Learn About Healthcare in France Posted By Bojidar Marinov
Hello there! If you are new here, you might want to subscribe to our RSS feeds  for updates on this topic and others. Several years ago I had a conversation with a professor in a European university. She was a staunch proponent of European socialism against American “cowboy” capitalism. Here is part of the conversation:
Bojidar Marinov: What about European incomes?
Professor: What about them? I make 22,000 Euro (24,000 US Dollars at the time) a year. Does anyone in America make this money?
Bojidar Marinov: Er, . . . ahem . . . yes, cashiers at Walmart make that.
Professor: Huh? Seriously? . . . Oh, but you don’t have free healthcare.
Europeans very often are quite ignorant about the United States. The same way, American liberals are ignorant about the real situation in Europe. And it is not as beautiful as the liberals would want it. But every time I point that in a conversation, I get the same reply: “What about the free healthcare?”
Well, then, let’s look at the most lauded and exalted example healthcare in Europe: that of France.
In the Houston Examiner of August 8, 2009, Jenny Kakasuleff presents a pretty picture of the French healthcare system . She mentions studies by the World Health Organization that rank France number one in health care. She lists different types of care that the French system supplies and the quality of the system compared to the healthcare system in the US. In a few words, the French socialized system of healthcare is what we want.
What Kakasuleff doesn’t mention is what that system costs the French people. Not only that, she forgets to make a comprehensive comparison between the life of a French family, and the life of, let’s say, a family in Houston. Every good thing has costs, some visible, and some invisible, and before we buy something, we need to know what we need to trade for it.
My first question always is the same as in the above dialogue: How much money do you make? I don’t just want to know if you have only one part of your lifestyle in a perfect condition, I want to know your comprehensive lifestyle and how well off you are. It makes no sense to buy a new Mercedes-Benz on credit and brag about it, if after the monthly payment you barely have anything left to put food on the table. So, I want to find out if that lauded healthcare system in France comes with the same level of wealth in the other aspects of the French lifestyle. We can’t just look at one thing and compare. We need to look at the whole picture.
So looking at the statistics , I find out that in 2003 the Gross National Income per capita in the USA was $37,750. I don’t know how exactly they came up with this number, but I can work with it. The same website tells us that the GNI per capita in France is $27,640. (All the numbers there are in US Dollars.)
So, even before I look deeper into it, the French citizen makes $10,000 less a year, before taxes. Question: Is this worth it? Think of how much healthcare you can buy here in the US for $10,000 a year. People here in the US get much more in healthcare than what the French system can offer, for much less than $10,000 a year.
Let alone the fact that in France fuel is three times more expensive, food is more expensive, clothes are more expensive, and in general, almost everything is more expensive than in the USA. One dollar in America can buy much more than the same dollar in France.
What about the taxes? What we get paid is one thing, what we get to keep and use is another.
In 2007 total government revenues in the USA were at $2.6 trillion, the highest in the history of the US. Divided by 300 million population, the Federal government took from each one of us $8,700 a year. It is outrageously too much, I believe. But let’s see what the French government did to its own people.
In the same year, the total tax revenues in France were 818 billion Euro . Divided by 64 million French, this makes about €12,780 Euro per capita. Or approximately $17,250 at the rates of that year.
Subtracted from the figures above, statistically the average American has about $29,000 a year left in his pocket, while the average French has only $10,000.
Granted, the numbers are rounded, they are not perfectly exact, and I could probably be more thorough in my research. But the difference between the two nations is too big to be ascribed to inaccuracy. In case you wonder if I have made any calculation errors, you can check with the French Embassy  and learn that the average family income in France was €20,440 Euro (around $26,000) in 2004. Take out the taxes, and consider the higher prices in France; and then compare to America.
So, my question is: What is it that the French government provides to its people that an average American can’t buy for much less than $19,000 a year?
I am skeptical about Kakasuleff’s claims concerning the successes of the French healthcare system. There are quite a few claims to the opposite, by French nationals themselves. But even if the French system was as perfect as claimed and gave its citizens much better and healthier life, they don’t seem to have much left to enjoy it. They have to pay higher prices for gas, for housing, for food. They have to live in smaller houses than the average Houstonian. And how many French can afford a vacation every year, or two cars per family?
The French healthcare system, even if taken at its best, is like an expensive jewel on a beggar’s neck. However interested I am in my health and the health of my family, I don’t get sick as often as I drive my Buick or as I rest in my spacious air-conditioned house. And I can pay much less than $19,000 a year and get much better healthcare than the French.
