European Socialized Medicine
by Denise Early on Feb. 28, 2010, under HealthHere is some interesting reading about the myth of “socialized medicine” which those awful European governments impose on their people.
By Trudy Rubin
Philadelphia Inquirer Opinion Columnist
One of the most bewildering aspects of the current health-care debate is the failure to learn key lessons from health systems abroad.
Conservative talk show hosts decry the alleged evils of “socialized medicine” in countries with universal health coverage; they warn grimly of rationed health care. Yet there’s nary a peep from Rush Limbaugh or Glenn Beck – let alone Congress – about countries such as Germany, France, Switzerland, or Japan, where coverage is universal, affordable, and top quality, and patients see private doctors with little or no waiting.
And, oh yes, their health costs are a fraction of our bloated numbers: The French spend 10 percent of GDP on health care, the Germans 11 percent, and they cover every citizen. We spend a whopping 17 percent and leave tens of millions of Americans uninsured.
If you want a very readable short course how European systems really work – as opposed to the Fox News version – take a look at The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, by T.R. Reid, a former Washington Post foreign correspondent. You might also watch a fascinating 2008 Frontline series, available online, in which Reid was an adviser: Sick Around the World: Can the U.S. Learn Anything From the Rest of the World About How to Run a Health Care System?
So far, the answer seems to be “No,” not because there aren’t valuable lessons, but because politicians won’t relinquish their myths about European health systems. Reid takes up that task.
Myth No. 1, he says, is that foreign systems with universal coverage are all “socialized medicine.” In countries such as France, Germany, Switzerland, and Japan, the coverage is universal while doctors and insurers are private. Individuals get their insurance through their workplace, sharing the premium with their employer as we do – and the government picks up the premium if they lose their job.
Myth No. 2 – long waits and rationed care – is another whopper. “In many developed countries,” Reid writes, “people have quicker access to care and more choice than Americans do.” In France, Germany, and Japan, you can pick any provider or hospital in the country. Care is speedy and high quality, and no one is turned down.
Myth No. 3 really grabs my attention: the delusion that countries with universal care “are wasteful systems run by bloated bureaucracies.” In fact, the opposite is true.
America’s for-profit health insurance companies have the highest administrative costs of any developed country. Twenty percent or more of every premium dollar goes to nonmedical costs: paperwork, marketing, profits, etc. “If a profit is to be made, you need an army of underwriters to deny claims and turn down sick people,” says Reid.
In developed countries with universal coverage, such as France and Germany, the administrative costs average about 5 percent.
That’s because every developed country but ours has decided health insurance should be a nonprofit operation. (We once thought that, too, until private insurance companies began buying up nonprofit health insurers like Blue Cross and Blue Shield and converting them into profit-makers.) In France and Germany, health insurance is sold by private insurers, who can only charge fixed rates in the nonprofit health field, but can sell other forms of insurance for a profit.
These countries also hold down costs by making coverage mandatory and by using a unified set of rules and payment schedules for all hospitals and doctors. This does NOT mean a single-payer system or a government-run health system. But it does sharply cut health costs by eliminating the mishmash of records and charges used by our myriad insurance firms, who use all kinds of gimmicks to shift their costs.
A unified system makes it possible for France and Germany to use digital records; every insured person has a smart card that includes all his or her health information, further cutting the number of bureaucrats. U.S. companies oppose such efficiencies, Reid says, “because they spend money on proprietary systems and no one wants to get together on a common system.” Can we afford this stubbornness?
For those who think we could never make the switch to such systems, take note that Switzerland shifted from private health insurers to nonprofits in 1994. And it’s hard to see how we can cut costs without reining in our private health insurers.
None of these European plans have to be adopted wholesale. Yet there’s no sign we’re even examining them for useful lessons. Some U.S. senators on the Finance Committee bought Reid’s book, but have you heard anyone talk about European health systems? Of course not.
It’s easier to embrace our myths and pretend Americans know best about managing health care. But that’s the biggest myth of them all.
This opinion piece appeared in the February 28, 2010 Philadelphia Inquirer.
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