Page 7 - the Noise July 2017
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noise news by cindy cole
government strictly regulates prices for all health care services. Patients pay 30% or less of expenses and there are income-based caps for costly treatments. Doctors run private practices and 80% of hospitals are privately owned. Japan still spends about half of what the US does on medical care each year.
It’s also difficult for doctors to “cheat the system” in Japan. If they try offering more of procedures for which rates are higher in order to increase their own income, when rates are reviewed for the following year, the price for that procedure will drop. This measure helps prevent abuse of the system.
Patients can see any doctor they desire and can go directly to specialists without first see- ing a general practitioner. As a result, Japanese citizens visit their doctors three times more often than Americans. Critics say that this low-cost, unlimited access is actually hurting the system. Hospitals and clinics are overwhelmed and there is a shortage of medical care professionals. These problems are increasing with Japan’s aging population. But there are no medical bankruptcies in Japan.
Japan spends about 11.2% of its GDP on healthcare. The Japanese can expect to live for an average of 83.7 years, the most of any industrialized nation. They also have the lowest infant mortality rates among large industrialized nations; Japan ranks 224 out of 225 (the first place is held by Monaco, a tiny country that also has the world’s lowest poverty rate). On the Legatum Prosperity Index, Japan is number 4.
France employs a healthcare system very similar to Japan’s at about the same rate of GDP, 11%. Life expectancy is just a little below Japan’s at 82.8 years. Its infant mortality rate is low ranking at 212 on the CIA’s World Factbook list. It’s the number 14 country on the Legatum index.
Switzerland’s health care system has what some Americans see as the “best of both worlds:” universal coverage provided through a system of mandatory private insurance. There are no free public health care services in Switzerland. There are no employer-provid- ed insurance plans. Buying health insurance for the Swiss is like buying a cell phone plan.
All Swiss citizens must purchase a private insurance policy that adheres to a minimum package of benefits required by law, known as LaMal. There are around 60 private insur- ance companies that establish rates annually with input from the federal government. Subsidies are provided to those with low income with a goal of keeping individuals from spending more than 10% of their income on healthcare. There can be no exemptions for pre-existing conditions and those in better health pay higher premiums to help subsidize high risk populations. Many choose policies with high out-of-pocket costs and deductibles in order to save on premiums.
Like the German and Japanese systems, insurers cannot make a profit from basic care plans. While benefits are fixed, companies compete on price and service. Companies can profit from the sale of supplemental insurance plans. Administrative costs for Swiss insurers are around 5.5% compared to 22% for US companies.
Pharmaceutical companies in Switzerland also operate without profit but can compete internationally to make money. Swiss drug companies make about one third of their profits from marketing their products in the US.
Rising medical costs have recently created problems for the Swiss. In 2017, premiums in some areas rose by as much as 7.3%. Premium increases had averaged only 3.6% over the last decade. Still, medical bankruptcy does not occur in Switzerland.
Switzerland has the second highest expenditure for healthcare, after only the US, but at 11.5% of GDP, it is still significantly lower. Life expectancy in Switzerland is second only to Japan at 83.3 years. The country ranks at 199 for infant mortality and was third on the Legatum Prosperity Index.
While Taiwan is not a member of the United Nations or the World Health Organization due to objections from mainland China, many see it as an independent country and its healthcare system should certainly be considered when observing the most effective in the world.
In 1995, after studying the healthcare systems of other nations, Taiwan adopted its Na-
tional Health Insurance (NHI) system. According to “Sick Around the World,” the Taiwanese government tried to pick the best parts from 10-15 other healthcare structures it examined. The US model was dismissed from consideration as a “market,” not a “system” of care.
The Taiwanese NHI is a single-payer mandatory insurance plan. The disbursement of funds is centralized and doctors are paid directly by the government insurance office. There is one government insurer and everyone is covered. There are no opt-outs. Revenue from the system comes primarily from employers and employees, with government subsidies for those with little or no income.
Patients can see any doctor they choose and there are no “gatekeepers,” which means one can go directly to a specialist without having to see a general practitioner first. Small co-payments are collected for most services with public assistance for those who cannot afford to pay. Coverage is comprehensive and includes almost every type of medical care, including child birth, dentistry, elder home care and even alternative medicine. The major- ity of hospitals and doctors operate privately so competition for NHI funds keeps levels of service high. There are virtually no wait times in Taiwan.
Taiwan also has one of the most technologically advanced insurance systems in the world. Every Taiwanese citizen has a smart card that carries a summary of their health his- tory in its memory bank. Doctors and hospitals can plug in the card, assess the patient’s needs and immediately bill the government insurance office for services provided. This results in a rapid claims process and the lowest administrative costs of any of the industrial- ized nations at under 2% of costs.
Spending for healthcare in Taiwan is so low, however, that its system has been facing some financial troubles in recent years. The government has been reluctant to raise premi- ums and has borrowed money from private banks to stay afloat. However, overall satisfac- tion with the system remains high. The Taiwanese have never heard of medical bankruptcy.
Taiwan spends only about 6.2% of its GDP on healthcare. This amount has stayed fairly consistent over the last decade. Life expectancy for Taiwanese people is around 80.1 years. Infant mortality is fairly low and Taiwan ranks at 186. Taiwan was not included in the 2016 Legatum Prosperity Index but a 2015 Forbes article by Daniel Runde called the nation a “model of freedom and prosperity.”
So, while the US continues to spend more on healthcare than any other developed na- tion, that spending has not equated to longer lifespans or better access or quality of care across the board. Even after the Affordable Care Act (ACA), access to healthcare can be challenging, especially for the poor. As Congress and the administration continue to de- bate the future of healthcare in America, maybe we, too, should be looking at our neighbors around the world for answers instead of playing politics.
Passage of the ACA was a start. Since its implementation, about 17 million people who were previously uninsured now have health insurance. Medicaid expansions helped cover more low income Americans. The percentage of people in America without insurance is at an all-time low.
The insurance industry practices of denying coverage or charging higher premiums for those with pre-existing conditions were eliminated. The ACA created minimum standards for basic health plans and eliminated age-based premiums and insurer caps on lifetime coverage.
But one key difference between the US healthcare system and those of other industrial- ized nations that offer universal coverage is — limits. Primarily, limits on profits for insurers and prices for services. Successful universal healthcare systems that utilize private insurers — like Germany’s and Switzerland’s — eliminate the ability of companies to profit from basic insurance coverage plans. Taiwan and Japan impose strict limits on the amounts doctors and hospitals will be paid for services. These systems are not without their problems or flaws but, for the most part, they are working; and at a lower cost than what we spend in America.
Perhaps it’s time to stop arguing over the politics of healthcare and instead, add it to the list of rights we will vehemently protect for every American. Otherwise, when it comes to healthcare, we’ll continue to throw money at a system from which we do not receive an equivalent benefit in return. | the NOISE arts & news | JULY 2017 • 7

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