T.R. Reid: The Healing of America

I've been thinking about the health care system for a long time now. I have some pretty straightforward ideas about how to fix most of the problems, and they led me to favor different solutions from the one that Congress settled on. Everyone likes their pet ideas, and I'm no different in that respect, but T.R. Reid's recent book is helpful in showing that there are actually many variations on health care system that all work much better than the one we have, both in terms of lower costs and better outcomes. In theory, I'm inclined to favor a "Beveridge Model" system like the UK has (or like the US provides through the Veterans Administration), where all services are government run. But the UK system tends to be underfunded, resulting in longer delays and fewer options than we are used to (assuming you have reasonably good insurance here in the US). Especially in terms of availability and flexibilty, it looks like the best health care systems in the world are in France and Japan, which use private insurance and providers, but regulate them severely, in effect squeezing the profit motive out of the system. This has led to great cost efficiencies in the systems: for example, an MRI that costs over $1000 in the US costs $100 in Japan -- a situation which allows Japanese doctors to order more MRIs and still save money. But the various systems aren't exclusionary: it's easy to imagine a UK-type system pursuing upstream supplier costs like the Japanese do. It's easy to imagine a Canadian system with adequate funding for specialists: in fact, that's what the US Medicare system does.

Reid offers good and bad news on prospects for change in the US. He shows two examples of systems that were similar to ours (profit-seeking, out-of-pocket) up to 1994 but were then changed successfully: Switzerland and Taiwan. In the Swiss case, the main change was to require private insurance companies to refund any profits. Before the change, Switzerland had the second most expensive health care system in the world at 11% of GDP, just 1% behind the US. Fifteen years later, Switzerland is still second, still at 11%, while the US GDP cut has boomed to 17% and is still headed up. Taiwan did a bit more, and got better results: they adopted a Canadian-style single payer scheme. The good news here is that such change is possible. The bad news is that in both Switzerland and Taiwan the changes were pushed through by conservative political parties, preferring to compete with the left-liberal parties by adopting progressive change on their own terms. In both cases, the decision was arrived at not just politically but morally: in both cases, even conservatives agreed that equal access to health care should be a right for all people, not just for those who can afford it. Of course, that's not bad news for Switzerland and Taiwan; it's bad news for us, where even the Democrats have trouble articulating health care as a fundamental right, and where Republicans are nothing short of shameless. Not a single Republican voted for health care reform this year, despite the numerous deals that Obama negotiated with the AMA, the pharmaceutical industry, and other lobbyists, despite the fact that insurance company stock prices rose on passage. The Republicans have moved past their usual stance of sucking up to industry; on health care they're into pure ideological malevolence. So the near term prospects for conservatives doing anything responsible are close to nil.

Prologue: A Moral Question (pp. 1-3):

If Nikki White had been a resident of any other rich country, she would be alive today.

Around the time she graduated from college, Monique A. "Nikki" White contracted systemic lupus erythematosus; that's a serious disease, but one that modern medicine knows how to manage. If this bright, feisty, dazzling young woman had lived in, say, Japan -- the world's second-richest nation -- or Germany (third richest), or Britain, France, Italy, Spain, Canada, Sweden, etc., the health care systems there would have given her the standard treatment for lupus, and she could have lived a normal life span. But Nikki White was a citizen of the world's richest country, the United States of America. Once she was sick, she couldn't get health insurance. Like tens of millions of her fellow Americans, she had too much money to qualify for health care under welfare,but too little money to pay for the drugs and doctors she needed to stay alive. She spent the last months of her life frantically writing letters and filling out forms, pleading for help. When she died, Nikki White was thirty-two years old.

"Nikki didn't die from lupus," Dr. Amylyn Crawford told me. "Nikki died from complications of the failing American health care system. It was a lack of access to health care that killed Nikki White." [ . . . ]

On September 11, 2001, some three thousand Americans were killed by terrorists; our country has spent hundreds of billions of dollars to make sure it doesn't happen again. But that same year, and every years since then, some twenty thousand Americans died because they couldn't get health care. That doesn't happen in any other developed country. Hundreds of thousands of Americans go bankrupt every year because of medical bills. That doesn't happen in any other developed country either.

Those Americans who die or go broke because they happened to get sick represent a fundamental moral decision our country had made. Despite all the rights and privileges and entitlements that Americans enjoy today, we have never decided to provide medical care for everybody who needs it. In the world's richest nation, we tolerate a health care system that leads to large numbers of avoidable deaths and bankruptcies among our fellow citizens. Efforts to change the system tend to be derailed by arguments about "big government" or "free enterprise" or "socialism" -- and the essential moral question gets lots in the shouting.

All the other developed countries on earth have made a different moral decision. All the other countries like us -- that is, wealthy, technologically advanced, industrialized democracies -- guarantee medical care to anyone who gets sick. Countries that are just as committed as we are to equal opportunity, individual liberty, and the free market have concluded that everybody has a right to health care -- and they provide it. One result is that most rich countries have better national health statistics -- longer life expectancy, lower infant mortality, better recovery rates from major diseases -- than the United States does. Yet all the other rich countries spend far less on health care than the United States does. [ . . . ]

My global quest made it clear that the other wealthy democracies can show us how to build a decent health care system -- if that's what we want. The design of any nation's health care system involves political, economic, and medical decisions. But the primary issue for any health care system is a moral one. If we want to fix American health care, we first have to answer a basic question: Should we guarantee medical treatment to everyone who needs it? Or should we let Americans like Nikki White die from "a lack of access to health care"?

1. A Quest for Two Cures (pp. 9-10):

The one area where the United States unquestionably leads the world is in spending. Even countries with considerably older populations than ours, with more need for medical attention,s pend much less than we do. Japan has the oldest population in the world, and the Japanese go to the doctor more than anybody -- about fourteen office visits per year, compared with five for the average American. And yet Japan spends about $3,000 per person on health care each year; we burn through $7,000 per person.

(pp. 10-11):

As Americans voted in the 2008 election, only 18 percent told the pollsters that the U.S. health care system was working well. Even American doctors, who generally do just fine, thank you, in financial terms, are unhappy with the ridiculously cumbersome and unjust system that has built up around them. And those Americans who want change in our system -- which is to say, almost all Americans -- are not willing to settle for minor tinkering or small-scale adjustment. Rather, 79 percent told the pollsters they want to see either "fundamental changes" or "a complete overhaul."

The thesis of this book is that we can bring about fundamental change by borrowing ideas from foreign models of health care.

(pp. 13-14):

The academics have a term for this approach to problem-solving: "comparative policy analysis." The patron saint of comparative policy analysis was an American military hero who went on to become our thirty-fourth president: Dwight D. Eisenhower. That's why this book is dedicated to his memory.

When Eisenhower became president, in 1953, the key domestic issue was the sorry state of the nation's transit infrastructure. Almost all major highways then were two-lane country roads designed primarily to get farmers' crops to the nearest market. Interstate travel was a torturous ordeal, marked by rickety bridges and long stretches of mud or gravel between intermittent paved sections. As postwar America embraced the automobile, it was clear that vast improvements were required. And most of the forty-eight states already had highway plans on the books. For the most part, those blueprints called for networks of two-lane highways that would run through the downtown Main Street of every city along the route. These were perfectly reasonable plans for the time. But Eisenhower, who recognized the value of comparative policy analysis, had a better idea.

As Supreme Allied commander during World War II, Ike had commanded the long push by American and British soldiers toward Berlin after the D-day landings in June 1944. By the spring of 1945, the Allies had battled their way across France to Germany's western border. Eisenhower's strategic plan envisioned months of painful slogging across a shattered German countryside. But then his forward commanders reported an amazing discovery: a broad ribbon of highway, the best road system anybody had ever seen, stretching straight through the heart of Germany. This was the autobahn network, built in the 1930s, which featured four-lane highways; overpasses and ramped interchanges to avoid intersections; and rest areas for refueling every hundred miles or so. Once Eisenhower's trucks, tanks, and troop carriers found the superhighway, they moved much faster than Ike had planned. By early May of 1945, the war in Europe was over.

Those German roads came to mind when, in 1953, President Eisenhower was presented with rather timid plans for a two-lane highway network across America. "After seeing the autobahns of modern Germany and knowing the assets of those highways were to the Germans," he wrote in his memoirs, "I decided, as President, to put an emphasis on this kind of road-building. I made a personal and absolute decision to see that the nation would benefit from it. The [American plans] had started me thinking about good, two-lane highways, but Germany had made me see the wisdom of broader ribbons across the land." [ . . . ] There was considerable debate about how to pay for this hugely ambitious engineering project. A giant bond issue was proposed. But in those more innocent times, it was considered irresponsible for the federal government to run up large debts; in the end, Ike settled on a highway trust fund financed by gasoline taxes.

Unfortunately, Eisenhower didn't take a good look at the German health care system as well.

2. Different Models, Common Principles (pp. 16-21):

Fortunately, for all the local variations, health care systems tend to follow general patterns. In some models, government is both the provider of health care and the payer. In others, doctors and hospitals are in the private sector but government pays the bills. In still other countries, both the providers and the payers are private. There are four basic arrangements:

THE BISMARCK MODEL

This system -- found in Germany, Japan, France, Belgium, Switzerland, Japan [again?], and, to a degree, in Latin America -- is named for the Prussian chancellor Otto von Bismarck, who invented the welfare state as part of the unification of Germany in the nineteenth century. Despite its European heritage, the model would look familiar to Americans. In Bismarck countries, both health care providers and payers are private entities. The model uses private health insurance plans, usually financed jointly by employers and employees through payroll deduction. Unlike the U.S. health insurance industry, though, Bismarck-type plans are basically charities: They cover everybody, and they don't make a profit. The doctor's office is a private business, and many hospitals are privately owned. Although this is a multipayer model (Germany has more than two hundred funds), tight regulation of medical services and fees gives the system much of the cost-control clout that the single-payer Beveridge Model (see below) provides.

THE BEVERIDGE MODEL

This arrangement is named after William Beveridge, a daring social reformer (we'll meet him in chapter 7) who inspired Britain's National Health Service. In this system, health care is provided and financed by the government, through tax payments. There are no medical bills; rather, medical treatment is a public service, like the fire department or the public library. In Beveridge systems, many (sometimes all) hospitals and clinics are owned by the government; some doctors are government employees, but there are also private doctors who collect their fees from the government. These systems tend to have low costs per capita, because the government, as the sole payer, controls what doctors can do and what they can charge.

Countries using the Beveridge Model, or variation on it, include its birthplace, Great Britain, as well as Italy, Spain, and most of Scandinavia. Hong Kong still has its own version of Beveridge-style national health care, because the populace simply refused to give it up when the Chinese took over the former British colony in 1997. The Beveridge Model, with government holding almost all the cards, is probably what Americans have in mind when they walk about "socialized medicine." Although this welfare-state approach to health care seems thoroughly European, the two purest examples of the Beveridge Model -- or "socialized medicine" -- are both found in the Western Hemisphere: Cuba and the U.S. Department of Veterans Affairs. In both of these systems, all the health care professionals work for the government in government-owned facilities, and patients receive no bills.

THE NATIONAL HEALTH INSURANCE MODEL

This system has elements of both Bismarck and Beveridge: The providers of health care are private, but the payer is a government-run insurance program that every citizens pays into. The national, or provincial, insurance plan collects monthly premiums and pays medical bills. Since there's no need for marketing, no expensive underwriting offices to deny claims, and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style private insurance. As a single payer covering everybody, the national insurance plan tends to have considerable market power to negotiate for lower prices. NHI countries also control costs by limiting the medical services they will pay for or by making patients wait to be treated.

The paradigmatic NHI system is Canada's; its universal application and its equal treatment for all satisfy Canada's national sense of community. Some newly industrialized countries -- Taiwan and South Korea, for example -- have adopted variations on the NHI approach.

THE OUT-OF-POCKET MODEL

Only the developed, industrialized nations -- perhaps forty of the world's two hundred countries -- have any established health care payment system. Most of the nations on the planet are too poor and too disorganized to provide any kind of mass medical care. The basic rule in such countries is simple,a nd brutal: The rich get medical care; the poor stay sick or die. In poor countries, the well-to-do and the well-connected, such as government officials, can usually find a doctor and pay for care, at least in the big cities. In rural regions of Africa, India, China, and South America, hundreds of millions of people go their whole lives without ever seeing a doctor. They may have access, though, to a village healer (such as the one we'll meet in chapter 9) who practices traditional medicine using home-brewed remedies that may or may not be effective against disease.

A hallmark of these no-system countries is that most medical care is paid for by the patient, out of pocket, with no insurance or government plan to help. Generally, the world's poorest countries have the highest percentage of out-of-pocket payment for health. Out-of-pocket payments account for 91 percent of total health spending in Cambodia, 85 percent in India, and 73 percent in Egypt. In contrast, the figure for Britain is 3 percent. The United States, with more than 45 million uninsured, ranks fairly high among wealthy countries on this scale, with 17 percent of health care costs funded by out-of-pocket payments.

