A CLOSER LOOK AT UNIVERSAL HEALTHCARE: BRIEF GUIDE ON HEALTHCARE SYSTEMS THROUGHOUT THE WORLD

By now it’s a well-known fact that the United States stands out among the developed world as the nation that does not guarantee healthcare to its citizens.

Most Americans agree that something needs to be done about our healthcare system, with its ever-rising costs. So why haven’t we done anything about it yet? Well, there are many complex reasons: Chiefly, healthcare is a very messy business. And this truth applies everywhere in the world.

It’s safe to say that should American adopt a universal healthcare system, chances are it will continue to be a complex issue in this country.

In the U.S., the Canadian model of universal healthcare is much discussed and often described as “government-run” healthcare. For starters, that language is misleading, for reasons that will be stated later, but this is the alternative most advertised to the American public.

Could it be that these approaches are really the only two ways healthcare is run? The quick answer is no; healthcare policy is a lot more complicated than that, and America has other options available.

First, there should be some distinctions made to clear up confusion. This is because, perhaps as surprise, there are many countries that feature universal healthcare and yet this is not treated technically as a “right.”

How is this so? Most countries that can afford it have programs called safety nets, and economic rights. These two terms, while serving similar functions, have key differences that must be distinguished.

Safety nets are programs set up to provide government-run services to people who meet certain criteria; for example, they may be poor, or perhaps old. A good example of a safety net that people often benefit from is food stamps, where the government subsidizes certain food purchases. Social Security is the largest U.S. safety net, providing income for the retired and the disabled.

Then, there are economic rights – material guarantees made to citizens by the government, because it has been deemed for one reason or another as a right that everyone should have, no matter how rich or poor, old or young, that one might be. In the United States, we don’t have many economic rights, save for one critical one for all Americans: universal K-12 education.

However, in a number of nations around the world, there is another right that citizens typically hold: the right to basic healthcare services.

The variance in how countries run their healthcare system rests primarily on the basis of whether their model is based on a robust safety net or as an economic right. In Oregon, there is a healthcare safety net for the elderly and for those who are low-income (the federal Medicaid-supported Oregon Health Plan). However, this safety net only applies to a certain demographic, not for the general population.

Meantime, there are basically three universal healthcare models used throughout the world: the Public Insurance, Single-Payer; and Statutory Insurance (sometimes called Multi-Payer) models.

SINGLE-PAYER MODEL

How does it work?

Single-Payer healthcare is an umbrella term for a system where services are paid for through one entity: the government, funded directly through taxes. Under single-payer, healthcare is considered an economic right to all citizens, no matter who they are, whether employed or not.

Just who provides the healthcare services can vary. Some governments contract private firms to provide services, and some will have their health ministry set up a healthcare service and the government will then directly provide healthcare to citizens. Just how big of a role the government can differ widely.

What are some countries that use it?

Canada is often given as an example of a single-payer system. However, Canada’s healthcare system is heavily decentralized; it’s largely up to the different provinces how their single-payer system is run. As a result, there isn’t one “Canadian model.” Some provinces, such as Alberta, will provide healthcare through a government-owned service run by the provincial Ministry of Health. Other provinces, including British Columbia, won’t have a health service and will simply contract much of their work to private healthcare providers. In this system, everyone (generally speaking) is on a government-funded healthcare plan that will cover expenses charged by their healthcare providers, whoever they may be.

The United Kingdom is another popular example of a single-payer system. Each country in the U.K. (England, Scotland, Wales, and Northern Ireland) has its own healthcare service that provides services to all, like that in Alberta. They do this generally with no out-of-pocket expenses. In most of the U.K. countries, this is called the NHS (National Health Service).

Historically the NHS provided everyone free healthcare, including foreign nationals. But in the last decade, the Conservative-led government in the U.K. has been reforming the NHS in an attempt to reduce its cost. The subject of the NHS is now very touchy, often one much debated in British politics.

What are some common problems with single-payer systems?

