Health Care Around the World

Canada has a single payer system but the provinces have the bulk of the responsibility of running the health care system for their own residents. In order to qualify for federal funding, each province must meet the following criteria.

1. Universality. Available to all provincial residents on uniform terms and conditions;
2. Comprehensiveness. Covering all medically necessary hospital and physician services;
3. Portability. Allowing residents to remain covered when moving from province to province;
4. Accessibility. Having no financial barriers to access such as deductibles or copayments; and
5. Public administration. Administered by a nonprofit authority accountable to the provincial government.

Nevertheless, the 2005 Canadian Supreme Court ruling striking down Quebec’s prohibition on private insurance contracting may foreshadow significant changes in Canada’s health care system. 

Percent Insured. ~100%

Funding. Funding is provided jointly by the federal and state governments. The federal government uses funds from general revenue to provide a block grant to each of the provinces. The block grant finances only about 16% of each province’s health care expenditures. The remainder is funded by provincial taxes: mostly personal and corporate income tax. Health care spending makes up between one-third to one-half of provincial social welfare spending. For the nation as a whole, health care costs only 9% of GDP.

Private Ins. “At one time, all provinces prohibited private insurance from covering any service or procedure provided under the government program. But in 2005, the Canadian Supreme Court struck down Quebec’s prohibition on private insurance contracting.” Private clinics are barred from offering medical services which are covered by the Canada Health Act, but many begun to offer services in the black market.

Physician Compensation. Physicians work in private practice and are paid on a fee-for-service basis. Since these fees are set by a centralized agency, wages are fairly low which has lead to a physician shortage. There are only 2.1 physicians per 1,000 people. This is far less than the OECD average of 3.0 physicians per 1,000. Hospitals are funded on a global budget basis. Capital expenditures are reviewed and approved on a case-by-case basis.

Physician Choice. Referrals are required for all specialist services except the ED.

Copayment/Deductibles. There are generally no copayments or deductibles for services. However, British Columbia, Alberta and Ontario charge insurance premiums (although health services cannot be denied because of inability to pay).

Technology. The U.S. has five times as many MRI machines per capita as Canada and three times as many CT scanners. However, because of Canada’s proximity to the U.S., many Canadians do have the option of coming to the U.S. for treatment.

Waiting Times. In a 2005 decision striking down part of Quebec’s universal care law, Canadian Supreme Court Chief Justice Beverly McLachlin wrote that it was undisputed that many Canadians waiting for treatment suffer chronic pain and that “patients die while on the waiting list.” For instance, the Fraser Institute finds that 800,000 Canadians are waiting for treatment at any given time. “According to [the Fraser] survey, treatment time from initial referral by a GP through consultation with a specialist, to final treatment, across all specialties and all procedures (emergency, nonurgent, and elective), averaged 17.7 weeks in 2005.”

If you are interested on more information about the Canadian health care system, see my October 2, 2007 post.

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

The most significant difference between Germany’s health care system and that of other countries is its use of sickness funds. All Germans with incomes under €46,300 are required to enroll in one of the sickness funds. Those with higher incomes can either join a sickness fund themselves or opt out and instead buy private insurance.

The federal government decides the global budget and which procedures to include in the benefit package. The National Association of Sickness Funds and the National Association of Physicians also help to form which benefits are included in the sickness fund benefit package. The state government regulates physicians and sets physician reimbursement rates.

In 2006, Angela Merkel proposed reforming the health care system by creating a centralized health fund, shifting funding from payroll taxes to general revenues, trimming benefits, and increasing cost sharing. This plan was abandoned due to a lack of public support and political opposition.

Percent Insured. 99.6% (There are about 300,00 uninsured individuals)

Funding. Sickness funds are financed through a payroll tax which averages 15% (but varies depending on the fund chosen). The tax is split between the employer and employee. In 2006, Germany ran a €7 billion deficit and the government has proposed a 1% increase in the payroll tax.

