Here are my takeaways.
Role of government
Governments in all eight countries are significantly involved in funding health care, spending between six and 10 per cent of gross domestic product in the process. And the United States government spend exceeds Canada’s.
Seven of the eight countries have a mandatory standard benefit that covers the entire population. But the standard entitlements aren’t equally comprehensive, a major difference being the provision – if any – for prescription drugs and dental care. Switzerland’s package is judged to be particularly broad.
The U.S. is the exception.
Reflecting its incremental evolution, the American system is a patchwork. Nonetheless, an estimated 91 per cent of the population have some form of health insurance. Of those who don’t, an unspecified proportion consists of healthy younger people who don’t find the purchase of insurance fits with their spending priorities.
Still, while most Americans are sufficiently insured to have access to top-quality care, those who are either uninsured or inadequately insured could find themselves in financial difficulty or even going without.
More than half of American health insurance comes from tax-exempt employer-sponsored plans. The rest is a combination of Medicare (for the elderly), Medicaid (for low income) and individual market (a significant chunk of which is government-subsidized).
The report divides funding models into four categories:
- Single payer (Canada and the U.K.), defined as the government being “the predominant purchaser of medical services, with restrictions on private insurance.”
- Dual payer (Australia and France), described as the government being “the primary purchaser of medical services, supplemented by private insurance whose premiums are publicly subsidized.”
- Competing payer (Germany, the Netherlands and Switzerland) is where the “government subsidizes the purchase of private insurance.”
- Segmented payer is the report’s descriptor for the American patchwork outlined above.
Premiums, deductibles, co-insurance, co-pays, et al.
Two developments, both positive on their own merits, have allied to put intense pressure on health costs over the last several decades.
One is the increase in longevity. As requirements for health care are heavily back-ended over the human lifespan, this has a disproportionate effect on costs.
The other development is the quantum leap in medical technology’s capabilities. And if a treatment is possible, we naturally want it.
So, in addition to defining the scope of a health-care entitlement, governments have to decide how to pay for what they promise.
Canada and the U.K. are outliers, choosing to fund their entitlements through general taxation. The other six countries add an additional element to the mix.
Although it varies, this additional element can include premiums, deductibles, co-insurance or co-pays. It may even include all four, Switzerland being an example.
France also permits balance billing, meaning the provider can charge an additional amount above the official government fee schedule. The report estimates that as many as 42 per cent of specialists and 73 per cent of surgeons do this.
In pursuit of equity, Canada restricts supplemental insurance to items that aren’t covered by the standard medicare entitlement. But not all countries follow suit.
For instance, both the U.K. and Australia permit the purchase of supplemental insurance as a means of avoiding or reducing time spent on waiting lists.
Measured as a percentage of household consumption, the report’s out-of-pocket comparison surprised me.
Thanks to prescription drugs, “the average out-of-pocket costs faced by Canadians are similar to those faced by Americans.” People in both countries devote between two and three per cent of household spending to health care.
But that’s not all.
The out-of-pocket percentage falls into the same range in Australia, Germany and the Netherlands. And Switzerland’s is approximately double, accounting for over five per cent of household consumption. Switzerland’s reliance on deductibles means that roughly 28 per cent of its health care costs are out-of-pocket.
Of the eight countries studied, the report is particularly friendly towards Germany.
It’s also philosophically ill-disposed towards single payer, believing that it restricts both choice and competition. Consequently, it attributes Canada’s relatively poor performance on things like specialist wait times and MRI availability to the funding model’s inherent rationing.
Canadians, of course, may beg to differ.
Pat Murphy casts a history buff’s eye at the goings-on in our world. Never cynical – well perhaps a little bit.