A Superficial, Comparative Look at Healthcare Systems
As that rare beast, a French free marketer, I have been looking at the healthcare debate in the US with mixed emotions. Sometimes bemused detachment. Sometimes anxiety, as I know how much European healthcare depends on American innovations.
As the debate has unfolded, I have been thinking about how the healthcare system I enjoy and the US healthcare system, the way I’ve seen it portrayed, work.
The French healthcare system is one of the few things we get to be justifiably proud of. It is relatively cheap. It avoids many (though by no means all) of the dysfunctions involved with other “government-run” healthcare systems. It covers everyone, and covers them pretty well all else considered. Given France’s demographic profile it probably isn’t sustainable over the long run, and looks set for either catastrophic collapse or drastic scaling back twenty years from now, depending on our politicians’ maturity. But as of right now, I think it’s fair to say that it is one of the very best, if not the best, healthcare system in the world.
Meanwhile, the US healthcare system (and there are actually US healthcare systems, between private insurance, Medicare, the VHA, etc.), though mind-bogglingly complex, has much going for it. There’s little doubt that the world’s top hospitals and medical practitioners and researchers are mostly in the US. The vast majority of Americans are actually happy with the healthcare they get. That said it also has dramatic flaws. Even though many figures bandied about by reform proponents are flawed, it is still, I believe, hardly justifiable to have so many uninsured. It is rife with inefficiencies.
But the one thing that struck me the most through this debate is how actually similar the two systems are.
The French healthcare system is actually mostly employer-based (a criticism often leveled at the US system). I get coverage through my school (students pay a fee to one of several public, but competitive firms that provide coverage for students) and, because I’m under 25, through my parents. As an entrepreneur, once I get married, I will get coverage through my wife.
The French healthcare system hasn’t always been universal. The CMU, our version of Medicare-for-all, actually came into force in 2000. Between Hillarycare and LBJ-era proposals, an alternate universe where Americans got universal healthcare before Frenchmen is a not-outlandish-at-all proposition.
The French healthcare system is actually quite free market, or at least competitive. There are private hospital chains listed on the French stockmarket, just as in the US, and unlike many other European countries. A publicly-run, tax-financed insurance scheme provides basic coverage to everyone, but most workers and their families (and retirees with savings) get top-ups through private, employer-provided insurance. You can buy insurance outside of your employer, too. Insurers (public and private) compete, private hospitals compete, doctors (not yet pharmacists) compete.
It is all very regulated, often haphazardly so, but then again that’s also true of the US system.
So, why does it work so well in France and so badly in the US? (Insert here caveats about how the French system really isn’t so great and the US system really not so bad, all true.)
I think the big thing is that the French system is much cheaper. Drug are cheap because of price controls, collective bargaining and lower GDP. French doctors make very little money relative to their studies.
As an aside, I am retrospectively struck by how, growing up in an upper-middle class household, medical school was never considered an option for me. When I was a kid and grownups asked me what I wanted to do when I grew up, I was suggested lawyer, engineer, journalist, high functionary (vive la France…), but never doctor, and when I was looking at colleges and majors, the idea never even came up. French doctors go to school for at least a decade in ghastly conditions (there are no grandes écoles for medicine, so it’s all done in derelict public universities), are underpaid until their thirties, work punishing hours, and unless they’re in lucrative specializations, work in a private hospital, or have a general practice in a wealthy place, make relatively good money but nothing great. Incidentally, starting a business was never a popular choice either.
It’s hard to imagine these characteristics being imported in the US. Even putting aside for a second the formidable lobbying might of the pharmaceutical and medical professions, there’s good evidence that turning drugmaking into a low-margin, utility business would kill medical innovation, and that we don’t want medical school to become a low/negative ROI proposition for bright young students.
So is the French system really the US system only much cheaper and with a sorta-public-option? Maybe, maybe not. Beyond these broad characteristics, not being an expert, I can’t really make an informed judgment.
