Besides being terrible dinner conversation, explanation of our health care system exceeds the cognitive capacity of 9 out of 10 astrophysicists. Much like enlightenment, pure and total understanding will be illusive to most of us; fortunately I have happened upon a framework to help us fake it.
Mostly this is a summary of journalist T.R. Reid's book "The Healing of America". An excellent read and probably the most easily understood explanation to how the U.S. system compares to other health care systems. If this post interests you then I highly recommend it.
For the most part there are three major stakeholders in the medical interaction: doctors, patients and insurers. When we start to talk on the level of systems, most use the following terms:
Providers - Doctors, nurses, hospitals, etc. The places you go when you are sick.
Payers - The institution paying the provider. Usually "payer" is synonymous with "insurer"
Beneficiary - The patient. You, me, and your aunt who gives weird gifts.
The System:
There are 4 major models of how health care is delivered: The Bismarck, The Beveridge, National Health Insurance, and Out-of-Pocket. Each of these models is being used somewhere in the world; most countries have chosen one model and just gone with it. In isolation most systems work pretty well. America, being awesome, uses all of them.
The Bismarck: Named for the Prussian chancellor Otto Von Bismarck who invented the welfare state in the late 1800's, the model is defined by the following:
Providers: Private
Payers: Private, multi-payer
How we pay: Insurance premiums are split between employees and employers
Sound familiar? It should. That is how most of us (younger than 65) get our health care. It's free-market to the fullest. Doctors are private sector, insurers are private sector, and employers split costs with workers. Sounds like the unique American solution for a unique American problem, right?
I'll bring you down gently. We're not the only one doing it. Germany and Japan, to name a few, each use a slightly modified Bismarck system. They differ from the US in that the other countries use only the Bismarck system and also regulate the insurers more tightly. In the US, the Bismarck model provides health care for most Americans but it is only one of many models being used.
Sidenote: a. I'm going to put a "von" in my name. b. I wish I could put "invented welfare state" under extracurricular activities for my residency application.
The Beveridge: Named after someone important in Britain, the Beveridge model is really what we are referring to when we invoke "socialized medicine".
Providers: Government employed
Payer: The government
How we pay: Taxes
If someone in the Tea Party drafted a "worst case scenario" health care system, this is pretty much what they would come up with. This is most notably used in the UK but also in Spain, Italy and a few other countries. Government employed physicians work in government owned hospitals all payed for by taxpayer dollars. All medical care is "free" at point of care. Meaning, when you are done seeing the doctor, you don't see a bill, ever. Just try to ignore the 20% sales tax when you go get lunch.
We also have an example of the Beveridge model in our own country. Government clinics, government employed physicians and free care provided by tax payer dollars? You got it, the VA system. We use the Beveridge model - i.e. "socialized medicine", the most un-American of models - to care for who else but our war veterans. The word "irony" doesn't quite cut it.
National Health Insurance: Most have no idea what national health insurance means, but almost all reflexively think that it is bad. It is interchangeable with "single payer" in almost all contexts because the payer in a single payer system is usually the government - though technically there could be a private single payer. Canada uses a National Health Insurance model.
Providers: Private
Payer: The government, single-payer
How we pay: Taxes
This is an important distinction. In a single payer model all of the providers - doctors, hospitals, etc. - are private. The government only acts as a really, really big insurance company. Many people like to equate single payer with "socialized medicine" and it isn't. The provider side of the equation is completely free-market. This is in contrast to the Bringham model in which both roles - provider and payer - are run entirely by the government.
Medicare is a single-payer system. Everyone over 65 purchases their insurance from the government which in turn pays private physicians.
Out-of-Pocket: This is the default when no health care system exists.
Providers: Private
Payer: none
How we pay: Personal finances on delivery of care
Out-of-pocket is how people pay when their is no insurance system and is also used in an insured population when someone receives care not covered by an insurance policy. Out-of-pocket is how the uninsured in the U.S. pay for care - 48 million currently.
It isn't all "socialized medicine" out there. Many countries, such as Japan, are using the Bismarck centered - read "free-market" - solutions with success. Japan has some of the most healthy people in the world and manages to keep health care costs among the lowest in the world. Other systems, such as Canada's single-payer model, are falsely labeled as socialized medicine but actually have significant free-market components.
Also, it shows us that our system is unique in that it employees so many different systems. It is the quilt-work nature of our health care system that adds to our challenges, not the unique strengths or weaknesses of any one part.
I hope this provides a broad strokes framework. Armed with this knowledge you can put your next date to sleep in the matter of minutes. If this piqued your interest, I reiterate my recommendation of "Healing America".
Please ask questions if anything wasn't clear or post suggestions for other topics for me to write about. Just no heckling. I'm a fragile flower.
Mostly this is a summary of journalist T.R. Reid's book "The Healing of America". An excellent read and probably the most easily understood explanation to how the U.S. system compares to other health care systems. If this post interests you then I highly recommend it.
