Have you ever heard about how the “Titans of Industry” in the Gilded Age made so. much. money? It’s because there was so little regulation on big business and the treatment of workers at the time. If you wanted to pay your workers an un-livable wage and work them 12 hours a day, 6 days a week under dangerous conditions, there was nothing to stop you. I think we face a similar lack of regulation in healthcare and insurance industries here in America.
The American healthcare system bears the dubious distinction of being one of the only developed nations whose healthcare system happened pretty much by accident. There was no decision that private health insurance from employers and relatively unregulated pharmaceutical markets are better. It just happened that way.
It started during the early twentieth century. Hospitals realized that they could make more money if they got people to buy into a “subscription” for healthcare on the idea that they would get a discount for services if they needed them. Pretty soon hospitals realized they could get a good business by offering scopolamine births as well and that added to the attractiveness of insurance, as it came to be known.
The idea really took off during World War II when factories were ramping up production and needed more workers. The catch was that the government had instituted caps on wages during the war, so manufacturing companies couldn’t compete by offering higher wages. So they offered health insurance as a benefit. After the war ended, employers just kind of kept doing it and soon it became a popular practice.
So in a nutshell here’s what the rest of the developed world is doing with nationalized healthcare:
Nationalized healthcare doesn’t always come easily– Sometimes nationalized health care is ushered in with something less than thunderous applause. In Germany, nationalized health care occurred soon after Germany became a country in 1871. At first sickness funds were instituted to pay for workers who couldn’t pay for their own healthcare. In 1883 nationalized health insurance was instituted under Chancellor Bismarck. Canada was another matter…
Canadian doctors were adamantly opposed to new reforms in healthcare. After the passage of the Saskatchewan Medical Care Insurance Act in 1961, doctors actually went on strike for 23 days. Emergency rooms were open with reduced staff, but most private practitioners closed their offices. (Ironically enough, mortality rates actually declined during the strike.) The local media and Canadian public at first demanded that the provincial government back down on their health plan. But as the strike wore on, the tide of public opinion turned against the doctors. The strike ended with universal health care still in tact. A series of compromises followed, which led to the current nationalized health care in seen in Canada today.
Fewer tests and procedures- Americans get lots of tests and procedures. More than people in other countries- with worse results. We still have the highest mortality and morbidity rates of any developed country despite paying more on healthcare. Americans are also more likely to suffer the effects of physician and hospital errors than patients in other countries. This could be due, in part, to the tendency of American doctors to favor more complex procedures which have accompanying risks.
One thing that will be a challenge in American healthcare reform is the continued cultural belief that Americans seemed to hold that more and newer technology improves patient outcomes. It’s an interesting phenomenon, but I have noticed that many people use availability of technology and complicated procedures like surgeries, MRI’s and CT scans as a metric for measuring the perceived value of a hospital, doctor or healthcare in general.
Doctor and Berenson (2009) theorize that when Americans express the opinion that the “United States has the best healthcare in the world”, they may be referring to access to new high-technology. They also point out that media coverage of procedures of a few procedures and patients (like transplant recipients and delivery of high-order multiple births, for example) may overshadow the reality of the average American’s health care. They also find that despite using more surgeries and technology than other countries, that the United States does not see better outcomes for its patients. Even in the care of premature infants, which has grown by leaps and bounds for developed countries, the abundance of technology in the United States has not been able to decrease our nation’s rate of infant mortality- which remains one of the highest of any developed nation- and prematurity remains a significant number of those deaths. Technology certainly has its good uses- but its overuse also creates problems as well and drives up costs.
In the United States, most hospitals (whether non-profit or for-profit) make decisions about the acquisition of new technology on an individual basis seeking a competitive advantage in the marketplace. This leads to an over-abundance of high-cost technology, the costs of which must be offset by using it frequently- whether necessary or not. Somebody has to pay for all this high tech machinery and guess who it will be? You guessed it, the patient. The increased costs of acquiring, using and maintaining new and technologically advanced equipment is passed on to the patient who may undergo and pay for tests that are not medically necessary, but which benefit the hospital by offsetting their costs.
In contrast, Canada has a full range of high technology facilities, though these facilities are rarer there than in the United States. This is because the provincial governments seek to control rising health costs by allocating the use of technology among hospitals in any given region . Because healthcare in Canada is federally funded and allocated through the provinces, there is an incentive to keep the cost of healthcare low. This interest in keeping healthcare costs low does not exist in the United States where private insurance dominates and healthcare facilities are businesses with an interest in maximizing revenue.
