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What Obama Can Learn from European Healthcare

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Imagine a place where doctors still do house calls. When I was visiting my friend Meredith, living in the small rural town of Lautrec about an hour's drive outside Toulouse, France, one day she was stung badly by a wasp, causing a sizable and painful swelling on her hand.

She called her doctor, and to my great surprise within 15 minutes he had shown up at her door -- the famous French doctor's house call. I couldn't get over it. "House calls in the United States went out when Eisenhower was president," I told her, shaking my head.

My father-in-law had a similar experience while vacationing in Switzerland. He awoke one morning with what turned out to be a painful urinary tract blockage. The doctor paid a house call with hardly any wait at all and inserted a cleverly designed catheter that had no drainage bag.

Even though he was a foreigner, my father-in-law paid out-of-pocket only $100 for this emergency service. Back at home in Minneapolis when he had to go to the emergency room a couple of years later, he waited nearly nine hours to receive medical attention, even though he had health insurance.

A U.S. expatriate living in Belgium told me that both he and his sister in Minneapolis had a procedure called a catheter ablation of the heart to eliminate an irregular heartbeat. Even though she had full medical coverage provided by her employer, she spent $2,400 out-of-pocket for the procedure which was performed as an outpatient surgery under a mild sedative.

For the same procedure in Belgium, he paid just under $100 and received full royal treatment, including two nights in the hospital for observation and post-op recovery.

The medicine he now needs to take costs him about $4 for a three-week supply. In the United States that same medicine costs his sister $19 -- nearly five times the price in Belgium.

Even the moderately poor and formerly communist countries in East and Central Europe have universal health care. In the Czech Republic, when the government wanted to introduce a co-payment of less than $2 per office visit, it nearly toppled the government because health care is viewed as a basic right and an integral part of the nation's social contract.

What is truly disturbing, given the vast outlays for health care in the United States, are the various health indicators showing the country's poor performance.

Whether one looks at infant mortality, life expectancy, the number of physicians, hospital beds, medical errors or high out-of-pocket expenses, America underperforms to a shocking degree. Consequently, the World Health Organization (WHO) has ranked the United States 72nd of 191 countries for "level of health."

And it ranks 37th for "overall health system performance" -- just behind Costa Rica and Dominica and just ahead of Slovenia and Cuba, countries with a fraction of the economic wealth of the United States.

France and Italy, which have universal health care coverage for all their residents, even recent immigrants, were ranked first and second in the WHO listing. Most other European nations, who also have universal coverage for all, also were ranked near the top.

Yet despite this difference in performance between U.S. and European systems, somehow Europe manages to spend only a fraction of what the United States spends on health care.

According to the WHO, the United States spends 16.5% of its GDP on health care, or about $6,100 per person. This compares to an average of 8.6% in European countries. France does it for far less, spending just $3,500 per person, or 10.7% of its economy.

Says Dr. Christopher Murray, director of the WHO's Global Program on Evidence for Health Policy, "Basically, you die earlier and spend more time disabled if you're an American -- rather than a citizen of most other advanced countries." That's a highly unsatisfactory state of affairs for the world's lone superpower.

How do the French, Italians and other European countries do it? How do they manage to provide better health care than most Americans receive for about half the per capita cost? While there are differences from nation to nation, there also are some broad generalities to point to, as well as national specifics.

These give us a pretty good snapshot that should be instructive to the Obama administration as it grapples with the inefficiencies that are continuing to hurt American workers, businesses -- and increasingly will hurt U.S. competitiveness in the global economy.

The first overriding difference between U.S. and European health care systems is one of philosophy. The various European health care systems put people and their health before profits -- la santé d'abord, "health comes first," as the French are fond of saying.

It is the difference between health care run mostly as a non-profit venture with the goal of keeping people healthy and productive -- or running it as a for-profit commercial enterprise. It's no coincidence that, as the United States tries to grapple with soaring health care costs and lack of universal coverage, UnitedHealth Group CEO William McGuire received a staggering $124.8 million in compensation in 2005. He is just one of many grossly overcompensated kingpins of the U.S. health care industry.

