Health Care Around the World

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Health Care Around the World: Italy

April 15, 2008 in Health Care Around the World, International Health Care Systems | 3 comments

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.”

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Health Care Around the World: France

April 14, 2008 in Health Care Around the World, International Health Care Systems | 18 comments

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.”

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Health Care Around the World: An Introduction

April 14, 2008 in Health Care Around the World, International Health Care Systems | 6 comments

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:

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