Many Americans assume that all European health care systems are essentially the same: single-payer, government run systems that were created, from scratch, by wise and benevolent reformers.
Nothing could be further from the truth, as Harvard surgeon and author Dr. Atul Gawande reveals in the most recent issue of The New Yorker.
In virtually every country, accidents of history have provided the foundation for reforms that are unique to each country. “Reform” did not mean sweeping change. Instead, each country used the hand that history dealt it, and built upon the system it already had. Gawande suggests that the U.S. should do the same.
And when he looks at the systems we have in place, the Veterans Administration Hospitals (VA) stands out as a very attractive footprint for a national health system that might include many, if not all, Americans. Let me be clear: Gawande does not explicitly vote for the VA as the best model. He presents it as one of several alternatives, alongside “Medicare for All” and the Federal Employees insurance. But as he describes the VA, one cannot help but think . . .
Gawande observes that the VA offers “low costs, one of the nation’s best technology systems for health care, and quality that (despite what you’ve heard), has, in recent years, come to exceed the private sector’s on numerous measures.”
I can confirm that this is true—I’ve researched the VA and written about it both in my book, Money-Driven Medicine, and on The HealthCare Blog here and here. Admittedly, during the last eight years, the VA has not been fully funded, but if Congress allocates the dollars the VA needs, it could once again provide the care that it offered at the end of the 1990s—what Philip Longman describes in his book on the VA: The Best Care Anywhere. Princeton healthcare economist Uwe Reinhardt agrees. Writing in Forbes, Reinhardt observes: “Your chance of getting . . . the right kind of care for the condition you have is higher at the Veterans Administration (VA) hospitals than in the private sector.”
Setting the VA side by side with Medicare, Gawande points out that “when compared to the VA, Medicare costs about one-third more and has had a hard time getting doctors and hospitals to improve the quality and safety of their care.” As for the Federal Employee plan that is often held up as a model for national health reform, the private insurers in that plan “have done even less [than Medicare] to control costs and most have done little to improve health care.” So why are we talking about Medicare-for-all and the Federal Employees’ plan as the best alternatives for universal coverage? The VA system, which is already up and running, with quality and safety controls in place, might offer a better starting point.
How Events, Not Ideology, Set the Pattern for Health Reform in Europe
But before taking a closer look at the homegrown healthcare models that we might build on, consider Gawande’s brief history of how other countries have gone about reforming their systems.
The U.K. wound up with a government-run single payer plan because, on the eve of WW II, Britain’s ministers realized that they must prepare for air attacks on the U.K.’s cities. With that in mind, they evacuated three and a half million people out of the cities, and into the countryside. They then had to make sure that medical services would be available—both in rural areas that were experiencing a population explosion, and in the cities where they projected they would need to treat up to two million war-injured civilians and returning servicemen.
Thus, the U.K. began a national Emergency Medical Service. It was meant to be temporary, but by the end of the war, the nation’s citizens were accustomed to it, liked it and did not want to see it go. “The private hospitals didn’t either,” Gawande explains; “ they had come to depend on those government payments.” Thus, the National Health Service was born.
Things played out differently in France. “Long before the war,” Gawande explains, “large manufacturers and unions had organized collective insurance funds for their employees, financed through a self-imposed payroll tax, rather than a set premium. This was virtually the only insurance system in place, and it became the scaffolding for French health care. . . .” After the war, the de Gaulle government did not try to create an entirely new healthcare system. Instead, it “built on what it had. . . The system “that de Gaulle inherited upon liberation had no significant public insurance or hospital sector,” Gawande explains. ”Seventy-five per cent of the population paid cash for private medical care, and many people had become too destitute to afford heat, let alone medications or hospital visits.”
The nation needed healthcare, and unlike the UK, France did not have a flourishing public healthcare system. So the government expanded the existing payroll-tax-funded, private insurance system to cover all wage earners, their families, and retirees. The self-employed were added in the nineteen-sixties. And the remainder of uninsured residents were finally included in 2000. “Today,” Gawande points out, “Sécurité Sociale provides payroll-tax-financed insurance to all French residents, primarily through a hundred and forty-four independent, not-for-profit, local insurance funds. . . .The French health-care system has among the highest public-satisfaction levels of any major Western country; and, compared with Americans, the French have a higher life expectancy, lower infant mortality, more physicians, and lower costs. In 2000, the World Health Organization ranked it the best health-care system in the world. (The United States was ranked thirty-seventh.)”
Switzerland also had no experience with public-sector insurance. In 1994, when the Swiss decided it was time to pass a universal coverage law, most of its citizens had private, commercial health insurance. So in Switzerland, reform meant passing a law requiring everyone to buy private commercial insurance, while providing government subsidies to insure that health insurance would cost no more than 10 percent of income.
