International Health Systems
International Health Systems
What’s the Issue?
Whenever the media discusses challenges with the Canadian healthcare system, pundits often propose alternative systems from other countries as a quick and easy solution. While it is certainly possible to learn and adapt different components of other systems into the Canadian context, it is important to understand exactly how these systems operate and to understand what else is different, besides the elements we point to as beacons of success abroad. After all, one must consider both the advantages and disadvantages of any system, and what it might take to make it work in Canada, before advocating its superiority.
One way that healthcare systems differ has to do with exactly how the costs are split amongst the population. Different financing structures, such as tax-financing, social insurance or the private marketplace, all impose their costs differently. To make matters more complicated, most countries’ healthcare systems are combinations of these systems; for example, Canada uses taxes to finance hospitals and physician care, but eye and dental care is largely left to private markets and insurance. In Canada approximately 71% of healthcare is financed by the government while in Sweden the public portion of healthcare spending is 82%. Healthcare systems also differ markedly around factors such as physician supply and physician payment. While Canada and the United States are quite similar, with 2.3 and 2.4 physicians per 1000 people, Sweden has more than 50% more, with 3.6 physicians per 1000 people. Payment also differs markedly: Swedish physicians were paid approximately $100,000 per year in 2010 while CIHI reports in Canada they were paid on average $307,000.
We have identified researchers who know several of the healthcare systems that many point to as examples from which Canada should learn. They are willing to talk to reporters who are looking for more information on these systems.
The Commonwealth Fund’s 2012 International Profiles of Health Care Systems describes all the countries mentioned below as well as Denmark, Iceland, Italy, Japan, Norway, Switzerland and Canada. Visit their International Health Policy Center for more international resources.
United States of America
Healthcare in the United States is delivered via a complex patchwork of different systems:
1 – Private health insurance (typically as part of an employment package though some Americans buy private coverage directly). 65.5% of Americans have some form of private health insurance, either by itself or in conjunction with additional public insurance.
2 – Classic social insurance (publicly financed Medicare for those 65 years and older and for persons with permanent disabilities and end stage kidney disease). In total, Medicare covers 14.9% of the population.
3 – Medicaid for low income individuals administered by state governments with both federal and state financing. While eligibility varies by state, in total the program covers 16% of the population (see US Census Bureau Table 4, far left hand column for these coverage figures).
4 – The Veterans Administration, an arrangement where government both finances and delivers medical services to those who have served in the armed forces.
5 – The Emergency Medical Treatment and Active Labor Act, the federal statute that requires hospitals to screen and, if they have a serious medical condition, stabilize any person who arrives at an emergency room regardless of their ability to pay.
The 2010 Patient Protection and Affordable Care Act represents the most important health reform legislation in the United States in nearly 50 years. In 2011, before the ACA provisions had gone into effect (they are scheduled to begin January 1, 2014), the uninsured population in the USA stood at 16.6% of the overall population.
The ACA does not create a new health insurance system as much as puts patches on the patchwork system of coverage summarized above (See Kaiser Family Foundation’s description of Health Reform). However, while the ACA is expected to produce a significant expansion of health insurance coverage — through an expansion of Medicaid, new subsidies for the uninsured to purchase private insurance in purchasing pools, regulation of heretofore common insurance practices that made coverage inaccessible for persons with pre-existing conditions, a requirement that larger employers must offer coverage or pay a penalty, and other measures — it will not result in universal insurance. Even after the ACA is fully implemented, over 30 million persons living in the US will still lack health insurance, according to projections.
The American patchwork has created the most expensive healthcare system in the world, with over 17% of their national income devoted to health expenditures, compared to an OECD average of 9.5%. Even though the United States’ healthcare system is an international outlier due to its reliance on private funding, 44% of healthcare financing comes from government sources to cover Medicare and Medicaid. Evidence on the outcomes from this system are a topic of heated debate; while the USA is not among the world leaders in common health indicators such as infant mortality and life expectancy, some experts believe this to be the result of population factors such as nutrition and violence as opposed to the fault of the healthcare system. According to a 2014 Commonwealth Fund report the United States health system ranks last among eleven countries on measures of access, equity, quality, efficiency, and healthy lives. For a more detailed overview of the American healthcare system, read more here. For The Commonwealth Fund’s 2014 Scorecard on State Health System Performance, which assesses states on 42 indicators of health care access, quality, costs, and outcomes over the 2007–2012 period, click here.
