The List: The World’s Worst Healthcare Reforms
This month, U.S. policymakers are working to overhaul their country’s healthcare system. In the past, they’ve looked to other countries’ models for guidance on how to make healthcare less expensive, more efficient, and more equitable. Here are four reforms they should avoid at all costs.
System: Free basic medical care provided by the government, with a byzantine and under-regulated employer-based private insurance market
Reform: Before it collapsed, the Soviet Union had an enormous socialized medical system, with millions of hospital beds and hundreds of thousands of healthcare workers. The transition from that system to a public-private model, between 1989 and 1993, went, in a word, horribly.
Ninety percent of Russians are technically covered. But, doctors and hospitals extract “donations” for free care. Anyone who can afford it pays out-of-pocket for private hospitals and doctors. In theory, consumers can pick their own insurance plan. In reality, their employers generally do it for them, bought-off by the insurers.
In 2006, Vladimir Putin’s government approved a $3.2 billion health care reform plan that failed to improve the system. The reform contained a hodgepodge of policy priorities, such as paying doctors to perform primary care, but did not address any of the healthcare system’s structural defects.
Even with the $3.2 billion infusion, Russia still allocates only 3.4 percent of government spending to healthcare, whereas the World Health Organization (WHO) recommends 5 percent.
System: A state-subsidized, public-private health insurance model
Reform: Starting in the late 1980s, China started to erode its centralized “cooperative medical system” and put a decentralized, partly privatized, market-oriented model in place. In theory, most Chinese were to pay income-scaled and government-subsidized sums into insurance pools.
But the reforms pushed costs onto local governments that were unwilling to pay for them. Government spending on healthcare fell. More than 100 million people lost their coverage.
Now, two-thirds of Chinese people have to pay directly for doctors and hospitals. If they cannot afford care, there are some free and low-cost clinics, though they are woefully substandard. Less than 1 percent of Chinese medical professionals have graduate degrees. China’s system, which is burdensomely expensive for the poor, is one of the most income-sensitive in the world.
This year, the country announced a new overhaul. As with everything in China, it’s big: Between 2009 and 2011, it plans to spend $124 billion to make sure that all have access to primary care. The government plans to build 700,000 new clinics, for instance. Plus, President Hu Jintao has promised to revamp the health insurance system, ensuring that each Chinese person pays something he or she can afford for the guarantee of coverage.
System: Socialized medicine, with universal coverage and government-owned hospitals
Reform: In 2003, “President for Life” Saparmurat Niyazov decided that poor, landlocked Turkmenistan’s medical costs were too high and that its healthcare system urgently needed reform. The country had already suffered from a shortage of doctors, and the only qualified ones were in cities, Niyazov said on a public radio address.
So, in a frankly insane healthcare reform effort, he restricted the public’s access to care by replacing up to 15,000 doctors and nurses with unqualified military conscripts. The next year, he ordered hospitals and clinics outside of the capital, Ashgabat, to close — even though the vast proportion of Turkmenistan’s population lives in rural areas. The BBC quoted him as saying, “Why do we need such hospitals? If people are ill, they can come to Ashgabat.” He also implemented fees and created an “unofficial” ban on the diagnosis of certain communicable diseases, like hepatitis.
As a result, an epidemic of the bubonic plague reportedly broke out (Turkmenistan’s highly secretive government does not allow in organizations like the WHO) and existing rashes of AIDS, hepatitis, and tuberculosis worsened. At the time of Niyazov’s death from a cardiac infarction in 2006, Turkmenistan had one of the lowest life expectancies in Asia — less than 60 years.
Only after Niyazov’s death did the edicts end and hospitals reopen — dentist-turned-President Kurbanguly Berdymukhamedov even performed an operation himself at an opening ceremony — though fatalities from easily treatable conditions remain woefully high in this impoverished country.
System: Employer-based private coverage, with an under-regulated private insurance market, and
government-subsidized public plans for the poor, elderly, and disabled
Reform: The United States has the rare distinction of being both one of the world’s richest countries and having one of its least-functional health care systems.
Americans spend around one in every six dollars on healthcare. But, in aggregate, they’re not getting much bang for their buck. People in the United States are as likely to die from diseases like lung cancer as citizens in all OECD countries – which, on average, spend less than half as much per capita. Some 47 million lack any health insurance coverage. An estimated 600,000 people file for bankruptcy every year because they cannot pay their medical expenses. Indeed, the United States is the only rich country without universal coverage.
The U.S. government has repeatedly tried to create a more coherent plan and to make sure more Americans are insured. Reformers have scored piecemeal victories — such as the 1997 creation of the State Children’s Health Insurance Plan, or Massachusetts’ recent implementation of universal coverage.
But for the most part, the history of health reform in the United States has been a history of failure. The last attempt at comprehensive reform — the 1993 bill derided as “HillaryCare,” during the administration of Bill Clinton — floundered in Congress. Since then, costs and premiums have doubled, a lower percentage of employers offer coverage, and millions more are uninsured.
Efforts at healthcare reform have tended to be derailed by partisan politics — and last week, Senate Republican Jim DeMint promised to make the issue President Barack Obama’s “Waterloo.” But with Democrats in the White House and enjoying a Senate supermajority, healthcare reform looks more likely to pass now than at any other time in recent history. Let’s just hope it works this time.
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