Lower cost medications-
The Pharmaceutical Research and Manufacturers of America (a.k.a. Big Pharma Lobbyist group) was recently involved with fighting Hillary Clinton’s bill that would put a cap on prescription drug prices. PhRMA claims that this would prevent new innovation in drug development . Clinton claimed it would make prescription drugs more affordable for patients. So who is more likely to be telling the truth on this issue? (This sounds like a trick question…)
Would caps on prescription drugs really mean that pharmaceutical development would be sent back to a “Stone Age” or simply that some folks will have to do without that second home in Aspen or a third BMW? While I don’t have the ledgers of any pharmaceutical companies in front of me, I can tell you what it’s like in Great Britain, a developed country with a high standard of living (and lower mortality rate than the US) who <gasp!> have instituted prescription drug caps.
The UK still has several problems with its healthcare system, but they have managed to resolve some issues and pharmaceutical costs are one of them. A national board negotiates with the pharmaceutical industry to set prices that allow for a profit- just not a profit so high that people are selling their possessions to pay for food after shelling out for prescriptions. The British approach actually rewards innovative research and discourages patent manipulation.
Companies must submit financial records which are then used in determining set proportions for expenditures on in-patent branded drugs (like what percentage of revenue can be spent on marketing, for example). And here’s the really wild thing about prescription drug caps in Great Britain: if the price set by the national board and the pharmaceutical companies result in higher profits than allowed, the pharmaceutical company has to pay back the excess profits. The overall profits of the pharmaceutical companies are less than can be expected in the United States, but companies are allowed operating budgets to provide for their needs and guarantee a profit while the actual prices of prescription drugs are stabilized for patients. And while coverage for generic drugs actually remains controversial for some healthcare plans and hospitals in the United States, in Great Britain general practitioners are actually given bonuses for prescribing mostly generic drugs.
It’s pretty common in Canada for people to have supplemental insurance for dental and optometry services. So it’s not like the Canadian health system covers everything. But it does cover a lot.
Higher taxes- It’s true. Many countries with nationalized healthcare have higher taxes than the US. That’s how they fund healthcare. But the cost has to be paid somewhere, somehow, by someone and guess who ends up footing the bill in the US? You guessed it- the patient. (Or in the case of Medicaid and Medicare, the taxpayer. FYI- we are forking over a lot of money for unnecessary cesarean sections on Medicaid here in the US.) In 2013, the highest proportion of debts collected from Americans was medical debt (38%). That’s more than student loans (25%) and credit cards (13%)!!!! So the idea that our healthcare system is less expensive is really just an illusion. This is why we Americans are frequently finding ourselves turning to GoFundMe to help us offset the our through-the-roof-medical bills.
Better care!- Want a doctor to make a house call in the middle of the night to treat your sick toddler? Here in America, that’s like getting a unicorn. In France, it’s a reality. Doctors and nurses make a variety of house calls in France. They cite particular benefits for care of the elderly as well as for families with new babies. And especially for maternal and child health, France is doing an outstanding job with much lower mortality rates than the US. In Denmark, mothers of any income or socioeconomic background can have a home visitation nurse to help them with adjusting to a new baby– whether it’s a first baby or subsequent birth.
But it’s not just nationalized healthcare either. In Japan, there is a hybrid system of job based insurance and government healthcare. But the government keeps prices low. Doctors and hospitals don’t make as much in Japan as they do in the US, but the healthcare is affordable. The Japanese government and the healthcare industry negotiate every two years and set prices on every procedure. (I have a friend whose husband is Japanese and his family live in Japan. She needed a scan one time and was quoted a price of a few thousand dollars in Alabama. She said she’d just get it done when visiting her in-laws and the price would be a few hundred.) And Japanese insurance companies aren’t allowed to be as picky as Americans about who they will cover and what claims they will pay on.
Here in the US, we have a lot better situation than most of the world. We have access to modern facilities, sanitation and good nutrition. The problem is that where we are and where we should be is still a wide divide- especially considering that we spend more on healthcare than any other nation in the world. The Declaration of Independence states that we are entitled as human beings with a right to life. And part of that means preserving our lives through good quality healthcare.