News From Terre Haute, Indiana

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September 10, 2009

Want a Euro-style health care system? Think again

TERRE HAUTE — The idea of universal health care is appealing. It makes us think of a perfect world where anyone can walk into a hospital or doctor’s office, receive treatment and walk out without any cost.

But is this idea very realistic?

Many people point to Canada and Europe as successful examples of successful universal health care systems. But how successful – and how “universal” – are these examples in reality?

Early last year the Cato Institute published a survey (“The Grass Is Not Always Greener,” March 18, 2008) of about a dozen western European national health care systems. This study shows (1) there is no single type of national health care. And (2) there is also no perfect health care system. Many systems suffer from expanding deficits, rising costs, stifling bureaucracy, a lack of technology, limited patient choice and long waiting lists for patient care.

Most importantly, the Cato study noted that the European health care systems that work the best are those that incorporate market mechanisms, such as patient co-payments and competition among providers, and allow for the existence of private insurers.

Some advocates of universal health care in America point to France (ranked No. 1 by the World Health Organization) as the country with the model health care system. About 99 percent of French citizens are covered by the country’s national health insurance, which is largely paid for by a tax on incomes that amounts to around 19 percent. As a percent of the total economy, the French system accounts for about 11 percent of the country’s GDP – the third most expensive in the world after the U.S. and Switzerland.

But, upon closer examination, the French system falls short of the ideal many Americans envision. Most French medical services require co-payments of between 10 and 40 percent. In fact, the French pay about 13 percent of their health care costs out of pocket – about the same percentage as in the U.S. On top of that, more than 90 percent of French residents purchase private health insurance in addition to their national insurance. As a result, more than 12 percent of French health care spending is covered by private insurers. In all, non-government sources of payments for French health care amounts to about 20 percent of total costs.

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