U.S. health care corporations will spout platitudes about wanting to provide good service for their customers, but there's no escaping the bottom line that the CEOs of giant health corporations ultimately are accountable to one small group -- their stockholders.

If nothing else, the U.S. health care system provides a valuable fable illustrating that corporate profits and affordable, quality universal health care are not a viable mix.

The second major difference between U.S. and European health care is in the specific institutions and practices that flow from this philosophy of "health comes first." Contrary to stereotype, not every country in Europe employs government-run, "socialized medicine."

Unlike single-payer Britain or Sweden, other nations like France, Germany, Switzerland and Belgium have figured out a third way, a hybrid with private insurance companies, short waiting lists for treatment and individual choice of doctors (most of whom are in private practice). This third-way hybrid is based on the principle of "shared responsibility" between workers, employers and the government, all contributing their fair share to guarantee universal coverage.

Participation for individuals is mandatory, not optional, just as it is mandatory to have a driver's license to drive a car.

These health care plans are similar to what Massachusetts recently enacted -- but with two essential differences.

First, in France and Germany, the private insurance companies are non-profits. Doctors, nurses and health care professionals are paid well, but you don't have corporate health care CEOs making hundreds of millions of dollars. Generally speaking, the profit motive has been wrung out of the system.

The second key difference is in the area of cost controls. In France and Germany, fees for services are negotiated between representatives of the health care professions, the government, patient consumer representatives and the private non-profit insurance companies.

Like in the U.S. system for Medicare, together they establish a national agreement for treatment procedures, fee structures and rate ceilings that prevent health care costs from spiraling out of control. And this is good for businesses because it doesn't expose them to the soaring health care costs that have plagued U.S. businesses and created bitter labor strife between business owners and their employees.

So if the United States' privatized system is at a dead end, which would be better to adopt in the United States, either the single-payer type of Britain, Sweden and Canada -- or the shared responsibility system of France, Belgium, Germany and Japan?

Either would be vastly better for most Americans than what the country currently has.

But in talking to different people in Europe in many countries, including doctors, nurses and consumers, I came to the tentative conclusion that the shared responsibility systems seem to offer a few advantages over single payer, including shorter waiting periods for surgery and other procedures.

Generally speaking, their health care systems had a better reputation among the people who used them, I found. In fact, it is not uncommon for those who live in single-payer countries like Britain to travel to the shared responsibility countries like France or Belgium for treatment.

That way, they avail themselves of certain health care services and surgeries because the lines are shorter and the care just as good if not better (individuals from EU member nations have reciprocity to use each other's medical services).

This trend seems noteworthy and worth further investigation. Instead of relying on the assumption that universal health care is synonymous with single payer, U.S. proponents of quality, affordable health care should examine the shared responsibility systems of France, Belgium, Germany and elsewhere.

President Barack Obama, to his credit, is doing what he can in difficult times to extend health care coverage to some of the 47 million Americans currently lacking it. Recently he signed legislation, previously vetoed by President Bush, to expand the State Children's Health Insurance Program (SCHIP), which will provide subsidized health care to up to four million mostly low-income children.

And his fiscal stimulus package included $25 billion for subsidizing 65% of health care premium costs for laid-off workers for up to nine months. Yet for many of the unemployed, even that subsidy will not be sufficient to allow them to afford health care coverage, an increasing concern as the ranks of the unemployed rise. And none of these measures do anything to bring down the cost of health care, which slowly is crippling the U.S. economy.

Americans love to be number one and win the gold, whether in Olympic skiing, the World Series, Super Bowl or the Tour de France. But I am still waiting for the day when Americans decide they want to be number one in health care. Wouldn't it be grand to beat the French for a change at something that really matters.

Steven Hill is a program director with the New America Foundation and his book Europe Rising comparing the Europe Way to the American Way will be published by the University of California Press in September 2009.