Comparative Systems

There are various types of healthcare systems worldwide, and all nations must design their health systems to meet the needs of their citizens using available resources. This section will cover four countries and contrast their health systems, highlighting the strengths and limitations of each.

United States

Source: OECD Statistics

Healthcare coverage in the US is provided through a mix of public and private entities. Both the federal government and state governments share responsibilities with regards to providing insurance coverage to citizens. The Centers for Medicare and Medicaid Services (CMS) administers the Medicare program, which operates at the federal level and offers coverage for those 65 or older as well as the disabled. The CMS also works in partnership with state governments to administer Medicaid and the State Children’s Health Insurance Program (CHIP) for low income populations (The Commonwealth Fund, 2016).

In the US, public expenditure as a percentage of total health expenditure was 49.1%, the largest source of funding. The two major national health insurance programs in the US are Medicare and Medicaid. Medicare is financed through a combination of payroll taxes, premiums, and federal general revenues, while Medicaid is tax funded and administered via individual states which operate within broad federal guidelines (The Commonwealth Fund, 2016). Furthermore, out-of-pocket payments contribute to 12.3% of the total health expenditure. Private health insurance is common and accounts for 34.7% of total health care expenditure. There are both not-for-profit and for-profit health insurance companies which offer private health insurance. Individuals can purchase their own private health insurance, but it is more often funded via tax-free premium contributions shared by employers and employees on an employer-specific basis, sometimes varying by type of employee (The Commonwealth Fund, 2016). In addition, some individuals hold both public and private insurance coverage, such as Medicare Advantage, which provides beneficiaries with more choices and additional services.

Strengths of US Healthcare:

Patients can choose their providers in general
Zero to minimal waiting lists for elective and non-elective procedures
Has some of the most cutting-edge medical technologies worldwide
For those who have jobs with great benefits or those who can afford it, some American insurance plans are among the best in the world (Christ, 2017).

Limitations of US Healthcare:

Spends more of its total GDP on healthcare than all other countries, but Americans are not healthier than other OECD nations that spend less
Despite the enactment of the ACA, some populations in the US remain underinsured or uninsured
Prices of medical procedures, services, and pharmaceuticals are often not disclosed which makes it difficult to compare and shop around
Some aspects of US healthcare are inefficient, such as the use of medical technologies and administrative services (e.g. different insurance plans cover different treatments and procedures, forcing doctors to spend precious hours coordinating with insurance companies to provide care) (Khazan, 2018)

Sweden

Source: OECD Statistics

Sweden provides universal healthcare coverage for all legal residents, as required through the 1982 Health and Medical Services Act. There are three levels of government which oversee the provision of healthcare in Sweden. The Ministry of Health and Social Affairs is in charge of overall health and healthcare policies. At the regional level, 12 county councils and nine regional bodies are responsible for financing and delivering health services to citizens (Glenngård, 2016). There are also 290 local municipalities which assume care for the disabled and seniors. The Swedish Association of Local Authorities and Regions represents the various regional and local agencies.

Health expenditures represent 11.0% of the total GDP: about 83% of this spending was publicly financed, with county councils’ expenditures amounting to almost 57%, municipalities to 25%, and central government to almost 2% (Glenngård, 2016). This funding comes from income, indirect, and local taxes, as well as state grants and subsidies (also financed via taxes). General government grants are designed to redistribute resources among municipalities and county councils based on need as must be used to finance specific initiatives (Glenngård, 2016). Private insurance accounted for around 1% of healthcare expenditures and is most often used to attain quicker access to specialists and expedite waiting times for elective treatment. Out-of-pocket spending (most often to purchase pharmaceuticals) accounted for the remaining 16% of healthcare expenditures.

Strengths of Swedish Healthcare:

Rates of avoidable hospitalization for chronic conditions are among the lowest in the OECD
There are low healthcare disparities, accredited to Sweden's basic healthcare principles of human dignity (all humans have the same rights), and need and solidarity (those with the greatest need should receive priority care)
Sweden’s quality registers, which track the quality of care that patients receive and outcomes for several conditions, are among the most developed across the OECD (Glenngård, 2016)

Limitations of Swedish Healthcare:

Access to primary care can be an issue, resulting in some Swedes going to the hospital for routine checkups or minor health needs
Waiting times for specialist appointments and elective surgeries are high compared to other OECD nations
Since healthcare is decentralized, services differ throughout the nation and coordination of care between local municipalities and counties can be difficult

Japan

Source: OECD Statistics

Japan has universal healthcare and all legal residents are required to have health insurance coverage. Both the national and local governments have a part in regulating the Statutory Health Insurance System (SHIS), which is made up of around 3,400 insurers. The national government sets the SHIS fee schedule and gives subsidies to local governments, insurers, and providers; it also establishes and enforces detailed regulations for insurers and providers (Matsuda, 2016). Local governments, which include prefectures and municipalities, are responsible for implementing regulations using allocated funds and developing health promotion activities for citizens.

