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Europe’s Healthcare System

I’m writing this health tip to respond to a question I get almost daily from my patients, who ask not my opinion of the current health care bill, but rather whether or not I’m worried about “government control” or “socialized medicine.” Since most Americans haven’t studied how health care is financed elsewhere in the world, here’s some information to consider.

Both the UK and Canada have single-payor systems, what might be called “Medicare for all” here in the US. Physicians and hospitals bill the government for professional services. Their fees (which no doctor on earth is ever happy with, no matter what country or which system) are determined in advance and regularly renegotiated.

I would give this system a solid B+ and our own system a D. When you hear an American politician crowing about how our system is the best in the world, I agree, so far as it applies to members of congress and their families. Congress doesn’t bother with mere Cadillac health benefits. They vote themselves Lamborghini-level coverage. At least in Canada and the UK everyone–prime minister to cab driver–is equally covered, with the option of self-funded add-ons. There are some glitches in their systems, with delays for elective surgery and appointments with specialists, but overall the citizens of these countries rate them highly.

The healthcare systems in France, Germany, and the Scandinavian countries are even better. France and Germany are rated by the World Health Organization as #1 and #2 in the world respectively for effective health care delivery. The US is #37, beating out Slovenia.

In these highly rated systems, doctors are in private practice (not government employees) and submit their bills to nonprofit government-regulated regional insurance companies. The companies are genuine nonprofits and the salaries of the employees and management are determined by the government, as are the fees paid to doctors, hospitals, and pharmaceutical companies. These systems save incredible amounts of money because everyone’s health records are available in an online network. Not only does this avoid unnecessary duplication, it affords many patient-safety features. For example, when a doctor writes you a prescription, she does so directly onto her computer, receiving an immediate warning if you’re allergic to that drug or if it can’t be taken with something you’ve been prescribed by a different doctor.

But what really makes the European system so superior to ours is that no one is in health care to make a profit. Citizens expect their doctors and hospitals to be fairly paid, but there are no outside investors, venture capitalists, hedge funds, or shareholders whose interests come before those of the patient.

To Europeans, the very existence of an insurance company like UnitedHealth Group is a source of shock and amazement. UnitedHealth Group is the master of health care for profit. They achieve this by slow or reduced payments to providers (they are endlessly sued by medical societies and hospital systems for nonpayment or underpayment) and are highly skilled at denying benefits for enrollees (that’s you, the patient) or ferreting out minor medical infractions to deny coverage for a “pre-existing condition.”

On the other hand, anyone owning United stock has made a great deal of money in the past few years. In 2004, United’s CEO William McGuire (an MD, woefully enough), received compensation of $125 million, obtained, you may be sure, by tens of thousands of denials. Beyond this, McGuire held stock options valued at more than $1.5 billion–yes, that’s billion with a “b”.

While the Tea Party rants about government interference, I’d prefer a responsible government that steps in to say, “Dr. McGuire, you can no longer behave this way to the citizens and health care providers of this country. We’re going to break up your company and transform it into a dozen regional nonprofits. The only United employee to lose a job will be you.”

I’m going to close with a quote from an exchange I found in the provocative new book Europe’s Promise, where I learned the details of European healthcare financing.

After some escalating irritation between Americans and Europeans about “who has the better system,” a man from Denmark entered the conversation:

“I am a teacher, and so is my wife. We have together a yearly income of $120,000. We have raised four kids; one has finished his free college education and the others will be heading to college. Besides free education, they will each receive $660 a month from the state for expenses. I myself was operated on for my shoulder last week, free of course, and will be receiving full salary during my absence from work…We have saved $100,000 in the bank and have a summer cottage worth $200,000. Our apartment is $850 a month including heat. We have also a pension plan that will guarantee 75% of our present salary from the day we retire until our deaths. We pay 42% of our income into taxes and for that we get comprehensive social security, free education for our children, free health care, and full pension. All that with a 37 hour work week, twenty holidays and a guaranteed six-week paid vacation every year. We use this vacation time to travel and this year have been to Spain, Portugal and the Canary Islands. Yes, it is surely hard to live in Europe.”

Some day, this may be possible for us.

For two different vantage points on the health care bill click here for Bill Moyers and here for the New York Times.

Leave a Comment


  1. Linda Silbert says:

    Thank you Dr. Edelberg! This was so informative. I so appreciate your clear interpretation and the links (Bill Moyers and NYTimes).

  2. Judith Allison says:

    Free, free, free. Are you sure? After paying 42% of your income into taxes (for those who have income), the loss of personal responsibility, the loss of freedom to choose, and a life totally structured by the government, what is really free?

    No thanks. There are ways to improve our U.S. healthcare system, and this is not it.

  3. David Bailey, DC says:

    Well said David. Thank you for helping me understand more fully the differences in health care here and in Europe. There is still personal responsibility inherent in the European model. There is still freedom to choose physicians. Is not the U.S. rated number 36 in the world in overall health of it’s populace? This is not a healthy country……..we are walking sick, yet we have resources that most countries cannot match. This healthcare system of ours is a misnomer; rather it is nonhealthcare. It is all profit oriented and enjoyed only by a select few.

  4. Jim Chicago says:

    Healthcare without profit will NOT generate advances in health care. Also, the waiting for “elective” surgery comment is very misleading.

    I grew up in Europe, visit often and have many friends and relatives in various countries throughout the Euro-zone. The vast majority wait for non-elective surgery as well. I won’t quote as a simple Google search will reveal that information easily.

    Would you want to wait months and months or a knee-replacement so you could actually walk? How about a hip replacement so you could stand? Or how about a bypass….

    Regards

  5. james walton says:

    good I’m in favor of the Denmark system. It sounds reasonably fair for caring for the citizens. President Obama is for the people first unlike the uncaring “me only” Republican party.

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  7. Elizabeth says:

    And I also always point out to those staunch “free to go bankrupt because of medical bills” people: Isn’t a healthy and competent (educated) workforce an important input into the American production function and competitiveness worldwide? In this country, getting ill, having an accident, or trying to put more than one kid through school ends up bringing most families close to bankruptcy. Is this really in the national economic interest?

  8. Kenneth Searby says:

    I lived in The Netherlands for 8 years and during that time my 13 yr. old daughter was diagnosed with a rare cancer. Apart from some complimentary medicine, all of her treatment costs were covered and we were spared the ordeal of negotiating with insurance companies and of acquiring the absurd medical debts we would have had if this had happened in the US. It’s a disgrace that we are so behind other countries in this basic human right.

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