Health Care Systems - Research Paper Example

Introduction Health care is at the center of a loud debate in America. One side states that our health care system is broken, the other side states that it is just fine. The recent health care legislation might change the landscape for Americans somewhat, but America's health care system has a long ways to go. However, in comparing America's system to other health care systems around the world, it seems that America does not have it as bad as previously thought. For instance, Great Britain, with its universal coverage, also has universal wait lists where a person can die from a disease that would have been curable, except he was not able to get timely care. The citizens of Spain and France do not have access to MRIs and CT scans, two technological advancement that we Americans take for granted. In Spain, there is no funding for rehabilitation, convalescence care or hospice services, and families are expected to do these duties. And in all these countries, high taxes pay for the meager services rendered, and the citizens often have extremely high co-pays. While all health care systems have their share of problems, the one universal is that their health care costs are rising. Here in America, it is no different. To this end, it is important that the individual take care of his or herself better so that he or she does not tax the health care system with problems that are the result of poor lifestyle choices, such as obesity and smoking. While this is a worthwhile goal, unfortunately, because of the American attitude that individual freedom comes before everything else, it probably is not going to happen. My proposal is that a combination of nanny state techniques, such as banning harmful items and taxing other harmful items, combined with incentives for poor people to get healthy and insurance companies paying for preventative care, might be a partial solution of rising health care costs in America. Research Section A Brief Comparison of Health Care Systems There are four major kinds of health care systems globally. The first is the single-payer system, which is just as it sounds – the government pays for the health care of all of its citizens. Hence, the government itself is the single-payer. This is the kind of health-care system that is often, pejoratively, referred to as “socialized medicine.” The government collects the taxes from the citizenry and pays the health providers directly from this fund. The typical way that a government does this is by establishing a budget that decides how much of its resources will go to health care, then sets the prices and reimbursement rates for physicians. In the strictest single-payer system, the individual cannot “opt-out”, or decide for him or herself whether to partake of the single-payer system or get private health insurance. (Tanner, 2008, p. 7). Comparable to the OECD term “public-integrated model,” this model easily provides coverage to all citizens, but suffers from “weak incentive to produce output, improve efficiency, or maintain quality and responsiveness to patient needs.” (Docteur & Oxley, 2003, p. 10). The next system is the employment-based system, in which employers are required to provide their workers with health insurance, often through “sickness funds.” These funds might operate “within or across industry sectors, with benefits and premiums set by the government.” (Tanner, 2008, p. 7). Other times, premiums are a type of payroll tax that is paid directly to the fund. Providers are independent, and the rates of reimbursement are negotiated with the funds, individually or sometimes at a national level. (Tanner, 2008, p. 7). The third system is the managed competition system, in which health care is left in private hands, but the marketplace is artificial, in that the government controls and regulates it. (Tanner, 2008, p. 7). The government usually mandates that individuals have insurance in this type of structure, as well as mandating that employers provide insurance to their employees. (Docteur & Oxley, 2003, p. 11). Individuals have a choice of providers and insurers, and the insurers and providers may compete on cost sharing, price and other benefits. (Tanner, 2008, p. 7). The fourth system is the private insurance provider model, which uses private insurance and private providers. In this case, insurance may be mandatory or voluntary, and, in the case of the latter, low-cost insurance may not be available to many individuals. (Docteur & Oxley, 2003, p. 10). These systems are responsive to patients' needs, but tend to have poor cost controls. Managed care plans, such as the HMOs in the United States, restrict choice by selectively contracting with certain providers. (Docteur & Oxley, 2003, p. 10). Germany, the Netherlands and Switzerland, all private insurance countries, tend to have lower inequalities than other companies with this scheme, which suggests that “regulation and equalisation schemes can help mitigating cream-skimming and the effects of other market mechanisms which can raise equity concerns.” (Joumard et al., 2010, p. 8). Other problems that are presented in this system are that there are many uninsured, who are, ironically, the population with the most health problems – the poor, those with a catastrophic illness and the