Health Economics & Health Economics & PolicyPolicy33rdrd Edition Edition

James W. HendersonJames W. Henderson

Chapter 16Chapter 16

Medical Care Systems Medical Care Systems WorldwideWorldwide

International International ComparisonsComparisons

Who’s got the best systemWho’s got the best system Key statisticsKey statistics Health care spendingHealth care spending Medical outcomesMedical outcomes

WHO Health Care WHO Health Care System Performance, System Performance,

19971997

Health Responsiveness

Level

Distribution

Level

Distribution Financial Fairness

Goal Attainment

Overall Performance

Canada 12 18 T7 T3 T17 7 30 France 3 12 T16 T3 T26 6 1 Germany 22 20 5 T3 T6 14 25 Japan 1 3 6 T3 T8 1 10 United Kingdom

14 2 T26 T3 T8 9 18

United States 24 32 1 T3 T54 15 37

Key StatisticsKey Statistics

2001

Canada

France

Germany

Japan United

Kingdom United States

Population (millions) 31.1 59.2 82.4 127.1 58.8 284.8 GDP per capita1 28,811 26,879 26,199 26,652 26,315 35,182 Health Expenditures Health care spending per capita

2,792 2,561 2,808 1,9843 1,992 4,887

Health care spending (percent of GDP)

9.7 9.5 10.7 7.63 7.6 13.9

Medical Services Number of physicians (per 1,000)

2.1 3.3 3.3 1.93 2.03 2.74

Number of hospital beds (per 1,000)

3.23 6.73 6.3 16.55 3.9 2.9

Average length of stay (days)

7.23 8.53 9.3 40.85 7.0 5.8

Medical Technology2 CT Scanners 9.5 9.63 17.16 84.44 6.24 13.13 MRI Units 3.5 2.63 6.26 23.24 4.64 8.13 Lithotripters 0.4 1.03 1.76 4.07 - 2.93 Patients undergoing dialysis

45.74 - 64.03 162.43 27.04 86.54

Source: OECD Health Data 2003, OECD, Paris, 2003. 1. In U.S. purchasing power parity (PPP) dollars—the exchange rate where different currencies buy the

same bundle of goods. 2. Per 1 million population. 3. 2000 4. 1999 5. 1998 6. 1997 7. 1993

Health Care SpendingHealth Care SpendingAnnual Compound Growth RatesAnnual Compound Growth Rates

Canada France Germany Japan United Kingdom United States Component 1980s 1990s 1980s 1990s 1980s 1990s 1980s 1990s 1980s 1990s 1980s 1990s

Nominal health care spending 9.64 3.89 9.64 3.82 4.19 6.87 4.73 3.83 8.91 6.80 9.78 5.76 Nominal per capita health care spending

8.47 2.89 9.06 3.48 4.11 4.12 4.19 3.57 8.78 6.58 8.90 4.59

Real health care spending1 3.76 2.23 4.61 2.38 1.24 6.213 2.53 3.203 2.04 2.613 2.82 2.38 Real per capita health care spending1

2.65 1.25 4.08 2.04 1.16 2.103 2.01 2.943 1.89 2.423 2.00 1.24

Real health care spending2 4.68 2.55 3.59 2.31 1.63 4.95 2.94 3.52 3.13 3.82 5.69 3.76 Real per capita health care spending2

3.57 1.57 2.72 1.97 1.54 2.24 2.42 3.26 2.97 3.61 4.84 2.61

Note: Measurements based on changes denominated in national currencies. Source: OECD Health Data 2003, OECD, Paris, 2003. 1. Spending adjusted by the 1995 medical expenditures deflator. 2. Spending adjusted by the 1995 GDP price deflator. 3. 1990-1996.

Health Outcomes, 2000Health Outcomes, 2000

Life Expectancy at Birth1 Life Expectancy at Age 801 Country

Males

Females

Males

Females

Infant Mortality

Rate2 Canada 76.7 82.0 7.8 9.7 5.3 France 75.2 83.0 7.4 9.3 4.6 Germany 74.73 80.73 6.83 8.33 4.4 Japan 77.7 84.6 8.0 10.6 3.2 United Kingdom

75.4 80.2 6.9 8.6 5.6

United States 74.1 79.5 7.6 9.1 6.9 Source: OECD Health Data 2003, Paris: Organization for Economic Cooperation and Development, 2003. 1. In years. 2. Perinatal deaths per 1,000 live births. 3. 1999.