For the most part there are three major stakeholders in the medical interaction: doctors, patients and insurers. When we start to talk on the level of systems, most use the following terms:
Providers - Doctors, nurses, hospitals, etc. The places you go when you are sick.
Payers - The institution paying the provider. Usually "payer" is synonymous with "insurer"
Beneficiary - The patient. You, me, and your aunt who gives weird gifts.
The System:
There are 4 major models of how health care is delivered: The Bismarck, The Beveridge, National Health Insurance, and Out-of-Pocket. Each of these models is being used somewhere in the world; most countries have chosen one model and just gone with it. In isolation most systems work pretty well. America, being awesome, uses all of them.
The Bismarck: Named for the Prussian chancellor Otto Von Bismarck who invented the welfare state in the late 1800's, the model is defined by the following:
Providers: Private
Payers: Private, multi-payer
How we pay: Insurance premiums are split between employees and employers
Sound familiar? It should. That is how most of us (younger than 65) get our health care. It's free-market to the fullest. Doctors are private sector, insurers are private sector, and employers split costs with workers. Sounds like the unique American solution for a unique American problem, right?
I'll bring you down gently. We're not the only one doing it. Germany and Japan, to name a few, each use a slightly modified Bismarck system. They differ from the US in that the other countries use only the Bismarck system and also regulate the insurers more tightly. In the US, the Bismarck model provides health care for most Americans but it is only one of many models being used.
Sidenote: a. I'm going to put a "von" in my name. b. I wish I could put "invented welfare state" under extracurricular activities for my residency application.
The Beveridge: Named after someone important in Britain, the Beveridge model is really what we are referring to when we invoke "socialized medicine".
Providers: Government employed
Payer: The government
How we pay: Taxes
If someone in the Tea Party drafted a "worst case scenario" health care system, this is pretty much what they would come up with. This is most notably used in the UK but also in Spain, Italy and a few other countries. Government employed physicians work in government owned hospitals all payed for by taxpayer dollars. All medical care is "free" at point of care. Meaning, when you are done seeing the doctor, you don't see a bill, ever. Just try to ignore the 20% sales tax when you go get lunch.
We also have an example of the Beveridge model in our own country. Government clinics, government employed physicians and free care provided by tax payer dollars? You got it, the VA system. We use the Beveridge model - i.e. "socialized medicine", the most un-American of models - to care for who else but our war veterans. The word "irony" doesn't quite cut it.
National Health Insurance: Most have no idea what national health insurance means, but almost all reflexively think that it is bad. It is interchangeable with "single payer" in almost all contexts because the payer in a single payer system is usually the government - though technically there could be a private single payer. Canada uses a National Health Insurance model.
Providers: Private
Payer: The government, single-payer
How we pay: Taxes
This is an important distinction. In a single payer model all of the providers - doctors, hospitals, etc. - are private. The government only acts as a really, really big insurance company. Many people like to equate single payer with "socialized medicine" and it isn't. The provider side of the equation is completely free-market. This is in contrast to the Bringham model in which both roles - provider and payer - are run entirely by the government.
Medicare is a single-payer system. Everyone over 65 purchases their insurance from the government which in turn pays private physicians.
Out-of-Pocket: This is the default when no health care system exists.
Providers: Private
Payer: none
How we pay: Personal finances on delivery of care
Out-of-pocket is how people pay when their is no insurance system and is also used in an insured population when someone receives care not covered by an insurance policy. Out-of-pocket is how the uninsured in the U.S. pay for care - 48 million currently.
It isn't all "socialized medicine" out there. Many countries, such as Japan, are using the Bismarck centered - read "free-market" - solutions with success. Japan has some of the most healthy people in the world and manages to keep health care costs among the lowest in the world. Other systems, such as Canada's single-payer model, are falsely labeled as socialized medicine but actually have significant free-market components.
Also, it shows us that our system is unique in that it employees so many different systems. It is the quilt-work nature of our health care system that adds to our challenges, not the unique strengths or weaknesses of any one part.
The bottom line is that blanket statements are almost invariably reductionist and just plain wrong. I would say that anyone loosely throwing around the term "socialized medicine" either doesn't know what they are talking about or has a political agenda. Does "socialized medicine" exist? Absolutely, in the UK. Are we at risk of being like the UK? Not really.
Conversely, total government takeover isn't the only solution. Our problems aren't purely due to the evils of unfettered capitalism. Many systems are arguably more capitalist than ours - no VA, no Medicare, and no Medicaid - and doing quite well. I'm not going to lie, almost all other health care systems have some form of government regulation but regulated capitalism is not equivocal to big-government takeover. There are blended solutions of capitalism and regluation that could be palatable to our American sensibilities.
Please ask questions if anything wasn't clear or post suggestions for other topics for me to write about. Just no heckling. I'm a fragile flower.
