Ambassador's Corner
WEEKLY MESSAGE FROM AMBASSADOR JOHN BRUTON
January 9, 2008
Healthcare – Can the US learn anything from Europe?
One of the big topics in the current US Presidential campaign – and in all
election campaigns in the western world – is what is called “healthcare”
although it might be more accurate to describe the real subject as “illness
care,” because the things we can all do to care for our own positive health –
exercise, diet, quitting smoking, etc. – are not what are currently being
discussed in election campaigns.
Personal responsibility for a healthy lifestyle, which was the only option
available to people in the days before national public health systems emerged,
seems to have been forgotten as the populace looks increasingly to others for
solutions. I strongly believe that a national healthcare safety net is an
essential component of a compassionate modern society, but it should complement
rather than replace individual actions.
The sole exception is Republican Presidential candidate and former Arkansas
Governor Mike Huckabee, who documented his successful effort to lose more than
100 pounds in his book Quit Digging Your Grave with a Knife and Fork: A 12-Step
Program to End Bad Habits and Begin a Healthy Lifestyle.
The United States spends 16% of its GDP on “healthcare,” and that figure is set
to reach 19.6% of GDP by 2016. One estimate is that it could use up 36% of US
GDP by 2050, which would have a dramatic effect on the ability of the US to give
global leadership in other fields. Already the US is spending 4.3 times as much
on healthcare as on national defence. The average premium for health insurance
for a family is greater than the minimum wage ($10,712).
The cost of Medicare and Medicaid to the budgets of the US government is set to increase
dramatically as baby boomers age. European governments will face
similar problems.
Healthcare costs per head in the US have been rising at 4.4% per head per year
since 2000, which is about the average rate of increase for developed countries,
but is a lot higher than what was achieved in Germany, which has kept its increases
to 1.3% p.a. per head since 2000. The US is also increasing from a much higher
starting point. Average spending on prescription drugs in the US has doubled
since 2000, which may be partly due to TV advertising.
An issue that any healthcare reform must tackle is that of overtreatment. I saw
an estimate which suggested that up to 30% of spending in the US goes to
unnecessary or useless treatments, hospitalizations, CT scans or surgeries. I
have been told that more of the revenue from pharmaceutical sales goes to
advertising as goes to R&D. The risk of being sued encourages doctors to run
extra tests just to cover their backs in case nature takes an unwelcome course.
How does the US compare with
EU Member States and other countries?
Whereas the US spends 16% of its GDP on healthcare, Finland spends only 7.5%,
Japan only 8%, the UK 8.3%, France 11.1% and Germany (the highest share in the
EU) 11.6%.
In the US, 45% of the healthcare costs are met by the Government and 55% comes
from private sources. Only Greece in Europe has such a high private contribution
to healthcare costs. On average in Europe, Governments meet about 75% of health
costs, rising to 90% in Luxembourg and 88% in the Czech Republic.
In Europe, each country has its own distinctive health system and this issue is
not regulated or paid for by the EU.
Although Europeans spend less on healthcare than Americans, Europeans,
surprisingly, seem to be healthier. Life expectancy for men in the EU 25 is 1.4
years longer, and for women it is 1.9 years longer, than in the United States.
Why is this? Is there anything in Europe that might inform the healthcare debate
in the US?
A European “health consumer index” for 2007 was recently produced by an
organization called Health Consumer Powerhouse, which is based in Sweden, but
which compiled its report with the aid of experts from all the major European
countries. It ranked European health services on various indices including:
• patient information;
• waiting times;
• the medical success of the procedures undertaken;
• and the generosity of coverage.
The survey shows a wide variety in the amount spent, ranging from $5,089 per
head per year in Luxembourg down to just $771 in Estonia. Broadly speaking the
richer a country is, the more it spends on healthcare. But high spending does
not necessarily buy high quality.
Austria, which spends almost $2,000 less than Luxembourg, comes out as having the
best health service in terms of accessibility and outcomes. (It also has the
best cancer survival rate in Europe).
The Czech Republic and Estonia also get a very good rating. Estonia leads the
field in cost effectiveness of health expenditures overall, followed by Austria,
Netherlands, Finland, France and Germany.
Broadly speaking the Health Consumer Powerhouse says that there are two types of
health service in Europe:
1. What it calls the “Beveridge model,” which includes the UK, Ireland and
the Nordic countries, where both the financing and the provision of the
service are within the one (government-run) organization.
2. What it calls the “Bismarckian” model, where there is a multitude of health
insurance organizations, which are organizationally independent of the
healthcare providers, but where everybody is covered. This model is followed
in most continental European countries. New Zealand also recently separated
the insurance for, and the provision of, healthcare.
Health Consumer Powerhouse concludes, having examined all the individual
systems, that the Bismarckian model provides markedly better total consumer
value to Europeans than the Beveridge model, presumably because insurers
negotiate at arms length with producers.
A fundamental difficulty remains in healthcare debates on both sides of the
Atlantic. We can all agree that costs should be controlled, but when it comes to
ourselves or our families, we want nothing but the best. It seems impossible to
put a financial value on an extra year of life, but budgets (whether they be our
own or the governments) are inherently limited. People have high expectations
for healthcare and will always clamour for more. We can all agree that we can do
a better job on healthcare but brave indeed will be the politician who will
stand up and say, “Enough.”
Minister Ivailo Kalfin
The Bulgarian Deputy Prime Minister and Foreign Minister [left] was in Washington last
week and he briefed EU Ambassadors on his recent talks in Brussels, Belgrade, Pristina and Washington, DC, on the situation of
Kosovo. This is a very difficult
issue on which a compromise solution has not been found, despite sustained
effort.
We in the European Commission are already working hard to
ensure that we are
ready to deliver in terms of financial, technical and political support. The
stability of the whole
Western Balkans region depends on Kosovo becoming a
stable entity. As EU Enlargement Commissioner
Rehn
[right] put it recently: “We must have no more black
holes on the map of Europe.”
Please send me your
comments about this or any of my weekly messages or other EU matters. I
look forward to hearing from you!
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