But I felt that pointing this out might illuminate a couple things, mainly the following: first of all, that while it’s sometimes useful to draw stark contrasts between alternatives, it can be even more useful to realize that they may not be so different after all. The US system isn’t nearly as “free market” as some seem to believe; the French system isn’t nearly as “socialized” as some fear (or others might like). The second thing that’s interesting, in my view, is how often the devil is in the details.
If so much of the basic framework of the US and French systems is the same and the result is so different, perhaps the answer isn’t to overhaul either one but to take a granular view and smartly shift a few things here and there. This might have important ramifications for most public policy, I think.
On the other hand, it’s hardly justifiable to insure everyone.
I would certainly agree that our system is not nearly as free market as many people think. In fact, those demons-from-hell—the insurance companies—are heavily regulated. They are not operating freely. Costs began skyrocketing because of government intervention, namely Medicare and Medicaid.
I’m not suggesting that the poorest shouldn’t get some kind of help. But neither should anyone suggest that they don’t get medical treatment already.
All of this discussion will eventually be meaningless. PEG said it in one sentence from above:
That’s a mouthful. Yet we go on spending and planning as if it’s not true. All of Europe is on the same path. It’s a slow train coming. It is not sustainable and any attempts by the US to emulate Europe are short-sighted and stupid.
— jd · Nov 10, 02:45 PM · #
I’m definitely on board with the idea that “free market” and “socialized” are highly debatable in this context. I think that a large amount of the problems that both systems face is that they don’t leverage the benefits of each properly. Even if you are deadset on government providing healthcare for the poor (and even though I’m quite libertarian, I do find it difficult to imagine this happening without intervention) then you can still use the free market systems — instead of having a “national healthcare system” that actually provides healthcare, owns the hospitals, and so on — just provide direct subsidies (from birth, before there are pre-existing conditions) that can be spent as the individual wishes, at private hospitals or insurers.
We can have both guarantee and all the advances and efficiency that free markets bring.
— Brian Moore · Nov 10, 04:49 PM · #
On Bloggingheads, I seem to remember Megan McArdle arguing that doctors enjoy higher social status in Europe, which presumably compensates for the disparity between French and American salaries. Do you think that’s an accurate assessment? Does social status play a role in keeping the cost of visits to the doctor in check?
— Will · Nov 10, 09:13 PM · #
Interesting post. One question, however. Is a “middle-upper class household” in France the same as an upper-middle class household in the US, or is it something different altogether?
— Mark in Houston · Nov 11, 05:27 AM · #
Brian: Yep. The goal is to find some smart compromise between the efficiency of free market and the social equity that we want. Even Hayek favored some form of universal health coverage. The Brad DeLong healthcare plan might be a good way to start.
Will: Yeah, I saw that one. Some of the things Megan says about European healthcare systems are somewhat surprising to me. In this case I seem to remember she was talking about Sweden, which I don’t know much about. I don’t think doctors are particularly prestigious in France, at least not more than in the US (it’s pretty damn prestigious to be a doctor in the US! ask any girl if she’d like to date a doctor!) but then again I know very few of them.
Mark: Ouch. I’ll correct that.
— PEG · Nov 11, 12:28 PM · #
PEG:
Can you really seriously put Brad DeLong and Hayek in the same sentence? Please tell me you don’t really believe that they think the same way. One fears bigger government and the other doesn’t. Have you mixed them up?
— jd · Nov 11, 03:07 PM · #
Sorry for the double posting, but it occurred to me once again, what it is about The American Scene that troubles me. It’s the unabashed arrogance of people who believe that one guy might have the solution to the problem of health care in the United States. In this case, PEG, who is a very thoughtful, and very intelligent YOUNG man, thinks that Brad DeLong might have a way to fix the problem—which involves one-sixth of the economy of the biggest, most complex, civilization the world has ever known. That Brad DeLong is a leftist is only part of the problem. A bigger part is the progressive notion that smart people in government can direct things in such a way as to fix it. We have come to this point because of that kind of thinking.
I don’t know if we’ve gone too far down the road to socialized medicine to turn back the tide. PEG and others may understand that better than I. But to suggest that Hayek favored some form of universal health care cannot mean that he would be in favor of the direction we are currently heading.