Total HCE/GDP, 1970 - 2000Total HCE/GDP, 1970 - 2000 1970a) 1980 1990b) 2000c) 1970-80 1980-90 1990-00 Australia 5.6 7.0 7.8 8.3 1.4 0.8 0.5 Austria 5.3 7.6 7.1 8.0 2.3 -0.5 0.9 Belgium 4.0 6.4 7.4 8.7 2.4 1.0 1.3 Canada 7.0 7.1 9.0 9.1 0.1 1.9 0.1 Czech Republic

.. .. 5.0 7.2 .. .. 2.2

Denmark 8.0 9.1 8.5 8.3 1.1 -0.6 -0.2 Finland 5.6 6.4 7.9 6.6 0.8 1.5 -1.3 France .. .. 8.6 9.5 .. .. 0.9 Germany 6.3 8.8 8.7 10.6 2.5 -0.1 0.7 Greece 6.1 6.6 7.5 8.3 0.5 0.9 0.8 Hungary .. .. 7.1 6.8 .. .. -0.3 Iceland 4.9 6.1 7.9 8.9 1.2 1.8 1.0 Ireland 5.1 8.4 6.6 6.7 3.3 -1.8 0.1 Italy .. .. 8.0 8.1 .. .. 0.1 Japan 4.5 6.4 5.9 7.8 1.9 -0.5 1.9 Korea .. .. 4.8 5.9 .. .. 1.1 Luxembourg 3.6 5.9 6.1 6.0 2.3 0.2 -0.1 Mexico .. .. 4.4 5.4 .. .. 1.0 Netherlands 6.9 7.5 8.0 8.1 0.6 0.5 0.1 New Zealand

5.1 5.9 6.9 8.0 0.8 1.0 1.1

Norway 4.4 7.0 7.8 7.8 2.6 0.8 0.0 Poland .. .. 5.3 6.2 .. .. 0.9 Portugal 2.6 5.6 6.2 8.2 3.0 0.6 2.0 Slovak Republic

.. .. .. 5.9 .. ..

Spain 3.6 5.4 6.6 7.7 1.8 1.2 1.1 Sweden 6.9 9.1 8.5 7.9 2.2 -0.6 -0.6 Switzerland 5.6 7.6 8.6 10.7 2.0 1.0 2.1 Turkey 2.4 3.3 3.6 4.8 0.9 0.3 1.2 United Kingdom

4.5 5.6 6.0 7.3 1.1 0.4 1.3

United States

6.9 8.7 11.9 13.0 1.8 3.2 1.1

Total OECDe

7.2 7.9

OECD 19 Country Averagef

5.4 7.1. 7.7 8.4 1.7 0.6 0.6

Mortality Ratios - Mortality Ratios - CancerCancer

Type of Cancer Country

Colon/Rectal

Breast

Cervical

Prostate

All Sites Except Skin

Canada 40.3 27.8 33.6 20.4 49.6 France 46.0 25.7 34.4 34.1 58.8 Germany 48.2 32.2 36.6 34.4 56.5 Japan 40.9 24.6 26.6 47.6 57.9 United Kingdom 53.0 35.8 41.9 46.0 65.7 United States 39.1 23.2 41.8 17.2 44.8 All Developed Countries

46.6 29.4 35.9 29.4 57.8

Source: J. Ferlay et al., GLOBOCAN 2000: Cancer Incidence, Mortality, and Prevalence Worldwide, Version 1.0, IARC Cancer Base No. 5, Lyon: IARC Press, 2001.

