused on helping people live quality lives, not producing profits. And the health of a nation needs to be devoted to population health measures, methods, and outcomes, not designed to benefit a few winners of the healthcare lottery.

And this is the healthpolicymaven signing off encouraging you not to sign blanket releases for medical procedures which require hospitalization, do specify that for which you agree and that which you decline. And try to bring a healthcare advocate with if you are mystified by medical terminology.

Roberta Winter is an independent health policy analyst, patient advocate, and author of https://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972

References

Kaiser Health Facts. (2019, September 1). 2018 Employer Health Benefits Survey. Retrieved from Kaiser Family Foundation.org: https://www.kff.org/report-section/2018-employer-health-benefits-survey-summary-of-findings/

Petersen/Kaiser Health System Tracker. (2019, September 1). How Do Healthcare Price and Use in the US Compare to Other Countries. Retrieved from Health System Tracker.corg: https://www.healthsystemtracker.org/chart-collection/how-do-healthcare-prices-and-use-in-the-u-s-compare-to-other-countries/

Suri, M. L. (2019, September 1). Review of Ghosst Work. Retrieved from New York Journal of Books: https://www.nyjournalofbooks.com/book-review/ghost-work