Private Ins. Approximated 9% of Germans have supplemental insurance. The private, supplemental insurance covers items not paid for in the sickness fund benefit package. As mentioned above, only middle- and upper-class individuals can opt-out of the sickness funds. Of those eligible to opt out, only about 1/4 of individuals do decide to opt out.

Physician Compensation. Physician reimbursement is set through negotiation with the sickness funds. Most of the negotiating power, however, lies with the sickness funds. Thus, the purchasing power of German physician’s wages is about 20% of that of physicians in the U.S. In 2005, there were physician strikes over low wage compensation. Further, physicians have to deal with significant reimbursement caps and budget restrictions. According to Tanner, physicians only attempt to provide the minimum care necessary.

Copayment/Deductibles. Until recently, there have been almost no copays or deductibles. Recently, Germans have begun paying €10 copays for prescription drugs, doctors visits, and hospital stays.

Technology. The U.S. has four times as many MRI units per capita and twice as many CT scanners per capita. Tanner claims that the existence of a small private insurance market helps to supplement technology spending. For instance, CT scanners at one point were almost non-existent in the public sector, but competition with private insurance companies meant that the public system had to add more CT scanners.

Waiting Times. It is a matter of some debate whether or not there are long waits for medical care in Germany. A WHO report says that “Waiting lists and explicit rationing decisions are virtually unknown.” On the other hand, another study finds that care is frequently rationed. For instance, the elderly and those with terminal illnesses are often denied care. Since hospitals are run through a global budget, this can reduce their incentive to treat those with serious, expensive-to-treat medical conditions.

Benefits covered. There is an extensive benefit package which even includes sick pay (70% to 90% of pay) for up to 78 weeks.

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

I have already written about Switzerland in previous posts (see Swiss Healthcare Sytem: Part I, and Part II). Still of all the countries with universal health care, Switzerland’s is the most market-oriented and merits discussion. Switzerland’s health care spending as a percentage of GDP is second only behind the U.S. (11.6% of GDP for Switzerland, 15.3% for the U.S. according to Frontline), yet the government pays for very little of this funding. The Swiss system is similar to the “managed competition” health care plan proposed by the Clintons in the early 1990s.

Percent Insured. 99.5%. Does this mean a mandated system system would lead to universal coverage in the U.S?  This is unlikely.  In Switzerland, a mandate for auto insurance has nearly 100% compliance, but in the U.S. the auto insurance mandate’s compliance rate is only around 83%.

Funding.  Insurance is purchased by individuals.  Individuals generally must pay the full cost of premiums, but the government helps to finance insurance purchases for the poor.  “These subsidies are designed to prevent any individual from having to pay more than 10 percent of income on insurance,” and one third of Swiss citizens receive this type of subsidy.    Thus, the Swiss government only pays for 24.9% of health care costs (compared with 44.7% in the U.S.).

Private Insurance.  All insurance is private insurance.  However, insurance companies are mandated to offer the same “basic benefits package.”  Some physicians operate outside the negotiated schedules and individuals are beginning to purchase supplemental insurance to cover the cost of these higher cost physicians.  Some estimates claim that 40% of Swiss citizens have purchased supplemental insurance.

Physician Compensation.  Physician compensation is negotiated between the insurance companies and doctors on a canton by canton basis.  Balance-billing is not allowed.  Switzerland has strong regulation with respect to nonphysician health care professionals (e.g., nurses, PAs, NPs,) and thus patients are often compelled to use expensive physicians even when this may not be medically necessary.

Physician Choice.  According to a WHO study, Switzerland ranks second only to the U.S. in terms of the ability of patients to choose their provider.

Copayment/Deductibles.  Premiums are community rated and only adjusted for sex and age.  Employers do not pay for workers insurance and thus many Swiss have opted for less expensive plans with higher deductibles.  This has lead to the Swiss paying for 31.5% through out of pocket expenses.

Waiting Times.  According to a WHO study, Switzerland ranks second only to the U.S. in terms of timely care.

