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Health check (Part 3): How the richest industrial countries compare to the U.S.

This article first appeared in the St. Louis Beacon, Oct. 11, 2009 - Historians often write about "American exceptionalism" -- the feeling among Americans that their country stands apart from all the rest.

But when it comes to health care, America stands under all the rest.

Among major industrialized countries, America spends the most on health care -- more than $7,000 a year for each of us, about double what the other countries lay out. Even so, America gets the sickest results -- the shortest life expectancy (78 years), the highest infant mortality rate (six for each 1,000 live births) and so on.

Study after study gives the U.S. system poor grades. In a global survey in 2000, the World Health Organization slotted the United States in 37th place -- just behind Bosnia. Seven years later, the Commonwealth Fund compared health care in six rich countries. The American system ranked dead last.

How do other rich countries handle health care? With lots of help from journalist T.R. Reid's newly published "The Healing of America," here's a look at health care in five other wealthy countries.

Three Big Umbrellas

Reid poked into health care in France, Germany, Britain, Japan and Canada. He found that all held to three health-care principles missing in America:

  • All use a single system with a single set of rules for everybody. In the United States, what a study panel said in the early 1930s holds true today: "What exists is not so much a system as a lack of a system." Today, health-care economist Henry Aaron of the Brookings Institution uses blunter words to describe the American way: "an administrative monstrosity, a truly bizarre melange of thousands of payers with payment systems that differ for no socially beneficial reason, as well as staggeringly complex public systems."
  • In the three foreign countries that have private health insurance, it's a nonprofit business. Only in America is health insurance expected to turn a profit.
  • In all of the foreign countries, coverage is universal -- that is, everybody has insurance. This coverage spreads the risk across a bigger pool. And Reid says it also leads the locals to accept some limits.

"If everybody is covered," he writes, "then everybody has an interest in seeing costs controlled; after all, if the system pays too much for my neighbor's Botox treatment, it may not have enough money to treat my broken shoulder."
Here, then, are the details on how those five countries do it.

France: Nous Sommes Numero Un

At first glance, the French system looks a lot like our own. Most of the doctors run private practices. They treat patients who buy insurance through employers to cover most of the cost. France has both private and public hospitals.

The differences? The French lack the freedom to choose their insurer. They're put into one of the country's tightly regulated plans according to where they live or what they do for work.

But none of the insurers can turn away anybody who's already sick. Nor can insurers drop anybody who loses or changes jobs. (In those cases, the government pays the employer's share of the tab.)

Unlike Americans in HMOs the French can go to any specialist or hospital without getting an OK from a "gatekeeper" primary-care doctor. In American HMOs, patients must use doctors in the HMO's network. In France, the whole country is one big network.

French insurance picks up about 70 percent of the bill -- and each doctor's office has posters stating just what the bill will be for every service. (Those prices are set by the government and are dramatically cheaper than American prices.) Most people in France buy cheap private policies to cover what their mandatory insurance doesn't.

Retirees keep their job-based coverage, with their share of the premium taken out of their pension checks.

Waiting times are roughly the same as in America, even though the average French citizen uses the system a lot more -- eight visits a year to the doctor, as opposed to five in the United States. (On the down side, all of those French visits drive up costs, and deficits.)

Even so, per-capita spending in France totals only $3,165 a year -- less than half the American figure.

By the way, the health-care study that ranked the United States 37th gave first place to the French.

Germany: The Originator

A national health-care system is an old, old story in Germany. Back in 1883, the Germans crafted the world's first such system. They made insurance mandatory, with premiums to private insurers split between employers and workers. The government used a heavy hand with rules and regulations.

By and large, things work the same way today.

Most doctors work for themselves, although most German hospitals are charity or municipal operations. Primary-care doctors serve as "gatekeepers" to the higher rungs of health care -- hospitals and specialists.

Germans can choose from among 200 or so nonprofit insurers. Although the insurers can't compete on price -- Germans pay a flat 15 percent of their income for their insurance -- the insurers compete on service and on extra benefits. (The very richest Germans can opt out of the system and buy private coverage from profit-making insurers.)

Like insurers in France, Germany's nonprofit insurers must accept all comers and must keep them even if they lose their job. German policies cover services that many Americans must pony up for -- opticians, say, and even health-club memberships.

In recent years, Germans have had to make a co-payment when they see a doctor. That's led to some grousing, even though at most, those co-payments run to $52 a year. The waiting time for care is minimal.

By European standards, the Germany system is pricey, eating up about 11 percent of the economy. (The American figure runs to about 17 percent.) To cover costs, the German system clamps rules on what treatments doctors can offer -- and squeezes them on how much money they can earn.

But Reid says that even so, Germans get first-class care at a reasonable cost. The Commonwealth Fund ranking of six rich countries puts Germany on top.

Britain: The Nanny Nation

Alone among the five nations looked at here, Britain has what Americans call "socialized medicine."

The British call it the National Health Service, or NHS. The government covers care for everybody, paying for it with tax revenue. Nobody ever sees a doctor's bill. Doctors who specialize or who work in hospitals work for the government.