chronically ill ; and that the insured over-consume health care, which leads to high health-care costs. (Lewis, 2006, p. 4). Most of the countries surveyed by the Organization for Economic Co-Operation and Development (OECD) have universal coverage, with the United States, Mexico and Turkey being the exceptions, as these countries, as of 2009, have large population that is uninsured. (Joumard et al., 2010, p. 6). Another near-universal aspect of countries globally is that health care spending continues to increase, with health care consuming 9% of GDP on average with OECD countries, and ranges from 6% in Mexico to 16% in the United States. (Joumard et al., 2010, p. 8). Wealthier countries tend to spend a higher percentage of per capita income on health care than poorer countries. (Merson, et al., 2009, p. 601). Below are some of the countries around the world, and the health care systems of each country. A. France This country provides basic universal health insurance through mandated, occupation-based health insurance funds, and, to many proponents, is considered to be a model for how national health care would look. (Tanner, 2008, p. 7). The funds are private entities, yet heavily regulated and supervised by the government. France relies heavily on market mechanisms to manage the supply of health care services when it comes to covering non-basic services, and also relies upon regulations. (Joumard, et al., 2010, p. 37). The government sets premium rates, benefits and provider reimbursement rates. (Tanner, 2008, p. 8). The largest fund is the General National Health Insurance Scheme, which covers 83% of French residents, as it covers all non-agricultural workers and their spouses and dependents. (Tanner, 2008, p. 8). Separate insurance plans cover certain workers, such as farmers, miners, transportation workers, artists, clergy and notaries public; other plans cover the self-employed; still others cover the unemployed. (Tanner, 2008, p. 8). Overall, 99% of all French are covered, in one way or another. Funding for the scheme comes from payroll taxes, as employers pay 12.8% of wages of every employee to their payroll taxes, and employees themselves contribute .73 of their wages. In addition to payroll taxes, there is a general social contribution tax on income that is 5.25%, as well as dedicated taxes on tobacco, pharmaceutical revenues and alcohol. (Flood, 2010, p. 16). Additionally, the citizens must co-pay their services at about 10 to 40% of the cost. Citizens also have the option of purchasing complementary health insurance, an option in which 92% of French citizens partake, due to the fact that many physicians do not accept the fee schedules and many health care services are not covered. (Tanner, 2008, p. 8). A global budget for health care spending is set by the National Health Authority, but this budget is often overrun. (Tanner, 2008, p. 8). Disadvantages of this system are many. Physicians make just 40,000 euro per year ($50,000 US Dollars), and they have organized strikes and protests because of the reimbursement limits. Patients must pay for all services up front, then get reimbursed from the health care fund. Physicians are allowed to charge over and above their reimbursement rate, and most do. The government has recently restricted access to physicians. Medical technology has lagged due to a lack of capital investment and the most advanced care is suffering from a lack of access. (Tanner, 2008, p. 10). These problems are somewhat off-set, however, by the fact that French citizens are allowed to purchase private insurance. B. Spain Spain has national health care, but it is decentralized, as each of Spain's 17 regions have their own health care systems. (Casanovas, 2007, p. 225). Its health care is provided by a heavily regulated public system, patient's choice is extremely limited, and gate-keeping is prevalent and important. (Joumard, 2010, p. 48). Coverage is at 98.7%. (Tanner, 2008, p. 14). Each region is provided with a block grant from the federal government, and each region decides how to spend this money. (Casanovas, 2007, p. 225). Additionally, each region may supplement the federal grant with its own money for their individual system. The result of this is that each region differs in the quality and quantity of its health care. One region might have 4.5 hospital beds per 1,000 residents, as does Catalonia, while another might have only 2.8 hospital beds per 1,000 residents, as does Valencia. (Tanner, 2008, p. 14). Freedom is limited in Spain. Citizens cannot choose their physicians, neither primary care nor specialists. They must choose from an approved network, which results in some Spaniards moving their residences to change their physicians or find a network that has a smaller waiting list then their own. (Tanner, 2008, p. 14). Wait lists can be from 65 to 140 days to see a specialists, depending upon the region and the type of specialist. (Tanner, 2008, p. 14). Care that Americans take for granted, such as rehabilitation, convalescence and care for the terminally ill are not provided and are left to relatives, and there are very few retirement homes, hospices and convalescence homes. (Tanner, 2008, p. 15). As with France, Spaniards may supplement with private insurance, in which 12 percent currently partake, with 25% of citizens