These four models should be fairly easy for Americans to understand, because we have elements of all of them in our convoluted national health care apparatus:

• For most working people under sixty-five, we're Germany, or France, or Japan. In standard Bismarck Model fashion, the worker and the employer share the premiums for a health insurance policy. The insurer picks up most of the tab for treatment, with the patient either making a co-payment or paying a percentage.
• For Native Americans, military personnel, and veterans, we're Britain, or Cuba. The VA and much of the Pentagon's Tri-Star system involve doctors who are government employees working in government-owned clinics and hospitals. Following the Beveridge Model, Americans in these systems never get a medical bill. The Indian Health Service also provides free care in government clinics.
• For those over sixty-five, we're Canada. U.S. Medicare is essentially a National Health Insurance scheme, with the near-universal participation and the low administrative costs that characterize such systems. Americans with end-stage renal disease, regardless of age, are also covered by Medicare; this group had enough political clout tog et what it wanted from Congress, and the "dialysis community" opted for coverage under the government-run NHI system.
• For the 45 million uninsured Americans, we're Cambodia, or Burkina Faso, or rural India. These people have access to medical care if they can pay the bill out of pocket at the time of treatment, or if they're sick enough to be admitted to the emergency ward at a public hospital, or if they have access to a charity clinic.
• And yet we're like no other country, because the United States maintains so many separate systems for separate classes of people, and because it relies so heavily on for-profit private insurance plans to pay the bills. All the other countries have settled on one model for everybody, on the theory that this is simpler, cheaper, and fairer. With its fragmented array of providers and payers and overlapping systems, the U.S. health care system doesn't fit into any of the recognized models.

(pp. 24-25):

Many Americans are worried that a national health care system with universal coverage would be an expensive proposition for the United States. In fact, a better-organized system, covering everybody, would almost certainly cut our health care costs -- after all, every other rich nation's health care system is cheaper than ours. Americans also tend to believe that the private sector can run a medical system for less money than government can; all the evidence from around the world suggests the opposite.

3. The Paradox (pp. 28-29):

When it comes to the essential task of providing health care for people, the mighty USA is a fourth-rate power.

This is particularly paradoxical because the American medical establishment boasts many assets that no other country can match. The United States has the best-educated doctors, nurses, and medical technicians of any nation. We have the best-equipped hospitals. American laboratories lead the world in medical research; American companies set the global standard in developing miracle drugs and advanced medical technology (like the titanium shoulder Dr. Ferlic recommended for me). If you walk along Main Street or through the mall in any American city, you will almost certainly pass people who would be dead if it weren't for the skill and dedication of some physician. This is the picture of American medicine conveyed by TV shows like House and Grey's Anatomy, where dedicated, highly trained professionals save a half-dozen lives each week before the first commercial break. For anyone with the money -- or the insurance policy -- to pay for it, American medical treatment ranks with the best on earth. That's why seriously rich people all over the world tend to board their private jets and race to some famous American clinic when they face a medical emergency. That's why, when I visited a sparkling new state-of-the-art hospital in Singapore, the sign outside said the facility was run by Duke University Medical School. The government of Singapore -- an island as far from North Carolina as you can get -- decided that the best possible place to find medical expertise was in Durham, North Carolina.

But the sad fact is, we've squandered this treasure. We've wasted our shining medical assets because of a health care payment system -- or, more precisely, a crazy quilt of several overlapping and often conflicting systems -- that prevents millions from receiving the treatment they need and that undermines the quality of care for millions more.

(pp. 29-30):

There are tens of millions of Americans who can't go to the doctor when they're sick, or don't take the pills that could keep them well, because they can't pay for the office visit or the prescription. Some Americans get world-class, state-of-the-art treatment for a chronic disease, while other Americans die from the same disease for lack of treatment. [ . . . ] When the World Health Organization rated the national health care systems of 191 countries in terms of "fairness," the United States ranked fifty-fourth. That put us slightly ahead of Chad and Rwanda, but just behind Bangladesh and the Maldives.

(p. 31):

In addition to those who have no health insurance coverage, tens of millions of Americans have coverage so limited that they are not protected against any serious bill from a doctor or a hospital. For those Americans who are uninsured or underinsured, any bout with illness can be terrifying on two levels. In addition to the risk of disability or death due to the disease, there's the risk of financial ruin due to the medical and pharmaceutical bills. This is a uniquely American problem. When I was traveling the world on my quest, I asked the health ministry of each country how many citizens had declared bankruptcy in the past year because of medical bills. Generally, the officials responded to this question with a look of astonishment, as if I had asked how many flying saucers from Mars landed in the ministry's parking lot last week. How many people go bankrupt because of medical bills? In Britain, zero. In France, zero. In Japan, Germany, the Netherlands, Canada, Switzerland: zero. In the United States, according to a joint study by Harvard Law School and Harvard Medical School, the annual figure is around 700,000.

(p. 32):

For all its organizational problems, I had thought that hands-on American medicine was top-notch. But comparative studies repeatedly demonstrate that this is not so.

One classic benchmark for a national medical system is "avoidable mortality" -- that is, how well a country does at curing diseases that are curable. A 2008 report by the Commonwealth Fund, "Deaths Before Age 75 from Conditions That Are at Least Partially Modifiable with Effective Medical Care," concluded that the United States is the worst of the developed countries on this measure. Among nineteen wealthy countries, the United States ranked nineteenth in curing people who could be cured with decent care. (However, we did better than any of the world's poor countries.) The number of people under seventy-five who die from curable illness was almost twice as high in the United States as in the countries that do the best on this measure: France, Japan, and Spain.

Another way to measure the quality of medical treatments is to compare the survival rate from major diseases. On this score, too, the United States generally comes out badly in comparison to other rich countries. [ . . . ] Americans with diabetes die younger than diabetics in any of the other countries. After kidney transplants, Americans have the worst survival rate. And if you've been thinking about having major surgery in the United States, here's a statistic to ponder: Among those nine rich nations, the per-capita rate of "Deaths Due to Surgical or Medical Mishaps" was the highest by far in the USA. For some particular ailments, U.S. medicine tops the world. America's five-year survival rate for women diagnosed with breast cancer was the best of the nine countries in this study. But overall, we lag the other rich countries in treating many of the diseases that medicine knows how to treat.

(pp. 33-34):

But out of twenty-three wealthy countries, the American health care system ranks dead last when it comes to keeping newborns alive. Our rate of infant mortality is more than twice as high as the rate in the top-ranked countries, Sweden and Japan. A key reason, as we'll see in later chapters, is that other rich countries offer free prenatal and neonatal care for every mother and every baby. This is costly -- but it's much less expensive, both economically and emotionally, than the heroic surgical efforts used in the United States to save threatened infants.

(pp. 34-37):

As we've seen already, the United States is by far the world's biggest spender on health care. Whether measured as a percentage of the nation's GDP or as per-capita spending, we pour roughly twice as much into medicine as other rich countries do. Given what we've just read about coverage and quality, that raises an obvious question: if we're getting only fair-to-middling performance from a system that leaves tens of millions of people without reliable health care, why are we paying more than anybody else? Why does American health care cost so much?

One reason (though not the main one) is that American health care "providers" -- doctors, nurses, hospitals, drug companies -- make more money for what they do than their counterparts overseas do. When Americans fill a prescription, the price is routinely twice as much -- sometimes ten times as much -- as a Briton or a German would pay for precisely the same pills made in the same factory. Our standard image of a physician - fairly accurate, although there are exceptions -- depicts someone who lives in the fancy suburb and drives a Lexus to the best country club after work. But that's not the standard picture of a doctor's life in other countries. [ . . . ]

In any case, the big money providers earn is not the major cause of high medical spending in the United States. Most economists who study this question have concluded that lower fees and prices would save Americans something, but not much. If we cut the average American physician's pay to European levels, and told the drug companies they can't charge more for Lipitor in the United States than they do in the UK, there would be savings, but not nearly enough to bring our medical spending down to the levels in the rest of the developed world.

Another widely cited culprit for our high medical costs -- Americans' penchant for filing malpractice lawsuits against their doctors -- also turns out to be a minor contributor to overall costs. [ . . . ] Economists who study this topic say that the nation's total malpractice bill, including insurance premiums, big-dollar verdicts, and defensive medicine, adds only 1 percent to our total health care costs.

Rather, the major reasons out national medical bill is so much higher than any other country's are two things that the United States does differently from every other country: the way we manage health insurance and the complexity of our health care system.

The United States is the only developed country that relies on profit-making health insurance companies to pay for essential and elective care. [ . . . ] The monthly premium goes toward paying the worker's medical bills, but the insurance firms also soak up a significant share of the premium dollar to cover the costs of marketing, underwriting, and administration, as well as their profit. Economists agree that this is about the most expensive possible way to pay for a nation's health care. That's why, as we'll see throughout this book, all the other developed countries have decided that basic health insurance must be a nonprofit operation. In those countries, the insurance plans -- sometimes run by government, sometimes private entities -- exist only to pay people's medical bills, not to provide dividends for investors.

(pp. 37-38):

Every organization, public or private, business or charity, has administrative costs. But the U.S. private insurance industry has the highest administrative costs of any health care payer in the world. Americans tend to believe that the private sector can manage any type of business better than government can. This is not the case, though, when it comes to health insurance. Medicare, the government-run single-payer system created by Congress in 1965 to pay for basic health care for the elderly, has administrative costs of about 3 percent; the single-payer government systems run by different provinces in Canada have about the same. Britain's National Health Service, a system where government both provides and pays for health care, has administrative costs of 5 percent.

(p. 39):

Anybody who has had the dubious pleasure of submitting claims to an American health insurance company probably knows that the insurance firms spend a lot of time and money figuring out how to avoid paying medical bills. They hire armies of adjusters and investigators to go through submitted claims looking for reasons to deny payment; it is cheaper to send out a form letter saying "claim denied" than to write a check to the doctor or the patient. In other developed countries, insurers are required to pay every claim. But U.S. insurance companies deny about 30 percent of all claims, although some of these are eventually paid through an appeal process.

(p. 41):

As we'll see in chapter 10, Switzerland used to have U.S.-style, profit-making health insurance, but the Swiss dropped that system on the theory that health insurance has to be nonprofit in order to do its job. Switzerland still has private health insurance companies; but the firms can't make a profit on the basic coverage package, and they have to cover everybody, regardless of "adverse selection" concerns.

The second major anomaly of the U.S. system -- the flaw that forces us to spend more than any other country on health -- is sheer complexity. We have developed, more or less by accident, the most fragmented health care system in the developed world, with "providers" sending bills to a vast array of different payers.

(pp. 42-43):

The presence of countless different payers and fee schedules drives another unique feature of American health care: the cost shift. Medical providers -- doctors, hospitals, labs -- naturally try to shift costs toward the highest payer. If Medicare, with its recurrent budget problems, cuts the fee it pays for a hospital for a particular procedure, the hospital will raise the price for other payers to make up the difference. That's another reason why the same operation in the same hospital on the same day can have ten different prices, depending on who is paying. [ . . . ]

"Like other observers," noted the prominent health care economist Henry Aaron, of the Brookings Institution, "I look at the U.S. health care program and see an administrative monstrosity, a truly bizarre mélange of thousands of payers with payments systems that differ for no socially beneficial reason, as well as staggernigly complex public systems with mind-boggling administered prices and other rules expressing distinctions that can only be regarded as weird." The administrative monstrosity we have built costs us a lot of money -- by far the highest administrative costs of any health care system on earth. The U.S. Government Accountability Office concluded that if the country could get the administrative costs of its medical system down to the Canadian level, the money saved would be enough to pay for health care for all the Americans who are uninsured.

4. France: The Vital Card (pp. 49-53):

France does a better job than almost any other country both in encouraging health and in treating those who get sick. As noted earlier, France has the best performance of any nation on a key measure, "Mortality Amenable to Health Care" -- which is to say, the French medical system does the best job of curing people whose diseases are curable. The French rank near the top -- and sharply higher than the United States -- on standard health measures like Disability-Adjusted Life Expectancy (DALE), infant mortality, and life expectancy among adults. (An average sixty-year-old Frenchwoman can expect to live in good health for a further twenty years and three months; a sixty-year-old American female will average another seventeen years and eleven months of healthy life.) The French health insurance system covers every resident of France and guarantees everyone a roughly equal level of treatment. France has more doctors per capita than the United States and more hospital beds. The French go to the doctor about eight times per year, on average, compared to five visits for Americans; the average Frenchman takes more pills and shots than Americans do. Continuing the tradition of doctors Péan and Latarjet, the French are significant innovators in health care and pharmaceuticals. In short, the French are big consumers of medicine, and they get a high-quality product. Yet France pays less than we do for health care.