CanadaCanada

Evolution of the Canadian systemEvolution of the Canadian system Single-payer conceptSingle-payer concept Cost-control measuresCost-control measures

– Binding fee schedulesBinding fee schedules– Global budgets for hospitalsGlobal budgets for hospitals– Regionalization of high-tech servicesRegionalization of high-tech services

Canada’s safety valve—private Canada’s safety valve—private travel health insurancetravel health insurance

GermanyGermany

Evolution of the German systemEvolution of the German system Sickness fund conceptSickness fund concept Cost-control measuresCost-control measures

– Institutional frameworkInstitutional framework– Linking health care spending to incomeLinking health care spending to income– Binding fee schedulesBinding fee schedules– System-wide global budgetsSystem-wide global budgets

Germany’s safety valve—private health Germany’s safety valve—private health insurance for upper income populationinsurance for upper income population

JapanJapan

Evolution of the Japanese systemEvolution of the Japanese system National health insuranceNational health insurance Cost-control measuresCost-control measures

– Uniform fee schedulesUniform fee schedules– Service distortionsService distortions

Japan’s safety valve—”gifts of Japan’s safety valve—”gifts of appreciation” to secure treatmentappreciation” to secure treatment

FranceFrance Evolution of the French systemEvolution of the French system System-wide goalsSystem-wide goals

– Spirit of egalitarianism—solidaritySpirit of egalitarianism—solidarity– Respect for individual freedom—liberty Respect for individual freedom—liberty – Minimal state intervention—laissez faireMinimal state intervention—laissez faire

Cost-control measuresCost-control measures– Binding fee schedulesBinding fee schedules– Global budgeting restricting adoption of high-Global budgeting restricting adoption of high-

tech servicestech services France’s safety valve—supplementary France’s safety valve—supplementary

private insuranceprivate insurance

United KingdomUnited Kingdom

Evolution of the National Health ServiceEvolution of the National Health Service Single-payer concept in a socialized Single-payer concept in a socialized

systemsystem Cost-control measuresCost-control measures

– Binding fee schedulesBinding fee schedules– Hospital trustsHospital trusts– PCG budgetholdersPCG budgetholders

British safety valve—private health British safety valve—private health insurance for wait-listed patientsinsurance for wait-listed patients

Promoting EqualityPromoting Equality

Units of Medical Care

Units of Equality

Price Price

P1 S

D1

D2 MCR

MCS

0 0

A B

ET ES ER Q1 Q2

P1

DE

Lessons From EuropeLessons From Europe GermanyGermany

– System of comprehensive, universal coverage is System of comprehensive, universal coverage is expensiveexpensive

– Cost control that includes binding fee schedules Cost control that includes binding fee schedules must also control utilizationmust also control utilization

FranceFrance– Promoting system-wide goals requires tradeoffsPromoting system-wide goals requires tradeoffs– Strict budget controls leads to lower investmentStrict budget controls leads to lower investment

United KingdomUnited Kingdom– Strong primary care covers all sorts of illsStrong primary care covers all sorts of ills– Strict cost controls can lead to long waiting listsStrict cost controls can lead to long waiting lists

The Economics of a The Economics of a Safety ValveSafety Valve

S

D0 D1

PC

P0

QS QD Q1 Q2

P1

A

Price Price

B PC

MC

0 0

Primary Market Safety Valve

Summary and Summary and ConclusionsConclusions

National health insurance does not guarantee National health insurance does not guarantee public satisfactionpublic satisfaction

Health care provided at zero cost offers no Health care provided at zero cost offers no incentive to limit demandincentive to limit demand

Eliminating financial barriers to care does not Eliminating financial barriers to care does not insure equal access to care or eliminate health insure equal access to care or eliminate health differences across subgroupsdifferences across subgroups

If prices are not used to allocate scarce If prices are not used to allocate scarce resources, something else must do so. In health resources, something else must do so. In health care it is often waiting lists and limited access to care it is often waiting lists and limited access to technologytechnology

Safety valves are criticalSafety valves are critical

Public Opinion PollsPublic Opinion Polls

Country

Minor Changes Needed

Fundamental Changes Needed

Completely Rebuild System

Australia2 19 49 30 Canada2 20 56 23 France1 41 42 10 Germany1 41 35 13 Japan1 29 47 6 New Zealand2 9 57 32 United Kingdom2

25 58 14

United States2 17 46 33 Source: 1. Blendon, et al. (1990) 2. Donelon et al. (1999).