International Health Systems



Japan has a population of 122 million people, nearly half that of the United States. The infant mortality rate in Japan is 3.6 per 1,000 live births, and life expectancy at birth is at 77.2 years for men and 84 years for women. Approximately 7.6% of GDP is spent on health care, and the 1998 per capita expense was $1,822-US. Japan’s current system of universal health care was initiated in 1958.

The Employee’s Health Insurance System is financed by compulsory payroll contributions (8% of wage), equally shared by employers and employees, and covers employees and their dependents. The National Health Insurance System covers the self-employed, pensioners, their dependents, and members of the same occupation. The local governments act as insurers, and premiums are calculated on the basis of income, the number of individuals in the insured household, and assets. Premiums account for 57% of health expenditures. The federal government contributes 24% to medical care expenditures and local governments contribute 7%.

About 80% of hospitals and 94% of private clinics are privately owned and operated. While some public not-for-profit hospitals exist, investor-owned for-profit hospitals are prohibited in Japan. Patients are free to choose their ambulatory care physicians, who are reimbursed on the basis of a negotiated, uniform fee-for-service schedule. Physicians have no formal gatekeeper function. Due to the combination of medical and pharmaceutical practices a large part of a physician’s income is derived from prescriptions. Hospital physicians have fixed salaries.

The Netherlands

The Netherlands has a population of 15.8 million, which is approximately the same number of people who live in the state of Florida. In 1997, 72% of the population had government-assured health insurance coverage. The infant mortality rate is 5.2 per 1,000 live births and life expectancy is at 75.2 years for men and 80.7 years for men. The Netherlands spend 8.6% of its GDP on health care, and the 1998 per capita expense was $2,070-US.

The health care system in the Netherlands is very similar to that in Belgium; health care is primarily financed by employer-employee social insurance. Health care is provided by private not-for-profit institutions, and the compulsory health insurance system is financed through sickness funds. 70% of the population is in the public health care system. 30% of the population (mostly civil servants and high-income groups) has private insurance, because they are not eligible for social health insurance. There are currently plans to convert the entire system to a tax-based one.

Most primary care physicians are in a solo office practice (54%) or practice in small groups. Reimbursement is by capitation for “public patients” (2/3) and via fee-for-service (1/3). Specialists are salaried and are restricted to hospitals.

New Zealand

New Zealand has a population size close to that of Atlanta, Georgia - 3.5 million people. In 1941, it achieved universal coverage and was the first country with a free-market economy to do so. Radical health sector restructuring occurred in 1993, which introduced a set of market-oriented ideas. However, the new system performed poorly and was thus restructured 3 years later. Today, New Zealand spends 8.1% of its GDP on health care and the 1998 per capita expense was $1,424-U.S. The infant mortality rate is 6.8 per 1,000 live births and life expectancy is at 75.2 years for women and 80.4 years for men.

The health system is funded through taxation and administered by a national purchasing agent, the Health Funding Authority (HFA). Health care is provided by 23 hospital provider organizations (Hospital and Health Services), GP’s (most of whom are grouped as Independent Practitioner Associations, IPA’s), and other noncrown providers of child care, disability support services, etc. These parties compete for the provision of health services. Public funding accounts for 76% of health expenditures. Complementary, non-profit, private insurance, on the other hand, covers about 1/3 of the population and accounts for 7% of health expenditures. It is most commonly used to cover cost-sharing requirements, elective surgery in private hospitals, and specialist outpatient consultations. New Zealand’s government is a purchaser and provider of health care and retains the responsibility for legislation and general policy matters.

Health care is free for children, and all patients have their free choice of GP. Out-of-pocket payments account for 17% of health expenditures. GP’s act as gatekeepers and are independent, self-employed providers. They are paid via fee-for-service, partial government subsidy, and negotiated contracts with HFA through IPA’s. The payment system is currently moving from fee-for-service to capitation. Private insurance and out-of-pocket contributions pay the remainder. Hospitals are mostly semiautonomous, government-owned companies that contract with the HFA. Specialists are commonly salaried, but may supplement their salaries through treatment of private patients.


Norway is home to approximately 4.4 million people, about the same number that live in Washington DC. Norway has had a single-payer national health insurance system since 1966. The National Insurance Act guaranteed citizens universal access to all forms of medical care. Norway’s health system is funded by progressive income tax, and from block grants from central government, with 8.9% of GDP being spent on health care, and in 1998 the per capita expense was $2,425-US.

Patients are free to choose their own physician and hospital, however, registration with local GP’s who act as gatekeeper, will begin in 2001. Patients are responsible for co-pays for some physician visits, approximately $15. Patients are also responsible for co-pays for prescription drugs, up to $216 per year. Once that level of expense has been reached, prescription drugs are covered at 100%. All hospital care is covered at 100%.

Hospital physicians have fixed salaries. GP’s have either fixed salaries or fee-for-service agreements. All medical and nursing education is free. The infant mortality rate in Norway is 4 per 1,000 live births, and life expectancy at birth is at 75.5 years for men and 81.3 years for women.


Spain’s population size is close to that of Texas and New York combined - about 39.1 million people. The country has had a comprehensive, single-payer national health service since 1978. The Constitution of 1978 explicitly affirms everyone’s right to health care. Spain spends 7.1% of its GDP on health care, and its 1998 per capita expense was $1,218-US.

The Spanish health care system is funded by payroll taxes through the National Institute of Health program (INSALUD), which in 1984 was 75% financed by employers and 25% financed by employees. Those with higher incomes have the option of obtaining private medical care. Public hospitals are run by one of the provinces or municipalities. The INSALUD program operates a large network of hospitals and ambulatory care clinics. Hospital physicians are on full-time salaries.

All medical and nursing education is free. The infant mortality rate in Spain is 5 per 1,000 live births, and its life expectancy at birth is 74.8 years for men and 82.2 years for women.