So Ms. Kakasuleff had it wrong. You can’t compare one thing only. You need to look at the whole picture. We need to fix the problems with our healthcare system, no doubt about it. But it is hardly a wise choice to follow the example of a nation where one thing is a success—allegedly—while every other aspect of the nation’s life is an abject failure.
Suppose that instead of looking at health care policy as a means to push an ideology or score political points, we examine it from a pragmatic American vantage point. What works? What does not work? What backfires? Those are the good, the bad, and the ugly, respectively. The table below summarizes our experience in terms of three goals of health care policy: improving access to care; improving the quality of care; and lowering the cost of our health care system.
--clinics --vouchers --high-risk pools
--mandates --Medicaid --Medicare
national health services
The first goal is access to health care. The expectation is that taxpayers will ensure that people are not denied necessary health care.
What poor people need are clinics that are convenient to where they live. Ideally, clinics would succeed at pro-active outreach and promoting issues of public health, including vaccination and disease prevention. Government can establish these sorts of clinics for poor neighborhoods, or it can offer subsidies to the private sector to provide these services.
Another way for taxpayers to help people with low incomes is to provide vouchers that could be used to purchase health insurance and to pay for health care. Vouchers would be means-tested. In other words, the poorest families would receive large vouchers, but the size of the voucher would decline as income rises.
Health care vouchers would work like food stamps. Food stamps allow poor people to shop at the same grocery stores as everyone else. There are concerns with food stamps, including high obesity rates among the poor, but on the whole they work relatively well in delivering benefits to the intended recipients.
High-risk pools are for people who have expensive medical conditions that make it impossible for them to get low insurance rates. In states that offer high-risk pools, private insurers cover people with pre-existing conditions, with premiums subsidized by the taxpayers of that state. High-risk pools are a reasonable way to help people who otherwise might fall through the cracks of the insurance system.
A bad way to provide universal coverage is through mandates. With a voucher, the family decides what type of health insurance meets its needs. With a mandate, the state decides what type of health insurance everyone should have.
The reason that mandates do not work is that politicians are under too much pressure to "gold-plate" the required insurance policy. Organized lobbies and provider associations work the political process to force insurance to cover fertility treatments or eye care or other services, rather than let individual families pick packages based on cost and need.
Uninsured citizens earning more than 300% of the poverty level are expected to buy their own insurance. Here, the state hoped that 228,000 of its uninsured citizens would sign up. So far, just 15,000 have enrolled.
Medicaid does not solve the problem of health care access for the poor. In Maryland, earlier this year we read about a boy who died from a tooth abscess. The article pointed out the difficulty with finding a dentist who will treat Medicaid patients. A voucher system, which would allow a family to choose any dentist rather than be limited to those who work with Medicaid, would seem to be a better idea. In the case of this particular family, I suspect that the best chance of avoiding the tragedy would have been by making health care more convenient through a local clinic.
Medicare is a bad approach for providing access. It does cover many people with expensive medical conditions. However, as I have said before, it is the fiscal equivalent of the Titanic. The iceberg that it is headed toward is tens of trillions of dollars of unfunded liabilities.
National health services, such as those found in Canada or the United Kingdom, are an ugly way to provide universal coverage. In theory, everyone has access. In practice, however, too many people wait for care and too many people receive low-quality care.
Health care quality is an issue in the United States, as well. For example, a paper that can be found on the web site of the Centers for Disease Control states that more than 90,000 people a year die from infections that are contracted in hospitals.
One good thing that the government can do about health care quality is to gather, analyze, and disseminate information. Statistics that pertain to the risk and effectiveness of common medical procedures would be very helpful. In addition, information on how outcomes of procedures vary by hospital and by doctor could be quite useful.
A bad idea to improve quality is a government-run "pay for performance" system. In theory, it is an excellent idea. The government would figure out what sorts of processes and treatments are most effective, and it would pay bonuses to providers who use such best practices.
In practice, as the United Kingdom has found, "P4P" is a system that is ripe for gaming, because it is political. Doctors in the UK were able to build in an "exception" system, where they could designate certain patients as requiring exceptions from best practices. In theory, this makes sense, because there has to be some flexibility in medical care. In practice, the exception process was used so cleverly by doctors that the bonus payments amounted to a 20 percent increase in physician pay, even though the administrators of the P4P program did not believe that there was anywhere near a commensurate improvement in quality.
An ugly idea for improving quality is malpractice lawsuits. It only works to the extent that being sued successfully is highly correlated with being a bad doctor. Instead, the pricing of malpractice insurance suggests that being sued is highly correlated with being an obstetrician.
The problem of restraining health care costs is quite acute. I believe that cost is the most urgent issue of all for health care reform. It is impossible to envision making progress in dealing with access or quality without doing something to address cost.
