Do Some Other Countries Have Health Care All Figured Out?

by JHI Staff on August 7, 2013

There’s a new book out that addresses the raging debate over how to lower health care costs and improve outcomes in the U.S. Affordable Excellence: The Singapore Health System, by William Haseltine, head of an international health care nonprofit, holds up Singapore as an example of a country that has been able to provide better health care to a larger percentage of its population—virtually all of it—at a lower cost than the U.S. (The Kindle edition of the book is currently free, by the way.) Haseltine summarized some of his points in an article published on journalist-analyst-academic-talkshow host Fareed Zakaria’s CNN website. An excerpt:

We spend almost 18 percent of our gross domestic product on health care—an astounding amount of money translating to $2.8 trillion dollars per year. In contrast, Japan spends just over nine percent of GDP; France is below 12 percent; and the United Kingdom spends 9.5 percent....A recent survey by the National Institutes of Health looked at health care outcomes in high-income countries around the world, and we simply did not measure up....the unavoidable conclusion is that our system simply does not deliver....Countries like Singapore, South Korea, Japan, and Taiwan have developed systems that are better and less costly than ours. They spend roughly half the percentage of their GDP that we spend on care, yet they are healthier than we are, and their medical outcomes are in many cases measurably better than ours.

One of the specific recommendations that Haseltine offers for the U.S., based on what Singapore and others have done, is introducing higher co-payments for patients—getting them to have skin in the game—so they shop for better value and avoid wasting money on unnecessary forms of health care. This comes with a responsibility to make sure patients know exactly how much services really cost so they can be smarter shoppers. Another is to pay providers a relatively set fee to treat a patient with a given condition (so-called “bundled payments”), rather than being paid for the specific treatments and services they provide, to incentivize providers to produce the best results for the lowest cost.

I’m a big fan of looking for lessons from other countries to improve the U.S. health care system. In fact, I’ve written here before about what we can learn from Singapore (where Johns Hopkins runs a medical oncology facility).

Although I’m completely behind exploring internationally for ideas for improving health care value and outcomes, I fear it’s not always done with a sufficiently balanced approach. Yes, we should be looking for inspiration and new directions, but we also need to bring a bit of skepticism and a lot of context. For starters, and again as I’ve written here before, U.S. health care isn’t actually as bad as it’s made out to be when you take various factors into account. (Haseltine brings some of these points up, too.) But more important, the solutions that other countries have adopted, including Singapore, aren’t quite the panaceas they’re sometimes made out to be, both in terms of the results they produce, and in why they might not work well in the U.S.

Zakaria himself is an outspoken proponent of the U.S. adopting “better” health care systems from elsewhere in the world (for example here and here). I have great respect for Zakaria’s opinions, but on this subject he doesn’t seem to dig deep enough to spot the actual and potential problems with other country’s systems.

Here’s an excerpt from a Forbes article by Avik Roy, senior fellow at the Manhattan Institute for Policy Research, that highlights where Zakaria may be glossing over some of the challenges. Among Roy’s observations:

Zakaria opens by repeating some of the misleading statistics that are often tossed around about American health care. We have poor life expectancy (debunked here). We have poor infant mortality (debunked here). Etc. He then goes on to praise Britain’s National Health Service as a worthy model, soft-pedaling its terrible health outcomes, arbitrary rationing, and rapid cost growth. “Britain’s government-run system provides good care for all, and is more cost-effective than one might imagine,” Zakaria cheerily claims, while grudgingly conceding that “the quality of its care can shift as funding waxes and wanes.”

Then, after noting how Zakaria holds up Taiwan’s revamped health care system as a role model, Roy points out some issues with that country’s system:

Recent health spending growth in the Taiwanese system is similar to that of the United States: about 5 to 6 percent a year. While the Taiwan government has succeeded in raising premiums twice to cover the rapid spending growth, these premium increases have been unpopular, and it’s likely that future governments will find it difficult to enact further premium increases. “Don’t expect politicians to do something unpopular like that very often,” notes Zakaria.

Already, the Taiwanese system is spending more on health care than it is taking in on premiums, and borrowing to finance the rest. The government is starting to ration care to keep spending in line with revenues. When Taiwan’s single-payer system is 50 years old, like Medicare is today, it’s more likely to look like a failure than a success. Voters hold the line on premium increases, but have no control over system-wide spending. It’s a recipe for disaster.

Taking on Zakaria’s claims that Switzerland is “a version of Obamacare,” Roy says this:

“Imagine an alternate universe in which a version of Obamacare has been the law of the land for almost two decades,” says Zakaria in introducing the Swiss system. Huh?....While it’s true that one segment of Obamacare is similar to that of the Swiss system—the state-based exchanges for some lower-income individuals—the huge, and central, difference between Switzerland and Obamacare is that Switzerland applies this same model to the poor and the elderly. Obamacare, crucially, does not: instead, it leaves Medicare’s core structure intact, and indeed massively expands Medicaid to 17 million more people.

Not only that, but those who have tried to apply Swiss-style reforms to Medicare, like Paul Ryan, have been excoriated by the White House for seeking to impose a “radical” system that would force Medicare to “wither on the vine.” None of this, for whatever reason, bears mention in Zakaria’s program, in which he implies that conservatives are nutty and misinformed for allegedly opposing Swiss-style health care in America. Actually, it’s Zakaria who is misinformed.

If Obamacare truly converted the American system into Switzerland—by privatizing Medicare and Medicaid, and using the savings to expand coverage to the uninsured—President Obama could have gotten bipartisan support for his proposal. He proposed nothing of the sort.

I don’t mean to pick on Zakaria—he’s a brilliant, insightful commentator on many issues, and has some very smart observations to make about health care. But as much as I support the idea of looking at other country’s systems to see how they could help the U.S.—or any other country looking for better health care—we need to be very careful about thinking anyone has it figured it out yet. It’s largely a matter of trade-offs and adapting lessons from others, then integrating them into another system. Making health care work involves recognizing and understanding those trade-offs so that we can wisely choose among them.

Photo credit: cbia.com

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