My visit to London a few months ago provided valuable lessons about the United Kingdom (UK) and its European Union (EU) neighbors. What was once unimaginable is happening: Europe’s citizens, who once held fast to socialized medical care, are letting go.
After generations of suffering long waiting periods for timely medical care, rationing of medical procedures, and financial exhaustion from high income taxes and a 17.5 percent value-added tax, a growing number of EU citizens are seeking movement toward the free market Americans tend to take for granted. Private health insurance and medical care are coming to be seen as an important part of Europe’s health care systems.
While in London, I met with the director of an influential think tank, Eammon Butler, Ph.D., of the Adam Smith Institute. Years ago I wrote an analysis of the UK National Health Service (NHS), so I was not surprised to hear that a significant portion of government funding directed to the NHS never makes it to patient care. “The money goes to the bureaucracy,” said Butler.
Not all medical care in the UK, however, can be considered a failure. It appears the most effective aspect of their system is also its greatest problem: a disproportionate share of spending goes to the least expensive primary or preventative care sector, leaving catastrophic health care, like cancer care, short of funds and long on patient angst.
This observation was reinforced during my meeting with Nick Bosanquet, professor of health policy at London’s Imperial College. An author and international speaker, Bosanquet said, “Our performance on the killer diseases is particularly alarming. Survival rates for cancer are far higher in the U.S.”
Private Sector Advantages
In response to major funding problems, some EU governments are turning over portions of public health care to the private sector for financing with private health insurance, as well as loosening the chokehold of government-owned hospitals and government-salaried physicians.
These experiments allow patients to break away from the government monopoly. It’s a bit early to predict, but I am willing to bet the growing demand for freedom of choice in health care will ultimately trump socialized medicine.
Bosanquet and I spoke of the similarities and differences between our health care systems, noting that unlike Canada, where it is illegal to own private health insurance that competes with government health care, the UK and EU have no such restrictions. The door is open to competition.
Bosanquet also pointed out some UK health services are now being delivered by private providers. Services for people with learning disabilities involve private and volunteer providers; dental care is mostly private; the majority of long-term care is provided in private facilities; and 40 percent of in-home care services are offered by private caregivers.
The Stockholm Network, a European think tank that advocates market reforms, released a survey last year showing patients across eight countries in Europe were losing faith in their socialized health plans. More than four in five of the 8,000 interviewed expressed a willingness to travel across borders for medical care.
Growing discontent with some European national health systems also is reflected in the trend toward private health insurance, once a rare option in countries with socialized medicine.
The best figures available to me are from 2003. That year, citizens of the UK spent $7.7 billion on private health insurance products. Private medical insurance covered 12.7 percent of the population. Interestingly, 8 percent had “cash plans,” which are very similar to our health savings accounts.
Thanks to the Internet, Europeans are witnessing the power of free markets in other countries. EU consumers know more than they used to about how it is possible to be treated better and how many more medical procedures are available in a timely manner elsewhere.
Some Europeans use the Internet to shop around for medical services in the United States as well as other less-restrictive health care environments, where waiting nine months for joint replacements is not the norm. It is becoming more common for an English patient to get on a plane and fly to Spain to get a knee replacement in two months, or fly to St. Louis and get a knee replacement in three weeks.
And, like U.S. consumers, those in the EU can now compare prices across borders, since half of Europe uses the same currency. The EU requires member countries to allow the free flow of goods, services, and people across national borders. For decades, health care was excluded.
Such “comparison-shopping” was not available until January 2002. But the common currency, the euro, is now part of daily life for more than 300 million Europeans–a demographic very close to our own.
The trend toward more private health insurance and medical care choices in the EU is in stark contrast to what we see happening in our own country.
While enlightened Europeans seek out the success of privatization and free markets, national health care devotees in the United States would return us to the dark ages.
Conrad F. Meier was senior fellow in health policy for The Heartland Institute and editor emeritus of Health Care News. He passed away unexpectedly on March 18, 2005.