All of our health care finance systems are under stress. The government system is completely unsound--the Titanic headed toward the iceberg of unfunded liabilities. Employer-provided health insurance is a questionable concept in theory that is unraveling in practice. The individual insurance market is a disaster, with something like 3/4 of all families who do not get insurance through work or government electing to remain uninsured.
The underlying driver of costs is that Americans make extravagant use of medical procedures with high costs and low benefits. See Crisis of Abundance or Overtreated.
A good way to help bring down cost is to provide patients with better information on the benefits and risks of medical procedures. As we have seen, this information will help with quality as well. In addition, consumers should be given transparent, advance information about the costs of alternative treatments using alternative providers.
Once consumers have the means to evaluate the benefit of procedures and to compare costs, they need to be given the opportunity to use that information. From the standpoint of opportunity, Maggie Mahar writes,
The well-informed patient, on the other hand, appreciates the grey areas of medicine. His doctor has been open in describing the uncertainties. As a result, this patient is more willing to accept answers like "We don't know." Or, "It depends." And he is more likely to listen to a doctor who tells him that the most aggressive approach is not necessarily the best approach. He is more likely to hear a physician who says: "Try physical therapy first. Try drug therapy. Try a change of diet and exercise."
This is why I think that, if doctors and patients work together, they can contain the cost of health care, paving the way for a sustainable, affordable, health care system that offers the right care to the right patient at the right time.
I believe, however, that having the means and the opportunity to make better choices is not sufficient. Consumers also need a motive, which is why I think that our system needs to eliminate the insulation provided by our poorly-designed forms of health insurance. Instead, I would like to see insurance policies with higher co-payments and higher, longer-term deductibles.
I would be very modest in portraying government's role in giving consumers the means, the motive, and the opportunity to make more cost-effective decisions. I think that government can contribute to gathering data and providing analysis, because it would be difficult for a private provider to profit from such an undertaking (information wants to be free). If doctors and patients need to have better conversations about treatment options, I do not see government as the natural driver of that. Finally, if the nature of insurance is going to change to give consumers more responsibility, that is going to require a less politically-tilted health care finance system, including a higher age of eligibility for Medicare and fewer tax advantages for employer-provided health insurance.
A bad idea for dealing with cost is "cost containment." What that means is cracking down on the prices and incomes of doctors, hospitals, and drug companies. Government attempts to do this run afoul of organized political opposition. Moreover, it is very difficult to implement heavy-handed negotiations on price without at some point stifling innovation and hurting quality. When it is allowed to operate, the market generally does a better job of cost containment. The example of laser eye surgery is frequently cited to support this in health care.
The government gets ugly when it regulates health care providers. My pet peeve is the requirement in Maryland that someone must obtain a doctorate to become a physical therapist. That regulation clearly was enacted for the benefit of incumbent physical therapists (who are exempt, of course) and works to the detriment of patients.
If health care is ever going to be rationalized, made efficient, deploy technology in a cost-saving way, and so forth, then practice regulations and licensing regulations will have to be revised. The anti-competitive nature of today's regulatory environment is discouraging.
The Superior Efficiency of Socialism?
One question concerning cost is whether costs would decline if we went with a single-payer health care system. Two arguments are typically made in support of the idea that socialism is the route to superior efficiency.
1. Other countries have single-payer systems, and they spend less on health care than we do.
2. Health insurance companies do not disburse all of their premiums to health care providers. Instead, they "keep" a large portion to pay for overhead and profits.
The amount that a country spends on health care is mostly a function of supply. In fact the amount that an individual state within the U.S. spends on health care is mostly a function of supply. One of the reasons that Massachusetts is a difficult state in which to try to offer universal coverage is that the supply of specialists and high-tech equipment is so high there. Given the vast supply of expensive health care providers in the United States, there is reason to doubt that shifting to a universal system provided by government would bring down spending.
Government is not as efficient as it might seem. While the government can operate without profits, it cannot operate without taxes. Taxes discourage work, thrift, and risk-taking. The deadweight loss from taxes as a percentage of revenue is higher than insurance company profits as a percentage of their revenue.
As to eliminating overhead, if all of private health insurance were ended, government would face a new responsibility: setting price schedules for every medical service in every section of the country. As it stands today, prices are negotiated with private insurers, and government programs feed off of these "usual and customary" charges. Deprived of this market information, government would have more overhead and would have difficulty correctly assessing the relative values of different services.
Overall, I am not persuaded that socialized medicine will prove more efficient in the United States. However, I am not a big fan of the insurance industry as it operates today, and I think that it would be interesting to see an experiment with single payer at a state level.