in large cities such as Barcelona and Madrid purchasing this option. (Tanner, 2008, p. 15). Alternatively, Spaniards pay for care out of pocket, and this accounts for 24% of all health care spending in Spain. (Tanner, 2008, p. 15). Also similar to France, technology in Spain is lagging, with 1/3 MRI units and 1/3 CT units per 1,000,000 people as the United States. This also has regional variance – Ceuta and Mililla do not have a single MRI unit, and Spaniards generally cannot go to a different region for their services, due to bureaucratic barriers. (Tanner, 2008, p. 15). Like France, their doctors do not make a salary anywhere near comparable to the United States, in that their physicians are public servants who are paid a salary that is commensurate with years of experience, attainment of professional credentials and across-the-board annual increases. This has caused a shortage of physicians, particularly in the area of primary care. (Tanner, 2008, p. 15). C. Japan Japan's universal health coverage is employer-based, and is comprised of 2,000 private insurance companies and 3,000 government units. (Tanner, 2008, p. 15). This country is characterized by wide patient choice, extensive private provision of care and no gate-keeping system. (Joumard, 2010, p. 48). These plans are financed through employer and employee contributions, with workers contributing 45% and employers providing the rest. If an company has fewer than 700 employees, they must enroll in the government-run small-business national health insurance program. (Tanner, 2008, p. 16). Companies with more than 700 employees must take part in the Employee Health Insurance Program. Self-employed persons and retirees are covered by the Citizens Insurance Program, which is administered by municipal governments. (Tanner, 2008, p. 16). Retired persons are covered through a fund that is financed by the other three programs, along with contributions from the central government. (Tanner, 2008, p. 16). The unemployed remain under the previous employers' program. (Tanner, 2008, p. 16). The benefits are generous, although the co-pays range from 10 to 30 percent, which means that the average Japanese family pays $2,300 out of pocket per year. (Tanner, 2008, p. 16). Out of pocket costs account for 17% of total health care spending. (Tanner, 2008, p. 16). As with Spain, physicians are salaried employees, whose reimbursement is set by the government. The physicians have an incentive to see as many patients as possible because of the way that they are reimbursed, which leads to “assembly-line medicine,” with 2/3 of patients spending less than 10 minutes with their doctor, and 18 percent spending less than 3 minutes. (Tanner, 2008, p. 17). According to the latest estimates, Japan has one of the highest consultations per doctor in the world, at 6,500 per year, on par with Korea and compared to 1,500 or less in Finland, Mexico, the Netherlands, Portugal and Sweden. (Joumard, 2010, p. 22). The fee schedules for surgery is much lower than non-surgical procedures, due to the cultural biases against surgery in favor of alternative methods. Unlike Spain and France, the technology in Japan is cutting-edge, with access to MRIs and CT scanners being comparable to the United States. (Tanner, 2008, p. 19). There is no price competition because of the government reimbursement schedules, so hospitals use their technology to lure in patients. This benefits patients, but also works against them, as the best hospitals with the latest technology has the longest wait lists, and a black market for these services. (Tanner, 2008, p. 17). Japan has managed to keep their health care costs controlled, due to cultural aspects, such as low obesity, healthy lifestyles, low drug abuse rates, low crime rates and low accident rates. (Tanner, 2008, p. 17). One study indicated that 25 percent of the difference between Japan's health care spending the United States is attributed to the lower incidence of disease. (Tanner, 2008, p. 17). However, this is off-set by the aging of the population, with the elderly being responsible for 90 percent of Japan's health care system increases. D. Great Britain An example of a single-payer system, that also has a small “parallel private sector.” (Tuohy, 2004, p. 361). The government pays directly for health care and finances the health care through tax revenues, and there are no co-pays or user charges for most services (Tuohy, 2004, p. 362). This has led to long wait lists, with 750,000 Britons awaiting admissions to hospitals. Some cancer patients wait 8 months for treatment, which has resulted in 20 percent of colon cancer patients, whose disease was treatable when first diagnosed, being incurable by the time they get treatment. (Tanner, 2008, p. 24). The government, in a cost-cutting measure, negotiated lower salaries for physicians in exchange for the physicians working fewer hours, which has resulted in still longer lines, as physicians generally do not work evenings or weekends anymore. Specialists has even greater lines, which has resulted in 40% of cancer patients not getting to see an oncologist. (Tanner, 2008, p. 24). Explicit rationing also takes place, such as for patients on kidney dialysis, and for individuals who need open-heart surgery and other expensive procedures. There are some