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LEARNING FROM ABROAD: Promise And Pitfalls



November 29th, 2007

Editor’s Note: This post was written by the 2007-08 Commonwealth Fund Harkness Fellows. The lead authors are Andreas Gerber and Rhema Vaithianathan. Additional authors include Kalipso Chalkidou, Richard Gleave, Peter Hockey, Geraint Lewis, Ruth McDonald, Neil MacKinnon, Peter McNair, Claudia Sanmartin, and Stephanie Stock.

While policymakers in the U.S. have long recognized the benefits of looking overseas for useful lessons about health system reform, there now appears to be a wider interest in international comparisons.

As a group of Harkness Fellows in Health Care Policy and Practice from Australia, Canada, Germany, New Zealand, and the United Kingdom, we are aware that learning from other health care systems has great value, but it needs to be undertaken with care and sensitivity. We, too, are grappling with how exactly one learns lessons from systems that are very far from each other.

The New York Times recently wrote about the lessons to be learnt from Switzerland and the Netherlands and the results of the latest survey of international health care from the Commonwealth Fund. America’s Health Insurance Plans (AHIP) and Kaiser Permanente (KP) hosted presentations by executives from Swiss and Dutch insurance companies about how their health care systems deliver universal coverage through private insurance.

Switzerland

Switzerland´s health care system is a private insurance-based model offering universal coverage and therefore has certain features from which the U.S. could learn useful lessons. However, it has the following important shortcomings:

(1) Switzerland has the second most expensive health system in the world after the US (with 11.6% of gross domestic product spent on health, according to the Organization for Economic Cooperation and Development), but achieves only mediocre health outcomes (ranked 20th by the World Health Organization in 2000).

(2) Cost containment in the Swiss system has failed, with premiums having increased by 80% in real terms since 1996 when the system was first introduced, and by 51.5% from 1999 to 2006 alone.

(3) To achieve “universal coverage,” more than one-third of the Swiss population must rely on state subsidies.

(4) Premiums vary by more than 100% between Swiss counties (“cantons”) for identical coverage.

The Netherlands

The Netherlands only introduced universal private health insurance last year, so the effect of the reform on costs, risk selection, and the proportion of the population requiring state subsidies is not yet known. However, there are features of the Dutch system that are strikingly different from the U.S. health care system, so simply extrapolating the Dutch experience to the U.S. could lead to invalid conclusions, unless other changes, such as primary care reform, are also made in the U.S.

One of the pitfalls of intercountry exchanges of ideas on health system design is that all too often we hear only one side of the story, but if U.S. policymakers are keen to learn from health systems providing universal coverage, we suggest that they also look at other countries that achieve better health outcomes, with wider choice at lower cost.

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6 Responses to “LEARNING FROM ABROAD: Promise And Pitfalls”

  1. Ruth McDonald Says:

    Health reform – learning from abroad, at home and Charles Dickens

    As an English Harkness Fellow based in Berkeley for a year I’m trying to learn from examples of good practice in the USA. Last week I visited Colorado where the snow was deep and crisp and even, unlike Berkeley where I’m based for my Harkness year. But my visit was prompted less by a desire to visit a winter wonderland than by stories I’d heard about the excellent health services in Grand Junction and their high levels of achievement as outlined in various publications based on the Dartmouth Atlas Study data.
    What accounts for this success? One factor appears to be the history of collaborative working between various stakeholders in the local community in Grand Junction. In response to the HMO Act of 1973, physicians in Mesa County Colorado founded the Rocky Mountain HMO in 1974. Since then these arrangements have evolved, with Rocky Mountain Health Plan (as the HMO has become) and the Mesa County physicians Independent Practice Association (IPA) working closely together to ensure, for example, that Medicaid patients are not disadvantaged due to low levels of reimbursement. Instead physicians receive the same level of compensation for patients covered by the health plan as they do for Medicaid patients. This arrangement and the ability to deliver timely and cost effective care more generally has been attributed to fairly tightly managed care, with local physicians playing a part in ensuring that resources are used wisely, as well as the active involvement of most physicians in the community more generally. Physicians agree to receive lower levels of remuneration, in order to subsidize the delivery of care to Medicaid patients and to actively manage what are perceived as the health care resources of the community. Physicians are rewarded financially if the plan generates a surplus, which also encourages them to think carefully about resource utilization as well as health outcomes.
    As a naïve foreigner these examples of collaborative joint working appeared to be exactly the sort of model we should all be aiming for (if only we had such close collaboration in my local health economy in the UK). But what surprised me was that these arrangements had been the subject of a Federal Trade Commission (FTC) investigation which resulted in the IPA’s insurance company spending over $500,000 in legal costs to reach an out-of-court settlement. In the USA it appears, collaboration is seen as synonymous with collusion and therefore to be actively discouraged.
    The Grand Junction experience illustrates the ways in which local communities, however well intentioned their approach, are unable to insulate themselves from other aspects of the wider health care system. Next year, for the first time since the formalisation of the collaborative arrangements in 1974, physicians in Grand Junction will receive lower levels of remuneration for treating Medicaid patients, compared with those covered by the Health Plan. In other words, market forces and an inability to sustain high levels of subsidy for Medicaid patients will result in a two tier arrangement, which is in direct contrast to the aims of the IPA and the (not-for-profit) Health Plan. Furthermore, in a context where doctors incur high levels of debt and primate care pays much less than specialty care, the option of becoming a primary care physician anywhere and especially in Grand Junction, Colorado where medical salaries are reduced in order to subsidise the care of the poor, is becoming increasingly less attractive. Added to this, the fact that physicians in Grand Junction are expected to take responsibility for the careful use of community resources and encouraged to manage their patients in hospital, rather than rely on the use of hospitalists, may all act to deter physicians from working in Grand Junction.
    Thinking about the wider context in which health care is delivered made me wonder about the pitfalls of trying to learn from other examples of good practice. The FTC case highlights just how prevalent the fear of ‘socialized medicine’ is in the USA. Of course that’s no accident, there are lots of people interested and working very hard at keeping it that way. But it means that trying to import ‘solutions’ from home or abroad without tackling some of the underlying issues and contextual factors may be doomed to failure. So in keeping with Christmas traditions and reflecting my English origins I suggest that it may be appropriate to respond to those who continue to raise the specter of ‘socialized medicine’ with some lessons from Charles’ Dickens ‘A Christmas Carol’. In response to the specter raised by those with a vested interest in maintaining the status quo, perhaps the Ghost of Christmas Present should take some US citizens on a tour in much the same way he did for Ebenezeer Scrooge in Dickens’ novel. Although perhaps many spirits are needed for, to paraphrase the spirit ‘My life upon this globe, is very brief and there are so many uninsured and underinsured people to show you… you’re paying for their care anyway through your health plan dollars it’s just that universal access via the ER is a really expensive and inefficient way to do it’.
    Of course, if they remain unmoved there is always Ghost of Christmas (or health care) Yet To Come. This spirit is more frightening than the others, showing Scrooge visions of the Cratchit family mourning their dead son, the cripple Tiny Tim, as well as Scrooge’s own lonely death and the cold reactions of the people around him who joke about his death and funeral. The message appears to be that he can avoid the future shown by the ghost, and change Tiny Tim’s fate but only if he changes. I’ll leave it to you to figure out whether this has any relevance to the US health system.
    Dr. Donald Lewis in the American Journal of Diseases of Children (1992) theorized that Tiny Tim suffered from a kidney disease that made his blood too acidic. This disease was treatable with proper medical care even in Dickens day. It’s just fortunate for Tim that all he needed was a change of heart by Ebenezeer Scrooge. If he’d been relying on Bush to change his mind on SCHIP, who knows what his fate might have been!