— jd · Nov 11, 03:44 PM · #
To jd, we have not, in fact, “come to this point” of expensive, bizarrely convoluted health care simply because a bunch of progressive smarty pants planned it that way:
http://www.dollarish.com/715492887/is-employer-based-health-insurance-the-best-system-for-health-care/
(Yes, I know the article notes the influence of IRS tax exemptions and a war-time economy on the surge in employee-based health care, but government incentives were in no way an exclusive or even guiding force in the matter. It was a complicated, largely unpredictable process, and decisions made in the free market played a significant part. They got the ball rolling and eagerly pursued it on its way.)
For you, blame always falls on the same place. It’s always and only do-gooder progressives with government jobs who endanger everything that, in your word, makes America “exceptional.” This position is lazy and tedious.
Also, what is it about you fluoride-conspiracy types that compels you to over-emphasize already clear points with all-caps and boldface? Are you afraid we don’t feel harangued enough already?
— turnbuckle · Nov 11, 07:48 PM · #
Nowhere did I say it was simply progressives who brought us here. As I said, this economy is way too big for there to be any simple reason for anything being the way it is. Unfortunately, that hasn’t stopped progressives in the past—from TR to Wilson to FDR to LBJ and now BHO—from trying to manage and direct outcomes. They have done it in the past with disastrous results and they cannot help themselves now. As Rahmbo Emanuel said: Never let a crisis go to waste. What a hideous human being.
It is tedious. But we need to fight against the enemy we’re given.
What you can’t seem to understand is that it’s not the free-market system that’s at fault—it’s the free-marketeers. You guys want to blame the system and then change the system. There is no better system. And even if you could come up with one, you’d still have the same corrupt people running it.
You guys can’t admit that while the free market is a horrible and frightening thing, we can’t be trusted with anything else.
— jd · Nov 11, 11:55 PM · #
jd, I’ll concede that nowhere did you explicitly lay the blame for expensive US health care on progressives, but you plainly implied as much: “A bigger part [of the problem] is the progressive notion that smart people in government can direct things in such a way as to fix it. We have come to this point because of that kind of thinking.” You even put “because” in bold face to emphasize the connection. So, dude, yes you did kinda say, “progressives brought us here.”
In your latest reply, you go on to describe the economy as quite big, quite complex, and therefore lament that progressives think they can “manage and direct outcomes.” How, though, is such arrogance the specialty of progressives? Any administration, whatever its ideology, seeks to manage outcomes. That’s what governance is about, right? The issue is not whether they should abandon the effort altogether; it’s a question of where these efforts are appropriate or productive.
I assume that you allow some flexibility about where the government belongs. The military is a given, but maybe you’ve also learned to live with National Parks, Interstate highways and river levees. Perhaps you appreciate the value of building codes devoted to occupant safety. Who knows, maybe you’re okay with tax money going to the Piss Christ (kidding!).
Further, it’s hard to dispute that occasionally progressive government efforts have remedied some things that the US has gotten exceptionally wrong— segregation, denial of women and renters the right to vote, unregulated medicine, etc. . .
A lot of government, even progressive government, has been good to us. Certainly, I don’t think it’s a mortal threat to free markets. You say free markets are a “horrible” thing, but the only thing to which we can be “trusted,” which is a rather bizarre way to put it. Your implied distinction between scary market freedoms and even scarier government controls is bogus. One does not operate independently of the other.
Just because I pointed out that market forces historically have played a part in the current high cost of health care doesn’t mean I think we should abandon them. Neither do I cotton to the imaginary struggle that you promote of free markets versus the government, vying for control of health services. The coexistence of Medicare and Anthem makes it clear that one need not extinguish the other.
— turnbuckle · Nov 12, 03:45 AM · #
It’s only the specialty of progressives insofar as it’s progressives who are constantly defending and promoting a bigger government. Conservatives don’t. It’s unfortunate that conservatives seem to lose their minds and start thinking like liberals after they’ve been in Washington for awhile. It’s all the more reason to oppose any more power being given to the feds.
If it’s so imaginary, just what the hell are we (you, me, libs, cons, repubs, dems) fighting about?