The United Kingdom is commonly cited as an example of a two-tiered healthcare system. The publicly funded National Health Service (NHS) covers all citizens, offering healthcare almost entirely free of charge at the point of contact. Unlike Canada, prescription drugs and other health services such as dental care are covered by the NHS, although small user fees apply in some cases. In addition to the public tier, however, patients can choose to use the private system, where fees are not reimbursed from the government. The private system can be used to see particular specialists, undergo elective procedures, or to avoid wait lines. Financing for the NHS is mostly tax driven, which accounts for 86% of all health costs, while private insurance and out-of-pocket fees make up the remainder. More information can be found here and here. Recent moves to open up the NHS in England to increase competition by private providers has been controversial. See Fiona Godlee’s, editor of the British Medical Journal, comments.
Although there is universal access to healthcare across Sweden, the system itself is mostly operated by regional and local governments. In addition to acute healthcare, housing for the elderly is also guaranteed to all citizens. Public expenditures make up 80% of healthcare costs, which are raised through taxes levied by the regional governments which administer the care. The other 20% of expenditures are made up of user fees for health services (which vary by region). More information can be found here.
The Netherlands’ healthcare system has been reformed to one that is modeled along managed competition lines. This means universal coverage is achieved by a mandate that all citizens buy insurance from competing private insurers. To ensure goals of equity and access the government regulates the system setting out a core basket of services that have to be covered for everyone and preventing insurers from denying coverage to individuals on the basis of ill-health or pre-existing conditions. Most importantly, the government requires central pooling of contributions on the part of individuals (which are calculated as a percentage of one’s income) and then insurers in turn receive an amount that reflects the relative risk of the individual. This means that someone who is poor and sick will pay in only a small fraction to the common pool but the amount paid on their behalf to their chosen private insurer will be much higher. In addition to this income-adjustment premium there is also a “flat” premium that insurers can levy which is intended to encourage some small amount of competition on premium prices but has potentially negative equity effects. In addition to this basic medical scheme, the Dutch also provide long-term care insurance to all of their citizens. A more detailed description of this system is available here.
The French healthcare system is often seen as between the centralized British National Health Insurance system and the German “Bismarkien” system. Funding is largely accomplished through payroll contributions to a social insurance provider and taxation. Statutory social insurance provides a comprehensive basket of services, but demands cost-sharing (user fees) including for essential services. Therefore more than 90 percent of the population uses voluntary private health insurance to cover user fees which can be quite high especially for dental and optical care. The delivery of healthcare services is performed by self-employed professionals such as GPs and pharmacists. This can take place either at physicians’ private practices or in community hospitals, which can be either public, private non-profit or (more rarely) private for-profit. More information on the French system can be found here and here. A much more extensive synopsis appears here with a manageable eight-page executive summary.
Germany’s healthcare insurance structure is quite different. Similar to many other European countries, there is public insurance available, which covers approximately 90% of the country. However, private health insurance programs are also available, both for individuals who wish to ‘top-up’ their insurance or those who wish to opt-out of the public option altogether. Private insurance brokers are often set up to cover either a geographical group or an organization of workers. For both public and private insurers, premiums are determined as a fraction of income. More information is available here and here.
The Portuguese health system consists of three coexisting systems: the National Health Service (NHS); health subsystems, which are special health insurance programs for certain professions; and the voluntary private health insurance. The NHS offers universal healthcare to the population and residents are entitled to free health services at point of use. However, one has to cover some user fees in order to guarantee the sustainability of the system. The NHS is mainly funded through taxes, as both the employer (whether the state or private) and the employee have to contribute. Every Portuguese citizen and nationals from every state-member of the European Union or immigrants who live in Portugal may benefit from general and specialist care, hospitalization, laboratory services, discounted drugs and medicines, basic dental care, maternity care, and appliances and transport. Private insurance, purchased voluntarily, offers additional coverage in a parallel private system. Many physicians and surgeons bill for work in both systems. More information is available here and here.