Benefits Covered.  All insurers cover the “basic benefits package” so most competition between insurers is based on price and service.  A politically defined benefit package is susceptible to influence from special interest groups.  Thus, Uwe Reinhardt notes that “over time, the growth in compulsory benefits has absorbed an increasing fraction of the consumers’ payment, thus compromising the consumer-driven aspects of the Swiss system.”

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

Great Britain represents all that is good and bad with centralized, single-payer health care systems. Health care spending is fairly low (7.5% of GDP) and very equitable. Long wait lists for treatment, however are endemic and rationing pervades the system. Patients have little choice of provider and little access to specialists.

Percent Insured. ~100%

Funding. Great Britain has a single payer system funded by general revenues. With any centralized system, avoiding deficits is difficult. In 2006, Great Britain had a £700 million deficit despite the fact that health care spending increased by £43 billion over five years.

Private Insurance. 10% of Britons have private health insurance. Private health insurance replicates the coverage provided by the NHS, but gives patients access to higher quality care, and reduced waiting times.

Physician Compensation. Unlike in the case of other single payer systems such as Norway, most physicians and nurses are mostly government employees. In 2004, the NHS negotiated lower salaries for doctors in exchange for reduced work hours. Few physicians are available at night or on weekends. Because of low compensation, there is a significant shortage of specialists.

Physician Choice. Patients have very little physician choice. However, under the experimental London Patient Choice Project, patients waiting more than six months for treatment will be offered a choice of four different treatment providers.

Copayment/Deductibles. There are no deductibles and almost no copayments except for small copayments for prescription drugs, as well as for optical and dental care.

Waiting Times. Waiting lists are a huge problem in Great Britain. Some examples: 750,000 are on waiting lists for hospital admission; 40% of cancer patients are never able to see an oncologist; there is explicit rationing for services such as kidney dialysis, open heart surgery and care for the terminally ill. Further, minimum waiting times have been instituted to reduce costs. “A top-flight hospital like Suffolk Est PCT was ordered to impose a minimum waiting time of at least 122 days before patients could be treated or the hospital would lose a portion of its funding.”

Benefits Covered. The NHS system offers comprehensive coverage. Because of rationing, care might not be as easy to get as advertised. Terminally ill patients may be denied treatment. David Cameron has proposed that the NHS refuse treatment to smokers or the obese (see 7 Sept 2007 post).

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

Greece has an employer-based health insurance system in which all Greek employers enroll their employees in one of the “social insurance funds.” Due to strict regulation by the Greek Ministry of Social Health and Cohesion, Greece in essence has a single payer system. For instance, the Ministry controls employee contribution rates, insurance benefit packages, and the types of doctors a social insurance fund can employee. Also, employers can not choose among competing sickness funds as they can in Germany, they must choose an their industry-specific social insurance fund.

The National Health Service (NHS) also operates its own health care services. For instance the NHS operates hospitals and employs some physicians. One can see the NHS as a backup for the social insurance funds, but in some rural areas, the NHS is the principal provider of care.

Percent Insured. Similar to the U.S., only 83% of Greeks have health insurance covering primary care. Most Greeks (97%) do have health insurance for hospital care.

Funding. In Tanner’s opinion, “the Greek health care system is funded through payroll taxes, general tax revenue and bribery.” (see below)

Private Insurance. About 8% of Greeks have private health insurance but this number has been growing rapidly in recent years.

Physician Compensation. About half of physicians are employed directly by the social insurance fund. The other half are in private practice, but are contracted on a fee-for-service basis by the insurance funds. Unlike in France, no balance billing is allowed. Despite this fact, many physicians demand under the table payments in exchange for treatment. Further, physicians often “actively attempt to persuade patients to move from a doctor’s sickness fund contract to the doctor’s private practice. Patients who switch pay out of pocket but receive faster and better care.”

Physician Choice. Greeks must have a referral from a GP in order to receive care at a public or NHS hospital.

Copayment/Deductibles. In theory, there are no deductible or copayments. In reality, the need to make informal payments to providers means that most patients incur significant out of pocket expenses. In fact, one estimate claimed that informal out-of-pocket payments make up 42% of healthcare expenditures.

