A few days ago Ben (channeling Paul Pierson) posed the provocative question: does the welfare state still matter? Because welfare states are so complex in structure and function, it’s unlikely that there is a single answer across all domains of policymaking. But at least in one domain – the provision of health care – the answer is an unambiguous “yes.” This article (available without subscription) in the latest Health Affairs describes how adults in eleven developed countries experience the quality and affordability of health care. A catchier title for this article could be: “Health Care in America is More Unequal and Difficult to Access, But at Least it Also Costs More.”
To briefly summarize, a random sample of respondents in the United States, Canada, Australia, New Zealand, the UK, and six western European countries were asked to rate their ability to see different types of providers, their out-of-pocket spending burden, and problems using their health insurance. The study shows considerable between country variation across all of the questions, reflecting the differences in cost-sharing and resource allocation in each coverage system (for example, longer waiting times in Canada and Norway, more administrative complexity in Germany and the United States). These findings confirm what we have seen in other prior surveys that look at national averages.
The authors take the further step of stratifying the sample by self-reported income groups to compare experiences within countries (To my knowledge, this is the first study to do so). It is worth noting how little variation there is between the upper and lower income groups in single-payer systems such as the UK and Canada. The United States – with a patchwork system of completely private payers, some means-tested programs for the very low-income, and universal coverage for the elderly, has the largest disparity between groups: “Although experiences varied by income in several countries, overall, the United States stands out for persistent and wide differences by income, with more negative experiences for those with below-average incomes.”
The study puts to myth the common misconception among Americans that the cost to greater regulation by the state is less access for everyone. The authors point to Switzerland as an example where regulation is high, but there are few access problems: “Switzerland has relatively high deductibles and cost sharing. Yet annual limits and exemptions, combined with transparent pricing and billing, appear to allow the Swiss to budget for health care costs and avoid insurance disputes or surprises. Swiss fee-for-service payments by insurers to doctors are the same within a geographic area, regardless of patients’ incomes, which promotes equity.” Rationing in such a system is accomplished not by explicit supply side restrictions, but by making consumers more sensitive to the marginal cost of health care. My own feeling is that this would be a desirable direction for American health policy, but as others (such as Jon Gruber) have noted, America has to fix the access problem before it can aggressively work on cost control.
There is also an important lesson in this article about the politics of health care systems: even if the current regime is clearly suboptimal, moving to some more progressive alternative can entail disruption for those who already get what they need. A nice piece in the New Yorker explains why the elderly, who already have comprehensive coverage, are the demographic group with the lowest opinion of this year’s health reform legislation. The point can be generalized: people with higher incomes in the United States have fairly good access to health care and don’t experience health care as unaffordable, while lower income people live under considerable risk and uncertainty. Not surprisingly, upper income Americans are much more likely to oppose the new health care law, and to believe that it is excessively regulated and redistributive. Observers may say that wealthy Americans are self-interested and uncaring about the plight of others, but the larger truth is that upper income Americans don’t perceive the access problems of their low income fellow citizens, because for the most part they don’t truly participate in the same health care scheme. For American health care to become progressive, it has to become desegregated first.