reform proposals, such as the London Patient Choice Project, which gives individuals who have been waiting for procedure for longer than 6 months the choice to choose from up to four providers. Another proposal, put forth by David Cameron, leader of the Conservative Party, is that physicians be allowed to refuse treatment to patients who do not practice healthy lifestyles, such as that they smoke or are obese, along with providing that the government pay for gym memberships and subsidize fresh fruits and vegetables. (Tanner, 2008, p. 25). Other ways that individual Britons have gotten around the system is by buying private insurance, which just over 11 percent hold, and this allows “ for a choice of specialists, higher standards of comfort and privacy, and allows people to jump queues in the public system.” (Flood, et al., 2010, p. 13). E. Developing countries These may divided into three basic systems. The first system are the countries who use budget allocations to fund health care facilities, physicians are salaried employees who have to supplement their income by selling goods and services under the table, emergency rooms are crowded, and supply shortages are common. (Gauri, 2004, p. 2). In this type of system, religious orders and philanthropic groups run health facilities that are more highly regarded than the facilities run by the public sector, and the well-to-do have accessed to more technologically sophisticated hospital wards and better trained physicians. (Gauri, 2004, p. 2). The countries who use this system include Nepal, Tanzania and the poorest nations in Sub-Saharan Africa. (Gauri, 2004, p. 2). The second system is much like the first, with the exception that semi-trained private providers “dominate the supply of health care in most rural and marginal urban areas.” (Gauri, 2004, p. 2). These private providers have limited contact with the public health system, and are usually paid by patients out of pocket. An example of a country that uses this system is India. (Gauri, 2004,p. 3). The third system is one used by Chile, Mexico, Thailand and South Africa, and is characterized by the fact that it is a hybrid between systems dominated by the public sector, as in the first system, and systems dominated by the private sector, as the first system is. The government collected taxes and pays physicians and hospitals, and these providers can either by public or private providers. Additionally, the hospitals in these countries have general-revenue funded hospitals and private insurance markets in well-to-do cities. (Gauri, 2004, p. 3). My Opinions Access to health care is a problem for which there is no easy solution. My inclination, prior to researching this paper, was to state that universal health coverage would be the way to go. After all, the United States has a problem with the fact that a great segment of its population is uninsured or under-insured, and horror stories abound about insurance companies dropping people from their rolls when they get sick and denying coverage for major illnesses, etc. However, after reviewing the problems that European countries have with their health systems, I no longer believe that a single-payer system is the best system for health care. One thing that seems to be missing from all of these analyses is the role of the individual. Where is the individual responsibility to not be obese, to not smoke, to not drink excessively, to not partake in fatty foods, etc.? Americans seem to believe that they have the right to any kind of behavior, and nobody can tell the individual what to do. They will continue to eat all the red meat they want, smoke however much they want, eat all the junk food they want, not exercise, and still expect the health care system to provide services to them when their lifestyle choices inevitably lands them in the hospital with a coronary or lung cancer. There is a strong rebellious streak to Americans, and there is a strong tendency to label anybody who wants to implement such policy considerations as banning trans fats from foods, banning public smoking, and implementing mandatory helmet laws as being purveyors of a nanny state. All that they can see is that their individual freedoms are being limited, and the rest of society, who has to pay for their choices, does not have a say in limiting these freedoms. The ones who are the loudest about not limiting their god-given right to consume as many grams of trans fats and cigarettes as humanly possible seem to not understand, or care, that there is another side to the story. Namely that health care costs are out of control mainly due to personal bad lifestyle choices. The selfish individual is at the center of the health care problem. To this end, there are two ways to tackle this problem. One is, yes, to implement a nanny state. Trans fats should be banned, not just in restaurants, but in all food. Trans fats are hydrogenated fats that allow processed foods such as chips, cookies, crackers and pies to retain their freshness, and is created by pumping hydrogen into the fat molecule. Trans fats increase bad LDL levels and triglycerides and decrease good HDL levels. Studies have shown that a 2 percent increase in trans fats in a person's diet increases the chance of heart disease by 23 percent. (Michaels, 2009, p. 94). Banning this