September 16, 2009

Health Care in Other Countries: Questions for T. R. Reid

New York Times "Prescriptions":

T. R. Reid was a bureau chief in Tokyo and London for The Washington Post. His new book, “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care,” is a systematic study of the health systems in seven countries that was inspired in part by his family’s experiences living overseas and receiving health care abroad. Mr. Reid also produced a 2008 documentary on the same topic for PBS called “Sick Around the World.” He spoke with blog contributor Anne Underwood.

Q. We’ve just passed the eighth anniversary of 9/11. You make a shocking comparison in your book between that crisis and the state of American health care.

A. On Sept. 11, 2001, roughly 3,000 Americans were killed by terrorists. Since then, we’ve spent hundreds of billions of dollars to make sure that doesn’t happen again. But the same year — and every year since, according to the National Academies of Science — about 22,000 Americans died of treatable diseases because they couldn’t afford health care. And we let that go on. Do Americans consider that acceptable? To me, it’s not. The American people must not realize how cruel our system is, because if they did, they’d change. We’re not a cruel people.

Q. You focused primarily on Canada, Great Britain, France, Germany, Switzerland, Taiwan and Japan. Why?

A. I chose big, rich, advanced, free-market democracies that might make a good model for the United States. In each of these countries, they set a goal of providing health care for all and found a way to get there. As I argue in the book, health care systems are moral instruments. They reflect a country’s basic moral values.

Q. Americans seem to think that all advanced countries with universal coverage have single-payer systems. Actually, that’s not true.

A. A lot of what Americans think they know about health care overseas is not accurate. Japan has 3,000 payers. Germany has 220 payers. Switzerland has 70. But in many ways, the systems in these countries act like single payers, with one set of rules, one set of forms.

In Japan, there is one price for each procedure for the entire country. They publish a huge book thicker than the Tokyo phone book that lists 30,000 medical procedures and sets the price for each. There’s one set price for a cut requiring six stitches on the back of the hand and another for a cut requiring six stitches on the thigh.

Q. Many Americans are saying that universal coverage is too expensive. But you say it’s essential for controlling medical costs. Why?

A. If everybody’s in the system, you have the political will to make tough decisions about cost control. If you say, “We will cover the $20,000 drug for breast cancer, but not the $40,000 drug,” that means some women may die sooner than they might have. But if the system covers everybody, you know the money saved is going to be used to help a sick child or a mother with a difficult pregnancy. That makes it easier for society to accept those tough decisions.

In the U.S., when Aetna or WellPoint declines to pay for a drug or a procedure, the money saved goes to enhance the insurer’s profit, not to pay for another person’s treatment. So people are less willing to tolerate cost controls. All over the world, health ministers told me that the first step is universal coverage — and that generates the political will to impose controls.

Q. Critics argue that if we institute cost controls, it will stifle innovation in both drug discovery and the development of new technologies.

A. That’s completely false. Overseas, cost controls drive innovation. In Denver, I had an M.R.I. that cost $1,434 dollars. The exact same procedure in Japan today costs about $105. That’s because the government kept reducing the price it would pay for M.R.I.’s. Japanese researchers had to devise ways to get the same scan for less money, and they did, developing much cheaper machines.

As for drugs, it’s also false. Lots of drugs that make TV news in America come originally from labs in the U.K., Switzerland or Japan.

Q. And yet other countries also have trouble keeping costs in line.

A. Modern medicine is extremely expensive. Other countries constantly have to decide which new procedures and medicines they will pay for.

Q. Which sounds like rationing.

A. Other countries definitely ration, but so do we. Here’s the difference. In other developed countries, there is a basic level of care that everybody gets. Our method is to leave tens of millions of people out of the system, which is the harshest way to ration.

