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U.S. and European lessons on health care reform

Rethinking Health Care Delivery: What European And United States Health Care Systems Can Learn From One Another

By Katharina Janus and Etienne Minvielle
Health Affairs Blog, December 15, 2017

Unlike the United States, where abolishing Obamacare was a key pillar of the new president’s pre-election platform and a big focus of his first year in office, Germany and France seem to agree that they would, in general, like to keep the systems they have. After all, they perform relatively well in terms of outcomes, life expectancy, and other critical indicators in comparison to resources consumed as a percentage of GDP.

What can we learn nevertheless from each other across the pond, taking the newly established European axis as one unit and the evolving United States system as the example from a new world.

Solidarity, “Health Care For All,” And (Almost) “The Same Services For All”

Many European health care systems go back to the idea of Bismarck (roughly 150 years ago) that when individuals’ incomes and ability to pay for care are unequal, we carry a social responsibility as citizens to redistribute resources. Under this redistribution, administered by the government, the rich pay for the poor, smaller families pay for larger families, and the younger pay for the older. Most Europeans willingly accept this notion—it is deeply ingrained in their culture. What is more, Europeans accept that we have to kick in some money, from time to time, to prevent the failure of an important market—such as the health care market— that has not found its own equilibrium. On the other hand, large parts of the United States society have elected leaders who favor a smaller government and believe that market forces require only limited regulation. Instead of fearing market failure, these leaders seem to relish a Darwinian view of health care markets where only the wealthy have true access and wide choice in the care they receive.

Free Choice—No “Gated Health Care Community”

A major right of both French and German health care systems is the right to choose your doctor freely and have those services he or she deems necessary covered with co-pays that are as little as €10 in Germany and more nuanced in France where a visit without referral to any specialist might reduce reimbursement rates to 30% of total costs, but is covered with referral. How can Europe afford this luxury of free choice and (nearly) full coverage?

The first answer is to look at prices: If you compare services in Europe with those in the United States, you will realize that prices for regular lab, x-ray, and doctor visits are a fraction of what they amount to in the United States.

Second, European medicine does not have the same level of provider dominance as the United States where clinicians, making all diagnostic and treatment decisions, have the greatest influence on costs. In European systems, governmental regulation frequently caps expenses. Developing closed networks to keep costs in check, the United States system has essentially rationed access while requiring additional resources to manage and coordinate these networks.

This management awareness in the United States has facilitated advances in population health management and created a better mindset for actually managing care in pathways across sectors.

The Comparative Paradox

And here lies the cross-pond health care system paradox: European systems—like Germany and France—pursue a strictly regulated ideological framework that is based on solidarity, equality, and social responsibility but once people have been socialized into this framework they can eat à la carte—choosing to utilize care freely and as much as they want. The United States represents the opposite: a free market system as a framework in which participants can (or cannot, due to limited financial resources) choose freely from the “prix fixe formule” (as one says in France). In this scenario, one can buy insurance at various levels, pay co-pays and deductibles, eventually having to find help to understand all these options, and then once they are “in”—though not necessarily fully covered—they must live with limited choices in a gated system.

What can we learn from each other? This question puts Europe in a much better position because, even though the United States might benefit from learnings from Europe at a macro-level (including those social care reforms that improve living conditions and are known to reduce health care costs as a consequence), these ideas are unlikely to find fertile ground in the United States where ideology makes many policymakers less receptive to such lessons. Europe in turn can learn a lot from the United States system on a micro level—how to manage populations and connect sectors. Nobody really coordinates or manages care in many European systems, so there is room for improvement. As a caveat, one might say that the European systems work well and one should never change a system that is already running well.

It remains to be evaluated whether a further investment in health care management contributes to better outcomes as a result of coordinated care pathways. And the assessment to what extent these outcomes are “better” than with less management will most likely lie in the eye of the beholder.

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From the comment by Ted Marmor:

This article raises issues about learning policy lessons in health care, especially between the industrial democracies of continental Europe and the US. The descriptions are useful, the evaluation of the European experience is optimistic, but the interpretation of their meaning for lessons is misleadingly simple and negative. The US cannot learn because our ideology prevents. Why then did Medicare pass, which in 1965 was an example of social insurance (Part A in the model of Germany's sick funds)? What about Social Security as social insurance? There is no reason to cut off discussion and limit the discussion so sharply.

https://www.healthaffairs.org...

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Comment:

By Don McCanne, M.D.

What can we learn from Europe about health care? That's simple - solidarity, equity, and social responsibility.

And what can Europe learn from the United States? Managed care under the nebulous ideology of free markets? But the authors appropriately caution, "one might say that the European systems work well and one should never change a system that is already running well."

If you look at the cost/performance ratios of the various health systems, the United States is an outlier, in the worst way. Maybe it is time for us to finally accept the facts and start becoming more diligent students of better systems of health care.

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