evil product is just one way that can help bring our health care costs down. The federal government should also ban smoking in public places, and institute hefty sin taxes on any product that is detrimental to one's health and has no health benefit whatsoever. This will include soda, chips, cookies, and the like, along with cigarettes and alcohol. Although red meat is also very detrimental to one's health, due to the high degree of saturated fat, it also has health benefits, so will be exempt. Same with any other product that evidence has shown to be harmful in some ways, yet beneficial in others, such as milk and dairy products and pesticide-ridden fruits and vegetables. The libertarians will howl at this, no doubt, but nobody can deny that health care costs are out of control and something needs to be done. The other way to tackle this is that insurance companies will put more out in preventative care. It is appalling that such measures as smoking cessation programs and gym memberships are not covered by insurance programs. It really does not make sense – the insurance companies will not spend the relatively small amounts for these and other measures, yet will spend the exorbitant amount that is required when the people get sick because they are obese or smoke too much. The argument is that these measures might not make people healthier, but if a person wants to quit smoking and does not have the money for a smoking cessation program and his insurance does not cover it, he probably will not go to the smoking cessation program and will continue to smoke and get sick because of it. Same with a gym membership. These are small expenses that might equate in large savings in the long run. Beyond these measures, it would be good practice for the government to subsidize, for low-income people, programs that help them eat healthy and practice good health habits. Perhaps these could be nutrition classes for anybody who wants them, perhaps it could be subsidizing activity programs for children that involve movement, such as dancing, basketball, roller-skating and the like. Maybe it could be subsidies to encourage Farmer's Markets in underserved areas, so that the poor can avail themselves of fresh fruits and vegetables that are locally grown and organic. It could be subsidies to improve our children's cafeteria food so that our children are not eating fried, processed, nutritionally sparse food and drinking sodas out of soda machines. It could be a combination of all of the above. The point is to get the poor to be healthier as well, as every country that was examined above had a problem with health care equity, in that the rich are always able to buy their way out of a poor health care system, where the poor is not. What the research shows is that no health care system in the world is perfect, or even adequate. It seems that either you have a system like in the United States, where a great number of people are uninsured and have no access to health care, or you have a system like Great Britain, where there is so much rationing and waiting that small diseases turn into incurable ones by the time a person gets to see a doctor. Therefore, the onus must fall on the individual. Japan has shown that, due to its culture that encourages good health habits, that if other countries want to emulate it, health care spending be controlled. If Americans can stop thinking only of themselves for one second, and realize that their individual bad health habits hurt the entire country, this would be a step in the right direction. Sources Used Docteur, E. and Oxley, H. “Health Care Systems: Lessons from the Reform Experience.” OECD Health Working Papers, No. 9. (December 10, 2003), pp. 1-98. Flood, C. and Haugan, A. “Is Canada Odd? A Comparison of European and Canadian Approaches to Choice and Regulation of the Public/Private Divide in Health Care.” Health, Economics, Policy and Law. (2010), pp. 1-26. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1350012 Gauri, V. “Are Incentives Everything? Payment Mechanisms for Health Care Providers in Developing Countries.” (June, 2001), pp. 1-20. Available at: http://papers.ssrn.com/sol3/ papers.cfm?abstract_id=632692 Joumard, I., Andre, C., & Nicq, C. “Health Care Systems: Efficiency and Institutions.” Economics Department Working Papers No. 769. (May 2010), pp. 1-56. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1616546 Lewis, M. “Governance and Corruption in Public Health Care Systems.” Working Paper Number 78, Center for Global Development. (January 2006), pp. 1-56. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=984046 Lopez-Casanova, G. “Organisational Innovations and Health Care Decentralization: A Perspective from Spain.” (November 2006), pp. 223-233. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1002561 Michaels, J. (2009) Master Your Metabolism. New York, NY: Crown Publishers. Tanner, M. “The Grass is Not Always Greener: A Look at National Health Care Systems Around the World.” Policy Analysis, No. 613. (March 18, 2008), pp. 49. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1262978 Tuohy, C., Flood, C., and Stabile, M. “How Does Private Finance Affect Public Health Care Systems? Marshaling the Evidence from OECD Nations.” Journal of Health Politics, Policy and Law, 29.3 (2004), pp. 359-396. Read More