One common problem in single-payer systems, particularly ones that run their care through public health services, is that performance of those institutions are more at the mercy of government funding: If the government is failing to fund the systems sufficiently, the public’s health is likely to go downhill. One can see this in the U.K., where the fight over NHS funding has become a constant in the British Parliament.

Another problem that many people have with introducing a single-payer system in the U.S. is that taxes, overall, would surely increase. Yet, one thing to consider is that some studies suggest that the increased taxes individuals would pay for the system would be less than what they already pay for private health insurance. That’s actually a net gain, if indeed the case. But the reality would heavily depend on how healthcare policy is crafted.

PUBLIC INSURANCE MODEL

How does it work?

The Public Insurance system (also known as the Bismarck Model) is also common across the world. In this model, universal healthcare is treated as a public safety net. It functions a little like our Social Security system, but funds healthcare expenses, rather than pay for pensions.

Many of the countries using this model tie their healthcare safety net to an individual’s work, where the government withholds part of the person’s wage while also making their employer pay into a mutual fund that person may use when they need medical attention.

Precisely how these systems function can vary widely. Many countries using this model will also use government funds to subsidize healthcare to make costs cheaper for the patient, and in some cases select services will essentially be free.

What are some countries that use it?

The most prominent example is France, though France is a little unusual for this type of system because the government heavily subsidizes healthcare. In fact, healthcare is so subsidized in that country that some mistake it as a single-payer system. But ultimately, France’s healthcare is structured around a safety net called Social Security (not to be confused with our own Social Security).

Another good example is the one in Japan. It’s normal there for an individual’s work to offer an insurance plan, but if that job does not come with insurance, a worker will be placed on the public insurance system. This system will usually cover a good portion of one’s healthcare expenses should they need it, but that person may still need to pay a portion of costs for those services.

What are some common problems with the public insurance system?

In the French system, healthcare is subsidized by reimbursement. Individuals must pay out-of-pocket costs in some instances, and there will be a lag before the French government makes up the difference. This adds a layer of complexity that anyone must consider when using healthcare in France, even if, ultimately, the service costs will be covered by the government.

STATUTORY INSURANCE MODEL

How does it work?

Unlike the others, this insurance model does not consider universal healthcare as a right, nor is healthcare guaranteed by a safety net. In contrast, this model works with a largely private health insurance market, similar to that of America’s system. Everyone is required by law to have a healthcare plan, similar to how drivers must buy car insurance in the United States.

However, there are two types of insurance, for different people: statutory health insurance, and private health insurance. Statutory plans are provided for people who fall below an income threshold. These individuals are insured by a firm that is heavily regulated by the government – telling companies how much can be charged and making sure the insurance and services being provided are affordable. These firms essentially run on an almost nonprofit basis.

Private insurance for high-income earners, meantime, is much like people would find here in the States: One simply buys a healthcare plan, and it’s up to the firm how much it charges.

What are some countries that use it?

Not many – only a handful: Germany, the Netherlands, Switzerland, and Israel. All of them have very similar systems.

An interesting case study is the U.S. relationship with this system, however, for many observers thought of “Obamacare” as an attempt to implement this system here. What we really have now is the vestiges of a failed attempt to bring about statutory insurance to America. So when some people called Obamacare “socialized medicine,” realize that this is really the most private-friendly universal healthcare model.

What are some common problems with this model?

By far, the cost: While not as costly as (typical) American healthcare, this model does still cost more money to manage than the other systems described here. While a person may not be paying taxes to a public health service, they will pay for services by a private – albeit very regulated – provider.

A CLEAR LOOK AT THE OPTIONS

When discussing ways to implement universal healthcare, there are ultimately three basic options: single-payer, public insurance, and statutory insurance models.

Single-payer and public insurance are, by far, the most commonly used and among the developed countries, single-payer is the favored model.

As Oregon and the U.S. move forward with attempts to improve our healthcare service, it’s important to know clearly what options we have. And while all these systems have their own problems and are by no means perfect, their examples could very well help us build a healthcare system that everyone could more readily rely upon.