5 Myths About Health Care Around
by T.R. Reid, The Washington
As Americans search for the cure to what
ails our health-care system, we've overlooked an invaluable source
of ideas and solutions: the rest of the world. All the other industrialized
democracies have faced problems like ours, yet they've found ways
to cover everybody -- and still spend far less than we do.
I've traveled the world from Oslo to Osaka
to see how other developed democracies provide health care. Instead
of dismissing these models as "socialist," we could
adapt their solutions to fix our problems. To do that, we first
have to dispel a few myths about health care abroad:
1. It's all socialized medicine out there.
Not so. Some countries, such as Britain,
New Zealand and Cuba, do provide health care in government hospitals,
with the government paying the bills. Others -- for instance,
Canada and Taiwan -- rely on private-sector providers, paid for
by government-run insurance. But many wealthy countries -- including
Germany, the Netherlands, Japan and Switzerland -- provide universal
coverage using private doctors, private hospitals and private
In some ways, health care is less "socialized"
overseas than in the United States. Almost all Americans sign
up for government insurance (Medicare) at age 65. In Germany,
Switzerland and the Netherlands, seniors stick with private insurance
plans for life. Meanwhile, the U.S. Department of Veterans Affairs
is one of the planet's purest examples of government-run health
2. Overseas, care is rationed through
limited choices or long lines.
Generally, no. Germans can sign up for
any of the nation's 200 private health insurance plans -- a broader
choice than any American has. If a German doesn't like her insurance
company, she can switch to another, with no increase in premium.
The Swiss, too, can choose any insurance plan in the country.
In France and Japan, you don't get a choice
of insurance provider; you have to use the one designated for
your company or your industry. But patients can go to any doctor,
any hospital, any traditional healer. There are no U.S.-style
limits such as "in-network" lists of doctors or "pre-authorization"
for surgery. You pick any doctor, you get treatment -- and insurance
has to pay.
Canadians have their choice of providers.
In Austria and Germany, if a doctor diagnoses a person as "stressed,"
medical insurance pays for weekends at a health spa.
As for those notorious waiting lists,
some countries are indeed plagued by them. Canada makes patients
wait weeks or months for nonemergency care, as a way to keep costs
down. But studies by the Commonwealth Fund and others report that
many nations -- Germany, Britain, Austria -- outperform the United
States on measures such as waiting times for appointments and
for elective surgeries.
In Japan, waiting times are so short that
most patients don't bother to make an appointment. One Thursday
morning in Tokyo, I called the prestigious orthopedic clinic at
Keio University Hospital to schedule a consultation about my aching
shoulder. "Why don't you just drop by?" the receptionist
said. That same afternoon, I was in the surgeon's office. Dr.
Nakamichi recommended an operation. "When could we do it?"
I asked. The doctor checked his computer and said, "Tomorrow
would be pretty difficult. Perhaps some day next week?"
3. Foreign health-care systems are inefficient,
Much less so than here. It may seem to
Americans that U.S.-style free enterprise -- private-sector, for-profit
health insurance -- is naturally the most cost-effective way to
pay for health care. But in fact, all the other payment systems
are more efficient than ours.
U.S. health insurance companies have the
highest administrative costs in the world; they spend roughly
20 cents of every dollar for nonmedical costs, such as paperwork,
reviewing claims and marketing. France's health insurance industry,
in contrast, covers everybody and spends about 4 percent on administration.
Canada's universal insurance system, run by government bureaucrats,
spends 6 percent on administration. In Taiwan, a leaner version
of the Canadian model has administrative costs of 1.5 percent;
one year, this figure ballooned to 2 percent, and the opposition
parties savaged the government for wasting money.
The world champion at controlling medical
costs is Japan, even though its aging population is a profligate
consumer of medical care. On average, the Japanese go to the doctor
15 times a year, three times the U.S. rate. They have twice as
many MRI scans and X-rays. Quality is high; life expectancy and
recovery rates for major diseases are better than in the United
States. And yet Japan spends about $3,400 per person annually
on health care; the United States spends more than $7,000.
4. Cost controls stifle innovation.
False. The United States is home to groundbreaking
medical research, but so are other countries with much lower cost
structures. Any American who's had a hip or knee replacement is
standing on French innovation. Deep-brain stimulation to treat
depression is a Canadian breakthrough. Many of the wonder drugs
promoted endlessly on American television, including Viagra, come
from British, Swiss or Japanese labs.
Overseas, strict cost controls actually
drive innovation. In the United States, an MRI scan of the neck
region costs about $1,500. In Japan, the identical scan costs
$98. Under the pressure of cost controls, Japanese researchers
found ways to perform the same diagnostic technique for one-fifteenth
the American price. (And Japanese labs still make a profit.)
5. Health insurance has to be cruel.
Not really. American health insurance
companies routinely reject applicants with a "preexisting
condition" -- precisely the people most likely to need the
insurers' service. They employ armies of adjusters to deny claims.
If a customer is hit by a truck and faces big medical bills, the
insurer's "rescission department" digs through the records
looking for grounds to cancel the policy, often while the victim
is still in the hospital. The companies say they have to do this
stuff to survive in a tough business.
Foreign health insurance companies, in
contrast, must accept all applicants, and they can't cancel as
long as you pay your premiums. The plans are required to pay any
claim submitted by a doctor or hospital (or health spa), usually
within tight time limits. The big Swiss insurer Groupe Mutuel
promises to pay all claims within five days. "Our customers
love it," the group's chief executive told me. The corollary
is that everyone is mandated to buy insurance, to give the plans
an adequate pool of rate-payers.
The key difference is that foreign health
insurance plans exist only to pay people's medical bills, not
to make a profit. The United States is the only developed country
that lets insurance companies profit from basic health coverage.
In many ways, foreign health-care models
are not really "foreign" to America, because our crazy-quilt
health-care system uses elements of all of them. For Native Americans
or veterans, we're Britain: The government provides health care,
funding it through general taxes, and patients get no bills. For
people who get insurance through their jobs, we're Germany: Premiums
are split between workers and employers, and private insurance
plans pay private doctors and hospitals. For people over 65, we're
Canada: Everyone pays premiums for an insurance plan run by the
government, and the public plan pays private doctors and hospitals
according to a set fee schedule. And for the tens of millions
without insurance coverage, we're Burundi or Burma: In the world's
poor nations, sick people pay out of pocket for medical care;
those who can't pay stay sick or die.
This fragmentation is another reason that
we spend more than anybody else and still leave millions without
coverage. All the other developed countries have settled on one
model for health-care delivery and finance; we've blended them
all into a costly, confusing bureaucratic mess.
Which, in turn, punctures the most persistent
myth of all: that America has "the finest health care"
in the world. We don't. In terms of results, almost all advanced
countries have better national health statistics than the United
States does. In terms of finance, we force 700,000 Americans into
bankruptcy each year because of medical bills. In France, the
number of medical bankruptcies is zero. Britain: zero. Japan:
zero. Germany: zero.
Given our remarkable medical assets --
the best-educated doctors and nurses, the most advanced hospitals,
world-class research -- the United States could be, and should
be, the best in the world. To get there, though, we have to be
willing to learn some lessons about health-care administration
from the other industrialized democracies.