Whenever talk turns to the need for health-care reform, one of the things often mentioned is how the United States compares to other industrialized nations.
It is no secret that the American health delivery system provides the world's most expensive health care. And it is true that in some cases, the high costs enable a system of extraordinary achievement. But in terms of equity and in some measures of health status, the United States compares unfavorably with other developed countries. The United States is a leader in the advancement of medical science, yet the American system is hampered by administrative inefficiencies, wasteful medical practices, litigation and some unhealthful social and environmental conditions, notes a report prepared by the Massachusetts Business Roundtable, a task force of business leaders.Growing concern over our nation's ability to compete in a global economy adds to the feeling that our health-care spending should be more in line with other industrialized nations.
As we debate our health-care future, it might be interesting to see what these other countries do. The Roundtable report provides a look at health care in Canada, Germany and Japan, three of the United State's leading trading partners.
CANADA
Structure: Provincial and territorial governments set policies and fees for health services and have regulatory responsibility within their jurisdiction. The federal government sets overall policy.
All citizens have identical coverage for all medically required services. Coverage for prescription drugs and for long-term care differs among provinces. There are no deductibles or copayments. Private insurance is prohibited except for items not covered by the public plan. Coverage is portable, and patients have free choice of physicians and hospitals.
Financing: Some Americans commonly believe that all Canadians receive "free" health care, but the Canadian system is actually financed by income corporate and payroll taxes. Annual budgets are negotiated between provincial governments and individual hospitals. Provider fees and rules of payment are negotiated periodically between medical associations and the health ministries.
Advantages: Universal coverage; simplified administration; coordinated planning; and because businesses are not involved, health care is not a source of labor-management conflict.
Disadvantages: Growing costs (Canada is second only to the United States in health spending. Although citizens don't pay out-of-pocket expenses, taxes are from 15 percent to 20 percent higher than in the United States); difficulty with setting budgets; limited services (cost controls have resulted in waiting lists for non-emergency surgery); lack of innovation; lack of cost consciousness.
GERMANY:
Structure: Most health insurance is available through about 1,340 "sickness funds" that fall into three categories: trade-related, corporate-based and self-employed white-collar. Citizens do not have choice among the funds, although affluent Germans have an option of private indemnity insurance. The national government establishes overall health policy and spending targets.
Financing: Sickness-fund premiums are financed primarily through payroll and pension taxes. A conference of providers, payers and consumers sets national health-care spending targets.
Advantages: Universal coverage; freedom to select doctors and easy access to quality outpatient care; cost containment; coordinated planning.
Disadvantages: Inequity in financing and provision of care (those rich enough to buy supplemental insurance get special treatment; there is also wide disparity in payroll taxes); lack of cost consciousness; separation of hospital and outpatient care; over-utilization; high pharmaceutical prices.
JAPAN:
Structure: Health insurance is available to all Japanese citizens through health-insurance societies, government-managed insurance, mutual-aid societies and national health insurance. Insurance is comprehensive, covering almost all inpatient and outpatient care. Patients are free to choose their primary-care physician and hospital.
Financing: Insurance plans are primarily financed through payroll taxes at the rate of approximately 8 percent of income. The employer's share of this tax is typically about 4.5 percent. Japanese citizens are required to pay at least 10 percent of the costs of each medical service.
Advantages: Health coverage is universal, and individual premiums are based on ability to pay; cost containment (of the major OECD countries only the United Kingdom spends less than Japan); health status (Japan has the highest life expectancy and the lowest infant mortality rate); no labor-management tension over health care.
Disadvantages: Japanese patients have long complained of impersonal and patronizing treatment by doctors; over-utilization; lengthy hospital stays; over-capacity and redundancy of services; high corporate tax burden.
Another interesting measure of health care is how satisfied citizens are with it. According to the Roundtable report, almost 90 percent of Americans with health insurance have positive feeling about the care they and their families receive. Nevertheless, American disaffection with the overall system outpaces dissatisfaction in other nations by a margin of almost two-to-one. Canadians appear to be the most satisfied; 56 percent claim that only minor changes in the system are needed; and 94 percent respond positively when evaluating the services they personally receive. Japanese citizens are highly critical of their national system of health care; over half support fundamental change and almost a third claim to be dissatisfied with individual experiences.
The system our country eventually comes up with is likely to be different from that in any other country. Profound cultural, political and demographic differences make it difficult to superimpose another country's system onto the United States, notes the report.
Most proposals for reform in the United States start with our country's system and build from there. But looking at these other approaches could inspire Americans to consider additional innovative approaches, and at the least, generate some interesting discussion.
(Additional information)
CHART: Facts about health care
A few facts and figures complied by Consumers Union that show why health care has become a prime issue in this country:
-Some 35 million Americans have no health insurance.
-An additional 60 million people are underinsured.
-Each year 1 million families try to obtain care when they are sick but find they cannot afford it.
-The U.S. spends 14 percent of its GNP on health care - no other industrialized country spends more than 10 percent.
-Of the 24 industrialized form the Organization for Economic Cooperation and Development, the U.S. ranks 21st in infant mortality, 17th in male life expectancy, and 16th in female life expectancy.
-A study of 386 heart bypass operations found 14 percent to be unnecessary.
-In 1990, hospitals took in 38 percent of national health expenditures (twice as much as doctors) and collectively earned a profit of $7 billion.
CHART: What Doctors earn in various countries:
United States: Doctors earn 5.4 times more than the average worker.
United Kingdom: Doctors earns 2.4 times more than the average worker.
Japan: Doctors earns 2.4 times more than the average worker.
Canada: Doctors earns 3.7 times more than the average worker.
Germany: Doctors earns 4.2 times more than the average worker.
France: Doctors earns 2.4 times more than the average worker.
CHART: President Clinton's health care plan
While we are still awaiting final details and proposals from the Clinton administration, here are the basic elements of his plan.
Basic features:
-System of "Managed competition" where private insurers and providers compete with restructured health insurance market.
-National Health Board establishes basic benefit package and national limits on health spending.
-Employers required to offer at least basic benefit package.
-Those not covered through employer obtain insurance through publicly sponsored program.
-Increased incentives for managed care through "local health networks."
-Small group reforms: prohibition of medical underwriting; guaranteed issue; and community rating.
-Other cost control measures: standardized, automated claims processing; limits of pharmaceutical costs; and medical malpractice reform.
Unanswered question:
-Will the government be able to ensure universal access without raising new taxes?
-What will be the economic impact of an employer mandate?
-How will spending limits and global budgets be implemented?
-Will global budgets result in rationing?
-What changes are required in the Medicare and Medicaid programs?