Technology/Quality. Hospital administrators are appointed not based on merit, but instead based on their political affiliation. Because of this, many hospitals suffer from poor quality. Pay for doctors and nurses is fairly low and thus there are severe staffing shortages. In NHS hospitals, “it has been estimated that less than half of authorized medical positions are actually filled.” The U.S. has twice as many MRI units per capita and 20% more CT units per capita.

Waiting Times. Wait times for medical care are very long in Greece. This is likely due to the provider shortages caused by low reimbursement rates. The wait for treatment at both public and NHS hospitals can be very long. There is a six month wait for some surgeries and the wait for appointments with specialists can be as long as 150 days. Simple blood tests often take a month.

Corruption and Inequality. There is significant corruption and inequality in the Greek system. For instance, some funds, known as “noble funds” have more extensive benefits and lower worker contributions. The reason for this is that strong worker unions are able to use their political clout to get a better deal for their workers at the expense of workers in other industries. Also, most doctors demand under the table payments in order to see patients or if patients want higher quality care. Further, many doctors receive kickbacks for referrals to private hospitals and diagnostic centers.

We can see that the centralized system of Greece is breaking down. Individuals are demanding higher quality care, but due to government rationing, significant corruption is occurring.

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

Portugal is similar to Norway in that it is a very centralized health care system. Despite the fact that Portugal ranks highly according to the WHO, there is widespread discontent with the Portuguese system.

Most individuals in Portugal are insured by the state-run, single-payer National Health System. However, 25% of the population is insured through an occupation based insurance scheme. These occupation based schemes include most government, military and telecommunication workers. “These plans were originally intended to be incorporated into the NHS, but their powerful constituencies have prevented that from occurring.”

Funding. Financing of the health care system is generated from general tax revenues. Health care spending accounts for 13% of government revenues. The National Health System (NHS) has an annual global budget, but it is often exceeded by a significant amount. Individuals in the occupation-based insurance schemes pay a premium of about 1% of their salary.

Private Insurance. About 10% of the population has private insurance. Private insurance pays for hospital stays and specialist care. Because there is no guaranteed renewability, premiums are often significantly raised or customers are dropped when they have very high claims amounts.

Physician Compensation. About half of primary care doctors are government employees and the other half work in private practice. Most specialists elect to go into private practice and are paid on a contractual basis by NHS.

Physician Choice. Patients must choose doctors from a list and can only change GPs with a written application. GPs act as gatekeepers. Referrals from the patient’s GP is needed to access specialist care.

Copayment/Deductibles. For most services, there is no or little copayments. For diagnostic tests, hospital admissions, specialists visits and prescription drugs, however, copayments can run up to 40% or more.

Technology. Portugal is seriously lacking in medical technology. The U.S. has 7 times more MRI units per person than Portugal and 20% more CT scanners.

Waiting Times. Waiting times are very long in Portugal. Further, there are often long waits for specialist visits. The European Observatory on Health Systems says the Portugal is heading towards “de facto rationing.” Because of this, many Portuguese either go to Spain for treatment or head to the emergency department. In fact, “at least 25 percent of emergency room patients do not need immediate treatment.”

Benefits Covered. On paper, all benefits are covered, but in reality, many benefits–such as dental care and rehabilitation–are rarely provided.

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

All Norwegians are insured by the National Insurance Scheme. This is a universal, tax-funded, single-payer health system. Compared to France, Italy, Spain and Japan, Norway has the most centralized system.

Percent Insured. 100%. All Norwegian citizens and residents are covered.

Funding. The National Insurance Scheme is funded by general tax revenues. There is no earmarked tax for health care. The Norwegian tax burden is 45% of GDP. The government sets a global budget limiting overall health expenditures and capital investment.

Private Insurance. Norwegians can opt out of the the government system and pay out-of-pocket. Many pay out-of-pocket and travel to a foreign country for medical care when waiting lists are long.

