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The eMatchPhysicians Blog

How Do We Compare To Our Old System and To Other Countries? Part One of Two – Countries

Posted on: Friday, July 10, 2009

For decades, the U.S. healthcare system was the envy of the entire world. Not coincidentally, there was far less government involvement in medicine during this time. America had the finest doctors and hospitals, patients enjoyed high quality, affordable medical care, and thousands of private charities provided health services for the poor. Doctors focused on treating patients, without the red tape and threat of lawsuits that plague the profession today. Most Americans paid cash for basic services, and had insurance only for major illnesses and accidents. This meant both doctors and patients had an incentive to keep costs down, as the patient was directly responsible for payment, rather than an HMO or government program.

We should remember that HMOs did not arise because of free-market demand, but rather because of government mandates. The HMO Act of 1973 requires all but the smallest employers to offer their employees HMO coverage, and the tax code allows businesses – but not individuals – to deduct the cost of health insurance premiums. The result is the illogical coupling of employment and health insurance, which often leaves the unemployed without needed catastrophic coverage.

Ron Paul, excerpted from Examiner Article

Upon reading this, we thought we should explore both “the old days” of healthcare referred to by Paul and also how other countries handle their health care. We start part one of this series with exploring how other countries handle their health care.

Many second and third world countries operate on a cash basis for any doctor and healthcare related visits. In Venezula, a vacationing family had to have emergency health care for their son after he had a seizure that was caused by an ear infection. After two hospital visits and ambulance rides, with multiple tests at both facilities, the bill came out to only $685.00. While this obviously isn’t comparable to prices in the US due to the lower cost of everything in a second world country, it is interesting to explore their system. Costs are kept down because doctors are required to donate three days a week of their time, something that would be unenforceable in the States but the idea is worth exploring. What if everyone in the medical industry donated an hour a week? How much money could we all save then?

In Canada, instead of paying private health insurance, Canadians pay more taxes to the government than we do. Income tax in Canada ranges from 24% to 46%, depending on your tax bracket. Most Canadians fall into the 24%-32% tax rates. The government, in turn, pays for all health care except for prescriptions and dental. Emergency dental procedures are covered, as are drugs given on an emergency hospital visit. Canadian doctors do not donate any time to the government, although they are less well-paid than their colleagues in the US and as a result there is a marked “brain drain” of doctors from Canada to the US. In contrast, in the US in 2008 companies paid an average of $12,700 per worker for health care premiums. Employees are often asked to kick in for premiums as well, and not all costs are usually covered in all plans. This means that running a company in the US is much more expensive than doing business in Canada or any other country. There have been a number of claims in the US media lately that Canadian healthcare is deplorable, but the only real down side is a wait time of 4 weeks for a specialist and longer for non-emergency surgeries. Most Canadians are happy to wait since the price is right.

In Sweden, the state pays 95% of medical costs, with the patient paying a nominal cost for examination on each visit. In addition, if a patient is declared ill, the patient is paid a percentage of their daily wage from the second day for the first 14 days by the employer, and after that by the state until they are declared fit.

In Nepal, the state subsidizes health care so that each resident pays about 70% of health care costs in cash on each visit.

Japan has an interesting system. Since 1973, all seniors have been covered for their health care. Everyone else is governed through a universal health care insurance system with fees set by a government committee. You must be enrolled in an insurance company if you are a resident of Japan. This is very similar to the two-tier insurance system that President Obama is putting forward, minus of course the free health care for seniors.

There are lessons to be learned here from all countries. In the case of Nepal, partial subsidy keeps costs down significantly. In Venezuela, payment is still solicited, but doctors donate a good portion of their time to ensure that the system works. Japan has managed to provide free health care for its seniors and runs a state-sponsored health insurance program, all for the low cost of 6% of their GDP, much lower than Canada’s 10% of their GDP for providing free health care for everyone.

It could be argued that the most sensible avenue to health care reform is to examine what works and what doesn’t in each country in order to put together a system that works well for everyone. For companies, health care organizations, and of course patients.

Tags: american healthcare system, healthcare, healthcare reform, healthcare systems, physician workforce, us health care

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