Another report on the various different health care systems across Europe.
There\’s one set of complaints about the NHS which is easy enough to explain. Yes, we\’ve got the highest paid doctors and also the fewest. You can look at it one of two ways. The planners have decided to have fewer but better….or we\’ve had a little bit of producer capture there . The BMA is, after all, really a rather strong trade union. But the actual outcome, fewer doctors, isn\’t all that much of a surprise, given the expense.
The thing that is vastly more interesting, given the current debate in the US about how their system might change, is looking at those numbers for private health care insurance. Holland and France (the latter actually being, according to the WHO and the like, the best health system in the world) rely more upon private health insurance than does the US. At least, that is, in the percentage of the population covered by it.
As we\’re constantly told, there\’s 49 million in the US without health insurance. 16% or so of the population. Then we need to add to that those with only Medicad or Medicare to get to the number without private medical insurance. No, I don\’t know what those numbers are and can\’t be bothered to look them up. But say another 50 million or so (it\’s slightly complicated by the fact that many retirees will have both Medicare and private insurance)?
So the French and Dutch systems, both good ones, have private coverage rates of over 90% while the US is about, what, 70%? I think it\’s Arnold Kling who makes the point about all of this best.
There\’s two different things being talked about when we say "health insurance". One is the proper meaning of insurance: protection by pooling risks against catastrophic costs. Cancer say, being scraped up off the road after a car crash, a degenerative disease. In the French and Dutch systems these are insured by the State (via a variety of means, perhaps a tax on wages etc). Then there\’s what might be called health assurance. Paying for the regular doctors visits, injections, mild illnesses and so on. These are things that all of us will need at times. So paying for them through the tax system isn\’t really "insurance", because tax is simply taking a known amount of money to provide a known amount of care. We don\’t all, after all, even over the course of our lives, need that hugely expensive catastrophic care. Now the bulk of this care is provided by those systems via the same State financing methods: but with co-pays for it. 20% 30% in the case of the French system. That\’s what the private insurance is to cover.
Our Glorious NHS, by contrast, funds everything, the routine care and the catastrophic, solely via the tax system. Which could be why it doesn\’t work all that well.
The American system, by contrast (excluding the poor and the aged, who have Medicaid and Medicare respectively), funds everything via the private insurance system. Which is also why it doesn\’t work very well: the incentive is of course for private insurers to dump those with one of those problems requiring catastrophic care.
A logical solution might therefore present itself. To get from the US system to the best in the world, why not adopt the financing methods of that best in the world? That is, for the insurance pooling via taxation to be only for catastrophic care? For routine care to be covered by private medical insurance? That is, take the amount the US Govt is already spending upon health care and redeploy it, and expanding, not contracting, the use of private insurance?
I think it\’s Glenn Whitman who explains why this won\’t actually happen though. The institutional pressures are such that those agitating for change want ever more of health costs to be carried by Govt, ever less by out of pocket or private insurance: even if the latter, more private payment, appears to lead to a better system.