France's health are system is a variation on the Bismarck Model, a system that would be familiar to Americans. It is not "socialized medicine." Rather, it is largely a system of private doctors treating patients who buy health insurance to cover most of the cost. As in the United States, most French doctors are in the private sector and charge patients on a fee-for-service basis; there's a specific charge for each office visit, injection, X-ray, and so on. As in the United States, the French buy health insurance through the job, with the employer and the worker splitting the cost; the monthly premium is withheld from the worker's paycheck. As in the United States, patients generally have to pay a fee, or co-pay, at the time of treatment; unlike the United States, the French patient will later have most or all of this co-pay reimbursed by the insurance fund. As in the United States, there are both public and private hospitals; the French for-profit hospitals tend to specialize in certain illnesses and procedures. For the most part, French workers don't have a choice of health insurance plans; they get the one that was set up for their line of work, or their geographic region, and stick with it for life.

But there are also major differences with the United States, particularly when it comes to health insurance. Because the insurance plans -- the caisses d'assurance maladie, or "sickness insurance funds" -- are nonprofit entities, their main concern is not providing a return to investors but, rather, paying for people's health care. Consequently, the French system eliminates some aspects of health insurance that Americans hate the most. French insurance funds can't turn you down for coverage, regardless of preexisting conditions. They can't terminate your coverage when you lose or change your job. (When a French worker loses her job, she keeps the same insurance plan; the government pays the employer's share of the premium.) They can't deny a claim; once the doctor submits a bill, insurance has to pay it. There's no deductible; French insurance pays from the first euro billed. The long delays in reimbursement that are common for American insurance companies are illegal in France. Doctors and hospitals are generally paid within a week, and patients must be reimbursed for their costs at the end of each month. [ . . . ] As we saw in chapter 3, the profit-making health insurance giants in the United States generally spend about 20 percent of all premium income on administrative expenses; the French insurance plans routinely keep administrative costs below 5 percent.

As a general rule, the French don't have to wait in line to see a general practitioner or a specialist; waiting times are usually about the same as those for people with insurance in the United States. [ . . . ] There's almost no limitation on a patient's choice in France. [ . . . ] Any patient can go to any doctor, any specialist, any surgeon, and any hospital or clinic in the whole country, and the insurance system must pay the bill. If you feel sick, you can call an ambulance to take you to the doctor or hospital of your choice -- for free. [ . . . ]

And France achieves all that at a reasonable cost. [ . . . ] France spends about $3,165 per capita each year for a health insurance system that covers everybody; the United States spends more than $7,000 per capita and leaves tens of millions without coverage. France's spending runs just under 10 percent of its total national wealth (as measured by gross domestic product); the United States is spending about 17 percent of GDP on health care.

(p. 54):

On paper, therefore, France is a multipayer health care system, with fourteen different sickness funds and a cluster of supplemental plans paying doctors and providers. In practice, France acts like a single-payer system, because the national Health Ministry essentially dictates what providers can charge for most types of treatment and what price will be paid for each prescription. Just as Aetna and UnitedHealth negotiate with doctors, hospitals, and drug companies to set fees in the United States, the French government negotiates, on behalf of the big sickness funds, with doctors, hospitals, and drug companies. The difference is that the French negotiations are completely transparent. That's why you see a highly detailed list of authorized fees in the waiting room when you go to the doctor in France. Most French doctors belong to a labor union, and these unions do the negotiating on behalf of the physicians. As with most other labor unions in France, the physicians' unions tend to do their negotiating on the picket line. Leading health economists complain that this amounts to "making health care policy through strikes." This charge is accurate. But then, a lot of policy disputes in France are resolved through strikes.

(pp. 57-59):

This carte vitale -- the "vital card," or the "card of life" -- contains the patient's entire medical record, back to 1998. Embedded in the gold metallic square just left of center is a digital record of every doctor visit, referral, injection, operation, X-ray, diagnostic test, prescription, warning, etc., together with a report on how much the doctor billed for each visit and how much was paid, by the insurance funds and by the patient. Everybody in France over age fifteen has this card -- a child's medical records are maintained on his mother's card -- and it is the secret weapon that makes French medical care so much more efficient than anything Americans are used to. When Dr. Bonnaud receives the carte vitale from his patient, he slides it into a small reader on top of his desk -- it's about the size of a desktop telephone -- and the patient's medical record is displayed on the doctor's computer screen. That's why French doctors and hospitals don't need to maintain file cabinets full of records. It's all digitized. It's all on the card. As Dr. Bonnaud considers his patient's symptoms and propose a remedy -- a shot, a course of drugs, a referral to a specialist, a good night's sleep, whatever -- he types in a record of the visit and his treatment. That information is written to the patient's carte vitale. If the patient is advised to go to the hospital or a specialist or a drugstore, he will take his carte vitale along with him, and on it the doctors there will find Dr. Bonnaud's diagnosis and recommended treatment. [ . . . ]

But the greatest value of the carte vitale is its impact on the payment of medical bills. Each patient's green card knows which sickness fund and which private health insurance plan (mutuelle) covers that patient. When Dr. Bonnaud finishes a consultation and enters that day's treatment on the patient's card, he stretches out the ring finger on his left hand and hits the "transmit" key on his computer. With that single keystroke, all billing information -- how much the patient owed, how much he paid the doctor as a co-pay, how much each of the insurance plans should pay back to the doctor and the patient -- is transmitted to each of the relevant insurance plans. With that single keystroke, the billing process is finished.

(p. 60):

To encourage doctors to make house calls, a GP gets an extra $13 for a consultation at the patient's home, and Dr. Bonnaud does a lot of that. When he visits a patient outside the office, he takes along a portable reader for the carte vitale and enters all the treatment information onto the card using his laptop computer.

(pp. 61-62):

Regardless of who pays, the prices for French medicine tend to be seriously cheap. It's hard to imagine any private general practitioner in the United States charging just $27 for an office visit, or any specialist willing to settle for $34 for a normal consultation. Most of the fixed prices set by the Health Ministry amount to one-third, or sometimes one-quarter, of what the same treatment would cost in the United States. Nor surprisingly, the cut-rate prices are reflected in doctors' cut-rate incomes. [ . . . ]

Of course, there are offsetting fiscal considerations. No French doctor pays a penny to go to college or medical school, so none graduates with the kind of debt burden facing most newly minted American M.D.s. In France, as in most of Europe, that's a cost the government bears. French physicians pay less in a year for malpractice insurance -- Bonnaud, the GP, pays $170 per year,a nd Tamalet, the orthopod, pays about $650 -- than their U.S. counterparts pay in a week. And neither French doctor ever expects to be sued. Even with those benefits, though, French physicians are doing their jobs for far less money than they could make doing the same work in the United States. And they know it.

(p. 64):

Whatever the next wave of reform might bring, ti seems certain that the French will continue to emphasize equal access to medical care -- the basic rule that anobody, regardless of race, income, or occupation, can go to any doctor and get the same treatment as anybody else. Whenever the French talk about health care, they invoke the concept of solidarité, the notion that all French citizens must stick solidly together to help one another in time of need. "The solidarity principle," explains Professor Rodwin, "requires mutual aid and cooperation among the sick and the well, the inactive and the active, the poor and the wealthy, and insists on financing health insurance on the basis of ability to pay, not actuarial risk."

5. Germany: "Applied Christianity" (pp. 66-68):

And thus it is somewhat counterintuitive to think of Bismarck as a humanitarian leader who wanted top help ordinary people deal with hardships like sickness and accidents. In fact, though, the Iron Chancellor had a benevolent streak. Always an innovator, Bismarck originated several of the programs that make up the modern welfare state. (As we'll see shortly, historians are still trying to figure out what prompted him to do it.) His Sickness Insurance Law, enacted by the Reichstag in 1883, was the world's first national health care system. It was a program of mandatory medical insurance, with premiums paid jointly by employees and workers. For ease of administration, the worker's share was withheld automatically from his pay. To this day, the 1883 structure remains a model for nations around the world. American workers who buy a health insurance plan through their employer, with the premium withheld from the paycheck, are using the Bismarck Model of health care.

In its home country today, the Bismarck health care system guarantees medical care to just about all 82 million Germans and to millions of "guest workers," legal or not, who live in the country. The package of benefits is generous, covering doctors, dentists, chiropractors, physical therapists, psychiatrists, hospitals, opticians, all prescriptions, nursing homes, health club memberships, and even vacation trips to a spa (when suggested by a doctor). The quality of care is world-class; Germany stands at or near the top in all comparative health care studies. Because the supply of hospitals and doctors is ample, there's no "queue" for treatment; on measures such as "waiting time for emergency care" and "waiting time for elective/non-emergency surgery," Germans spend less time waiting for care than Americans do. Patients can choose any doctor or hospital, and insurance must pay the bill. And every German has a choice among some two hundred different private insurance plans, which compete vigorously even though the prices for insurance are fixed.

It's worth emphasizing that the insurance plans -- that is, the Krankenkassen, or "sickness funds" -- are private entities. The general practitioners who make up the bulk of Germany's medical profession are also private businesspeople, working in private clinics. German hospitals are mainly charity or municipal operations, but there is a growing business in private, for-profit hospital chains. The private insurance plans negotiate prices with the private medical clinics and the hospitals; these are private commercial agreements, with little government input. In many areas of medical practice, there's less government control of medical care in Germany than in the United States. It's sheer nonsense to suggest that Germany, or any of the other countries using the Bismarck approach, is engaged in government-run "socialized medicine."

But there's a downside, of course, and a serious one. Providing free choice of insurance and treatment, in a system with minimal waiting and a high standard of quality, costs money. Germany has one of the world's more expensive health care systems, consuming a hefty 11 percent of the nation's hefty GDP. That's significantly higher than in most other European nations. Still, the German system is a bargain-basement operation compared to the United States, where we spend about 17 percent of GDP on a health care system that provides less choice and less coverage than Germany does.

6. Japan: Bismarck on Rice (pp. 83-85):

It's worth noting that this happens in a largely private-sector system; Japan relies on private doctors and hospitals, with the bills paid by insurance plans. In fact, Japanese doctors are the most capitalist, and most competitive, that I've seen anywhere in the world. Japanese clinics and hospitals blanket the buses, the subways, the billboards, and the airwaves with advertising. [ . . . ]

Since medical care is so readily available, so easy to get, and so cheap, you might think that the Japanese use an awful lot of medical care. And you'd be right. The Japanese are the world's most prodigious consumers of health care. The average Japanese visits a doctor about 14.5 times per year -- three times as often as the U.S. average, and twice as often as any nation in Europe. If you can't get to the doctor, no problem: Nearly all general practitioners in Japan make house calls, either daily or weekly. The Japanese love medical technology; they get twice as many CAT scans per capita as Americans do and three times as many MRI scans. Japan has twice as many hospital beds per capita as the United States, and people use them. The average hospital stay in Japan is thirty-six nights, compared to six nights in the United States. Japanese women giving birth consider it routine to stay in the hospital with their infants for eight to ten days -- roughly a week longer than a new mother in the United States. Japan lags, though, in terms of invasive surgery; Japanese patients are much less apt than Americans to have operations such as arthroplasty, transplant, or heart bypass. This is partly economics -- sine the fees for surgery are low, doctors don't recommend it as often -- and partly cultural. As a rule, Japanese doctors and patients prefer drugs to cutting the body. On a per-capita basis, the Japanese take about twice as many prescription drugs as Americans do. [ . . . ]

"Japan's macro health indices, such as healthy life expectancy and infant mortality, are the best, or among the best, in the world," says Professor Ikegami Naoki, the country's best-known health care economist. "Now, that's not all the result of health care. Japan has lower rates of violent crime than most countries, less illicit drug use, fewer traffic accidents, lower rates of HIV infection, less obesity. In terms of keeping people alive and healthy, those factors obviously help. But you also have to give some credit to the health care system for providing universal coverage and egalitarian access without long waiting lists, and we need to credit the doctors and the medical schools for providing a high quality of treatment." [ . . . ]

To an American, it seems natural that this formula -- heavy demand by an aging population, with almost no rationing of care -- would add up to a huge national medical bill. But when ti comes to costs, Japan has turned the predictable formula upside down. Despite universal coverage and prodigious consumption, Japan spends a lot less for health are than most of the developed nations; with costs running at about 8 percent of GDP, it spends about half as much as the United States.

(pp. 92-93):

The prices that Japanese insurers pay to doctors and hospitals are set every two years in a national negotiation between the Japanese Medical Association -- the trade group representing doctors -- and the national government's health ministry. The Fee Schedule that results from the biennial back-and-forth is the key governing tool of Japanese health care. "The doctors are private," says Professor Ikegami, the economist. "The insurance plans are mostly private. But the Ministry of Health and Welfare determines which treatments and drugs the insurance plans have to pay for, and negotiates the prices that insurance has to pay. So you have a multipayer system that works like a single-payer system. The single national Fee Schedule gives the ministry enormous power." In essence, Japan's market for medical services is a competitive free market operating under the firm hand of government regulation. This is something like the market for home telephone service in the United States. The phone companies are private firms, free to compete in the market, except on price. The price for basic land-line service is set by the local Public Service Commission or some other government regulator.