Physician Compensation. Hospital and nonhospital physicians generally are paid on a salaried basis. Some specialists can receive an annual grant and fee-for-service payments. Reimbursement rates, however, are set by the government and, unlike in France, the physician can not charge higher rates than the centrally-set reimbursement rate.

Physician Choice. Patients choose general practitioners (GPs) from a government list. These GPs then act as gatekeepers for specialist services. Patients can only switch GPs twice per year and only if there is no waiting list for the requested GP.

Copayment/Deductibles. There are no copayments for hospitals stays or drugs. There are small copayments for outpatient treatment.

Waiting Times. There are significant waiting times for many procedures. Many Norwegians often go abroad for medical treatments. The average weight for a hip replacement is more than 4 months. “Approximately 23 percent of all patients referred for hospital admission have to wait longer than three months for admission.” Also, care can be denied if it is not deemed to be cost-effective.

Benefits. Very generous. The program also provides sick pay. “As Michael Moore has noted, the Norwegian system will even pay for ’spa treatments’ in some cases.”

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

Japan has universal health insurance based around a mandatory, employment-based insurance. “The Employee Health Insurance Program requires all companies with 700 of more employees to provide workers with health insurance among some 1,800 ’society-managed’ plans. Nearly 85% of these plans cover a single company…Most of the rest of the [health insurance plans] are industry-based.” Small business workers join a government-run small business national insurance plan. The self employed and retirees are covered by the Citizens Insurance Program administered by municipal governments.

Japan has very generous health insurance benefits, significant provider choice, and high quality medical technology, but costs are not as high in the U.S. One reason for this is a significant level of cost sharing. The average Japanese household spends $2300 per year on out-of-pocket health care expenses (this figure excludes the payroll taxes used to finance health insurance premiums). Other reasons for lower health care costs is a healthy life-style, a lower incidence of disease and a general Japanese cultural aversion towards invasive procedures.

Another reason for lower costs is that the Japanese government sets a reimbursement fee schedule for all physician services. This has resulted in “assembly line medicine” where “two-thirds of patients spend less than 10 minutes with their doctor; 18 percent spend less than 3 minutes.”

Funding. The health insurance plans are funded by an 8.5% (for large business) or an 8.2% (for small-businesses) payroll tax . The small business national health insurance program is also supplemented by government funds. The payroll taxes are split almost evenly between the employer and the employee. Sometimes these funds are not sufficient to cover costs. In 2003, more than half of the insurance plans at large firms lost money and many companies are now joining industry-based plans. Those who are self-employed or retired must pay a self-employment tax. The Roken is financed by contributions from the Employee Health Insurance Program, the small-business national health insurance, and the Citizens Insurance Program. The elderly do not contribute to this plan.

Private Insurance. Very few Japanese use private, supplemental insurance. Private supplemental insurance pays for less than 1% of health care costs.

Physician Compensation. Hospital physicians are salaried employees but nonhospital physicians are paid on a fee-for-service basis. Hospitals and clinics are privately owned but the government sets the fee schedule, just as it does for private physicians. The fee-setting system, however, is very corrupt since there are over 3000 procedures whose price needs to be set. For instance, “[i]n 2004, a group of dentists was indicted for bribing the fee-setting board.”

Physician Choice. There are no restrictions on physician or hospital choice and no referral requirements.

Copayment/Deductibles. Copayments are 10% to 30%, but generally closer to 30%. Copayments are capped at $677 per month for the average family.

Technology. Japan has high levels of technology. Patients have just as much access to MRI and CT units as in the U.S. Further, because the government imposes a fee schedule, competition is based solely on technology (there is no price competition).

Waiting Times. Waiting times are a significant problem at the best hospitals. Since the best hospitals can not charge higher prices there will be a queue. Many hospitals have been known to accept “under the table” payment to see patients quicker. Thus, the market may be working, whether or not policy makers want it to do so.

Benefits covered. Very generous.

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

The Spanish have one of the most centralized health care systems in the world. Patients have no choice of provider and there is almost no cost sharing. Like most centralized systems without cost-sharing, there are significant waiting times for procedures. This has resulted in a 2 tiered system where 12% of the population receives higher quality care by purchasing private insurance.

