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Let's Go Dutch

8:00 AM, Aug 18, 2009 • By STANLEY GOLDFARB
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A surprising European approach to health-care reform.

The Netherlands is a liberal country. It has legalized drugs and euthanasia is an accepted social policy. Yet, to solve its health care dilemma of rising costs and inefficiency, it has turned to a health care system that sounds much more like something to come out of the American Enterprise Institute than from a nation in which the Socialist party made the largest gains in the last election. It is opting for private health insurance and competition.

We have heard many arguments that the American health-care system should adopt a typical European style, centrally controlled, single-payer system. The argument is made that such a system would provide a fairness that is now missing in our system. While the European systems were generally begun with the premise that all citizens should have health-care coverage, the problem of rapidly rising costs has plagued every European nation. Unlike what has transpired in the Netherlands, these rising costs have typically led to restraints on the demand for care (co-payments, deductibles, other incremental payments) or on the supply of services (global budgets that limit purchase of equipment by hospitals, gatekeepers to control referrals to specialists, etc.).

In response to these limits, private health insurance and non-governmental hospitals and facilities have become available in nearly every country in Europe. Why? Because of the demand for services beyond those offered by government regulated plans. Europeans who can overcome the explicit or implicit rationing of health care will do so, if they can afford it.

We tend to assume rationing means the denial of care. It is not like that. It is not an outright obstacle to care, it is much more subtle. One way for a government to ration care is to simply delay it. You probably will get the care eventually but a long wait time means that there are fewer resources, facilities, and equipment needed in a health care system.

There are many problems with the U.S. health-care system, but access to resources and this form of rationing is not one of them. For example, survey data, as reported in a study published by the OECD (Organization for Economic Cooperation and Development), suggest that there are very short waiting times for elective surgery in the United States. Robert Blendon of the Commonwealth Fund reported the percentage of respondents to a phone survey in 2001 who had experienced elective surgery in the previous two years and who said they had waited longer than four months for elective surgery: 5% of patients had been waiting for at least 4 months in the United States, as opposed to 23% in Australia, 26% in New Zealand, 27% in Canada, and 38% in the United Kingdom. Tulane University cardiac surgeon Robert Carroll, in another study, found that the percentage of the respondents in need of elective coronary bypass surgery who had been waiting for more than three months was 0% in U.S., 18.2% in Sweden, 46.7% in Canada, and 88.9% in the United Kingdom.

For those who want to avoid these waits, supplemental private insurance and access to a discrete private system is one solution. While some countries have expanded access in the public system because wait times became intolerable, this has led to costs rising at rates that have themselves become a major issue.

Another approach to rationing is to limit availability of technology. For example, there are 26 MRI scanners per 100,000 people in the United States versus 5 per 100,000 in Canada. If there is no MRI scanner in your local hospital, you probably will not have an MRI in the near future. If you are one of those Canadians that has never needed an MRI, this is not a problem; if you do need one and have to wait 4 to 6 months, you probably are not that happy with your system. That is why anecdotes and surveys that show most people are happy with their health care systems in most countries are potentially misleading. People who regularly need and use health care must be the ones questioned.