Shikha Dalmia has a great new column in Forbes that explains well the similarities as well as the contrasts between the U.S. health-care system and those of European countries. None actually relies primarily on private markets to finance and deliver medical services, so blaming America’s health-care woes on the “free market” is preposterous:
The major difference between America and Europe of course is that America does not guarantee universal health care whereas Europe does. But this is not as big a deal as it might seem. Uncle Sam, along with state governments, still picks up nearly half of the country’s $2.5 trillion annual health care tab.
More importantly, contrary to popular mythology, America does offer public care of sorts. It directly covers about a third of all Americans through Medicare (the public program for the elderly) and Medicaid (the public program for the poor). But it also indirectly covers the uninsured by–at least in part–paying for their emergency care. In effect, anyone in America who does not have private insurance is on the government dole in one way or another.
The French and German systems, for example, aren’t all that different. I wrote a little something about this issue a while back, too:
Nearly half of all American health spending is by governments – Medicare, Medicaid, and other programs. Canada’s share in 70 percent. Most big European nations have shares between 70 percent and 80 percent. Taking the share of government health care in the U.S. up by 20 points, to Canada’s level, would be a big (and in my view unwelcome) change. But it wouldn’t be quite as radical a change as some liberals and conservatives seem to think.
Moreover, the share of health care accounted for by government programs is hardly the only indicator of the extent of market control or decontrol. While America has less government insurance, we impose more significant licensing regulations on medical providers and institutions than do some of our competitors, where nurse practitioners and other lower-cost alternatives are more readily available to consumers. Furthermore, America’s generous tax deductions for health care distort markets for insurance and service provisions in ways that are not always present in Europe.