Gawande’s point is that, in each country, national health insurance “has taken a drastically different form, and the reason has rarely been ideology. Rather, each country has built on its own history, however imperfect, unusual and untidy.” Here, I am reminded of an anecdote told by Congressman Barney Frank and quoted in a recent New Yorker profile “When someone asked Harold MacMillan ‘what has the most impact on political decisions,’ he said ‘Events, dear boy, events.’” Events—these are the unplanned historical realities that provide the building blocks for reformers.
Frank added that recently, “events have just totally repudiated [the conservatives and we are now in a position to take advantage of that.”
Some might think that this means we are in a position to nationalize the hospitals, put doctors on the government payroll, abolish employer-based insurance and roll out the far more perfect system that you and I dream about.
Gawande disagrees. He is quick to acknowledge that the system we have is “an appallingly patched-together ship, with rotting timbers, water leaking in, mercenaries on board, and fifteen per cent of the passengers thrown over the rails just to keep it afloat.”
And yet, and yet: “Hundreds of millions of people depend on it,” says Gawande. “The system provides more than thirty-five million hospital stays a year, sixty-four million surgical procedures, nine hundred million office visits, three and a half billion prescriptions. It represents a sixth of our econo
my. There is no dry-docking health care for a few months, or even for an afternoon, while we rebuild it.”
At the same time, Gawande understands why, from a progressive point of view, a single-payer system might seem the ideal solution. From a conservative point of view, a pure, market-based system would represent the most rational fix. But, Gawande declares, “these are siren songs. . . . Grand plans admit no possibility of mistakes or failures, or the chance to learn from them. If we get things wrong, people will die. This doesn’t mean that ambitious reform is beyond us. But we have to start with what we have.”
If we want a chance to learn from mistakes and failures, we cannot pour billions of dollars all at once, into a plan that looks good on paper. Gawande points to the 2003 prescription-drug program for America’s elderly as an example of what can go wrong :
“This legislation aimed to expand the Medicare insurance program in order to provide drug coverage for some ten million elderly Americans who lacked it, averaging fifteen hundred dollars per person annually. The White House, congressional Republicans, and the pharmaceutical industry opposed providing this coverage through the existing Medicare public-insurance program. Instead, they created an entirely new, market-oriented program that offered the elderly an online choice of competing, partially subsidized commercial drug-insurance plans. It was, in theory, a reasonable approach. But it meant that twenty-five million Americans got new drug plans, and that all sixty thousand retail pharmacies in the United States had to establish contracts and billing systems for those plans.
“On January 1, 2006, the program went into effect nationwide. The result was chaos. There had been little realistic consideration of how millions of elderly people with cognitive difficulties, chronic illness, or limited English would manage to select the right plan for themselves. Even the savviest struggled to figure out how to navigate the choices: insurance companies offered 1,429 prescription-drug plans across the country. People arrived at their pharmacy only to discover that they needed an insurance card that hadn’t come, or that they hadn’t received pre-authorization for their drugs, or had switched to a plan that didn’t cover the drugs they took. Tens of thousands were unable to get their prescriptions filled, many for essential drugs like insulin, inhalers, and blood-pressure medications. The result was a public-health crisis in thirty-seven states, which had to provide emergency pharmacy payments for the frail. We will never know how many were harmed, but it is likely that the program killed people.”
And the retail drug business represents only about 11 percent of U.S. health care. Imagine what would happen if we tried to roll out an entirely new health care system. We should have offered prescription drugs through the traditional Medicare program. But the Bush administration was bent on throwing the business to private sector insurers, so it tried to create a market-based drug program with a single stroke of the pen.
When it comes to universal coverage we need to proceed in a way that allows for continuous learning from mistakes, constant tinkering with reform.
Gwande acknowledges that this will take time. He envisions national health reform that begins on “say, January 1, 2011” and involves “no noticeable change for Americans who have dependable coverage and decent health care. But we can construct a kind of life boat alongside it.” He suggests, for instance, that if we want to use Medicare and/or the Federal Employees private insurance plans and/or the VA system as a model for national health insurance, we might begin by offering “any of these programs . . . to a starting group of Americans—the uninsured under twenty-five years of age, say---the chance to join within weeks.”
Why begin with Americans under 25? Because all children would have access to care, and young adults would receive the preventive care and counseling that can set the stage for a healthy middle-age. Finally, as a group, Americans under 25 are healthier than the rest of us, and so by starting there, we could cover the maximum number of people at the lowest cost.
An Approach that Allows Us to Learn From Mistakes and Failures
“With time and experience” Gawande writes, “the programs could be made available to everyone who lacks coverage. The current discussion between the Obama Administration and congressional leaders seems to center on opening up the federal workers’ insurance options and Medicare (or the equivalent) . . . with subsidized premiums for those with low incomes..
“The costs have to be dealt with,” Gawande continues. “The leading proposals would try to hold down health-care spending in various ways (by, for example, requiring better management of patients with expensive chronic diseases); employers would have to pay some additional amount in taxes if they didn’t provide health insurance for their employees. There’s nothing easy about any of this. But, if we accept it, we’ll all have a lifeboat when we need one.”