The Australian healthcare system provides tax financed universal coverage for hospital treatment (in public hospitals), out of hospital medical services (predominantly private providers paid fee for service), and pharmaceuticals. In addition, private insurance covers private hospital treatment and services which are not covered by the public system, the most important of which is dental care. Like Canada, Australia has a federal system of government with responsibilities for healthcare divided between the national government and states. More information is available here.
The New Zealand healthcare system is similar to the UK system; it has a two-tiered structure with universal publicly funded coverage for all residents along with the option of supplementary private insurance for elective procedures or faster care. New Zealand, like many other countries, is seeking ways of maintaining universal access to a high quality health system while containing health spending.
After experimenting with a more competitive regime, the government now seems to be shifting towards the idea that increased collaboration and more central guidance may be both less costly and more effective. These shifts are apparent in a number of recent reforms including: greater regional collaboration in service planning, improving integration of care across service boundaries, national prioritization of health technologies, and group purchasing of medical supplies.
A distinctive feature of New Zealand’s healthcare system is their pharmaceutical coverage. The national Pharmaceutical Management Agency of New Zealand (PHARMAC) uses effectiveness and cost-efficiency information to select one drug from a group of similar ones and negotiate with drug providers to obtain the lowest price. As a result, their expenditures on pharmaceuticals are significantly lower than most other developed nations; pharmaceuticals make up less than 10% of their total health expenditures, compared to the OECD average which exceeded 17%. The program is largely funded through tax subsidies in addition to small co-payments made by patients. Despite the cost savings, critics focus on how the system results in the country lacking some effective medications that are available elsewhere. More information pertaining to PHARMAC can be found here.
A Comparison Of Hospital Administrative Costs In Eight Nations: US Costs Exceed All Others By Far, in Health Affairs (2014), compares administrative costs across multiple nations with various types of health care systems.
Private finance reforms will make it more expensive to deliver healthcare. A new report from the UK looks at what impact the reforms will have on the cost of National Health Service projects, explains Mark Hellowell.
New York Times article on growing inequality comparing Canada to other nations across a number of dimentions. How Canada ranks in inequality measures before and after taxes; how Canadians vacation entitlement compares to other nations and more
For a comparison of OECD countries on a number of measures, including total expenditure on health (% GDP for 2012), total expenditure on health per capita (2012) and life expectancy, see the table — OECD Data on Key Expenditure and Health Data for Countries Similar to Canada. (Source: OECD Health Statistics 2014).
For The Commonwealth Fund’s recent overview of several international systems (including Canada) see: International Profiles of Health Care Systems, 2012: Australia, Canada, Denmark, England, France, Germany, Iceland, Italy, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United States. Edited by: Sarah Thomson, Robin Osborn, David Squires, and Miraya Jun.
The European Observatory on Health Systems and Policies supports and promotes evidence-based health policy-making through comprehensive and rigorous analysis of the dynamics of healthcare systems in Europe. The Observatory has developed a Health Systems and Policy Monitor platform that provides up to date information on reforms and changes that are policy relevant. Most of the countries mentioned below (as well as several others) are included.
A new online, interactive tool developed by the Canadian Institute for Health Information (CIHI) compares the performance of provinces not only with each other, but also with OECD countries (Australia, France, Germany, the Netherlands, New Zealand, Sweden, the United Kingdom, and the United States). This tool gives users the ability to compare provinces and Canada with OECD countries on a number of measures, including demographics, health expenditure, healthcare activities and non–medical determinants of health. A companion report, International Comparisons: A Focus on Quality of Care provides context and interprets the results.
The European Health Journalism site offers key resources for health journalists and links to relevant international organizations. The site contains free access to all of the presentations and discussions from the First Do No Harm international conference on health journalism and PR, held in May in Coventry. The presentations and summaries are organized in themes and are a great resource for all journalists and PRs working in health.
See the National Public Radio (NPR) special series, Health Care for all.