Few politicians in their battle to lay claim to a fix for the U.S. healthcare-coverage crisis have been willing to seriously consider the financial and regulatory tactics used by other countries to achieve universal healthcare.
Why over there isnt over here
Experts say U.S. can look to foreign healthcare systems to adopt best practices
The potential for higher taxes and longer waits to access specialty care and elective surgeries are among the reasons many policymakers cite for their rejection of mandated healthcare coverage. Former Republican presidential candidate Rudy Giuliani wrote in his Modern Healthcare candidate commentary (Nov. 26, 2007, p. 16), for example, that systems such as those found in Canada, Cuba and Europe, which mandate healthcare coverage for every citizen, set prices, suppress medical innovation and restrict access to care. Recently, however, a growing number of healthcare policy experts have suggested lawmakers might do well to look toward foreign systems for examples of how the U.S. can effectively implement universal healthcare coverage and improve the overall quality of care.
Last October, the Commonwealth Funds 2007 International Health Policy Survey compared the American system of payment and delivery of healthcare services with six other countriesAustralia, Canada, Germany, the Netherlands, New Zealand and the U.K. The report highlighted a number of substantial cost and care disparities between the U.S. and its counterparts, which all provide universal healthcare coverage. Researchers found, for example, that in 2007 the U.S. spent $6,697 per capita on healthcare services, which was more than double the per-capita expenditures of the reports six other surveyed countries. Canada, which spent $3,326 per capita, was the next highest-spending country.
Ironically, despite higher spending in the U.S., health indicators for Americans were worse than they were for citizens in the six other countries. The report found, for example, that expense had prevented 23% of Americans from filling a prescription within the past year. Australia, with 13% of residents forgoing drug therapy because of costs, was the next closest country. Some 25% of Americans needed medical attention but couldnt afford to visit a doctor within the past year compared with just 1% of citizens in the Netherlands. At 20%, the U.S. tied Australia for the highest percentage of citizens saying theyd experienced medical error while in the care of a physician, laboratory or hospital.
In terms of what we learned (from the comparisons), its that (the U.S.) spends more on healthcare and has worse outcomes, says Karen Davis, president of the Commonwealth Fund, a New York-based foundation that promotes development of high-performing healthcare systems. Davis adds that no matter the approach, countries with universal healthcare have been more successful than the U.S. in providing accessible primary care and reducing treatment errors through the use of shared medical-record systems. I think the issue here is not adopting someone elses system; its looking at best practices all over the world and taking from those systems, she says.
Davis assessment was echoed in a position paper put out by the American College of Physicians and published in January in the Annals of Internal Medicine. Authors of the paper considered data from the Commonwealth Funds report along with the most recent information available from the Organization for Economic Co-operation and Developments annual international-benchmarking project, which compiles and compares healthcare-system and patient-outcome information from 30 countries.
What we found is there is no one best system of healthcare, says Jack Ginsburg, director of health policy analysis and research at the American College of Physicians and an author of the paper. There are pieces of both the single-payer and pluralistic-payer system that we should consider.
While method of payment is just one of many controversies driving the debate over universal healthcare, no exploration of a potential system can begin without a discussion of how to finance it, acknowledges Kathleen Stoll, director of health policy at Families USA, a Washington-based healthcare-access advocacy group. Stoll says that while many politicians and lobbyists seem stuck in a debate over the desirability of a single-payer system, there are other successful financial examples to cull from.
The European countries systems are actually all very different, and theyre not all single-payer models, Stoll says.
It isnt just European countries, however, that have employed diverse methods for financing universal healthcare. In addition to the U.K., Canada, Japan and Taiwan also have opted for single-payer systems. Australia joins Belgium, Denmark, France, Germany, the Netherlands and Switzerland on a list of countries that have adopted a multipayer approach to funding universal healthcare.
Under single-payer models, taxpayers and employers pay into a national healthcare fund, and money from that fund is used to pay for every citizens primary care, hospitalization and, in most cases, prescriptions. The fund compensates medical providers and hospitals and pays for medical technology, including, typically, a shared electronic health-record database. Coverage may or may not require patient copayments.
Pluralistic or multipayer models use a mixture of private and public funds to create a system that guarantees coverage to all citizens. Employers have the option to provide free or subsidized coverage for their workers or pay into a government healthcare fund that will provide free or subsidized coverage. Tax dollars are also used to create or subsidize insurance plans for workers who are not covered by their employers. Those workers as well as self-employed citizens can select and buy into affordable plans, while low-income or unemployed residents receive subsidized or free coverage similar to the way Medicaid operates in the U.S.
Healthcare policy analysts interviewed by Modern Healthcare mostly agreed that a single-payer system would be a more challenging approach to universal healthcare in the U.S. given the entrenched nature of for-profit insurance companies and the existence of a well-established and complex multipayer system. Whats more, the U.S. population is more than 4.5 times the size of Germany, the next most-populated nation examined in the Commonwealth Funds report, so system size alone will have a great bearing on the effectiveness of a financing approach. But experts say there are lessons to be gleaned about price controls, care coordination and quality-improvement mechanism from each approach.
