Markets

Essential Reading: How National Healthcare Systems Evolved

By David Hamilton

Updated on: January 29, 2009 / 8:11 PM EST / MoneyWatch

Atul Gawande, a Boston-area surgeon, researcher and writer for the New Yorker, has just published a fascinating look at how national healthcare systems around the world grew and evolved from very different starting points. The subject is obviously timely because of momentum building behind a major healthcare reform later this year, but it also serves as an important reminder that universal healthcare looks very different depending on where you are -- and that the "starting conditions" in a given country play a huge role in determining what shape the system actually takes.

I won't belabor Gawande's piece, but for BNET Healthcare readers, here's a very condensed summary of his major data points:

In the U.K., the government-run National Health Service grew out of a WWII system of state hospitals and clinics established to serve the large population that moved out of cities into rural areas. Thus most doctors are employed by the government, which also owns hospitals and sets medical reimbursement policy.
In France, universal healthcare also came together in the aftermath of WWII, but incorporated an existing system of nonprofit insurance pools established by businesses and unions. As a result, the French healthcare system consists of an expanded nonprofit private-insurance system, funded by payroll taxes.
Switzerland avoided wartime privations and didn't enact national healthcare until 1994. Since it had no experience with public medical infrastructure, it expanded private commercial insurance to the entire population by requiring everyone to buy it and providing subsidies to limit the cost to 10 percent of income. (The Netherlands, which Gawande doesn't mention, has a similar system.)

The important point for the U.S. reform effort is that universal healthcare here is almost certainly going to come about as some sort of expansion of our current patchwork system. Private health insurance and employer-funded coverage, despite its failings, is unlikely to be swept away. Instead, the path of least resistance is also likely to be the most politically achievable and probably the most durable. If I had to guess, the most probably outcome will be some form of insurance mandate coupled with an expansion of Medicare to the general population as an alternative to employer-provided coverage.

Universal healthcare in the U.S. is almost certainly never going to resemble the U.K.'s NHS -- a favorite bogeyman of universal-healthcare critics, who make hay out of the system's real and perceived shortcomings such as rationing of care, the limited availability of newer cancer drugs and so forth. (The system's biggest limitation, in fact, is the fact that it spends far less per capita than even most European systems -- which themselves generally spend much less than the existing U.S. system.)

The real challenge, as Gawande notes, is how to couple such changes with others that motivate doctors, hospitals and insurers (public and private) to emphasize safety, quality and cost containment. That's not an unachievable goal, but it's also incredibly difficult, given the perverse financial incentives that riddle our system and an entrenched medical culture that -- so far -- values physician autonomy over safe, affordable and effective care.