Spain ranks #7 on the WHO health care rankings and the Spanish the second-most satisfied with the quality of their health care in Europe (behind France).

Percent Insured. 98.7%

Funding. The Spanish health care system has decentralized control run by each of the regions (comunidades autónomas). Thus results in wide variations in health care spending and quality across each for the regions. The central government gives block grants to each region based on its population and demographics. These funds are raised from general revenues.

Private Insurnace. About 12% of the population has private health insurance (about 25% of people living in Madrid or Barcelona have private health insurance). Like in other countries, we see evidence of a two-tiered system. Private insurance payments account for 21% of total heat care expenditures. Further, a fair number of Spaniards pay out-of-pocket for care outside the national healthy system.

Physician Compensation. Most physicians are quasi-civil servants and are paid a salary based on seniority and credentials. The fact that doctors are paid a salary reduces their incentive to under- or over-treat, but the fact that there is no merit pay may decrease physician effort levels. Lower pay has resulted that Spain has fewer physicians and nurses per capital than most OECD countries.

Physician Choice. Spanisards can no choose their physician. They are assigned a primary care doctor who must refer the patient in the case that specialist services are needed. Patients are not allowed to change doctors unless they have private insurance. According to Tanner, “This has sparked an interesting phenomenon whereby sick Spaniards move in order to change physicians or find networks with shorter waiting lists.”

Copayment/Deductibles. There are few copayments except for prescription drugs.

Technology. Spain has about one third as many MRI and CT units as the U.S.

Waiting Times. Waiting lists are a significant barrier to care in Spain. The average wait to see a specialist in Spain is 65 days. Waiting times for procedures are also long, up to 62 days for a prostectomy and 123 days for a hip replacement.

Benefits not covered. Rehabilitation and convalescence are not covered. Those with terminal illnesses are generally the responsibility of the patient’s relatives.

While France may have the highest rated health care system in the world, Italy is second according to the WHO. The Italian health care system is a decentralized version of the British NHS. Despite the high rankings by the WHO, Italians are dissatisfied with the quality of their care. Italians believe more patient choice will improve quality, but “given the general dysfunction of the Italian political system, and the entrenched opposition of special interest groups, substantial reform is not likely anytime soon.”

Cost: Health care spending rose by 68% between 1995 and 2003.

Funding. Funding is based on a regressive payroll tax. The tax starts at 10.6% of income for the first €20,660 and drops to 4.6% of income between €20,51 and €77,480. The rest of the funding comes from federal and regional general taxation (i.e.: income and value-added taxes). The regions are responsible for health care provision. The Ministry of Health funds these regions according to a formula based on weighted capitation and past spending. Then the regions allocate these funds to Local Health Authorities (LHA).

Private Insurance. Private health insurance in Italy is uncommon, but is occasionally offered by employers. It is not possible to opt out of the National Health Insurance system and insurance premiums are not tax deductible. Many Italians do pay for private health care. It is estimated that about 35% of Italians use at least some private health services, but the public sector certainly dominates the private in terms if its relative importance.

Physician Compensation. Physicians are paid via capitation. Hopsitals are paid via DRGs.

Physician Choice. Italians have limited choice of their physician but more than in the UK or in Spain. They must register with a general practitioner (GP) in their LHA. For any specialist services, patients must get a referral from their GP.

Copayment/Deductibles. Inpatient and primary care are free. For tests, diagnostic procedures and prescription drugs, copayments are as high as 30%. However, 40% of the population (e.g.: the elderly, pregnant women, kids) are exempt from these copayments.

Technology. There is a shortage of medical technology in Italy. The U.S. has twice as may MRI units per million than Italy and 25% more CT scanners.

Waiting Times. Waiting times are fairly long for diagnostic tests. The average wait for a mammogram is 70 days, for endoscopy 74 days. Tanner notes that: “Ironically, the best-equipped hospitals in northern Italy have even longer waiting lists since they draw patients from the poorer southern regions as well.”