A good example of how this works in Japan is the price of a magnetic resonance imaging (MRI) scan. In the United States, a standard MRI scan of the head costs about $1,000 to $1,400. In Japan, the health ministry thinks that price is far too high. The fixed price for an MRI of the head in Japan is ¥11,400, or $105. That's why Japan, with the highest per capita rate of MRI scans in the world, still spends less than most developed countries on health care; you can buy a lot of scans if the price is dirt-cheap. [ . . . ]

As it turns out, the heavy-handed price control from above has had a salutary effect on the cost of medical care. Because the permitted fee for an MRI scan is so low, for example, Japanese doctors went to the MRI manufacturers -- Hitachi, Toshiba, etc. -- and demanded a new line of compact, inexpensive MRI machines. The industry responded. Today, Japanese doctors and clinics can buy MRI scanners for around $150,000 -- about one-tenth the price of the bigger machines used in the United States. That helps keep prices down for the Japanese health care system. And the new line of cheap, simple MRI machines has been an export boon for the Japanese manufacturers, giving them a lock on the MRI market in poorer countries.

After a section on how hard-up the underpaid doctors are under Japan's Fee Schedule (p. 96):

Actually, Dr. Kono and his wife do fairly well at their clinic, earning joint income of about $160,000 per year. That's roughly the average family income in Japan for a dual-income couple with college degrees. Unlike his American counterparts, Dr. Kono emerged from medical school with no student debt; the tuition was only $1,500 per year, and the local government helped pay it, as many municipal governments still do in Japan. When I asked him how much he pays annually for malpractice insurance, the doctor was stumped. "It's covered in my dues to the medical association," he said. "The dues are about $100 per month, but you also get the magazine and the directory for that." At the maximum, then, Dr. Kono and his nineteen-bed hospital are paying $1,200 per year for malpractice insurance, a smidgen of what a comparable clinic would pay in the United States. "I buy the insurance for peace of mind, but I don't think we need it," Dr. Kono said. In some forty years of operation, neither the Kono Medical Clinic nor any of its doctors has ever faced a malpractice suit.

7. The UK: Universal Coverage, No Bills (pp. 103-105):

The British National Health Service, the system that [Lord William] Beveridge designed and [Nye] Bevan muscled into existence sixty years ago, is dedicated to the proposition that nobody should ever have to pay a medical bill. In the NHS, there is no insurance premium to pay, no co-payment, no fee at all, whether you drop by the GP's office with a cold or receive a quadruple bypass from the nation's top cardiac surgeon. The doctor's bill is paid for by the government, and the patient never even thinks about it. There are private health insurance plans in the United Kingdom, but few people bother with them. Nine out of ten Britons get all their health care from the NHS. People go their entire lives without ever paying a doctor or hospital bill; in Britain, this is considered normal.

The Brits do pay for medical care, of course. They pay through a network of taxes that would make Americans cringe; the sales tax in the UK runs from 15 to 17.5 percent, while income and social security taxes are higher than America's in every income bracket. The Brits pay by forgoing treatments and medications that the NHS won't provide. They pay by waiting in lines for care in a system that is sometimes overstretched. But the single national system, with minimal paperwork and no billing, has proven to be an unusually cost-efficient means of providing quality health care to everybody. It cares for roughly one-fifth of the population of the United States but spends only one-fifteenth of the U.S. health care bill. And yet the results are good: Britain has lower child mortality, longer healthy life spans, and better recovery rates from most major diseases than does the United States.

Beyond all that, the Beveridge-Bevan system has been a clear political success. The people who provide care in the NHS are enormously proud of their system and the work they do. The people who receive care from the NHS are among the most satisfied medical customers on earth. [ . . . ] Free nationalized health care is such a basic part of British life today that not even the iron lady of British conservatism, Margaret Thatcher, ever dared to take on the NHS. Her Conservative Party privatized the coal mines, the railroads, the telephones, the water supply -- but not health care. "Margaret would never touch the NHS," said Nigel Lawson, who was her chancellor of the exchequer (basically, budget director). "In Britain today, the NHS is the closest thing we have to a religion."

(pp. 110-111):

But he [Aneurin Bevan] also proved adroit at compromise, and his negotiations produced a modus operandi still found in the National Health Service today. Bevan decided that all hospitals -- municipal, charity, and private -- would be nationalized as part of the NHS. The specialists working in the hospitals -- surgeons, orthopedists, radiologists, and so on -- would all be government employees. To win the backing of these specialists, Bevan agreed that they could continue to see patients on their own time,a nd charge fees. This essentially created a private medical system alongside the NHS; but Bevan predicted, correctly, that the private system would never amount to more than a smidgen of the free public service. (Today, private care constitutes about 3 percent of British medicine.) Next, in a crucial concession to the British Medical Association, he agreed that general practitioners could remain private operators, treating patients in their own offices but receiving their fee directly from the NHS. Next, Bevan told the insurance industry that it could still market medical policies to any customers who chose not to use the NHS. These detours from pure socialized medicine did not sit well with an organization of left-wing doctors known as the Socialist Medical Association,but Bevan resisted their pressure. He had secured his main goals -- universal coverage, with no medical bills -- and that was enough. On July 5, 1948, the National Health Service opened its doors, free to all comers.

(pp. 112-115):

To keep its service free, the NHS strives mightily to keep its costs low -- and in fact, it is recognized by experts around the world as one of the most cost-effective health care plans ever devised. It is a model for any country that wants to provide quality care at low cost. One key reason, of course, is that no-fee funding mechanism. With no bills, no billing offices, no bureaucracy needed to file or review insurance claims,the administrative costs at the NHS are small -- about one-fifth those in the United States. Beyond that, the British system uses various other mechanisms to keep a lid on expenses.

For the NHS, the first line of defense in cost control is the nationwide network of general practitioners, who have a powerful gatekeeping role. Everybody who wants access to NHS treatment -- which is to say, everybody in Britain -- has to register with a general practitioner. [ . . . . ] Since many complaints can be managed just fine by a GP in the local clinic, this is a smart way to save the time and cost of expensive visits to specialists in the hospital. Indeed, the gatekeeper system is so effective at controlling costs that many U.S. health insurance plans have imposed the same requirement.

True to Bevan's original compromise, the GPs are independent businesspeople, not government employees. But most of them have only one source of payment: the NHS. A general practitioner is paid by a system known as capitation -- that is, she gets a set fee for each person registered with her practice. This creates a clear economic incentive for the doctor to practice preventive medicine -- another proven money-saver for any health care system. [ . . . ]

The most notorious cost-control tool in Britain's system is the dreaded "queue" -- that is, the waiting list. Even when the gatekeeper agrees that you need to see a consultant, it can take weeks or months to get an appointment. [ . . . ]

American politicians regularly bring up this aspect of British health care as evidence that "socialized medicine" doesn't work. But that line of criticism, once valid, is somewhat out of date today. Under intense political pressure, Prime Minister Tony Blair and his successor, Gordon Brown, poured large sums into the NHS in this century specifically to reduce the waiting lists. NHS statistics suggest that this has made a major difference; waiting lists are much shorter than they were, say, fifteen years ago. But some people still have to wait, particularly for procedures that the NHS considers elective. In the fall of 2007, Dr. Badat told me how long his patients typically stay in the queue for specific complaints: "If you need a hernia repair, and there's no acute pain, I think it's about three months. Varicose veins is about six months. But if it's acute, that's different. We are much faster now. Any suspected cancer, seen by the consultant within two weeks. Any cardiac, we get you in the hospital the same day. If you got chest pain, I send you to cardiac within an hour."

8. Canada: "Sorry to Keep You Waiting" (pp. 125-126):

For Canadian schoolchildren, the story of Tommy Douglas and his banged-up knee has the legendary quality of George Washington and the cherry tree. But the Tommy Douglas legend has the added virtue of being essentially true. Thomas Clement Douglas was six years old in 1910 when he suffered that injury in Falkirk, Scotland. The boy was still limping, and sometimes using crutches, when his family emigrated to western Canada a year later. Surgery was indicated, but surgery in those days was a luxury for people who had far more money than the struggling Douglas family. By sheer chance, a professor of orthopedics in Winnipeg chose Tommy to be the subject of a demonstration of surgical technique. The operation was a complete success; the boy could walk normally again. But young Tommy was bothered by the unfairness of it: Why was his cure a matter of sheer chance? And why should he get medical care when countless others had no access to treatment?

"I felt that no boy should have to depend either for his leg or his life upon the ability of parents to raise enough money," Douglas wrote in his memoir. "I came to believe that people should be able to get . . . health services irrespective of their individual capacity to pay." When he was elected premier (that is, governor) of the province of Saskatchewan in 1944, Douglas turned that passionate belief into a government-run, single-payer health care system for all of Saskatchewan's 1 million residents. The program was so successful and so popular that residents of other provinces began demanding the same program. The federal government in Ottawa signed on; by 1961 everyone in Canada was covered by a taxpayer-funded hospital insurance program. Today the public health insurance system covers all medical and psychiatric care, in or out of the hospital.

(pp. 127-128):

This is mainly because Canada guarantees health care to everyone who needs it while the richer country to the south does not. Beyond that, Canada has better health statistics overall than the United States, a longer healthy life expectancy, and a lower rate of infant mortality. And it achieves all that for about half the cost per capita of the U.S. system. "Canada's cost advantage," the Canadian health care economics Robert Evans, told me, "is due to a much more efficient payment system and to the sheer clout that a universal system has in price negotiation."

Still, the federal and provincial governments have not been willing, or able, to provide the funding Medicare [Canada's health system] needs. In 2006, Canada spent about 8 percent of GDP on health care, roughly half the U.S. rate. With that level of spending, it can't keep up with the rapidly rising cost of medicine. The result is a health care system that is "underdoctored," as the Canadians put it. Since the system is in a constant state of scrimping and saving, medicine is a less desirable profession in Canada than it once was; fewer Canadian college students want to become nurses or physicians. To make a bad situation worse, an official commission in 1991 recommended that Canada reduce the number of students at its medical schools. By the early twenty-first century, when that policy shift bore fruit, the ratio of doctors to patients had fallen across Canada, particularly in rural areas. Today, Canada is trying to graduate more homegrown doctors and import others from the developing world. But the system remains significantly "underdoctored," and it's not clear that government is willing to spend the money to solve that problem.

For acute illness, accident, and emergency care, Canada's system does guarantee that rich or poor can always get the care they need, generally at no cost. But if your medical problem is not urgent enough to require immediate treatment, Canada will almost always keep you waiting. [ . . . ]

It has been widely reported, on both sides of the border, that millions of Canadians stuck on the waiting list travel to the United States to pay for the care they could not get in the free Canadian system. This "fact" is satisfying to advocates of private-market health care, both in Canada and in the United States; it seems to prove that government-run health care can't work. In fact, though, the race to the south is mainly fictional. The anecdotal reports are not supported by any statistical research. Expert studies of the "health care refugee" issue have concluded that the actual number of snowbirds heading south for health care is tiny. Rather, most Canadians deal with the waiting list by waiting. Statistics suggest that those who need care urgently can get it. But anybody whose problem can wait will wait, somewhat mollified by the awareness that everybody else is waiting, too.

(p. 133):

Each of the ten provinces and three territories operates its own Medicare plan, with some difference in fee structures and rules. Some provinces pay 100 percent of every doctor and hospital bill; others require patients to make a co-pay or pay a deductible before the government insurance kicks in. Still, Canadian Medicare is a closely coordinated structure that works like a single-payer system in many ways, because the federal government provides much of the funding and sets many of the rules for the individual provincial plans. That gives Medicare serious clout when it comes to negotiating fees and prices for treatment, medical equipment, and drugs. Among other savings, Canadians pay one-quarter to one-half the price Americans do for the same pill made by the same drug company; that's why a flourishing cross-border trade in drugs developed, with Americans going north to fill their prescriptions at the cheaper Canadian prices.

(pp. 134-135):

Most Canadians pay nothing for a doctor visit, nothing for the emergency room, nothing for a hospital stay, nothing for an MRI scan or other diagnostic test, nothing for an injection or a vaccination. Mental health care is commonly part of the package (although you may wait months to see a psychiatrist). Normal dental care is not covered, but dental surgery performed in a hospital is free. Most provinces pay for ambulance services. Although prescriptions are cheaper than in the United States, people in most provinces have to pay for their drugs; Medicare picks up the drug bill for the poor, the elderly, and people with chronic illness who need constant medication. [ . . . ]

In other words, most medical costs in Canada are covered by the government health insurance plan. And yet most Canadians -- roughly two out of three working people -- also have private health insurance to pay the tab for things that aren't covered by the system, like dental care, private hospital rooms, prescriptions, childbirth classes, and so on. You can't use private insurance to cut to the front of the waiting line, but you can buy things the public system doesn't offer. [ . . . ]

Even though private health insurance plays a supplemental and decidedly minor role in Canadian health care, its very existence is the source of considerable angst in medical and political circles. The constant fear is that rich people will turn more and more to private insurance and away from Medicare. The result would be "two-tier medicine," a term that is as pejorative in Canada as "socialized medicine" is in the United States.

