Sunday, December 20, 2009

Fixing the System – Where do we start?

This is another piece that takes a bite out of the ideas of writer Atul Gawande. One thing we haven’t looked at are the diverse systems that can be found internationally that seem to work. The British system uses a purely governmental-run healthcare system called the National Health System. Canada uses a government-run health system established in 1966. Sweden uses a privately run health insurance model with insurance mandates like US car insurance. France uses a payroll-tax funded private insurance system.

The interesting part is a lot of these systems seem to work, and a very fair question is – can these systems work in the US too? Well in this article titled “Getting There From Here,” Atul Gawande argues that these systems could work, but that doesn’t mean every country should model their system off of any particular example. Interestingly, his argument is that these systems weren’t developed because some bureaucrat decided to mandate a certain health system, they were developed because of the circumstances of the country at the time – incidentally a lot of these circumstances were in connection to World War II – and so is ours (see a previous posting: Employer-Based System).

Again, just like last time with the Two Towns posting, this will be a slight summary of Dr. Gawande’s main points, so I highly encourage you to read the source article to help formulate your own opinion.

Back in the 1940s, the British system consisted of a variety of hospitals and health insurance systems. London was obviously the most concentrated UK city of the time; however, when Germany starting its bombings of London, the government needed to evacuate millions of its citizens out of the city and into the smaller towns. This created a large strain on its healthcare system, and the only way to create the infrastructure to care for the large healthcare needs of its citizens in these suburban and rural areas, the British government had to build all of its own facilities and employ the providers itself (this is much like the US military’s Veterans Administration healthcare system). Amid the bombings, the private infrastructure in London was destroyed, and by the time the war ended and the rebuilding of London ensued, the government took it upon their own shoulders to again build-out the infrastructure of London’s healthcare. Ergo, by the time any real debate about healthcare started to happen, the government was already running its own healthcare system. It was a natural extension for the UK to continue using its government-run healthcare.

The French system developed in a different way. Before the war, large manufacturers and unions had organized insurance cooperatives through a payroll tax. By the time France set to rebuild its country post WWII, it simply expanded on this already existing insurance system. Nowadays over a hundred non-profit, local insurance funds serve as the basis of France’s healthcare system

The other example that Dr. Gawande presents is the Swedish system. Because they chose to be neutral, it was not ravaged by the war the way the rest of Europe was. The private sector continued to chug along during the war, and consequently their system built upon its history of private sector involvement.

The US system developed into the employer-based system because of the laws and restrictions implemented during the war. For a detailed description of how it developed, please go back and read the piece on the “How did we end up with the Employer-based system?” So ultimately, the conclusion of the article is that we should not push ourselves to be a national payer system like the UK. Nor should we abolish the employer-based system and turn into a Swedish private model.

I know this concept doesn’t make a whole lot of intellectual sense. If a system is bad to begin with, why don’t we scrap it and go with something else that is better? Atul Gawande goes on to describe a few more examples of this “path-dependence” including VHS vs. beta-max (a superior technology to VHS), the telephone system, the gasoline-based transportation network. Sometimes nations are too far down one path to turn it around, and any such upheaval of the existing system can pose serious risks (like Mao’s Great Leap Forward).

Our country is built on a patch-work of 1) the employer-paid piece, 2) the government-paid piece for seniors (Medicare), 3) government-run piece for veterans (Veterans Administration), and 4) the federal/state government-paid piece for the poor (Medicaid). Any realistic/pragmatic expansion would build on these already-existing programs. Indeed, just earlier this morning, the Senate is pushing a package through that will expand Medicaid and establish a new health insurance exchange that will help solve the broken individual market. They are building on what already exists; not by intellectual choice, but by practical necessity.


  1. Another thing I've started to realize about why our system is the way it is has to do with how we view healthcare in the States. In other countries, health care is seen as a cost to society - similar to sanitation, defense, education, etc. Profit, money, and whatnot can be made in this field, but the driving force behind the healthcare system is to keep society healthy and functional. Our country views health care as subject to the free market, and unlike many other health care systems, profit is what currently drives our health care system. The many inefficiencies, obscure costs, and pains to keep inequality in the system has led to what we have right now. Unless this mindset changes, it's going to be difficult to improve our health care system.

  2. I prefer the chilean or singaporean system. basic care provided through a tax based system with additional more expensive system for those who have a higher willingness to pay for better care.