As we experiment, we will learn: “It won’t necessarily be clear what the final system will look like. Maybe employers will continue to slough off benefits, and that lifeboat will grow to become the entire system. Or maybe employers will decide to strengthen their benefits programs to attract employees, and American health care will emerge as a mixture of the new and the old. . . . The system will undoubtedly be messier than anything an idealist would devise. But the results would almost certainly be better.”
Gawande does not pick one model that he thinks will work best. This is something that will have to play out over time: Events that we cannot foresee will tell reformers what is possible and what is not.
Nevertheless, Gawande stresses that we have options: “our health-care system has been a hodgepodge for so long that we actually have experience with all kinds of systems . The truth is that American health care has been more flotilla than ship. Our veterans’ health-care system is a program of twelve hundred government-run hospitals and other medical facilities all across the country (just like Britain’s). We could open it up to other people. We could give people a chance to join Medicare, our government insurance program (much like Canada’s). Or we could provide people with coverage through the benefits program that federal workers already have, a system of private-insurance choices (like Switzerland’s).
“These are all established programs,” he notes, “each with advantages and disadvantages.“ The VA offers effective care at a low cost, meeting the two goals that President Obama stressed during his Inauguration address. But, Gawande acknowledges. “it has a tightly limited choice of clinicians—you can’t go to see any doctor you want, and the nearest facility may be far away from where you live.”
By contrast, “Medicare allows you to go to almost any private doctor or hospital you like, and has been enormously popular among its beneficiaries, but” as noted, “it costs about a third more per person and has had a hard time getting doctors and hospitals to improve quality and safety” As Obama describes the federal employees insurance , it sound least attractive: while it offers a range of subsidized private-insurance choices, “insurance companies have done even less than Medicare to contain costs and most have done little to improve health care (although there are some striking exceptions.)”
There is no question but what Americans value being able to choose their own doctor. Granted, many stay “within network” because co-pays are lower, but they might resist being limited to VA doctors . Though, in fact, VA medical centers are affiliated with medical schools, and are known for practicing cutting-edge “evidence-based medicine” based on what the newest medical research tells us about risks and benefits. When Merck finally was forced to withdraw Vioxx from the market, the VA, along with the Mayo Clinic and Kaiser already had stopped giving the potentially dangerous drug to most patients.
And while Medicare patients have a choice of doctors, doctors also have the choice not to take Medicare patients. Citing low fees, more and more doctors are shutting their doors to new Medicare patients. One wonders how many previously uninsured patients would be able to find a doctor who would take them under “Medicare for All.”
To my mind, effective care at a lower cost trumps everything else; opening the VA to all seems a superb idea. The VA would need addition funding and staff; but I think we would get a better bang for taxpayer dollar investing in the VA rather than in Medicare or private insurance. Nevertheless, many uninsured Americans do live too far away from a VA center, and so they would need other choices.
We might open all three alternatives to the public, letting Americans choose between the VA, a public-sector Medicare for all plan, and a menu of private insurance plans modeled on the federal workers’ program. Since the VA is the most efficient of the three (defining efficiency as better outcomes at lower costs) premiums for individuals who chose the VA would be lower. And the government subsidies for those who could not afford the premiums also would be lower—good news for taxpayers.
The VA system offers another example of how lower-cost care often is better care. The VA is more efficient, makes fewer errors, and does a better job of managing chronic diseases, in part because it has the VistA Electronic Health Record, a health IT system designed by the VA itself. Over at the Healthcare Blog, Scott Shreeve recently described VistA as by far the most successful” system when it come to achieving clinical transformation through the use of information technology, adding that the VA’s “should seriously be considered as a potential solution for government-based health care information technology.”
What We Can Learn From Massachusetts
Gawande ends his story by looking at reform in the state where he lives and works: Massachusetts. He applauds the state’s effort, noting that “surveys have found that at least two-thirds of the state’s residents support the reform.” Gawande cites just one major problem: “The Massachusetts plan didn’t do anything about medical costs . . . , and, with layoffs accelerating, more people require subsidized care than the state predicted. Insurance premiums continue to rise here just as they do elsewhere in the country. Many residents also complain that eight per cent of their income is too much to pay for health insurance . . .” [Though the Swiss pay 10 percent of their income for healthcare before getting a government subsidy, proving that even in a relatively efficient system, medical care is not cheap. ] Gawande concludes: “The experience [in Massachusetts] has shown national policymakers that they will have to be serious about reducing costs.”
Massachusetts, like the rest of the country, also suffers from a serious shortage of primary care providers and family doctors. Loan-forgiveness programs that allow medical students who choose these specialties to graduate debt-free could go a long way toward solving the problem –but it will take years for these students to make it through the pipeline and into the marketplace. This is another reality to keep in mind: universal coverage will create demand, but it will not create supply.
Keep this in mind when someone tells you that “True reform requires transformation at a stroke.” Gawande reminds us that this is not the way healthcare reform has occurred in other countries. For those interested in “reality-based reform,” the truth about how health reform has come about elsewhere is, as Gawande says, “both surprising and instructive.”