9. Out of Pocket (pp. 143-144):

In much of Africa, South America, and South Asia, the "health care system" is brutally simple: The rich, the military, and sometimes other government employees get medical care; everybody else stays sick or dies. In countries where almost all resources are needed to provide food, water, and shelter, medical care is a luxury, and a scarce one at that. As we saw earlier, rich nations spend a significant share of their gross national product on health care -- about 17 percent in the United States, 11 percent in Switzerland, 8 percent in Japan. In Nigeria, in contrast, total medical spending amounts to less than 1 percent of GDP; the country spends $5 per person per year on health care. Some nations spend less than that. In most African countries, the bulk of public spending on health care, whether the funds are domestic or foreign aid, is aimed at the lethal epidemic of HIV-AIDS. There is little or nothing left over to pay for treatment of all other diseases or accidents. Thus people have to pay for treatment themselves -- and if they can't pay, there's no treatment, unless the patient is lucky enough to have access to doctors from an international charity organization.

In India, as in other "developing nations" -- a standard term nowadays for the world's poorer countries -- it is not at all normal for most people to see a doctor or to receive any kind of structured medical treatment. Of India's 1.1 billion people, about 750 million live in rural villages; most of those villagers never see a doctor or a hospital. A woman in childbirth, with luck, might have the services of a local midwife who has learned traditional techniques from earlier generations of midwives. A person with a snakebite or a broken bone or an abscessed tooth may have access to a local healer, who might use traditional herbal medicines, or perhaps yajnopathy, to attempt a cure.

(pp. 144-145):

When health care economists describe the basic models of health care systems -- the Bismarck Model, the Beveridge Model, etc. -- a standard term to describe the systems, or nonsystems, in poor countries is the Out-of-Pocket Model. Sine there is little or no government money to pay for health care and there is no health insurance, most medical treatment must be paid for by the patient. If a sick person has some money, he pays in currency. If there's no money, the patient pays in potatoes or pottery or dairy products or babysitting services or whatever he can scratch up.

(pp. 147-149):

The medical implications of the Out-of-Pocket Model are sadly predictable. Because most people can't get treatment or medication, there are millions of deaths each year in Africa, south Asia, and Latin America from diseases that have disappeared in the developed world: polio, smallpox, malaria, leprosy, etc. When this pattern of life and death is turned into statistics, it turns out -- no surprise here -- that countries using the Out-of-Pocket Model of health care have the world's shortest life expectancy. Among the wealthy nations, life expectancy (averaged among men and women) generally ranges from seventy-five to eighty-one years; in the United States, the average life expectancy at birth is just over seventy-seven years. But look at the average life span in some of the countries where people don't have access to health care [ . . . ]

The absence of health care is not the only reason that the average person dies in his thirties or forties in some of these countries; starvation, harsh living conditions, warfare, HIV-AIDS, and violence all play a role in keeping lives short. But the fact that people rarely, if ever, see a doctor is a key factor. Simply put, an out-of-pocket health care system lets large numbers of people die from illnesses or trauma that could be treated.

This pattern also holds in the only wealthy country that uses the Out-of-Pocket Model for a significant portion of the population: the United States. Most Americans are covered by health insurance, Medicare, or Medicaid and can get medical treatment; at any given time, though, more than 40 million residents who are too young for Medicare and too well-off for Medicaid go without health insurance. For these people, medical care is mainly an out-of-pocket thing. It's true that Americans who are acutely ill can go to a hospital emergency ward and receive treatment, whether they are insured or not. But that option applies only to people in active labor or on the verge of death; otherwise, the uninsured have to pay for their care -- and, often, can't afford to. The impact on health is clear. Many studies show that uninsured Americans are more likely to get sick and stay sick longer than their neighbors with health insurance. A U.S. government study found that accident victims who are uninsured are 37 percent more likely to die from their injuries than somebody with insurance. As we noted at the beginning of this book, government and academic studies report that more than twenty thousand Americans die each year from treatable diseases, because they don't have health insurance and can't afford to pay for treatment out of pocket. Beyond that, Americans on the Out-of-Pocket Model generally don't get early diagnosis of potentially fatal diseases -- cancer, hypertension, diabetes -- and thus are more likely to suffer and die from these ailments.

(pp. 149-150):

If you make a graph that compares personal income to life expectancy in all the nations of the world, the two lines on the chart go up together almost in lockstep; the higher the GDP per capita, the longer people live. The biggest exception to this rule -- the obvious outlier on that chart -- is Cuba.

The island nation of 11 million that the Castro brothers have run as a totalitarian Communist fiefdom for more than forty years is one of the poorer nations in Latin America. It has a per-capita income of around $4,000 per year; its housing stock is mainly wooden hovels where electricity and hot water are iffy propositions; its farmers tend their sugarcane fields in battered, forty-year-old Soviet tractors held together with wire and duct tape. And yet Cuban health statistics are on par with the best in the world. Life expectancy at birth, according to the World Health Organization, is longer than seventy-seven years -- about the same as in rich nations with six times as much per capita income. Infant mortality rates are actually lower than in the United States. Cuba spends about 6 percent of its GDP on health care, a lower proportion than almost any wealthy country but considerably higher than other poor nations.

Unlike most other poor countries, Cuba has a health care system that provides universal coverage, with no out-of-pocket expenditure. (Officially, at least. An American physician who had taught in Cuba told me that people do sometimes offer a doctor cash as a way to jump to the head of the waiting line.) Of the systems describe din this book, Cuba's is the closest to the Beveridge Model, although the inspiration for Cuba was not Britain but, rather, the state-run hospital system in the Soviet Union, Castro's first benefactor. In the Cuban system, all hospitals are government-owned, almost all doctors and dentists are government employees, and all the bills are paid by the government, through general taxation. The Cuban Constitution declares that every citizens has "a right to health protection and care," and the government says ti has stationed a doctor and nurse in every rural village. Most countries wouldn't have the manpower to do that, but Cuba has more doctors and nurses per capita than any other nation, according to the WHO. Its medical schools train doctors from all over the world (including several dozen American students studying for an M.D., tuition free, at the Escuela Latinoamericana de Ciencias Médicas, just north of Havana). Under a policy called Medical Diplomacy, the Castros not only provide free medical education for foreign students but also export trained doctors to Venezuela, Bolivia, and other Latin American states. In return, those countries provide the poor island nation with oil and food at cut-rate prices.

(pp. 151-152):

[A]s South Korea, Singapore, and Taiwan moved into the ranks of the world's richer nations, they all set up national health care systems to replace out-of-pocket payment. The results can be dramatic, both for the fiscal status of individual citizens and for the health status of the whole population. [ . . . ]

In short, most nations try to drop the Out-of-Pocket Model as they grow richer. But the world's most populous nation, China, has gone the opposite direction. Since the 1980s, the cadres overseeing China's transformation to a market economy have also transformed health care, from a universal government system to a nonsystem that puts most of the financial burden of health on the patient. In 1978, when Chairman's "barefoot doctors" were running government-funded clinics in almost every rural community, out-of-pocket payment in China came to 20 percent of health care costs, not much more than in some wealthy nations. By 2005, with medicine mostly privatized, about 60 percent of all health care costs were paid from the patients' pockets, which ranks China with the world's poorest countries. For wealthy people in the big eastern cities, China today has excellent medical care in clean, modern hospitals. But for hundreds of millions of people in the desperately poor rural areas, medicine is an unaffordable luxury. Millions of Chinese die each year because they don't have the money to pay for medical care. [ . . . ]

When I was traveling the world looking for lessons Americans could benefit from, several economists suggested I look at China as an example of what not to do. "Just to make your American readers feel better," advised Ikegami Naoki, the health care expert at Keio University's hospital in Tokyo, "you ought to tell them about china. It has all the problems of American health care but none of the benefits." [ . . . ] What galls these experts is that China, virtually alone among nations, has gone backward in terms of health care. Mao's Cooperative Medical System was spartan but universal and essentially free -- a poor man's version of Britain's Beveridge Model. It produced impressive results: From 1952 to 1982, life expectancy in China increased from thirty-five to sixty-eight years, and many contagious diseases were controlled. In the early 1980s, though, this government-run system essentially shut down,and China reverted to the Out-of-Pocket Model for most of its 1.3 billion people. The results are clear. Infant and child mortality rates actually increased in China during the first decade of the twenty-first century; life expectancy is unchanged since the '80s; some infectious diseases are causing epidemics not seen in decades.

10. To Big for Change? (pp. 164-165):

And yet some industrialized democracies have carried out fundamental reform of their health care systems, despite significant political opposition. In the course of my global quest, I visited two countries that completely revamped their national health care arrangements: Switzerland and Taiwan.

Neither of these countries looks much like the United States of America, of course. Taiwan is an island nation of 23 million Chinese people with a deep commitment to Confucian traditions. Switzerland has 8 million people steeped in European culture and history, speaking four different official languages. Still, both countries have important parallels to the United States. Both are vigorous democracies marked by fierce competition between political parties that look a lot like our Republicans and Democrats. Both have finance and insurance industries that are rich and politically influential. Both are ferociously capitalist places, and both have jumped aboard the digital revolution to build advanced, high-tech economies. Most important, both Taiwan and Switzerland had fragmented and expensive health care, similar to the American system -- until they launched their reform campaigns. In both countries, payment for medical care was dominated by health insurance plans tied to employment; in both significant numbers of people were left with no coverage at all. Even with large numbers of people uninsured, both countries were pouring considerable amounts of money into health care. In both Taiwan and Switzerland, as in the United States today, a growing chorus of voices began demanding universal coverage, arguing that every sick person should have access to a doctor.

(pp. 167-169):

By the early 1990s, Taiwan had the money to build divided highways, bullet trains, state-of-the-art engineering schools, and other accoutrements of an advanced nation.

But it still had a poor country's health care system -- which is to say, an out-of-pocket system for most of the people. There were insurance plans for government employees, farmers, soldiers, and employees of some big companies, but 60 percent of the population had no coverage at all. They could see a doctor or go to a hospital only if they could scratch up enough money out of pocket to pay the bill. In a political pattern that would be familiar to Americans, the liberal Democrats latched onto universal health care as a central issue. They made two arguments for universal coverage. Ona moral level, the Democrats said, a prosperous country like Taiwan had a basic ethical duty to provide access to medical care for all its people. But there was also a matter of national pride: A national health care system would be one more area in which wealthy Taiwan surpassed mainland China. For some years, the political argument over health care followed predictable left-right lines, with the liberal Democrats agitating for universal coverage and the conservative Nationalists backing the status quo. But in Taiwan, the familiar script took an unexpected turn: The conservative party changed its position. At the same time America's conservative Republicans were going to the mat to defeat the Clinton health care plan, Taiwan's conservative Nationalists took the opposite tack. They endorsed universal coverage, stealing the liberals' strongest issue. In 1994, with strong backing from the Nationalist president, Lee Teng-hui, Taiwan's parliament created a National Health Insurance system that guaranteed coverage for every resident of Taiwan. Largely because of this popular initiative, Lee's conservative party held off the Democrats, and he won the presidency again in 1996.

Taiwan's new health care system was the product of several years of study. [ . . . ] To lead them on this global exercise in comparative policy analysis, the Taiwanese hired the best possible tour guide: Professor William Hsiao, a health care economist at the Harvard School of Public Health. Born in Beijing in the 1930s, Hsiao (pronounced like the first syllable of "shower") was the son of a Guomintang official and came to the United States to stay when his father worked with the Taiwanese delegation at the United Nations. [ . . . ] Hsiao's famous textbook, Getting Health Reform Right, is required reading among health officials anywhere on earth who are trying to fix a health care system in an era of skyrocketing costs. For a newly rich Asian island nation that needed a health care system built from scratch, Bill Hsiao was just what the doctor ordered.

(pp. 170-171):

Considering different recipes from around the world, Hsiao's task force set out to build a health care system on the Chinese-menu principle -- this part from column A, this part from column B, and so on. Although Hsiao is a fan of Britain's National Health Service, he rejected that approach on the grounds that Taiwan had mostly private hospitals and it had health insurance plans in place already for civil servants and others. This dictated a model based on private providers and an insurance system to pay the bills. That approach, of course, sounds like the Bismarck Model, as found in Japan and Germany. But Hsiao was not a fan of the way Bismarck countries relied on many different funds to pay the bills. He urged Taiwan to set up a single national insurance system: "When you have a single player . . . for the doctors and hospitals, then you can identify who's really abusing the system. That also allows you to put a global budget in place. When you have a single payer, you can say, 'I'm only going to spend X percent of my GDP for health insurance,' and you can enforce that."

