Beveridge vs. Bismarck

Health, Politics, The Economy

Taiwanese love to complain about their country and how it is going down the drain. And they also like to idealize how much more advanced and modern America is by comparison. When I was in Taiwan this past summer, everyone was bitching about the poor quality of health care. It is true, there are a lot of problems with health care in Taiwan. For instance, doctors give out antibiotics like it was candy, and rarely give enough for a full treatment. But that’s because Taiwanese patients are upset if they aren’t given pills. When I was in Taiwan I couldn’t even find out what pills I’d been assigned or why. I had to look up the brand names on the web to find out. All that is true, but Taiwan is still doing far better than the U.S. according to Paul Krugman:

Let’s start with the fact that America’s health care system spends more, for worse results, than that of any other advanced country. In 2002 the United States spent $5,267 per person on health care. Canada spent $2,931; Germany spent $2,817; Britain spent only $2,160. Yet the United States has lower life expectancy and higher infant mortality than any of these countries. But don’t people in other countries sometimes find it hard to get medical treatment? Yes, sometimes — but so do Americans. No, Virginia, many Americans can’t count on ready access to high-quality medical care…. Americans are far more likely than others to forgo treatment because they can’t afford it. Forty percent of the Americans surveyed failed to fill a prescription because of cost. A third were deterred by cost from seeing a doctor when sick or from getting recommended tests or follow-up.

Why does American medicine cost so much yet achieve so little?… The U.S. system is much more bureaucratic… because private insurers and other players work hard at trying not to pay for medical care. And our fragmented system is unable to bargain… for lower prices. Taiwan, which moved 10 years ago from a U.S.-style system to a Canadian-style single-payer system, offers an object lesson in the economic advantages of universal coverage. In 1995 less than 60 percent of Taiwan’s residents had health insurance; by 2001 the number was 97 percent. Yet… this huge expansion in coverage came virtually free: it led to little if any increase in overall health care spending beyond normal growth due to rising population and incomes….

If Taiwan is going to improve its system, it will likely be by moving even more towards a European model, not by copying the mistakes of the US. But which European model will Taiwan adopt? Will it be the Beveridge system (also called compulsory social insurance) seen in countries such as the UK and in northern Europe” or will it be the Bismarckian system (also called social insurance) widely used in Germany, other European countries and Japan”? In America we can only wish that we were having such debates!

(Via Alas, a Blog)

{, , }