In Japan, public expenditure as a percentage of total health expenditure was 84.3%; taxes, premiums, and user charges accounted for about 42%, 42%, and 13% of health expenditures, in that order (Matsuda, 2016). All plans offered through SHIS provide the same benefits package and each enrollee has to pay a 30% coinsurance for each service or good rendered to them (except for certain populations). Annual expenditures on health services and goods can be deducted from taxable income (Matsuda, 2016). Cost sharing in the form of out-of-pocket payments accounted for 13% of total health expenditure. Private insurance also exists as a form of supplemental coverage (such as in the case of hospitalization or diagnosis of a chronic disease) and is held by most of the population. Both nonprofit and for-profit organizations manage private health insurance.

Strengths of Japanese Healthcare:

Healthcare operates on a non-profit business level according to law, as a result doctors are responsible for running hospitals and some services cost less than in other countries
The government uses a nationally uniform fee schedule for reimbursement, which means that patients know what a service will cost in all parts of the country (Regoli, n.d.)
Patients have free choice of both physicians and healthcare facilities

Limitations of Japanese Healthcare:

The high cost of medical education means that Japan has one of the lowest doctor-to-patient ratios in the OECD
The low rate of EHR use and no concept of a regular PCP can cause inefficiencies
The current healthcare infrastructure might not be sustainable in the long term due to significant aging of its population and a reduction in birth rates

Germany

Source: OECD Statistics

Germany has a universal multi-payer health care system and health insurance is mandatory for all legal residents. It is provided through two systems: 1) 124 competing, nongovernmental health insurers (“sickness funds” in a national exchange) in the statutory health insurance (SHI) system; and 2) substitutive private health insurance (Blümel & Busse, 2016). Those of higher income are able to opt out in favor of private coverage. The Federal Joint Committee represents self-governing organizations within sickness funds and other health insurance providers which are responsible for healthcare regulation.

In Germany, public expenditure as a percentage of total health expenditure was 74.0%, of which 58% was SHI spending. Sickness funds are financed by compulsory contributions levied as a percentage of gross wages up to a ceiling; the legally set uniform contribution rate is 14.6% of gross wages (Blümel & Busse, 2016). There are around an equal amount of nonprofit and for-profit private health insurance providers, and private insurance represented 8.9% of total healthcare expenditure. Private health insurance has a mixed complementary and supplementary role, covering minor benefits not covered by SHI, access to better amenities, and some copayments (Blümel & Busse, 2016). Cost sharing and out-of-pocket spending (including copayments and the purchase of pharmaceuticals and nursing home care) accounted for 13.2% of total healthcare expenditure.

Strengths of German Healthcare:

It has some of the lowest wait times overall and highest patient satisfaction ratings out of other OECD countries
Enrollees of public plans can shop around for the best price, and enrollees of private plans can look for the best provider of complementary and/or supplemental insurance policies
Since all residents are mandated to hold health insurance, and insurance premiums are based on a percentage of income, all citizens can receive treatment no matter their socioeconomic background (those living in poverty or unable to work receive free care)

Limitations of German Healthcare:

Doctors have much lower salaries compared to other OECD countries, which makes it challenging to keep the best doctors from moving out of the country
The compulsory contribution to sickness funds can be high, as households that top out at the maximum premiums for the public scheme pay over €10,000 per year in medical premiums (Regoli, n.d.)
Though it has a mixed payer system, public health insurance is required unless individuals make over €60,750, limiting choice of insurance

References

Blümel, M. & Busse, R. (2016). The German health care system. The Commonwealth Fund. Retrieved from https://international.commonwealthfund.org/countries/germany/

Christ, S. (2017). Advantages & disadvantages of American health care. Healthfully. Retrieved from https://healthfully.com/advantages-disadvantages-of-american-health-care-13590832.html

Glenngård, A. H. (2016). The Swedish health care system. The Commonwealth Fund. Retrieved from https://international.commonwealthfund.org/countries/sweden/

Khazan, O. (2018). The 3 reasons the U.S. health-care system is the worst. The Atlantic. Retrieved from https://www.theatlantic.com/health/archive/2018/06/the-3-reasons-the-us-healthcare-system-is-the-worst/563519/

Matsuda, R. (2016). The Japanese health care system. The Commonwealth Fund. Retrieved from https://international.commonwealthfund.org/countries/japan/

OECD. (2019). OECD health statistics 2019. Retrieved from http://www.oecd.org/els/health-systems/health-data.htm

Regoli, N. (n.d.). 19 pros and cons of the German healthcare system. Vitanna. Retrieved from https://vittana.org/19-pros-and-cons-of-german-healthcare-system

Regoli, N. (n.d.). 16 pros and cons of the Japan healthcare system. Vitanna. Retrieved from https://vittana.org/16-pros-and-cons-of-the-japan-healthcare-system

The Commonwealth Fund. (2016). The U.S. health care system. Retrieved from https://international.commonwealthfund.org/countries/united_states/