So Taiwan built a system that uses private doctors and hospitals, with a single, government-run insurance plan to pay them. That's a national health insurance -- which is to say, the Canadian model. But Hsiao insisted on one major break from the Canadian system. In Taiwan, National Health Insurance is not funded through general taxation; rather, the money people pay to finance the health insurance fund is called a premium. Both employer and employee are required to chip in monthly to pay this "premium." For Hsiao, the nomenclature is important. Yes, there's a mandatory payment for everybody. Yes, it's withheld from pay and goes directly to the government. But this payment is not a tax. "You never want to all it a tax," Hsiao says. "If you call it a national insurance premium, then you're asking people to pay for a product, not to pay a tax to some huge government entity."

Meanwhile, high-tech Taiwan saw the carte vitale in France and decided to give all 23 million Taiwanese patients their own electronic card, with medical and billing records embedded on a chip. As in the Bismarck countries, Taiwan made health insurance mandatory for everybody -- with government providing interest-free loans to help people who couldn't pay the premium -- and guaranteed that anybody, healthy or sick, would be covered. As in France and Japan, the government's newly created Bureau of National Health Insurance was given central power to set the prices for medical services and drugs. And as in France and Japan, this has proven to be a powerful force in keeping prices low. Because the health insurance plan is run by the government and is thus highly responsive to political pressure, Taiwan's plan covers just about every imaginable form of medical treatment, including physical, mental, dental, and optical, as well as organ transplants, acupuncture, Chinese massage, drugs, traditional herbal medicines, and long-term care.

(pp. 172-173):

Almost overnight, some 11 million Taiwanese who had no medical insurance suddenly had access to doctors and hospitals, with the Bureau of National Health Insurance paying most of the bill. This created a flood of new demand for medical services. The market responded with a flood of new supply: Clinics, hospitals, dentists, optometrists, labs, hostels, and acupuncture centers sprang up everywhere. it was not exactly the way a Harvard economist might have planned it, but Bill Hsiao says now that things worked out reasonably well. "We had this sudden explosion of new suppliers," Hsiao told me during an inspection visit to Taiwan a dozen years after his project was launched. "And that has meant lots of competition, lots of access for the people, and low prices." The government insurance allows patients free choice of any hospital, clinic, or doctor, so providers end up competing furiously for customers. Many clinics offer free ambulance service to bring the patient to the examining room. In most Taiwanese cities, medical clinics stay open twelve hours a day, seven days a week. The doctors don't particularly like it, but they have to operate that way. After all, their competitors down the street are open for business. Chang Hong-Jen, the businessman who helped design the system -- and later became the CEO of the Bureau of National Health Insurance -- told me that "doctors in Taiwan work very, very hard, because they have to use volume to make up for the low fees."

The most striking result of Taiwan's new system is a healthier population with a longer healthy life expectancy and much higher recovery rates from major diseases. This is particularly evident in rural areas, where it was difficult or impossible to see a doctor before the new system took place.

(pp. 173-174):

As a system started from scratch, with uniform rules and procedures for every doctor and patient and state-of-the-art paperless recordkeeping, Taiwan's new health insurance system is the most efficient in the world. The 1994 law seemed hopelessly optimistic when it set a limit of 3.5 percent for administrative costs; in fact, the system has done much better than that, with paperwork, etc. accounting for only 2 percent of costs most years (and sometimes less). That's about the same administrative cost rate as in the U.S. Medicare system -- but one-tenth as high as the administrative burden for America's private health insurers. As a result, even with explosive growth in the consumption of medical services, national health spending in Taiwan remains at about 6 percent of gross domestic product (as opposed to about 17 percent of GDP in the United States). This has kept costs low for patients. The co-pay for a doctor visit runs about $7; the monthly premium for an entire family's health insurance averages $150 or so.

(pp. 177-178):

Another definition of "solidarity" in the Swiss context is the principle that all the people of Switzerland should have equal access to basic rights: Everybody gets to vote, everybody gets a jury trial, everybody gets an old-age pension, everybody pays the same price for a ticket on the national railroads. And everybody has access to medical care. In Switzerland, the "right to medical care" is not a political argument advanced by left-wing parties but, rather, a basic truth of modern life. President Couchepin, a corporate executive who became a leading figure in the Christian-Democratic Party -- the European version of America's Republicans -- set this forth for me, in his excellent but accented English, in dramatic terms. "A society cannot have complete equality," M. Couchepin said. "It is not possible. You can earn more money than your neighbor; that is not society's business. But a good railway system, a good school system, a good health system -- the basic needs of the people -- must be handled with a high degree of equality. To have a great sense of solidarity among the people, all must have an equal right -- and particularly, a right to medical care. Because it is a profound need for people to be sure, if they are struck by the stroke of destiny, they can have a good health system. Our society must meet that need."

In health care, though, the basic solidarity, the equality, of Swiss society became badly strained near the end of the twentieth century. The Swiss health insurance business was coming to resemble the American system. Traditionally, Switzerland had had a network of "mutual," or nonprofit, health insurance plans; workers bought insurance through their employer. But Switzerland is home to some of the world's largest insurance firms. In the 1980s, these private insurance giants learned a profitable lesson from American insurers. U.S. companies like Aetna and United Health had been buying up nonprofit health insurers like Blue Cross and Blue Shield and converting them into profit-making operations. As it turned out, for-profit health insurance produced fabulous bottom-line results, especially when the insurers were picky about the people they covered and diligent about denying claims. The big Swiss insurance firms were impressed; they started buying the old mutual health plans in Switzerland and converting them into profit-making businesses. By the early 1990s, Switzerland's health care system was the closest in the world to the American model. Costs were high -- Switzerland ranked second only to the United States in per-capita spending on health care -- and more and more Swiss citizens were being left without insurance. Just as in America, the insurance companies refused to cover anybody with a preexisting condition, on the logical theory that covering sick people would cost more and eat into profits. Even those who had coverage found their claims being denied, because the insurers decided, logically, that every claim they paid would eat into profits.

It was a fine example of unfettered capitalism at work. But in Switzerland, there was a problem. Even more than it cherishes capitalism and profit, Switzerland cherishes its solidarity. And this change in the health insurance market began to undermine solidarity. Some Swiss people could afford to see a doctor when they were ill; others could not. Some people were covered for large medical bills; others faced bankruptcy. By 1993, nearly four hundred thousand Swiss citizens had no health insurance coverage -- about 5 percent of the population. By U.S. standards, of course, that would be barely a blip; in 2009, some 16 percent of Americans were living without health insurance. For the Swiss, though, leaving 5 percent of their fellow citizens outside the health care system was an unacceptable violation of the core national values: solidarity, community, equality.

For all the formal similarities between the U.S. and pre-reform Swiss systems, there's obviously a huge disconnect when it comes to solidarity, community, and equality.

(pp. 178-181):

A special task force was set up to study this national problem. The commission examined the transformation of health insurance in Switzerland, but also took a long look at the systems in other European nations. [ . . . ] With strong support from the liberal parties, the commission in 1993 proposed a bold new approach to health insurance, based largely on the Bismarck Model. The new law -- the Swiss Federal Law on Compulsory Health Care, or Loi Fédérale sur L'Assurance-Maladie -- was dubbed LAMal. This is a French pun -- mal is French for "illness," but the acronym stands for "health insurance law," from the law's French name. Under this plan, health insurance was separated from employment, and every family went out in the market to buy coverage. Insurance companies were required to offer a basic package of benefits to all applicants, and insurers could not make a profit on basic health coverage (any profits or surplus earnings must be used to reduce premiums for the next year). To soften the impact on the insurance industry, the new law required that everyone buy health insurance; anyone who didn't sign up was automatically assigned to one of the companies, and the premium was deducted from the paycheck. That ensured the insurance companies a large enough pool of customers to keep them solvent. Further, insurers were allowed to make a profit on supplemental coverage -- that is, they could sell additional insurance to pay for cosmetic surgery, private rooms in the hospital, and so on. Under this plan, everybody could afford medical care and nobody would go bankrupt paying doctor bills.

It's a basic rule of Swiss democracy that any major policy change must be approved by the people. And so a national referendum was scheduled on LAMal in 1994, just as the Clinton health care plan was sputtering to its death back in America. [ . . . ] LAMal was passed with a bare majority of the vote, and the new system went into effect on January 1, 1996.

When I visited Switzerland a dozen years later, universal health care coverage was so firmly entrenched as an element of Swiss life that nobody seemed to oppose it anymore. Even M. Couchepin, the conservative businessman who became president, agreed. "Nobody would want to go back to the system before, when some people were locked out of the insurance," he told me. [ . . . ]

Switzerland is still a big spender on medicine. It spends about 11 percent of GDP on health care -- that's the second-highest spending rate in the world, and roughly the same share as before LAMal was established. But today, everyone in Switzerland is covered by the insurance system; nobody is turned down for coverage, and no claim can be denied if it is signed by a doctor or a hospital. The absence of profit has not meant an absence of competition among insurance companies; on average, Swiss workers have about seventy different plans to chose from. The insurers can't compete on the basic package of benefits, which is determined by the government. They do battle one another on price, on extra benefits, and on user-friendliness. One of the major insurers, Groupe Mutuel, promises to pay every claim within five days; if it misses that deadline, the next month's premium is free. Most firms have used the nonprofit basic health coverage as a sort of loss leader, to draw customers to profitable lines of business, like supplemental health coverage, life insurance, or fire insurance. "We opposed the reform," Pierre-Marcel Revaz, the president of Groupe Mutuel told me. "But in fact, our insurance industry has thrived with it. Of course, we are Swiss. So we are pleased that everyone in Switzerland now has access to the same package of care." The insurance industry reports higher profits overall than before LAMal was passed.

It's worth repeating one basic lesson here. In 1994, health care spending in Switzerland was 11% of GDP, while in the US it was 12% of GDP. After this reform, which extended Switzerland to universal coverage, the cost is still 11% of GDP. In the US, with no reform, with ever growing numbers of people not covered, costs have swelled to 17%. Switzerland does not appear to have done much in the area of cost controls, so the containment of costs seems to be the result of eliminating the profit-seeking insurance company drive.

(pp. 182-183):

The advocates of reform in both countries [Taiwan and Switzerland] clarified and emphasized that moral issue much more than the nuts and bolts of the proposed reform plans. As a result, the national debate was waged largely around ideals like "equal treatment for everybody," "we're all in this together," and "fundamental rights" rather than on the commercial implications for the health care industry.

The contrast with Bill Clinton's approach in that same year is instructive. President Clinton emphasized economics. Health care reform, he said, was a key element of "our efforts to strengthen the economy." "Over the long run, reforming health care is essential to reducing the deficit and expanding investment," Clinton argued in his first State of the Union Address. He named the smartest and most driven member of his White House team, First Lady Hillary Rodham Clinton, to head the Task Force on National health Care Reform -- and she, too, emphasized the economic impacts of change. But the economics of change in a $2 trillion business were hardly attractive to those whose interests were tied to the status quo. The health insurance industry committed tens of millions of dollars to the famously effective "Harry and Louise" TV ads, which began denouncing the "Hillarycare" plan months before it was completed. The hospital industry, the drug industry, and many physicians' groups joined the insurers in opposition. Business support began to crumble. Organized labor, angry at the Clinton White House because of the NAFTA free-trade agreement, was lukewarm at best. Liberal backing was tepid, because the compromise plan the Clintons came up with fell short of the single-payer universal-coverage plan that the left had expected from a Democratic president. Meanwhile, an important Republican strategist, Bill Kristol, circulated an influential memo saying that GOP political interests dictated defeat of the Clinton plan. "Any Republican urge to negotiate a 'least bad' compromise with the Democrats, and thereby gain momentary public credit for helping the president 'do something' about health care, should be resisted," Kristol argued. Clinton's fellow Democrats didn't help much either. Senator Daniel Patrick Moynihan of New York, chairman of the Senate Finance Committee, announced, "There is no health care crisis" in America, and thus kept the Clinton bill tied up in his committee until it died.

By early 1994, when the Clintons abandoned their plan, the central ethical argument for universal health care coverage -- the notion that a wealthy country ought to provide medical treatment for all who need it -- was nowhere to be heard. The moral issue that drove major change in Taiwan and Switzerland never really got moving in the USA.

