Health Reform in Europe and the US: Converging or Diverging?

As with many of the political differences between Europe and the United States, we tend to view the Atlantic as a simplistic division; in this case a division between state-run hospitals and market-based healthcare. Alternatively, the ocean separates socialist dictatorship from free-market poverty trap, depending on your prejudice of choice.

Arguments regarding healthcare are never seen through rational eyes however. President Barack Obama has tried to align the United States with the rest of the advanced democracies, by introducing some system of public healthcare. Unfortunately for him, the debate that followed has been clouded, contentious and far from evidence-based.

Similarly, European politicians, burdened with often high health and welfare costs, at a time of deficit-spending, are beginning to look at the American laissez-faire administration with some envy. Although, any considered change is condemned as non-egalitarian. Angela Merkel’s posited reforms, mild by American standards, brought thousands out onto the streets in protest.

Yet, there is some truth in some knee-jerk reactions. Britain’s National Health Service is reportedly the fifth largest employer in the world – nestling behind the Chinese People’s Liberation Army and the nationalised Indian railway system. In the US, of a population of 300 million, 47 million Americans have no medical insurance cover. A further 25 million are thought to have inadequate insurance. Moreover, it is reported that doctors’ bills accounted for 60% of US bankruptcies in 2007. Adding to the pain, in the past nine year premiums for employer-provided schemes have inflated four times faster than wages, and have now doubled in cost.

President Obama’s attempts to reform the American system has been chided by a highly activitist grass-roots movement, and received a bruising in Congress. The most controversial aspect of his plan is the so-called "public option". This seeks to establish a system of Health Insurance Exchanges that would provide government-run care for those eligible – the extent of this eligibility is still subject to political negotiation.

Further still, Mr Obama plans to cover all Americans under the "individual mandate" which individuals would be required to sign into, or face a fine. Disadvantaged citizens may be offered subsidise to assist in the payment on this insurance. The bill would increase healthcare provision to 97% of the population.

The United Kingdom, on the other hand, proudly operates a highly centralised, state-run service, in which the Government provides “cradle to the grave” assistance. For the overwhelming proportion of British subjects, the state is deeply involved in their lives.

And yet, the system is perceived as expensive and inefficient. Condemned by former Vice Presidential candidate Sarah Palin as “evil”, where the lives of patients hung in the balance before unaccountable “death panels.” This may be an exaggeration, but it is wrong to think that state involvement in providing universal healthcare, necessarily means provision of care by and through government. Indeed, although some lazily refer to the UK, when they discuss the "European system" (or communist Russia), there may be tempting alternatives on the continent.

In the German system, clinicians are encouraged, cajoled and incentivised to provide social healthcare through the insurance system. All those earning below €48,000 must subscribe to a state “statutory fund”. The statutory insurance premium is progressive in its claim on an employee’s income, and usually accounts for about 15% of her wages.

Yet, there is no government monopoly of healthcare. Of Germany’s 2,030 hospitals, 790 are publicly-owned, 820 are private not for-profits, and 420 are private for-profits.

Even the briefest walk around any German city will reveal a flourishing cottage industry in healthcare providers. Signs for single-practitioner, privately-operated clinics pepper even shopping high streets. Whereas, primary care in the UK is dominated by a combination of vast general practitioner surgeries and immense NHS hospitals.

Similarly, in France, citizens are subject to compulsory social health insurance contribution. Although private “top-ups” are available, most procedures are reimbursed by the social insurance fund, once the private doctor has performed the issued a bill.

Moreover, government involvement does not necessitate centralised administration. Sweden’s healthcare system is highly decentralised. Although the National Board of Health and Welfare (Socialstyrelsen) plays a broad regulatory and supervisory role, the local county councils and minupicalities are charged with prodivding care – with 71% of all health expenditure funnelled through local taxation.

The assumption that universal healthcare results in government monopoly is false. There are many market-based system available to potential reforms that, in themselves, refute that crude distinction between public and private systems as reflecting broader political dichotomies between sinister Marxism and cold libertarianism. In any case, the provision healthcare will always be at the hands of clinicians, not governments, regardless of the over-arching administrative system.

The healthcare system astride the pond is no conceptual division. The system in each jurisdiction is unique. Like Hume’s billiard balls, it still interacts with those around it, but there is no sign of them moving in the same direction, let alone resting in the same pocket.