Friday, October 2, 2009

Health Care Models

Here's an excerpt of John Guthrie's review of T.R Reid's "The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care":

In brief summary, the four national health care systems he examines are as follows (Examples of all four are found in the U.S.):

The Bismarck Model: Belgium, France, Germany, Japan, Switzerland and in some form in parts of Latin America. It uses private health insurance plans, typically paid for by employers and employees. Unlike the U.S., the insurance companies are not-for-profit and cover everyone, making care much more affordable. Provision is made for someone who is unemployed. Such systems are tightly controlled by the government in their services and fees. This form was developed during the tenure of Otto Von Bismarck (1815-1898), the mustachioed prime minister whose picklehaub, that spear point topped helmet, tended to give him an opĂ©ra bouffe air. For all his ruthless realpolitick, his Blut und Eisen or “blood and iron” rhetoric, the Iron Chancellor had a commanding intelligence and a humanitarian streak that led him to institute worker’s compensation, social security, and, in 1883, “sickness insurance,” a national health care system. Waiting times are minimal as are out-of–pocket expenses. This system has been, with occasional adjustments, a constant through all the political contortions Germany has experienced in the intervening years. The Bismarck health care system is generally beloved by Germans. Reich Chancellor Bismarck characterized his health plan, interestingly enough, as “applied Christianity.”

The Beveridge System: Named for William Henry Beveridge, a British economist and social reformer. Beveridge designed the United Kingdom’s National Health Service. Of the four systems considered, this is the only true example of socialized medicine. It is found, with variations, in Great Britain, Spain, New Zealand, most of Scandinavia and Cuba. Health care is provided by the government and paid for by taxes, like national defense. With rare exceptions, medical facilities are government owned and physicians are government employees. No bills are rendered to the patient. Fees are government mandated as are what procedures are available, keeping costs down. In the United States, the U.S. Department of Veterans Affairs provides an excellent example of socialized medicine. The VA also provides, in this writer’s experience as a patient there, courteous, efficient and world class medical care.

National Health Insurance: Canada, South Korea, Taiwan. Medical bills are paid by a government operated insurance program. There is no expense for marketing, underwriting, or profits. All citizens pay into the system. Government has extensive control of prices and procedures. Services are rationed in part by waiting lines

Out-of-Pocket Model: Generally a third world phenomena, but encompassing a minimum of 17% of U.S. health expenditures, higher if copays and deductibles are factored in. Reid notes that, “The basic rule in such countries is simple and brutal: The rich get medical care; the poor stay sick or die.” This plan, or the lack thereof, provides 91% of Cambodia’s health, India 85%, Egypt, 73%.

For all of you libertarians clamoring for a true free-market in health care, the result would be to take us from 17% to 100%. This would not be good.

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