  2. Rhema Vaithianathan Says:

    One of the artificial distinctions made in trying to find “comparable” countries from which to learn is the desire to focus on countries that are predominantly privately funded. This has lead to the focus on Switzerland. However, the fact is that the Public Expenditure portion of the US is equal (or higher) than the public expenditures (and indeed the total expenditures) in many of our home countries. http://www.oecd.org/dataoecd/52/34/38976588.pdf



    If the current US public spend was organized differently, it could perfectly reproduce the full health care systems in my home country New Zealand. Every America could have access to a New Zealand or UK level of health care – a perfectly adequate safety net on top of which a private system could exist as is their wont. Such is the size and scale of Government in US Health system.

    I find it surprising that when people say that the US has a private system. To my foreign eyes, the US has a huge public system and a huge private system! So, as a start, why not look at how very comparably sized public spending is managed in other countries such as UK, Japan or Australia?


  3. Judy Frabotta Says:

    George, I think you are spot on about the American sense of exceptionalism. I had it too, and I have been embarrassingly amazed at what should be obvious — there are many excellent ways to skin this particular cat, and some not so excellent ways. Canadians routinely research and often adopt practices from other English speaking countries — perhaps out of a sense of Commonwealth, not to mention the ease of common language.

    If you do get that institute underway, I’d be pleased to support you in any way I can.

  4. George Moseley Says:

    Judy, your comment came at an apropos time for me. I was just preparing to teach a class session on Comparing International Health Care Systems in my course on an Introduction to the New American Health Care System. It is only in the last few years that policymakers in the US have begun to even mention the huge gaps between the US and other developed countries in terms of per capital health care spending and traditional health status metrics. Despite this, there appears to be no interest at all in learning some lessons from these other countries about how to finance and deliver health care. One of the major roadblocks is a value prevalent in the US – a sense of exceptionalism – a sense that Americans are different from everyone else and, therefore, have nothing to learn from them. One of my former students has just proposed to me starting a NFP institute that will study the features of other nation’s health care systems for their applicability to the US situation.

    By the way, I do believe that fundamental system change is necessary. In the first place, the US does not right now have anything that truly resembles a rational system. Furthermore, all the reform initiatives up to now have been aimed at pieces of a very large, fragmented yet interrelated health care industry. Even when worthwhile systemic suggestions are made, the political will to carry them out seems lacking. Finally, do not forget about the powerful entities with vested interests in the current dysfunctional structure.

  5. bett martinez Says:

    According to the WHO report, the top 5 HC systems, based on a multiplicity of factors, are France, Andorra, Italy, San Merino, and Malta. Why not begin by looking at those countries? Is it enough to take a macro-look, or would it be adviseable to also gain somewhat of an anthropological perspective, and examine from a more close-up observational perspective?

    bett martinez

  6. Judy Frabotta Says:

    As a consultant who has worked for years in the U.S. system, recently moved to Canada, and have been privileged to work with the Canadian system, it is my dream to create some kind of forum in which best practices from the health care systems of other countries can be explored and possibly adopted. I’m just not sure where to start. My initial idea was to convene leaders of mostly English-speaking countries as a beginning. From what I have seen at the program level, I think we have a lot to teach each other without even getting into macro systems change.

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