Where’s the Solidarity?

A recent New England Journal of Medicine article by Dr. Victor Fuchs pointed out some startling facts about the U.S. healthcare system. Fuchs states that the U.S. spends “50% more than the next-highest spender and twice as much as the average country in the Organization for Economic Cooperation and Development.” Unfortunately for U.S. citizens, the life expectancy at birth in European countries is higher than ours. Ouch.

Fuchs offers two explanations. First, he says that the structure of the U.S. political system confers too much power to health care “special interests” — manufacturers of drugs, devices, and equipment, as well as physicians and hospitals that want higher expenditures. This brings increased healthcare access for citizens. Unfortunately, this benefit is unfairly distributed. In the U.S., the poor are more likely to be unable to obtain or delay care due to the high costs of healthcare.

Next, Fuchs writes that other counties with national health insurance systems are more successful at redistributing money from the wealthy to the poor (and from the healthy to the sick). This is done through the tax system. (The U.S. government’s share of the total personal healthcare expenditures is about 50%, whereas European governments typically pay for 70-90%.) As Fuchs points out, to achieve the level of health services spending of the U.S. the counties would have to raise their taxes beyond responsible levels. Instead, these countries use cost control mechanisms such as limits on expensive technologies, price negotiations, and restraints on standardized physician fees.

The reason for our failure to implement a national health insurance scheme that uses tight cost controls, according to Fuchs, is American’s strong sense of individualism. In other words, we lack the need for solidarity in our society.

So, what if Americans had a sense solidarity? In other words, what if we were more like the Germans? As German health services researchers wrote, “Solidarity has been the governing principle of the German social health insurance (SHI) since its implementation under Bismarck in the late 1880s.”

Like the U.S., Germans have relatively good access to care. A recent study showed that, among seven industrialized nations, German and U.S. adults reported the most rapid access to elective surgeries (although Americans were most likely to have gone without care because of cost).

Similar to the U.S., Germans have insurance companies, called sickness funds. In the 1990s, the Germans introduced market reforms to reduce the social health insurance deficits. Some of the features of their solidarity-competition balancing act are reminiscent to our recent reforms found in the Accountable Care Act (ACA). Examples include a requirement to contract with all health insurance applicants and standardized insurance premiums with risk-adjusted subsidies to the sickness funds (health plans).

With health reform, are we becoming more like the German system? Or are the Germans viewing us with schadenfreude?