Q. Did other countries find it difficult to institute universal coverage?

A. In Switzerland it was very tough, because Switzerland is home to huge drug companies and giant international insurance companies. Until the 1990s, they were making a profit on health insurance. They copied the pre-existing conditions rule of American insurers and tried not to sell policies to anyone who might make a claim. They hired lots of underwriters to deny claims, like our guys do. And by 1994, Switzerland got to point where 5 percent of people couldn’t afford health insurance.

For the Swiss, this was shocking. They had national referendum on universal coverage, and most of the business community opposed it. The giant insurance companies opposed it, and the drug companies opposed it. But the reform passed and took effect on Jan. 1, 1996. The result was that insurers had to cover everybody and they couldn’t make a profit on basic health insurance.

Q. How’s it working out?

A. I went there in 2007, and everyone was happy. The pro-business Christian Democratic Party is proud of it. And the insurance companies are doing better than before the reform. Here’s why. They’re now required to sell basic coverage to anybody for no profit, and there are strict controls on pricing and administrative costs. But the same companies sell supplemental policies on a for-profit basis that cover things like private hospital rooms or Viagra. In addition, the same companies sell life insurance and fire insurance. They use the basic health insurance plan, for which they can’t make profit, as a loss leader for other lines of business. All of them are bigger and making more money than before the change.

Q. The rate of medical bankruptcies in this country is alarmingly high. What about overseas?

A. When I made the documentary “Sick Around the World,” I asked the health minister in every country I examined, “How many people in your country went bankrupt last year due to medical bills?” They looked at me as if I’d just asked how many flying carpets they rode on their way to work. In Canada, it was zero. In the U.K., zero. In Germany, zero. Japan, zero. Taiwan, zero. The other rich countries don’t let it happen. When I asked the president of Switzerland, who belongs to the pro-business Christian Democratic Party, he said, “Nobody. It would be a huge scandal if we let that happen.”

Q. Another issue on the table now is tort reform. Are medical malpractice suits a problem in other countries?

A. No. Every country has come up with a mechanism to compensate patients who are injured by doctors and hospitals. These injuries happen in every country. If doctors are seriously negligent, you need a system to discipline them. But nobody does this through the tort system except the United States because it’s a very expensive way to do it. Most of the money doesn’t get to injured person, but gets paid to court system, investigators, lawyers.

Q. If other countries don’t handle malpractice through the tort system, how do they do it?

A. In Germany . . . it’s like an accreditation body that tests you. In Britain, they have an agency called NICE, the National Institute for Health and Clinical Excellence. NICE issues guidelines for treating medical ailments. In the U.K., if you demonstrate that you followed NICE guidelines, you can’t be held liable. Even if patients are horribly injured and impaired for life, you can’t be disciplined as long as you followed the guidelines.

Q. So other countries have no huge jury awards to drive up costs?

A. You read about massive judgments in this country with injured patients receiving tens of millions of dollars. A major part of that is, once someone is injured or crippled, the damage award includes lifetime care. In the United States, that’s really expensive. But if somebody won a judgment of lifetime medical care in the U.K., the cost would be zero. Health care is free. And if you won a big tort judgment in France or Belgium, an award of lifetime care would be vastly cheaper than in America.

Q. Do you support any of the plans being discussed on Capitol Hill?

A. I think all the plans that we’ve seen in America are tinkering at the margins of a system that is unfair and grossly expensive. On the other hand, I came away from writing the book feeling optimistic, because I know we could get to universal coverage at reasonable cost if we want to. All the other developed countries in the world have done it. Are you telling me Taiwan can do this and the U.S.A. can’t? Come on.

Q. Do you see a way of getting back on track?

A. It takes a leader. My book focused on people like Tommy Douglas in Canada, Otto von Bismarck in Germany and Nye Bevan in the U.K., who persuaded their countrymen that they needed universal coverage. It will take someone who can grab the moral imperative and remind us that the important issue is not whether insurance companies make 4 percent or 6 percent on their coverage, but whether people get medical care when they need it.

By Anne Underwood
September 15, 2009