Shikha Dalmia of the Reason Foundation has written about this in a recent Forbes column, The Myth Of Free Market Health Care In America. Some excerpts:
But apart from England, most European countries have a public-private blend, not unlike what we have in the U.S.
The major difference between America and Europe of course is that America does not guarantee universal health insurance whereas Europe does. But this is not as big a deal as it might seem. Uncle Sam, along with state governments, still picks up nearly half of the country’s $2.5 trillion annual health care tab.
More importantly, contrary to popular mythology, America does offer public care of sorts. It directly covers about a third of all Americans through Medicare (the public program for the elderly) and Medicaid (the public program for the poor). But it also indirectly covers the uninsured by—at least in part—paying for their emergency care. In effect, anyone in America who does not have private insurance is on the government dole in one way or another. …
The most striking similarity between America, France and Germany, however, is the model of “insurance” upon which their health care systems are based. In other insurance markets, the more coverage you want, the more you have to pay for it. Consider auto insurance, for instance. If you want everything—from oil changes to collision protection—you’d have to pay more than someone who wants just basic collision protection. That’s not how it works in health care.
For the same flat fee—regardless of whether it is paid for primarily through taxes as in France and Germany or through lost wages as in America—patients in all three countries effectively get an ATM card on which they can expense everything (barring co-pays) regardless of what the final tab adds up to. (Catastrophic coverage plans are available in America, but the market is extremely limited for a number of reasons, including the fact that most states have issued Patients Bill of Rights mandating all kinds of fancy benefits even in basic plans.)
Thus, in neither country do patients have much incentive to restrain consumption or shop for cheaper providers. In America and Germany, patients don’t even know how much most medical services cost. In France, patients know the prices because they have to pay up front and get reimbursed by their insurer later—a lame attempt to ensure some price consciousness. But since there is no cap on the reimbursed amount, the French sometimes shop for doctors based on such things as office decor rather than prices, according to a study by David Green and Benedict Irvine, researchers at Civitas, a London-based think tank.
Read the whole article, The Myth Of Free Market Health Care In America.
(via Ari Armstrong)