I think that Obama, Pelosi, Reid, Frank, Clinton…are attempting to control one-sixth of the US economy. I think it’s a huge step in the wrong direction. They are attempting to force us to buy something that we don’t want: government insurance. They need to be stopped.
The fact that government has done some good things is not a reason to support bigger government.
— jd · Nov 12, 04:35 AM · #
jd: I point to DeLong’s suggestion as one worthwhile one among many. I am aware of the many disagreements between DeLong and Hayek (and DeLong and myself, and Hayek and myself for that matter), but I think it is precisely the beauty of the world we live in that you can find places of agreement with people who belong to other ideological camps.
I could have cited Martin Feldstein’s plan, a Republican, whose plan is very similar to DeLong’s! DeLong calls for the government to provide only catastrophic (i.e., narrow) health coverage, while Feldstein calls for the government to provide vouchers for catastrophic health coverage. Both solutions would mean roughly the same thing for the size of government as a % of GDP, and while Feldstein’s is ideally better it probably has even less chance of passing than DeLong’s.
So I mentioned DeLong in passing in the spirit of ecumenism.
I apologize for ever thinking that a person who is not labeled a conservative might have some useful ideas to solve one specific problem one time.
I apologize for ever even mentioning the NAME of someone who is not labeled a conservative in anything other than a negative light.
Clearly, doing so means that I have lost all manner of judgement on the size of government, and the One True Faith that government is always, everywhere, and for all time, the only entity responsible for anything bad, anywhere. I must repent. I shall self-flagellate at once.
I apologize for being so arrogant that I think one person has all the answers. Because clearly, when I write a post which explicitly states how much of the subject matter I don’t know and explicitly bills itself as partial and tentative, SURELY the right interpretation is that I’m an arrogant douchebag who thinks he knows better than anyone.
Clearly, the writers on The American Scene are much, much more arrogant and blinkered than their commenters.
— PEG · Nov 12, 09:54 AM · #
PEG:
Jeez, did I really accuse you of all that?
Well, please forgive me.
And please forgive me for thinking that Obama and company don’t scare you enough.
— jd · Nov 12, 05:20 PM · #
A day may come when some bourgeois Frenchie takes the title of Arrogant and Blinkered away from us combox lowlies, but it is not this day mon ami. Not. This. Day.
— Kristoffer V. Sargent · Nov 12, 05:32 PM · #
jd, you ask what we’re “fighting about,” largely because you choose to see this issue on fighting terms. In my mind, we should be having a discussion, even if it occasionally veers into rudeness or repetition. You, however, ratchet it up to the point of goofiness. You consistently charge your arguments with unnecessary combat rhetoric. Progressives, in your telling, must be stopped. They must be fought at all costs, lest we lose America’s exceptional virtues— whatever those are. Liberals are enemies. Stranger than that, in your words, they’re “enemies we’re given,” making it sound as though the Obama administration was crafted in a demon’s workshop and slipped into the executive office rather than chosen by a wide majority of our fellows through the exceptional democratic process of regular, orderly elections.
I guess I get your angle to some extent: our political parties and media outlets, after all, are inclined to frame issues in opposition to one another. Inevitably, our conversations tend to follow these terms, but it gets ridiculous when you constantly view differing ideological priorities in nothing but stark contrast, thriving only on antagonism. Instead, let’s allow for some gray areas. I don’t think the choice is between unbridled markets and tyrannical feds— that’s the way you frame it, but don’t assume I buy into that simplistic dichotomy. That, really, is what I’m arguing— or if you like, fighting— with you about. It’s not whether or not we should have a public option in health care; it’s whether, if we do, that public option inevitably squeezes out a market approach. I don’t think one precludes the other. As far as I can tell, you do.
Fine, but wouldn’t it be more productive if you simply pointed out that the Democrats’ proposals, at this point, do little to control costs? This is a serious issue, and one that a lefty like me acknowledges the Democrats are mostly evading. Instead, you keep warning that a public option effectively cedes a sixth of our economy to a cabal composed of Nancy, Rahm, Hillary and Barack. What? Really? This verges on looniness. It’s an utterly un-serious concern.