11. An Apple a Day (pp. 186-187):

On occasion, the incentives built into the U.S. health care system are downright perverse. Because awareness of a preexisting condition can lead to higher insurance premiums -- or outright denial of coverage -- some Americans deliberately avoid physical exams or other medical tests for fear of losing their health insurance. This means they avoid the preventive care that might help control the condition; eventually, they'll have to go to a doctor for treatment, running up vastly higher costs for the system. Beyond that, health insurers are sometimes more likely to pay for treating disease than for preventing it. "Insurers will often refuse to pay $150 for a diabetic to see a podiatrist, who can help prevent foot ailments," the New York Times noted. "Nearly all of them, though, cover amputations, which typically cost more than $30,000. Patients have trouble securing [insurance] reimbursement for a $75 visit to the nutritionist who counsels them on controlling their diabetes. Insurers do not balk, however, at paying $315 for a single session of dialysis, which treats one of the disease's serious complications."

In contrast, all the other rich countries I visited on my global odyssey have a powerful economic interest in keeping people well. The reason was set forth vividly by a Scottish politician named John Reid, who served as Britain's health minister -- in essence, the chief of the National Health Service -- under Tony Blair. John told me exactly why his NHS saw economic value in preventive medicine: "Almost every person in this country is my patient for life. From the minute the line turns blue on your mother's pregnancy test until the minute you die, maybe ninety-nine years later, you are my patient. If you become ill, it is the job of the NHS to treat you, without regard to cost. So of course I want to prevent you from becoming ill."

(p. 190):

For example, poverty is associated with higher rates of illness in every society; poor people get sick more often and die at a younger age than those with an average or high income. In the United States, people with a yearly income below $10,000 are three to six times as likely to die before the age of sixty-four as those with an income over $25,000. Americans living at or near the poverty line are more likely to get cancer than their richer neighbors, and more likely to die within five years of contracting the disease. The variation in health due to wealth or the lack of it is less pronounced in nations that give everybody cheap or free access to medical care; but even in Britain, a country that has eliminated doctor bills, poor people tend to be sicker than the rest of the population.

(pp. 200-202):

The British, like most other European countries, consider prenatal and postnatal care for a mother and her new child to be a central element of the preventive medicine routine. [ . . . ] My friend Helen Ward had a baby on August 8, 206, in the Whittington Hospital in North London. Helen is a reporter, and she kept detailed notes on her pregnancy.I asked Helen how much she paid for the care she was provided at the doctor's office, at the hospital, and in her home. "Well, let's see," she said, consulting her notes. "When we had the sonogram, they make you pay £2 if you want a copy of the picture. And when labor began, we called a taxi to get to the hospital. Well, you have to pay for the taxi; it's a tenner. So that's what it cost me to have a baby, I guess. Twelve quid. What would that come to in American money? Twenty dollars?"

And then Helen asked me a question: "My friends say that in America, you have to pay for antenatal visits, and delivery, and the postnatal. But that is hard for me to understand. Obviously, all that medical care is going to make sure the mother and the baby are healthy. Isn't that what a medical system is supposed to do>? Keep people healthy, not let them get sick?

"So, could I just ask you: Why would you charge somebody to have a baby?"

It's a good question.

All the industrialized countries, except the United States, provide various other benefits for expectant mothers, such as free prescriptions, free dental care (because pregnant women and new mothers are unusually susceptible to tooth infection), free childbirth classes, and free nursing help at home in the baby's first weeks of life. In much of Europe, the government pays the mother (or father) a salary to stay home and raise the child for a period ranging from four months (France) to two years (Norway). In Finland, the government gives each expectant mother a free baby bed; it's delivered to the home by a nurse who talks over the basics of baby care while she sets up the crib. All the countries list this care and benefit system under the rubric "preventive medicine." It's an accurate label. Careful medical and nursing attention before and after birth tends to prevent the kind of neonatal health emergencies that are tragic for the new family and hugely expensive for the health care system. It is largely because of this extensive preventive intervention before and after birth that all the other wealthy countries report rates of infant mortality (that is, death within the first year of life) that are one-half or one-third as high as America's.

12. The First Question: Returns to the case of Nikki White, from the introduction, who contracted lupus but was uninsured, initially had too much money for Medicaid, and after she lost her job because of her disability ran into further cutbacks in Tennessee (pp. 211-212):

Nikki White was a college graduate and had worked in medical care. She knew how to research health insurance regulations. Eventually, she figured out that Medicaid would have to give her coverage if she was legally determined to be "disabled." She began filing applications with yet another government department, the Social Security Administration, the agency that determines whether or not an American is disabled. Denied. By the summer of 2005, Nikki White began to fear that she would never get the medical care she needed. "I don't want to die," she said on her thirty-second birthday. "Please don't let me die."

In her last weeks of life, Nikki began to receive medical care. In November of 2005, she suffered a seizure -- due to kidney failure and perforated intestine -- and was admitted to the emergency ward at Bristol Regional Medical Center. From that point on, her insurance problems didn't matter; under federal law, the hospital had to treat her until her condition was "stable." Over ten weeks, she had more than twenty-five operations, all provided gratis. By then, though, the patient was too sick for any hospital to save. In the spring of 2006, at the age of thirty-two, Nikki White died. Officially, the cause of death was listed as "complications of lupus." In fact, as her doctor said, the proximate cause of death was a health care system that failed to provide the treatment that would have saved her life.

Monique White was an American citizen, guaranteed equal access, along with every other American, to certain basic rights. But she didn't have equal access to health care. If Nikki had received the standard treatment regimen for lupus readily available to any American with health insurance, she could have lived a normal life span. If she had been a resident of any other developed nation, she could have lived a normal life span. No other rich country would have tolerated the inequality that left Nikki White dead.

Which inequalities will society tolerate? Is it acceptable that some people are left to die because they can't see a doctor when they get sick? That question encompasses a more basic question: Is health care a human right?

(p. 213):

All the developed countries except the United States have decided that every human has a basic right to health care. Many international organizations have reached the same conclusion. When distinguished commissions of scholars and government officials from around the world get together to produce some flowery -- but essentially unenforceable -- declaration on "the rights of man," they almost always include language that includes a "fundamental right" to some level of health care.

(pp. 217-218):

Why doesn't the United States recognize a right to medical care? Are Americans so cold, so callous, so obsessed with their own lives and bank accounts that they don't care if their neighbors can't afford to see a doctor? The answer is: No. In fact, when pollsters ask the basic question -- "Do you think everybody has a right to medical care when they get sick?" -- more than 85 percent of Americans answer that health care is a basic human right. And yet our nation does not provide it. The result is that the world's richest nation allows twenty-two thousand of its people to die each year from treatable illnesses.

One reason our society lets this happen is that most Americans don't know that it's happening. Americans generally believe that anybody who needs health care in the United States can get it, either through health insurance or charity. Opinion polls frequently ask questions designed to gauge public awareness of the plight of the uninsured. A common formulation is "Do you think people in your community, rich or poor, can get the medical care they need when they get sick?" To this question, roughly nine out of ten Americans answer "Yes." They may not know the exact mechanism for getting care to the uninsured, but most Americans believe our society provides it. President George W. Bush repeatedly assured the American people that they need not worry about their uninsured neighbors. "I mean, people have access to health care in America," Bush told a business meeting on July 10, 2007. "After all, you just go to the emergency room."

But the president was wrong. As a rule, you can't just go to the emergency room in America unless you have the cash or the insurance coverage to pay the bill. Hospitals routinely turn sick people away if they can't prove they have the means to pay. This is legal. "A hospital is not, as a general rule, required to provide non-emergency care to persons unable to pay," notes the leading U.S. Textbook on the law of health care. "It is not required to continue treatment in the face of nonpayment of bills."

(pp. 220-221):

Obviously the cost of health care could shoot upward toward infinite levels if everybody had the right to the full range of testing, treatment, surgery, and medication afforded by state-of-the-art contemporary medicine. To offer all possible treatment to every patient would lead any health care system rapidly toward bankruptcy. For this reason, other developed nations have framed the right to universal health care in terms of a flood and a ceiling. There is some floor level of care -- that is, the basic package of benefits -- to which everybody has access. Generally, this includes standard diagnostics and treatment for disease, some level of preventive care, and access, either for free or a small fee, to an approved list of drugs. And there is generally a ceiling beyond which the system will not go. Some expensive drugs, some advanced surgical interventions, cosmetic surgery, and so on will generally not be covered by the health care system. Some effective but expensive procedures will not be covered for a patient who has only a brief time left to live. Some nations -- including Canada, as we saw in chapter 8 -- have tried to make it illegal for people to buy health care that is above the ceiling by denying doctors and hospitals the right to perform any procedure that is not on the approved list. But these efforts to limit what rich people can buy almost always fail. A wealthy patient who is denied care in his own country is likely to cross the border and pay a doctor in the nation next door. Accordingly, the developed nations maintain a floor of basic coverage available to everyone, and a ceiling on the treatments that the national system will pay for. The former British health minister John Reid put it succinctly: "We cover everybody, but not everything."

The United States differs from all the other developed nations in that it has no floor and no ceiling. For tens of millions of people, the American health care system offers little or no care (or no care until it is too late, as the case of Nikki White). For people covered by top-of-the-line insurance plans, the U.S. system offers almost anything, regardless of the price or the patient's age.

13. Major Surgery (p. 225):

America's health care system, in contrast, does require major surgery. My global quest demonstrated that America's approach to health care is unique in the world for a good reason: No other country would dream of doing things the way we do. So it's clear that we can't fix the basic problems by tinkering at the margins of our existing system. Any proposal for "reform" that continues to rely on our fragmented structure of overlapping and often conflicting payment systems for different subsets of the population will not reduce the cost or the complexity of American health care. Any proposal that sticks with our current dependence on for-profit private insurers -- corporations that pick and choose the people they want to cover and the claims they want to pay -- will not be sustainable.

Myth 1: "It's All Socialized Medicine Out There." (pp. 226-227):

Most wealthy countries rely on private-sector mechanisms to provide and/or pay for health care. Indeed, some foreign health care systems are more privatized than ours. [ . . . ] But even the Beveridge system isn't fully socialist. The GPs in Britain, who provide most of the care, are private businesspeople -- and they can be ferocious capitalists, like my stout, prosperous physician, Dr. Badat. The National Health Insurance countries (e.g., Canada, Taiwan) rely on private-sector doctors, hospitals, and labs but pay for their services through a government insurance plan. Public payment of private providers -- should we call that semi-socialized medicine? The Bismarck Model countries (such as France, Germany, the Netherlands, Switzerland, Japan) offer universal coverage using private providers and private insurance plans -- with government exercising various degrees of regulatory control over insurance coverage, pricing, and so on. [ . . . ] In some aspects, "European-style" medicine is less socialized than America's. Almost all Americans take up government-run health care -- Medicare -- when they turn sixty-five. But as we've seen, people in Germany, Switzerland, and elsewhere stick with private insurance plans for life. In those countries, moreover, military veterans are covered by the same private insurance plans as everybody else. Meanwhile, the U.S. Department of Veterans Affairs is one of the planet's purest examples of government-run health care.

Myth 2: "They Ration Care With Waiting Lists and Limited Choice." (pp. 227-228):

In many developed countries, people have quicker access to care and more choice than Americans do.

Germans can sign up for any of the nation's two hundred-plus private health insurance plans, a broader choice than any American has. If a German doesn't like her insurance company, she can switch to another, with no increase in premium. The Swiss, too, can choose any insurance plan in the country.

In France and Japan, you don't get a choice of insurance company; you have to use the one designated for your company or your municipality. But you do get total choice of providers; patients can go to any doctor, any hospital, any traditional healer in the entire country. [ . . . ] Canadians, similarly, have to pay into the government-run national insurance plan -- no choice about that -- but they can choose any doctor anywhere, and insurance will pay the bill.

As for those notorious waiting lists, some countries are plagued by them. As we've seen in this book, Canada and Britain limit the number of specialists and operating rooms in the system to save money, with the result that patients wait weeks or months for nonemergency care. But other nations -- Germany, France, Sweden, Denmark -- perform better than the United States on standard measures such as "Waiting time to see a specialist" and "Waiting time for elective surgery." As we saw in chapter 6, waiting times in Japan are so short that most patients don't bother to make an appointment. A fellow with a sore right shoulder can walk into Keio Daigaku Hospital and see the nation's top orthopedic surgeon on the same day; no appointment required.

Myth 3: "They Are Wasteful Systems Run by Bloated Bureaucracies." (p. 229):

America's for-profit health insurance companies have the highest administrative costs in the world. This is a major reason why we spend more for health care -- and get less in return -- than any other developed country. As we've seen, the estimates vary somewhat, but America's health insurance industry spends roughly 20 cents of every dollar for nonmedical costs: paperwork, reviewing claims, marketing, profits, and so on. France's private, but nonprofit, health insurance industry, in contrast, covers everybody but spends about 5 percent for administration. Canada's universal insurance system, run by government bureaucrats, spends 6 percent on administration. [ . . . ] Taiwan's government-run financing system has administrative costs under 2 percent.