Regardless of whether they use public or private funds, (these countries) have gone much further than the U.S. in integrating their systems, both in terms of care and coordination of billing, Stoll says.
Paul Ginsburg, president of the Center for Studying Health System Change, agrees. He says both single-payer and multipayer systems use price-control mechanisms to stabilize insurance-provider premiums and coordinated systems of provider reimbursement to reduce actual healthcare costs. He notes that Germany, for example, has created a risk-adjustment pool that pays subsidies to health-insurance providers with a high percentage of sickly or elderly members. The payments offset any profit losses that may result from more expensive and frequent claims that a particular provider may face.
I believe in order for universal healthcare to succeed here, well have to have a similar insurance exchange, Ginsburg says.
Shifting spending toward primary-care access and away from safety net hospital services is one way countries with universal healthcare have been able to contain treatment costs, explains the ACPs Jack Ginsburg. In the U.S. for example, 30% of healthcare spending goes to cover hospital care, while just 21% goes for physician and clinical services, according to the CMS. While no comparative percentages were available for other countries, the Commonwealth Fund report suggests that greater access to primary carewhich is less costly than hospitalizationis one reason countries with universal healthcare are able to spend less per capita on patient care.
The study found that just 80% of Americans said they had primary-care physicians compared with 84% to 100% of residents in the six other countries. Whats more, only Canada, at 16%, outpaced the U.S., at 15%, for the percentage of citizens who had in the past two years visited an emergency room for a condition that could have been treated by a primary-care physician.
Jack Ginsburg says a dearth of primary-care physicians in the U.S. is one of the barriers to care even for well-insured patients. Under our system, primary-care physicians are reimbursed so poorly that few doctors are interested in the field. Ginsburg says that in countries such as Francewhere the 2005 per-capita spending was $3,374 compared with $6,401 in the U.S., according to an Organization for Economic Co-operation and Development reportthe government pays to educate primary-care physicians and patients have to get referrals from their primary-care doctors in order to visit specialists. In Denmark primary-care doctors receive fee-for-service payments from government healthcare funds, and they also receive monthly stipends for coordinating specialist and prescription care for their patients.
While many foreign healthcare system models offer promising solutions to the U.S. efforts toward universal coverage, none are without significant flaws, healthcare policy experts say.
Lynn Etheredge, a consultant with the Health Insurance Reform Project at George Washington University, says that some countries, in an effort to keep costs down, are slow to incorporate new medical technology into their patient-care protocols. They have tighter controls on their adoption, he says. Also, since much of the financial emphasis is on preventive care, hospital and specialist staffing can be insufficient in some countries. As a result, wait times at hospitals, particularly for elective-surgery admissions, can be significant. Fourteen percent of patients in Canada and 15% of patients in the U.K. reported waiting up to six months for elective surgery, compared with just 4% who reported that long of a wait in the U.S., the Commonwealth Fund report found.
Higher taxes are another challenge of paying for universal healthcare systems, but policy researchers say that those costs are typically offset by fewer out-of-pocket medical expenses and lower insurance premiums.
Whats more, countries such as Switzerland and the Netherlands are debunking the belief that universal healthcare is synonymous with government-run hospitals and federally employed providers.
Both countries have established universal healthcare systems where 100% of citizens are covered by private insurance providers. Under the plans, citizens can choose between private and government-employed providers and hospitals. Government regulation of provider fees along with market incentives such as taxpayer-financed risk-adjustment payments made to insurers with a disproportionate number of sickly patients help to control costs and ensure fair competition among insurers, according to a story published earlier this month in AHIP Coverage, a publication of the trade association Americas Health Insurance Plans.
Switzerland and the Netherlands were able to achieve their private universal health coverage plans using slightly different approaches. In the Netherlands employers are required to pay half the costs of their employees monthly health insurance premiums while individuals pick up the remaining 50%. Tax credits are provided to help citizens finance the premiums, and low-income residents are provided subsidies to help cover the costs.
The Dutch can choose between a range of plans offered by for-profit and not-for-profit providers, and they can choose from plans that provide a range of deductibles and service coverage. Freedom to switch plans annually helps generate competitive pricing and services among insurers, according to government officials. The Swiss have embraced a similar approach to universal health insurance with all coverage coming from privately owned health insurers. Under Switzerlands program, however, employers do not contribute to the premium payments. Instead, individuals, with assistance from tax and pension-fund subsidies, pay the monthly premiums. Low-income residents are provided additional subsidies.
I think the opposition (to many foreign system examples) is fear, says Maureen Bisognano, executive vice president and chief operating officer of the Institute for Healthcare Improvement, a not-for-profit agency based in Cambridge, Mass. The average person cant see how we keep the system we have and pay to cover the other 45 million who are uninsured. I think its about shifting resources.
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