But the majority of Britain's doctors -- 60 percent -- work for themselves. They're the primary-care doctors, and everybody in Britain has to register with one of them. These doctors play the "gatekeeper" role, deciding whether a patient may (or may not) see a specialist or check into a hospital.

The British government pays these primary-care doctors on a "capitation" basis. In other words, the doctor gets paid a flat fee each year for each patient, no matter how much treatment a patient may need.

The result: The primary-care doctors stress wellness and preventive medicine. The reasoning is simple: Although healthy patients show up only rarely at the doctor's office, they generate income for the doctor anyway.

(Contrast that with America, where most doctors get paid on a fee-for-service basis. For every service -- every office visit, every X-ray, every shot -- an American doctor gets a fee. More services mean more money in the doctor's pocket, even when the extra services are useless and wasteful.)

British patients pay about $10 for each drug prescription. But the fee is waived for children, the elderly, the chronically ill and pregnant women. Reid says about 85 percent of drugs in Britain get dispensed at no charge.

With so much health care available for so little out-of-pocket cash, Britons tend to use the system a lot. So the government has to use a heavy hand in controlling costs. Americans who oppose any sort of socialized medicine say that heavy hand in Britain results in long waits for health care -- and in the rationing of medical treatment.

In recent years, the government reacted to political heat over long waits by dumping cash into the system. Reid says that although things are better, cases that fall short of urgent -- a hernia repair, say, or varicose veins -- are put off from three to six months.

When the issue of rationing arises, the NHS replies: "We cover everyone, but we don't cover everything." The government decides (sometimes on a case-by-case basis) whether the potential outcome justifies the cost of a treatment.

Reid cites the case of a pub waitress with breast cancer. The government gave her surgery, chemotherapy and radiotherapy. But when she asked for a drug that cost $36,000 a year, the government said no.

Rationing like that keeps spending within the finite budget of the NHS. At any rate, Britons tell their American critics that the United States also rations health care -- through America's for-profit insurance companies.

Japan: Low Overhead

Like health care in France, the system in Japan looks at first glance a lot like the American way. Doctors and hospitals are private, not "socialized." Patients can choose their doctors and need not go through a "gatekeeper" to see a specialist.

But the differences add up quickly.

Insurance is universal and nonprofit. It's split into three groupings. Big employers offer policies paid for in part by workers. For small employers, the government kicks in a subsidy, with the business and its worker splitting the rest. Pensioners and the self-employed share costs with their city government.

Japanese patients co-pay about 30 percent of their medical bills. But when a month's bills reach $650, those co-payments stop.

The Japanese government dictates the price for treatment of ailments, with the same price applying everywhere in the country. Those prices run a lot lower than similar care in America. Reid says an MRI scan that costs an American $1,000 to $1,400 can be had in Japan for a flat fee of $105.

With bargains like that, Japan's aging population makes a lot of trips to the doctor's office -- on average, more than 14 a year, or almost triple the American rate. Even so, waiting times are all but nil -- a visit today, surgery tomorrow.

For all that, Japan holds health spending to about 8 percent of its economy, half the American rate. The down side: The government-set fees squeeze doctors and hospitals. Japanese hospitals tend to be drab and crowded, and Japanese doctors sigh at the income their American counterparts take home.

Still, the Japanese people live on average for 83 years (five years longer than Americans) and have an infant mortality rate of only three for each 1,000 live births -- half the American rate.

And for this, they spend about $3,400 a person a year -- less than half the bill in America.

Canada: Pride And Problems

In a way, Canada is a health-care halfway house.

Like Britain, Canada pays the bills for medical care (but through its 10 provinces and three territories, not through the central government). Like Britain, the health insurance system is run by government, not by private enterprise.

But like France, Germany and Japan, Canada stops short of drafting doctors and nurses as government employees. The health-care providers work for themselves, not for the government.

Few Canadians fork over anything for a visit to a doctor's office, an MRI scan or a stay in the hospital. The provinces pay for most of it. And to cover what government doesn't -- dental care, say, or a private hospital room -- Canadians can buy private insurance. It's cheap enough that some Canadian companies offer private insurance as a fringe benefit.

Government covers the cost of drugs for the poor, the elderly and the chronically ill. Everybody else pays for their own, but prices are cheap enough to lure Americans who live within driving distance.

In all, health care siphons off only 8 percent of the Canadian economy, or half the American rate. While annual health care comes to $7,000 a year for each American, the Canadian tab tops out at only $3,900.

And that's part of the problem.

The province's plans set limits on what they'll pay doctors for services. As a result, fewer Canadians are going to medical school. Doctor shortages are popping up -- and fewer doctors mean longer waits to see the doctors still on hand.

Thus, the horror stories about suffering Canadians who are put on medical hold for months or years. Reid calls many such stories overblown; if you're having a heart attack, he says, you'll get in right away. But if you need a joint replacement, you'll have to wait.

The six-nation health-care survey by the Commonwealth Fund ranked Canada fifth, nosing out only the United States.

For all that, Reid insists, Canadians take pride in their health-care system. He quotes a Canadian who puts it this way:

"It's not really part of the Canadian psyche to feel superior to anybody. But there are two areas where we enjoy feeling smugly superior to the United States: hockey and health care."

Harry Levins is a freelance writer in St. Louis.