In the midst of a presidential election in which competing health care
reform plans have brought widespread attention to disparities in health care
access in the United States, health care policy experts discussed two European
systems that could serve as models for reform in this country.
The national approaches of the Netherlands and Germany to health care
financing have many differences from and some similarities to the more
fragmented U.S. approach. Among the chief differences—and possible
lynchpins for a future U.S. system—is the requirement in both European
countries for mandatory individual health insurance through affordable and
widely available plans.
"I think there are some really important lessons to be learned from
these countries in terms of the individual mandates in making payments
affordable to individuals by, if not having contributions proportional to
income, then at least having bigger subsidies for lower-income people,"
said Patricia Danzon, chair of the Health Care Systems Department at the
Wharton School of the University of Pennsylvania.
Her comments and those of other U.S. and European health care experts came
during an April roundtable discussion before congressional staffers on
possible European models for a U.S. health care financing overhaul. The
discussion came not only in the context of competing presidential candidates'
health care plans but also amid an increasing amount of research data showing
that the U.S. system spends much more money for lesser amounts of overall care
than do those of other industrialized nations.
Recent research has found that U.S. health care spending—about 16
percent of gross domestic product, and growing—is significantly higher
than that of every major European nation. However, the U.S. ranks lowest on a
variety of health-outcome categories, including deaths that could be avoided
through available interventions, according to the 2006 Commonwealth Fund
National Scorecard on U.S. Health System Performance.
As a key feature that the European systems share, mandated health insurance
remains a controversial proposal for many Americans. Additionally, it is very
hard to implement on a state basis because the use of state tax exemptions and
fines to enforce it—as Massachusetts uses to enforce its individual
mandate—are seen as relatively weak compared with enforcement under the
federal tax code.
The Dutch system provides legal sanctions to force enrollment and then
deducts the cost of the premiums from government payments scofflaws would have
received. The German approach also is technically an individual mandate, but
because employers pay the premium, all sanctions for lack of payment are aimed
The barriers to state-level enforcement of individual insurance mandates
argue for a federal health care approach in the United States, Danzon said.
Such a national system could use the Internal Revenue Service to enforce
National mandatory individual insurance "would be easier to do, and
having an individual mandate immediately solves some of the problems of
insurance markets, because once everybody has to buy insurance, the risks of
adverse selection that individual insurers face are somewhat reduced,"
she said. "It is not just the sick people who are out looking for
The possibility of an individual insurance mandate drew criticism, however,
from Stewart Butler, vice president of domestic and economic policy studies at
the Heritage Foundation, a conservative think tank. He noted that Americans
are much more resistant to mandated insurance than are Europeans. In
Switzerland, for example, there is near-universal adherence to the auto
insurance requirement, while fewer then 80 percent of American drivers have
it. Americans also have much higher demands for privacy from the government
and from each other than do their European counterparts.
"The idea that people can find out what insurance you have and share
it with the government and then come and knock on your door if you haven't
signed up is something that all Americans" would be concerned about,
Another obstacle to a mandatory insurance system, Butler maintained, is
that a national approach would eliminate a potential advantage of the U.S.
federal system, which can allow for states to experiment with various funding
approaches to find the best ones, he said.
Likely to be less controversial with most Americans, said Butler,
are the Europeans' use of a variety of mechanisms to mandate that insurers
provide affordable insurance plans to all citizens, regardless of preexisting
conditions. However, those provisions draw fire from U.S. insurers, who
maintain that this strategy would undermine the entire insurance market.
A possible way to address insurers' concerns are found in the Dutch system,
which pays insurers for accepting sicker patients while requiring that they
pay the government for every healthy person they cover.
"It is not a free market," said Wynand van de Ven, a professor
of health insurance at Erasmus University in Rotterdam, of the Dutch system."
The government manages the market to achieve socially desired outcomes,
and this requires that many preconditions have to be fulfilled."
More information about health financing system comparisons is posted