CURRENT BOOKS: In Search of a New Health Care Model

Peter Bretan, MD

The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, TR Reid, 304 pages, Penguin (2010).

The United States spends the largest proportion of GNP (17%) for health care of any country in the world, without providing universal health care. The percentages of GNP for countries that do provide universal care include France (11%), Switzerland (10.8%), Germany (10.4%), Canada (10.1%), UK (8.4%), and Japan (8.1%). Japan spends $3,400 per capita on health care vs. $7,400 for the U.S. A recent Bank of America study found that the U.S. would save $600 billion per year if it could bring its health care costs down to 10% of GNP.

Why is our health care so inefficient and fragmented? More importantly, will we fix it before it collapses? In his book The Healing of America, TR Reid proposes that we cannot begin to answer any of these vital questions unless we know what kind of health care system we have. He cites an old Chinese proverb for beginning this healing process: “In order to navigate through thick fog, follow the oxcart’s tracks in front of you.” In a valiant attempt to do so, Reid explores health care systems throughout the world to compare government oversight (degree of regulation and support), payer mix, cost efficiencies and many other factors that may elucidate possible solutions to our dysfunctional health care system.

Reid’s contemporary classic is a must-read for all Americans, as health care is now at the forefront of American politics. An inevitable collapse from the growing cost of care will affect everyone. As health care professionals, our patients depend on us for health care policy guidance. Unless all physicians understand basic health care structures, we cannot begin to save our health care system.

In The Healing of America, Reid—a well-known reporter, lecturer and documentary filmmaker—describes four distinct health care systems: the German Bismarck model, the UK’s Beveridge model, Canada’s national health insurance model, and the out-of-pocket model.

The Bismarck model was started by Otto von Bismarck, the first chancellor of Germany, in 1883. Today health insurance in Germany is provided through employers for 82 million citizens and millions of guest workers, both legal and illegal. There are 180 insurance companies, whose income is supplemented by a 15% income tax specifically for health care. Medical education is free. Medical malpractice premiums are less than $1,400 per year, but physician specialists make less than half as much as their American counterparts. Costs are rising and sustainability is questionable. The Japanese and Taiwanese health care systems are similar but less costly because they have more rigid cost controls via a single national fee schedule, at the expense of physicians and hospitals. All these countries have an individual mandate and are happy with their health care.

The UK’s Beveridge model covers 90% of the population via a national 17.5% sales tax and is administered via their National Health Service. The model is single payer and truly socialized. Cuba has a similar system. Primary care physicians are the gatekeepers for most care; pay-for-performance bonuses can double their income. Medical education is free, but certain procedures and tests are only used for high-risk patients. Many cancer drugs are just not covered.

Canada’s national health insurance model began in Saskatchewan in 1946 and spread nationally, culminating in the Medical Care Act, unofficially known as Medicare. The United States later copied this system and name for American citizens 65 and older. The man most responsible for the Canadian system was their national hero, Tommy Douglas, who waited years to get a common orthopedic procedure performed under the old system. The new system covers basic care for everyone and is equally available to both rich and poor. This egalitarian pride sustains the system, but long wait times for elective procedures are common.

In the out-of-pocket model, the rich get medical care, while the poor stay sick and/or die. Most poor countries use this model, including China, which is moving back to out-of-pocket care. In the United States, 20,000 out-of-pocket poor people die annually from easily preventable or treatable diseases.

The United States uses all four of these models. We have Medicare like the Canadians for our elderly population. We have government-run, UK type of care from our veterans and for certain diseases, such as end-stage renal disease. We have multiple insurers, but these companies are not regulated to the same extent as in countries with a Bismarck model. Finally, we have an out-of-pocket model for 23 to 40 million Americans, all of whom suffer from a lack of access to care. This uncoordinated and fragmented health care system has led to inefficient, overlapping care for those with health care coverage, and to no care for millions without any coverage.

The United States is the only developed country in the world with for-profit health care insurers. In single-payer countries, such as Canada and the UK, these companies simply do not exist. In multipayer countries—such as France, Germany, Japan and Taiwan—the insurance companies are all nonprofit, charitable organizations, and are all government regulated and highly efficient, without the enormous bureaucracy found in the United States. Reid makes a compelling argument that “You can’t allow a profit to be made on the basic package of health insurance.”

Reid acknowledges that for those with money to pay for basic health insurance, American medical treatment is the best on the planet. Many Americans, however, go without insurance. Prior to the Affordable Care Act, 45 million Americans (15% of the population) were without any medical insurance. After the ACA is fully implemented, an estimated 23 million Americans (8% of the population) will still be without insurance. These patients constitute a high proportion of the 700,000 Americans  who go bankrupt each year from out-of-pocket costs.

Despite our country’s enormous spending on health care, our infant mortality rate is one of the highest in the world at 6.37 per 1,000 births, compared to 2.76 for Japan and 5.0 for the UK. The World Health Organization ranks the U.S. 37th in the world in overall health indexes. Much of the low rating is caused by lack of access to care.

Reid dispels many myths about foreign health care. He refutes untrue statements, made by former New York City mayor Rudy Giuliani and others, that European health care could not work in the U.S. because the Europeans severely ration all care. He also debunks claims that the World Health Organization data is too liberal and that countries listed as more efficient by WHO criteria are all “socialized” in their health care. Reid explains that this is simply not true, pointing out that Japan has more for-profit hospitals than the U.S.

Reid also notes that American Medicare is efficient and popular for those over 65 years of age. Medicare is essentially a single-payer model, but it is not completely government-run care, as hospitals and physicians remain independent of the government. Reid also discredits the belief that Americans dislike foreign systems or solutions. He dispels this myth in part by dedicating his book to President Dwight Eisenhower, for creating our Interstate Freeway system, taken from the Autobahn he so admired when he invaded Germany during World War II.

Observing that more than 20,000 Americans die each year from lack of access to basic health care, Reid proposes a moral question: “Should we guarantee medical treatment for all in our country who need it?” Eighty-five percent of Americans answer yes to this question and support basic health care as a right. Nonetheless, Reid asks a more fundamental question: “Will we as Americans ever have the political will to fix our system?”

I believe we can and we will, but we must understand where we are now and how we got here, and then follow the oxcart track in front of us to get us out. This strategy has worked for the newly developed health care system in Taiwan, and the strategy continues to cost less and provide more care for industrialized countries throughout the world.

We can remain in denial, as exemplified by President George Bush replying to a reporter’s question in 2007 about the lack of health care for the poor: “All they have to do is go to an emergency room.” We can blame the “forces of liberal, progressive, anti-constitutionalist, redistributive, pro-entitlement, strong central government activists [who enslave] patients and physicians,” as Dr. Thomas Kendall, president of the Association of American Physicians and Surgeons, did in a recent article. Finally, we can do nothing and get the health care system we don’t want.

I think we should be proactive and educate ourselves, our patients and our legislators, enabling us to fix our health care system before it collapses. A good start would be to read The Healing of America.

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Dr. Bretan, a Novato urologist, serves on the MMS Editorial Board.
Email: bretanp@msn.com