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

France is often seen by liberals as the ideal system. It has universal health care, with few waiting lists. France has the highest level of satisfaction with their health care among all European countries. How can this be? What is their secret?

France provides a basic, universal health insurances through large occupation-based funds. The General National Health Inusrance Scheme covers 83% of French workers, while other occupational specific (e.g.: for agricultural workers, for the self employed, for miners, etc.) cover the remainder. About 99% of individuals are covered by this universal health insurance system.

However, France utilizes more market-based ideas than most people realized. Copayment rates for most services are 10%-40%. About 92% of French residents have complementary private health insurance.

In essence, the French system avoids widespread rationing because, unlike true single-payer systems, it employs market forces. Even the OECD says that the “proportion of the population with private health insurance” and the degree of cost sharing are key determinants of how severe waiting lists will be.

Insured. About 99% of French residents are covered by the national health insurance scheme.

Cost. France is the third most expensive health care system (~11% of GDP). While the system has generally been well funded, in 2005 the health care system ran a €11.6 billion deficit and in 2006 the health care system had a €10.3 billion deficit. No centrally planned health insurance system will be immune from occasional (or even frequent) deficits.

Funding. Most of the funding is from a 13.55% payroll tax (employers pay 12.8%, individuals pay 0.75%). There is a 5.25% general social contribution tax on income as well. Thus, there is an approximately a 18.8% on employees for health insurance. There are also dedicated taxes which are assessed on tobacco, alcohol, and pharmaceutical company revenues.

Private Insurance. “More than 92% of French residents have complementary private insurance.” This insurance pays for additional fees in order to access higher quality providers. Private health insurances makes up 12.7% of French health care spending. These complementary private insurance funds are very loosely regulated (less than in the U.S.) and the only stringent requirement is guaranteed renewability. Private insurance benefits are not equally distributed so there is, in essence, a two-tier system.

Physician Compensation. French doctors are paid by the national health insurance system based on a centrally planned fee schedule, but doctors can charge whatever price they want. The fees are based on an up front treatment lump sum, which is similar to DRGs in the U.S. The patient–or their private insurance–must make up the difference between the fee charged by the doctor and the amount paid for by the universal health care system. The average French doctor earns only €40,000, although medical school is free for them and the French legal system is fairly tort-averse.

Physician Choice. The French have a fair amount of choice in which doctors they choose. However, recently the French have moved towards a more “managed care” practice style where patients have a “preferred doctors” who acts as a gatekeeper for specialists.

Copayment/Deductibles. 10% to 40% copayments.

Technology. The government does not reimburse new technologies very generously and because of global budgets and fee restrictions, there is little incentive to make capital investments in medical technology.

Waiting Times. France has generally avoided waiting lists, likely due to the fairly high coinsurance charges. Recent trends towards Increased restrictions, reduced reimbursement rates, and rationing has increased wait times however.

Tanner’s summary. “To sum up: the French health care system clearly works better than most national health care systems. Despite some problems, France has generally avoided the rationing inherent in other systems. However, the program is threatened by increasing costs and may be forced to resort to rationing in the future.”

• Tanner, Michael D. (2008) “The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World” Cato Policy Analysis no. 613.

Recently I came across an article by Michael Tanner of the Cato Institute title “The Grass is Not Always Greener: A Look at National Health Care Systems Around the World.” I figured that the article would be a highly biased piece of writing which would show that the U.S. healthcare system is great and the universal health care systems of Western Europe are horrible.

While the article does tend to highlight some of the drawbacks of centralized, planned medical care, the article has a well-researched, thorough review of the health care systems of many countries.

For the next week or so, I will be summarizing the health care systems in some of these countries. How do these health care systems operate? Which countries have the “best” health care systems? What are the pros and cons of each system? I hope you find these summaries enlightening.

The link to all the summaries can be found here. The countries who’s health care systems I will discuss are:

• France,
• Italy,
• Spain,
• Japan,
• Norway,
• Portugal,
• Greece,
• Great Britain,
• Switzerland,
• Germany,
• Canada.