Thursday, March 10, 2016

A Cross-National View of Health Care Systems: Thoughts on Canada, the UK, and Germany

Discussions of the US health care system and how it might be reformed sometimes have a tendency to imply that the other high-income countries of the world have a single template for the financing and provision of health care, and only the US is unique. For example, one sometimes hears statements about how "the United States is the only high-income country without national health insurance," which is true, but which also neglects the fact that other high-income countries finance and provide health insurance in some very different ways.

For an overview of the details and differences across the health care systems of major countries around the world, a useful starting point is the 2015 International Profiles of Health Care Systems
published by the Commonwealth Fund in January 2016. The volume includes some overview table of differences across countries, followed by pithy essays sketching the nuts and bolts differences across countries--some written by individuals, some by the Commonwealth Fund. It was edited by Elias Mossialos and Martin Wenzl of the London School of Economics and Political Science and by Robin Osborn and Dana Sarnak of the Commonwealth Fund. As they write: "Each overview covers health insurance, public and private financing, health system organization and governance, health care quality and coordination, disparities, efficiency and integration, use of information technology and evidence-based practice, cost containment, and recent reforms and innovations." The 18 countries included in the report are mostly high-income countries, but overviews of China and India are also included. Every reader will mine their own nuggets from a report like this, but here are a few points that caught my eye.

I recently heard someone in a casual discussion suggest that "the US health care system should be more like the UK or Canada"--but of course, the UK and Canada actually have rather different health care systems. To list just a few of the differences as they arise in the report:

  • Canada spends $4,500 per person per year on health care; in the United Kingdom, it's $3,300 per person per year. The US is much higher at $9,100 per person, but the Canada-UK gap is still significant. 
  • Britain's National Health Service is run at the national level, while many of Canada's government health care funding and policy-making is at the regional level. As the report notes: ""Provinces and territories in Canada have primary responsibility for organizing and delivering health services and supervising providers. Many have established regional health authorities that plan and deliver publicly funded services locally. Generally, those authorities are responsible for the funding and delivery of hospital, community, and long-term care, as well as mental and public health services."
  • In Canada, "Nearly all health care providers are private." In the UK, about two-thirds of general practictioners are private. When it comes to specialists in England, "Nearly all specialists are salaried employees of NHS [National Health Service] hospitals, and CCGs [cliical commissioning groups] pay hospitals for outpatient consultations at nationally determined rates. Specialists are free to engage in private practice within specially designated wards in NHS or in private hospitals; the most recent estimates (2006) were that 55 percent of doctors performed private work ..."
  • In England, 11% of the population buys private health insurance for uncovered services; in Canada, 67% of the population buys private health insurance for uncovered services.
  • Average per capita out-of-pocket health care spending is about $300 in the UK, $600 in Canada, and $1100 in the US. 
  • Of all primary care physicians, 98% use electronic medical records in the UK, compared with 84% in the US and 73% in Canada.  
  • As one measure of access to medical technology, the UK has 6.1 MRI (magnetic resonance imaging) machines per 1 million people; Canada has 8.8 MRI machines per million; and the US has 35 MRI machines per million. 
  • When people are surveyed about whether they are "Able to get same-day/next-day appointment when sick," 52% say "yes" in the UK, 48% say "yes" in the US, and 41% say "yes" in Canada. 
  • getting care, 
  • When people are surveyed about whether they have "Waited 2 months or more for specialist appointment," 29% of Canadians say "yes," compared with 7% in England and 6% in the US. 
  • When people are surveyed about whether they have "Waited 4 months or more for elective surgery," 18% of Canadians say "yes" compared with 7% of Americans. This measure isn't available for the UK.
  • When it come to cost control in England, "Rather than using patient cost-sharing or imposing direct constraints on supply, costs in the NHS [National Health Service] are constrained by a global budget that cannot be exceeded. NHS budgets are set at the national level, usually on a three-year cycle. CCGs [Clinical Commissioning Groups] are allocated funds by NHS England, which closely monitors their financial performance to prevent overspending. They are expected to achieve a balanced budget each year. The current economic situation has resulted in a largely flat NHS budget against a backdrop of rising demand." In Canada, ""Costs are controlled principally through single-payer purchasing, and increases in real spending mainly reflect government investment decisions or budgetary overruns. Cost-control measures include mandatory global budgets for hospitals and regional health authorities, negotiated fee schedules for providers, drug formularies, and resource restrictions vis-à-vis physicians and nurses (e.g., provincial quotas of students admitted annually) as well as restrictions on new investment in capital and technology. The national health technology assessment process is one of the mechanisms for containing the costs of new technologies ... The federal Patented Medicine Prices Review Board, an independent, quasi-judicial body, regulates the introductory prices of new patented medications." 

So when a US person says "be like Canada or the UK," they are ducking some real differences. Are they advocating that US health care spending per person should be cut by 50% (Canada) or by 65% (UK)? Are they saying that the health care system should be run by states, or by the national government? Are they envisioning a system where most people have outside private health insurance, or where no one does? A system where most health care specialists are direct employees of the government, or not? What kinds of waiting times will be expected? What kinds of cost controls and budget caps?

Saying the US health care system "should be like the UK or Canada" is a little like says that we should head either northeast or northwest--sure, both directions are north, but there's a considerable difference in where you eventually end up.

My other concern with the invocation of Canada and the UK as models for US health care policy goes back to a standard comment in discussions of public policy that how to design a new policy can be quite different from issues of how to reform an existing policy. For example, one might not choose to design a US tax code which doesn't tax employer-provided health insurance as income, which then helps to feed a system of private health insurance provided through employers. But once those provisions have been in place for decades, and people and companies have made plans based on those tax provisions, figuring out how to reform the existing system becomes a delicate problem.

For that reason, I've for some years been intrigued by Germany's approach to a national health insurance system, because it's based on somewhat decentralized system of 124 "sickness funds"--essentially nonprofit and nongovernmental health insurance companies--competing against each other in a national exchange. Those with high incomes can opt out and buy private health insurance from one of about 42 companies. About 11% of the population does so. However, when you buy private health insurance, the price and coverage is based on an expectation of a lifetime contract between you and the insurance company. Doctors belong to regional associations that negotiate fees with the sickness funds. The same health care providers treat those with insurance from the sickness funds and those who have private insurance, and "Individuals have free choice among GPs, specialists, and, if referred to inpatient care, hospitals."

As the report describes the German health care system: "States own most university hospitals, while municipalities play a role in public health activities, and own about half of hospital beds. However, the various levels of government have virtually no role in the direct financing or delivery of health care. A large degree of regulation is delegated to self-governing associations of the sickness funds and the provider associations, which together constitute the most important body, the Federal Joint Committee. ... Within the legal framework set by the Ministry of Health, the Federal Joint Committee has wide-ranging regulatory power to determine the services to be covered by sickness funds and to set quality measures for providers ..."

Of course, just as the Canadian and UK health care systems could not be easily transplanted to the US, neither could the German system. In particular, Germany seems better able than the US to have organizations like the Federal Joint Committee that manage to shape consensus decisions with input from health care providers, insurance companies, patient representatives, and government. That said, the German health care system is in many ways a closer cousin to the US approach, and as long as we are tossing out casual comparisons of where the US health care system might look to learn some lessons, it should surely be included. For a readable comparison of the German and US systems, here's a link to an article in the Atlantic a couple of years ago.