— turnbuckle · Nov 12, 05:45 PM · #
It does verge on looniness, doesn’t it? Unfortunately, there is no other conclusion to reach. What they are doing will help a very small percentage of the population, while spending a trillion dollars that we don’t have. Since they’re not doing the things that could really help, the only conclusion to reach is that they want control—damn the consequences. The rush to get this passed is truly despicable.
— jd · Nov 12, 08:33 PM · #
“The rush to get this passed is truly despicable.”
This RW talking point is truly pathetic. Discussions and ideas for reforming how we pay for healthcare in this country have been ongoing for decades. Our politicians have not gone from zero-to-here since Obama was elected. This is the result of a debate that’s been going on for decades, man. Last time around, it was “HillaryCare” and the GOP playbook was the same. It’s just not working as well this time. You might want to wonder why that is. My suggestion is that you resist the temptation to blame it on evil progressives corrupting the minds of American voters. A majority of American voters think our healthcare (payment) system is broken. They may worry about the reform effort (I do too!), but that sure as hell doesn’t mean do nothing.
I sure wish a certain opposition party actual had some useful ideas on the table. There may be some floating around the ‘net, though I have to admit those I have seen have struck me as half-baked (long on theory of the great free market, short on “this is how it would actually work in our world”).
— Rob in CT · Nov 12, 09:33 PM · #
If this is such a winning issue such that the American people are behind the efforts of the Democrats, why not wait until next summer just before the elections? The problem is that the more voters find out about this thing, the more they dislike it.
Who can possibly trust these people passing a 1900 page obscenity on a Saturday night?
As to doing nothing; it’s better than the typical liberal alternative: “Just do something!”
— jd · Nov 12, 10:15 PM · #
jd: Sorry for losing my temper.
Look, no, Obama and company don’t scare me that much. The public option is effectively dead. The bill that is going to come out will widen the deficit, but the budget is already unsustainable, and it’s going to overregulate the healthcare system, but it’s already overregulated. Is it bad? Sure. Is it the second coming of Stalin, or even FDR? Not quite.
— PEG · Nov 13, 12:00 PM · #
I’m worried that way too many people use the “It can’t happen here” defense, both on our side and the other.
If Obama and Co. believed themselves to be full-blown Marxists, they would not and could not proceed any other way to fulfill their mission. I know it sounds kooky, but how did we get to the government and unions owning GM? It’s a hugely symbolic act, and, as usual, will have many negative unintended consequencs.
Would Obama scare you if he was more effective, and able to pull off everything he intends?
Speaking of FDR and “It can’t happen here”: did you know they’re still paying people not to farm their own land?
The expansion of government is the enemy and anyone who supports it, like Turnbuckle, is in the enemy camp.
— jd · Nov 13, 02:33 PM · #
jd, I admit, the enemy camp has its share of hassles: enforced morning calisthenics are boring, solar mopeds suck during a Nor’easter and even I don’t think Rosie O’Donnel’s conspiracy theories should be aired three hours nightly on PBS. Also, do we really need a huge, bronze statue of Obama hugging Mao in every Ikea lobby?
On the other hand, there are the good days: poor people don’t have to wait until they’ve been shot to see a doctor, prisoners-of-war have proven much more cooperative since we gave them spa priveleges, the books and movies are much better (although we miss Bruce Willis) and— Jesus, Joseph and doggie-style Mary!— there’s so much fucking weed!
So, remember, if your vow to stop us doesn’t pan out, your option to join us remains. In the meanwhile, I’ll fire up the hot tub and this massive joint and tell my multiple gay partners to leave room for jd!
— turnbuckle · Nov 13, 03:51 PM · #
I know from experience that smoking pot makes it easier to think like you. I used to be a liberal democrat but I quit cold turkey.
Damn, I used to write some really funny satire back then, too.
— jd · Nov 14, 05:02 PM · #
They paid for the stock, is how. I guess buying and selling things constitutes “communism”, these days.
— Chet · Nov 16, 12:53 AM · #