As it stands, none of the leading Presidential contenders is advocating single payer. Instead, some candidates propose additional government mandates and/or subsidies, while keeping our existing private insurance systems intact. It seems unlikely that this will reduce the cost of providing insurance.
Solving the Problems
I believe that there are things that government can do to enhance access, improve quality, and lower the cost of health care. However, I believe that we would be best served by having government focus on the policies that I put into the "good" category--clinics in poor neighborhoods, vouchers, high-risk pools, and better information on the effectiveness of services and the performance of providers. If we look to government to take a larger role in running our health care system, then my prediction is that things will get ugly.
Daily Dose - The dangers of universal healthcare
It's only April, but the rhetoric of the 2008 Presidential Campaign is already at fever pitch. This November, as in all election years, there are important issues at stake. One of them is the issue of socialized medicine or, to use the Democrats' latest euphemism for it, "universal healthcare." Universal disaster is more like it. The Dems do their best to put a positive, humanitarian spin on the idea, but the long-term ramifications would be devastating.
The Democrats would have you believe that conservatives who are against universal healthcare take this stance because they are mean-spirited and compassionless. Naturally, this isn't the case. And it's hardly how I feel.
I am against universal healthcare because I believe it will create one of the most intrusive government bureaucracies since the Internal Revenue Service, and it will impinge heavily on the individual freedoms of all American citizens.
Both Clinton and Obama would attempt to achieve universal healthcare coverage by relying primarily on private insurance. That's right -- they would look to solve our nation's health care problems by giving control of the system to the insurance companies. Wow.
Their plans rely on an "individual mandate" -- a legal requirement that every person obtain coverage. This is already law in Massachusetts, which mandates coverage for both adults and children (more on this below). The Massachusetts model is exactly what Hillary Clinton would try to impose nationally. Obama's plan would only require that parents obtain coverage for their children.
One of the key misconceptions among those who support either Clinton or Obama is that a universal healthcare system would make healthcare more affordable. What delusional planet are they from? Under socialized medicine, the healthcare system may be perceived as being more fair, but it certainly won't be any cheaper.
A better way to describe the program would be to call it "universal heath insurance." The idea is that by compelling everyone in the nation to participate in the insurance market, you'd cut down on what's known as the "free rider" syndrome. As the term suggests, this would be people getting a "free ride" from the healthcare system by deciding not to get their own health insurance because they've been assured that in the case of an emergency or personal health catastrophe, inexpensive care will be guaranteed to them by the government. The theory is that mandated participation would help to drive down insurance costs.
But any mandate requires an enforcement component. My fear is that a government branch with the kind of power to actually identify and penalize those seeking to avoid the insurance mandates of universal healthcare would be vast and all-powerful. The new healthcare arm of the government would likely have the same kind of power (and loathsome reputation) as the IRS.
I'm all about personal freedom and the rights of individuals. Universal healthcare is not only impractical, but costly -- and not just for your pocketbook. It's handing over yet another right to the government, and allowing the government to decide and rule your fate.
I'm not compassionless?I'm just sensible. And universal healthcare as it's being proposed by both Clinton and Obama still doesn't make much sense to me.
The disaster of the Massachusetts universal healthcare system should give you a preview of what life under a universal healthcare scheme could be like.
The universal healthcare dam springs a leak
As I mentioned earlier, a Clinton-style program of mandated health insurance is already in effect in Massachusetts. Under that system, subsidized insurance is made available to individuals earning up to $30,636 annually, and families of four earning up to $61,956 per year. The state government has begun to impose stiff fines on residents who fail to purchase health insurance -- and the penalties can amount to as much as $912 a year!
And this place is already known as "Tax-achusetts!"
Even though this system is in its infancy, it already has many vocal opponents. Devon Herrick, a senior fellow at the National Center for Policy Analysis calls the Massachusetts universal coverage plan "overregulated and largely unworkable." Herrick explains that the least expensive health plan available through the program costs $196 a month, while the state fine for being uninsured is about half that cost -- $98 a month!
After just two years, Massachusetts' universal coverage program is running at a staggering $147 million deficit, and the four insurance carriers who provide the state- subsidized insurance are estimating that costs will go up by 14 percent next year.
Even more shocking is the manner in which Massachusetts state officials have decided to deal with the out-of-control costs of their broken system: they've ordered the insurance companies to cut payments to doctors and hospitals, reduce choices for payments, and possibly increase how much patients will have to pay.
I only hope that Americans get a good, long look at the disaster that universal healthcare has wrought on the economy and people of Massachusetts before a similar catastrophe is unleashed on the whole country. The train wreck in New England is headed our way if Clinton or Obama get into the oval office.
