What the United States can learn from the rest of the world

When I received my first job offer for a position in the United States, I did not understand what people meant when they talked about the "benefits" associated with a job: a free membership to the club of gym? Food? Company outings? No, as I learned, the most important benefit of a US employer is health insurance.

Photo of Unsplash.

Health coverage worldwide

I grew up in Germany, a country with a universal health coverage system, which means everyone has it. Health coverage in my home country is not considered a benefit, but a benefit. need. In Germany, insurance companies (Krankenkassen) are government-regulated organizations, and the government regulates the premiums they collect, which are shared between the employer and the employee, while the government pays for the unemployed. More importantly, insurers are non-profit associations. This contrasts sharply with the US system, where insurance companies seeking to make a profit are encouraged to refuse as many requests as possible. Systems similar to those in Germany can be found today in Japan, Belgium or Switzerland.

After leaving Germany, I had the chance to live several years in Finland, which also has universal health coverage, but with a different system. In Finland (as well as other Nordic countries, the United Kingdom and some others), health care is provided and paid for by the government through taxes. This means that many doctors are full-time government employees. The advantage of this system is that because the government plans everyonehe can negotiate good deals to reduce costs.

Central Station of Helsinki, Finland (photo by Unsplash)

Poor countries, poor health

Many countries around the world are too poor to provide health coverage, especially in Cambodia, Burkina Faso or rural India or China. In these places, people have to pay for health care themselves, which means that only the rich can afford medical care, while the poor remain ill or die. A cruel system.

The United States is really a patchwork different health systems. Most people are enrolled in employer-sponsored health insurance (which is part of their employee benefits). The government provides Medicare and Medicaid to some of the others. Alarming, about 9% of the US population does not have health insurance at all (Report of the 2017 census) – For them, being in the United States is no different than being in Burkina Faso or Cambodia.

Cambodia (photo by Unsplash)

Disadvantages for the employer and the employee

The American system has disadvantages for both the employer and the employee: For the employer, especially for small businesses, it is extremely burdensome to pay for the health insurance of all their workers. As a note, when I was looking for a job in the United States, recruiters announced contractor jobs for me; Given the lack of benefits (including health coverage), I did not consider contractors' jobs as an attractive option. By using contractors, companies can avoid at least some of the costs of health insurance.

Compare that to a Finnish start-up: a Finnish entrepreneur does not have to worry about the health care provided to his workers, as they are already covered by the universal government system.

The US system also imposes a heavy burden on employees: if I lose my job, I would also lose my health insurance (and any dependents I may have on my plan would also lose it), which could cause even more losses. financial loss for me. Even worse, if I became seriously ill, so sick that I could not work, I risked losing my job and the health insurance I needed most in this situation. It's a scary thought, but the American system makes it a possibility.

The problem of the lemon market

There is another problem with the American system, a problem that a universal system would solve, and it is about the lemon market I have discussed here. The problem is that, in a system where people can or can not subscribe to health insurance, the most unhealthy part of the population will have more incentive to join, which will result in a more secure population distribution. 39; unhealthy.

If this happens, the insurance company must then increase its premiums to reflect the new distribution of the insured population, which will amplify the same effect. This feedback loop, or spiral of death, may continue until the insurance provider ceases its activities. One of the ways to prevent the spiral of death is to ensure everyone – and that's exactly the premise of the universal system.

Health care issues provided by the government

Health care provided by the government is also problematic. How should the government choose which treatments to use? In the UK system, the National Institute for Clinical Excellence (NICE) evaluates different treatments and decides for which the government has to pay. But if you think about it, it's an incredibly difficult task, given that NICE has a limited budget, but an unlimited number of treatment options that it might decide to pay. As Tim Harford puts it in his book The Undercover Economist,

"How, then, would you compare a treatment that increases the chances of walking after an accident with treatment that reduces the risk of becoming blind? Impossible! But if you used NICE, you should try. "The silhouette of Singapore (photo by Unsplash)

The Singapore model

Tim Harford argues that the best health care system would be one in which patients pay small costs such as health checks themselves, while the government covers extremely high bills, such as surgeries. Such a system would encourage patients to reduce their costs, while at the same time ensuring that they are protected against extreme losses.

Such a system exists today in Singapore.

The system in Singapore works as follows: each worker has a mandatory savings account for medical expenses and must spend 7 to 9% of his income there. Routine medical examinations and small expenses are deducted from this account. However, everyone is at the same time covered by catastrophe insurance, provided by the government, which intervenes if they have very high medical expenses. In Singapore, the system has been working well for about two decades.

Conclusion – universal health care is the way forward

It is remarkable that the United States is the only developed country in the world without universal health coverage. At the same time, the United States spends about twice as much on health care per capita as other rich countries. Other countries, such as Germany, Finland, the United Kingdom and Singapore, which I have discussed here, show that an effective universal system is possible.

Countries in red do not have universal health coverage (source: Wikipedia)