Myth 4: "Health Insurance Companies Have to Be Cruel." (p. 230):

Americans tend to expect nasty treatment from health insurance companies, because that's what Americans get. Our insurance companies do their best to refuse coverage for any applicant with a preexisting condition -- the very people who need their services the most. They employ armies of adjusters to deny claims. They have investigators who search for reasons to cancel coverage ("rescind") if a customer suddenly faces a big medical bill. It's no wonder Americans are the world's least-satisfied health insurance customers. U.S. insurance companies defend their tough business practices by noting that they're in a tough line of business. If they covered everybody and paid every claim, they'd go broke. [ . . . ]

In foreign health insurance systems -- for example, those of France, Germany, Japan, and Switzerland -- insurers have to accept all applicants, regardless of any previous diseases or accidents. They can't cancel coverage as long as you pay your premiums. They are required to pay any claim submitted by a doctor or hospital (or health spa), usually within tight time limits. The corollary is that everyone is mandated to buy insurance, to give the plans an adequate pool of rate players. And with a large enough risk pool, these plans don't go broke.

Myth 5: "Those Systems Are Too Foreign to Work in the USA." (p. 231):

Far from being "foreign," each of these systems is in use today in the United States. For veterans, active-duty military personnel, and Native Americans, we use the British model. For people over sixty-five, we've adopted the Canadian model (we even use the name for it that was coined by the socialist who invented the Canadian system: Medicare). For working people who get insurance through their employers, we're a Bismarck country, like Germany or Japan. And for the tens of millions without insurance coverage, we're just another Out-of-Pocket country.

A Unified System (pp. 232-234):

All the other developed countries have decided to use one system of health care that applies to everybody. Young or old, employed or unemployed, military or civilian, sick or well, aboriginal or immigrant, private citizen or prime minister, newborn or about-to-die -- everybody is included in the same system and covered by a single set of rules. All other rich nations have embraced this basic principle, because they think it's fairer if everybody in the country has the same access to the same level of care. They find a single system is much easier to administer, with one set of forms to fill out, one book of rules, and one price list. As an economic principle, a unified system is a powerful force for cost control. Since the single health care system is the only buyer of medical services, it has enormous market clout in negotiating fees with doctors, hospitals, drug companies, and so on. That's why an MRI scan that costs $1,200 in Denver is priced at $98 in Tokyo. That's why a pill that costs $1.20 in Denver is priced at 20 cents in London. The doctors and drug companies don't like that meager price regime, but it's all they can get from their only source of payment. [ . . . ]

A unified system makes it much easier to use digital record-keeping and smart cards like the carte vitale in France and the Gesundheitskarte in Germany. These digital records cut administrative cost, and they make for better medical care as well, because the doctor or pharmacist can instantly see what other treatment, tests, and medications the patient has received. The United States certainly has the technological skill to introduce digital medical records -- in fact, that system I admired so much in France was designed in the USA. But we don't have a common record-keeping system here, because each of our overlapping systems and insurance companies has its own regimen.

Beyond that, a unified system eliminates the gamesmanship and cost-shifting that permeates American health care. In the United States, whichever entity is asked to pay for the treatment of a particular patient will save money if it can shove that patient off to another system. And so hospital emergency rooms try to push sick veterans out the door; why should the hospital pay for somebody's care when there's a separate VA health care system that could bear that cost? Some financial advisers counsel sick people on ways to reduce their net worth, so their medical bills can be shifted to Medicaid. If hospitals are underpaid by one payer -- for example, Medicare -- they make up the difference by raising their fees for other payers -- for example, private insurance plans. In contrast, if there's only one system paying for care, there's no need to shuffle patients around and play paperwork games to shift the cost.

Beyond that, a single system for all creates an incentive for preventive health measures. As we've seen, U.S. insurance companies generally don't want to pay for preventive medicine, because the customer will likely have switched to another company or another system (like Medicare) long before there is any payoff for the investment in preventive care. In contrast, a system that covers everybody for the full extent of their lives will probably find it pays off to spend some money early in a patient's life to keep him healthy when he's older.

Nonprofit Financing (pp. 235-236):

Another basic building block in the health care systems of every wealthy country -- except the United States -- is the principle that financing health care must be a nonprofit endeavor. There's a crucial distinction between providing health care -- what doctors, hospitals, labs, and pharmacies do -- and financing health care. As we've seen around the world, most countries rely on free-market enterprise to provide health care -- but not to pay for it. [ . . . ] The fundamental difference here is that foreign health insurance plans exist only to pay people's medical bills, not to make a profit. The united States is the only nation that lets insurance companies extract a profit from basic health coverage. This is the explanation for Myth 4 above: Health insurance companies don't have to be cruel to their customers if they don't have to worry about paying dividends to investors. But insurance firms whose primary mission is to make a profit quickly realize that covering every applicant and paying every claim will eat into profits. So they deny coverage to those who need it most, reject claims by the bucketful, and search for ways to rescind coverage just when the big bills roll in. That's why U.S. health insurance companies are loathed by their customers but loved on Wall Street. That's why health care economists around the world say that there's a basic conflict between the principle of health insurance and the pursuit of profit.

I want to expand on this a bit. The profit we're talking about here isn't the sort of cost-plus-ten-percent standard in US defense contracting. It's based on the fundamental proposition: your money or your life. It's based on fear of denial, fear of losing either money or life, or both. This fear heightens the value of insurance, which is to say that the more insurance companies walk over their customers, cut them loose, hang them up to dry, the more their policies are worth. Cutting costs by shafting providers is just gravy on top of the core scam. It doesn't happen to control costs, since industry-wide costs actually work in favor of insurance companies. After all, the more expensive health care becomes, the more dear your insurance policy is. Take this denial away, which is one of the main things that happens when insurance is guaranteed to be universal, and the fear angle goes away.

Universal Coverage (pp. 237-238):

The various shortcomings of the U.S. health care system can be summarized in three words: cost, coverage, and quality. When we set out to fix our system, where should we start? At first blush, it might seem logical to go after health care costs first; once costs are under control, we could more easily afford universal coverage. But everywhere I went on my global quest, I was told that this approach gets things backward. Universal coverage has to come first. Universal coverage is an essential tool to control costs and maintain the overall quality of a nation's health.

Covering everybody in a unified system creates a powerful political dynamic for managing the cost of health care. Since the costs of medical care are rising around the world, every health care system has to find ways to limit expenses -- either by limiting the procedures and medications it will pay for, or by cutting the price it pays for the procedures that are covered. If everybody is covered, then everybody has an interest in seeing costs controlled; after all, if the system pays too much for my neighbor's Botox treatment, it may not have enough money to treat my broken shoulder. In a democracy, universal coverage helps create the political will to accept limitations and cost-control measures within the system. In any country, any decision to ration medical care is going to be unpopular with somebody. But if everyone is included in the health care system, people are more likely to accept a necessary but unpopular decision, because it leaves more money to treat everybody else.

Universal coverage also enhances health care results by improving the overall health of a nation. If everyone has access to a doctor, then people can get the diagnostic and preventive treatment that will keep them healthy. One of the major reasons the United States ranks low compared to other rich nations, in standard measures of health care quality is that millions of Americans don't get any care until they are acutely ill. Universal access to diagnostic and preventive care also reduces costs, because it is much cheaper to treat a problem early than to take heroic medical measures when the illness becomes life-threatening.

Appendix: The Best Health Care System in the World (p. 241):

On this measure -- average life expectancy at birth -- the United States comes in at 77.85 years. That means the world's richest country ranks forty-seventh, just ahead of Cyprus and a little behind Bosnia and Herzegovina, in terms of longevity. The United States is among the worst of the industrialized nations on this score; for that matter, the average American can expect a shorter life than people in relatively poor countries like Jordan.

(pp. 242-244)

To carry out comparative studies of different health care systems, the health care economists have come up with a range of measures of a nation's health status that are more sophisticated and more meaningful than "life expectancy at birth." One important gauge is the DALE, or Disability-Adjusted Life Expectancy, an index developed by economists and statisticians at the World Health Organization. (Sometimes this same concept is given a slightly different name, the HALE, for Health-Adjusted Life Expectancy). A nation's DALE rating -- sometimes described by the term "healthy life expectancy" -- measures how many years the average citizen can expect to live before encountering the disabling diseases of old age. The basic theory is that most people live in a state of "full health." In this condition, you feel good most of the time. You may have an illness or accident now and then, but a healthy person recovers from it. At some point, though, "full health" gives way to illness. The chronic diseases we generally associate with the elderly begin to take a toll: heart disease, back pain, rheumatoid arthritis, blindness, hearing loss, Alzheimer's, and so on. At that point, people are living in "partial health." Some people with these problems can go on living with only minor impairment of their normal activities. Others may be so sick or disabled that their life isn't close to what they enjoyed in the years of "full health." The World Health Organization developed a complicated set of formulas to weight these ailments according to the level of severity. [ . . . ]

On the DALE measure, the country with the longest healthy life expectancy is Japan, where the average baby born today can expect to live 74.5 years in "full health." The top ten countries for healthy living, in terms of DALE years, are:

1.	Japan	74.5 years
2.	Australia	73.2 years
3.	France	73.1 years
4.	Sweden	73.0 years
5.	Spain	72.8 years
6.	Italy	72.7 years
7.	Greece	72.5 years
8.	Switzerland	72.5 years
9.	Monaco	72.4 years
10.	Andorra	72.3 years

According to the World Health Organization, twenty-four countries have a healthy life expectancy of 70 years or more; about one hundred countries have a DALE between 60 and 70. Once again, the ten saddest countries in the world were sub-Saharan African nations beset by AIDS, poverty, and civil strife. Sierra Leone, a nation of 4.3 million on Africa's Atlantic coast, came up last on this ranking: a baby born there today can expect to live in "full health" for less than 26 years.

The richest country in the world ranked twenty-fourth in the world for health life expectancy, with a DALE of 70 years (72.6 years for females and 67.5 years for males). That put the United States just behind Israel and just ahead of Cyprus. Again, we stand below almost all the other developed nations. [ . . . ] Still, the U.S. ranking in DALE terms, twenty-fourth, is considerably higher than the forty-seventh place we scored on the simpler ranking of life expectancy at birth. That difference means that American health care is making people healthier -- at least, for those who have access to it. It's because we fail to provide access to regular health care for 45 million Americans that our overall rank for healthy life expectancy trails the rest of the developed world.

(pp. 250-251)

The WHO study also graded something it called "responsiveness" of national health care systems. This was a measure of how customer-friendly the national medical structure is: Does the doctor respect the patient's dignity? Does the system protect the privacy of personal medical information? Does a patient get prompt treatment or wait months to see a specialist? Does the patient have freedom to choose among doctors and hospitals? On this criterion, and this one alone, the United States rated No. 1 in the world, followed by the other wealthy democracies of western Europe, Japan, and Canada. The worst countries in terms of responsiveness to patients were the poor countries of Africa.

But the USA did not fare as well on two key issues that the WHO counted as more important than responsiveness. Those were "goodness" and "fairness." The "goodness" test measured how well a country did at keeping its people healthy -- essentially, the DALE, or "healthy life expectancy" measure. The "fairness" test measured two things:

1. How equally a health system treated the rich and the poor.
2. How a national health care system was financed. For the WHO, a progressive financing system, in which rich people paid more than the poor to finance health care for all, was an essential element of "fairness."

The United States, with tens of millions of low-income people left out of its health insurance system and thus forced to pay out of pocket for whatever treatment they could get, came out badly on both measures of "fairness." In terms of equal distribution of health care, the United States was ranked thirty-second in the world. Chile, Japan, and the European democracies stood at the top of this table. In terms of "Fairness of financial contribution," the United States was rated fifty-fourth. Colombia, with health care funded by a steeply progressive tax code, topped the chart on this scale, followed closely by western European countries and Japan.

Finally, the WHO experts took all these factors, tabulated each country's score on each measure, and arrived at its rating of "overall performance." But this score was adjusted by one more fudge factor: a comparison of each country's actual performance on national health care to the overall performance it should have been able to achieve, considering its level of education and the amount of money it spends on health care. With this ultimate wrinkle factored in,t he report finally came up with its ranking of "overall performance" in all 191 member nations. When the figures were all computed, the French health care system was rated first in the world -- and the United States, thirty-seventh.

(pp. 254-256)

One of those defenders of American-style health care is Dr. Kevin C. Fleming, an internist at the Mayo Clinic in Minnesota and a health care analyst for the Heritage Foundation, a Washington think tank committed to free-market solutions to national problems. [ . . . ] Dr. Fleming's approach to the question reflects the general tenor of those who still say that the United States has "the best health care in the world." In economic terms, he deals mainly with "inputs." When it comes to numbers of specialists, numbers of beds, investment in intensive care facilities, the United States ranks near the top every time. But the discerning reader of this book may notice one statistic that Dr. Fleming did not mention in his comparative discussion of "indices of treatment" for newborns: What are the "outputs"? How does the United States perform, relative to other wealthy countries, when it comes to keeping sick babies alive? On this scorecard, as on so many others, the United States stands behind other developed nations.