Saturday, August 12, 2017

Universal Insurance is Fix for U.S. Health Care

Senate Leader, Mitch McConnell, equating Single-Payer health Insurance systems with Socialism, Government, and Europe, rests on a set of deep archetypes.

It can trace its roots back more than a Century, to the days when Gilded Age Railroad Barons fulminated against the Leftist European Immigrants who, they believed, were infecting America with Communism. But it makes no sense in the context of the Health-Insurance Debate. In the first place, it gets its terms all wrong. A Single-Payer system is Socialized Health Insurance, not Socialized Medicine,

In many Countries with Single-Payer systems, such as Canada, most Medical Providers are Private, For-Profit businesses. It does not imply a “Government Takeover of Everything”, or even of all Health Insurance. In France, Spain, Britain, and elsewhere, Single-Payer Government-Provided Insurance Co-Exists with Private Health-Insurance industries supplying Supplemental Policies for those who want Extra Coverage.

Nor is Single-Payer Health Insurance synonymous with “European Health Care”, not just because Insurance is not Care, but because much of Europe does not have a Single-Payer system. European Countries that do not have Single-Payer Health Insurance include Switzerland, the Netherlands, and an obscure Republic called Germany.

These Countries achieve Universal Coverage through a mix of Private, For-Profit and Not-for-Profit Insurers. This Private-Public combination may sound like the sort of Ideological breakthrough that could serve as a Compromise between Democrats and Republicans.

But it isn’t new. Germany has been using some variety of this model ever since it invented Public Health Insurance, 134 years ago, during the Administration of Otto von Bismarck. In fact, what is interesting about European schemes for Universal Health Insurance is precisely their variety.

The systems fall into Three Paradigms:

- In the First, the Government takes over both Health Insurance and the Provision of Care, Employing Doctors, and Running Hospitals.

- In the Second, the Government provides Universal Health Insurance, but leaves much of the Provision of Care to the Private Sector. This is the “Single-Payer” model to which McConnell refers.

- In the Third, the Government leaves both Insurance and Care to the Private Sector, but uses Regulation, Government Subsidies, and an Individual Mandate to Guarantee that everyone is Covered.

Most Countries fall somewhere between these three.

Britain, Italy, Spain, and Sweden essentially use the First System. Everyone is Enrolled in a National Government-Run Health system, most Health Care is Paid for by the Government, usually Free of Charge, and most Doctors Work for the Public Health Service. But there are also some Private Doctors and Hospitals, and Private Insurers offering Supplemental Plans for those who can afford them.

France’s Health-Insurance System, like Canada’s, is mostly based on the Second System, the “Single-Payer” concept. Doctors are mostly Private, but the Basic Insurance schemes that provide Universal Coverage are Government-Funded. Most people in France raise up their Coverage with Supplemental Private Insurance Plans.

Germany, meanwhile, falls somewhere between Systems Two and Three. Most Citizens are covered by Government-Administered schemes, but those Earning above a certain Threshold can choose to buy Private Health Insurance.

Finally, in the Netherlands and Switzerland, Health Insurance is handled almost entirely by Private Insurance companies, and Doctors and Hospitals are generally Private. Coverage is Universal because Citizens are Legally obliged to Buy it, which ensures that Healthy People stay in the System, holding Insurers’ Costs Down. The Government keeps Premiums affordable by pumping in Generous Subsidies, and bars Insurers from Rejecting those with Pre-Existing Conditions. It also Regulates Providers in order to control Expenses.

If this last Variant sounds familiar to Americans, that is because it is essentially the same as Obamacare. One salient difference is that because the Netherlands and Switzerland provide more Subsidies, Premiums are much Lower. We also Enforce the Mandate more Strictly. As a result, they manage to insure over 99% of their Citizens, whereas we Insure only about 90% across all Sectors.

All this may seem terribly complex. In fact, European Countries’ Health-insurance systems are, without exception, simpler than America’s, which is a bewildering hodgepodge of Private and Public systems. For those over 65, America has a Single-Payer system, Medicare, that dishes out Taxpayer Money to For-Profit Private Health-Care Providers with virtually no Cost Controls. For those earning below a certain Threshold, which varies by State, there is another Single-Payer system, Medicaid, that does have Cost Controls. For those who have served in the Armed Forces, like me, America has a single-Payer system, the Veterans’ Administration (VA); some Veterans are treated at Government-Run Hospitals, as with Britain’s National Health Service, and some get treated at Local Hospitals with VA credits. For those who are Employed by businesses above a certain size, America requires Employers to provide Private Insurance subsidised by a Regressive Tax break. For those who earn too much for Medicaid but whose Employers do not provide Insurance, America has Obamacare: a heavily Regulated, Government-Subsidized system of Private Insurance Exchanges with an Individual Mandate, like the Netherlands and Switzerland.

That Complexity contributes to Costs. America spends vastly more on Administration: 8% of Health Spending, versus 2.5% in Britain. As of 2013, Duke University Hospital had 400 more Billing Clerks, 1,300, than Hospital Beds, 900. Americans also consume more Health Care. The result is that Health Care manages to chew up about 17% of GDP without even Covering Everyone. No European system costs more than 12% of GDP. Americans would be getting a terrible bargain even if their resulting Health was as good as that of Europeans. In fact, it is Worse. Europeans have longer life Expectancy than Americans. Fully 28% of Americans have multiple Chronic Health problems, such as Diabetes or Arthritis, more than in any European Country. America does manage to Outperform most European Countries on Cancer Mortality, though even there, Sweden does better.

But the main reason why McConnell should hesitate before dismissing “European Health Care” is not so much its Effectiveness as its Variety. There are not that many ways to achieve Universal Health Insurance Coverage in a Country. Fundamentally, the Government must either provide it Directly, or Regulate and Subsidies the Insurance Industry to do it. For any variant one can imagine, some European Country has probably tried it out.

NYC Wins When Everyone Can Vote! Michael H. Drucker
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