America: you have been warned.
Giving you complete coverage on all the dangers of universal healthcare coverage, William Campbell Douglass II, M.D.
If you thought Hillary Clinton's government takeover plan for health care was bad, wait 'til you see what she has in store for the housing sector. As always with the Clintons, the market is the problem and Big Nanny is the solution. Unfortunately for taxpayers, Hillary has bipartisan company in the Bush administration on this issue. Their election season prescription? Rewarding bad behavior. Punishing responsible behavior. Doing more harm than good.
In case you've been living in a cave, there's a painful credit crunch underway. The culprit is the subprime mortgage -- a species of risky home loans to buyers with dubious credit and income. Cash-rich lenders doled out the subprimes hoping rising home prices would compensate for any failed bets. But when housing prices started plummeting and interest rates began rising, many borrowers started defaulting. Insolvency looms for countless lenders.
Instead of letting lenders and subprime mortgage-holders suffer the consequences of their actions, politicians and grievance-mongers are riding to the supposed rescue. In a supreme irony, the very same champions of the needy in the Democrat Party who complain constantly about the lack of "affordable housing" are now fighting tooth and nail to keep housing prices high.
To "cure" the housing crisis, Hillary wants a 90-day moratorium on foreclosures for homeowners who default on subprimes. In addition, she wants a five-year freeze on the monthly rate for subprime adjustable mortgages. While she demonizes lenders as predatory out of one side of her mouth, the other side of her mouth is floating legislation to protect lenders from lawsuits and let them convert certain mortgages into "stable, affordable loans." On top of all that federal meddling, she proposes a $5 billion -- yes, that's "billion" with a "b" -- fund to "help communities suffering from high rates of foreclosures."
Jesse Jackson is also stirring the pot. With subprime victim sob stories flooding the news and anecdotes of minority homeowners in trouble, there's no way the shakedown king could stay away. But the subprime mess isn't a result of ruthless racial discrimination. If anything, it's the result of too little discrimination by lenders too willing and eager to sign on people who had no business taking on mortgages. (And you know Jesse Jackson would be screaming either way. The lenders are damned if they lend and damned if they don't.)
Let's boil this down to fundamentals: Why should the rest of us have to shoulder the burden because some buyers made poor choices, overextended themselves and bought more house than they could afford? Why should other business owners bear the costs of lenders' failed bets? And why are falling home prices such a catastrophe to be "fixed" in the first place? Sacramento Bee columnist Daniel Weintraub put it well:
"It is great news when the price of energy, food, transportation, health care and consumer electronics drops. But for some reason it is bad news when the price of shelter drops. . . . Shouldn't we be seeing stories filled with anecdotes about formerly priced-out middle-income families finally getting their chance at the American Dream?"
There's another side of the housing crunch equation that's not making it onto the newspaper front pages and presidential campaign websites. "For every house sold because the buyer couldn't make the payments," Weintraub notes, "there is a buyer on the other end of that transaction who got a good deal. And for every foreclosure, there are probably 10 buyers of nearby homes who benefited from the general easing of house-price pressure." Bingo.
Fiscal conservatives ought to be balking at Hillarycare for housing. But President Bush's treasury secretary, Hank Paulson, is singing a similar tune. He proposed a new safety net to stem the tide of home foreclosures through a bailout plan for homeowners with bad credit scores. They'd be eligible for relief from paying hundreds of dollars in additional monthly payments when their mortgage rates reset. Those who have been responsible enough to maintain good credit, however, will be out of luck. In addition, Federal Reserve Chairman Ben Bernanke has proposed that government-sponsored mortgage enterprises Fannie Mae and Freddie Mac be allowed to raise their loan limits and have their debt explicitly guaranteed by the public dole.
Lawmakers on both sides of the aisle are colluding to protect the reckless and keep home prices high on the backs of prudent taxpayers. Who'll bail us out from this perversion of the American Dream?
The simple solution to health care in America -- Both private and public insurance companies and hospitals exist, and whomever wants to purchase the insurance purchases the insurance. There is also government run health care. For those who cannot afford or do not want to purchase health care.
In Australia, they have both and the system works beautifully.
Right now doctors have an incentive to keep their patients sick. Because the sicker the patients, the more money they make, the more surgeries they do, the more drugs they prescribe.
In England the doctors get paid more to have healthier patients. Traditional Chinese doctors got paid when their patients were healthy, and didn’t get paid when their patients were sick.
But in America, it is completely the opposite. Insurance companies make more money by only insuring the healthy and paying for as little care as possible. And doctors make more money when you are sick.
How can this be called health care? I don’t think it can. That is why I say all Americans have no true health care.