Mar 07, 2014 - 3:30pm

Healthcare Lessons From Europe

Since the launch of Obamacare, Americans have begun to witness the reality of what more government intervention in the health care system means—burdensome mandates, tax increases, punitive fines, and heavy regulations.

Yet at the same time Obamacare has created an expanded federal role in health care, other countries that have been operating government-run health programs for decades are furiously seeking to reform their dysfunctional and financially unsustainable systems before they unravel.

Perhaps most notably, “enlightened” social democracies in Europe are looking toward market-based solutions to meet the twin challenges of accommodating consumer flexibility and choice while containing high costs.

One of the most common complaints in government-run health systems: extremely long wait times for routine medical care and surgeries. In Sweden, a nation often cited for its commitment to universal health care, that unfortunate dynamic has led to the rise of a private health insurance industry to help consumers get a leg up.

According to Svensk Försäkring, a Swedish trade organization representing the insurance industry, one in ten Swedes now carry private health insurance to avoid long waits for care.

“It's quicker to get a colleague back to work if you have an operation in two weeks' time rather than having to wait for a year,” Anna Norlander, a private insurance customer, told a Swedish radio station in a recent interview. “It's terrible that I, as a young person, don't feel I can trust the health care system to take care of me.”

The introduction of more market-based elements in the Swedish health care system is not new. It extends back two decades, when the nation suffered a severe economic crisis, which triggered a serious rethinking of the role of the state. Today, that rethinking has included allowing greater private competition in the health care market to alleviate long wait times for treatments.

Or consider the case of France, once rated as providing the “best overall health care” by the World Health Organization. And indeed, France’s single-payer government health plan is famously generous, paying for spa care and massages and other high-end services under the rubric of “preventive care.”

Not coincidentally, the French health care system is going broke, according to a 2013 Bloomberg Businessweek report. Although French President Francois Hollande has pursued modest reforms, the system still posts billions of euros in annual deficits.

“Reform is needed fast,” Willy Hodin, the head of an organization representing French pharmacies, tells Bloomberg. “The most optimistic believe this system can survive another five to six years. The less optimistic don’t think it will last more than three.”

Similar challenges can be found in Germany, which has a two-tiered health care system in which most of the population (about 90%) is covered by the state system, while the remaining 10 percent, primarily high-earners and self-employed individuals, purchase private insurance for their coverage.

But exploding costs, rising more rapidly than inflation, brought a round of unpopular reforms in 2010 that shifted more of the costs to employers and workers. Those measures likely won’t be the last. 

As U.S. policymakers weigh the impact of Obamacare and explore efforts to improve the law, it would behoove them to observe Europe’s experience, which is that government-run systems often create new classes of problems as they seek to address old challenges.  



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Freelance writer