Health care: What are America's options?

Despite passing The Patient Protection and Affordable Care Act, or “Obamacare,” the United States remains mired in a health care crisis. Yes, the act did have some notable aspects to it, including coverage for applicants regardless of pre-existing condition. However, the act failed in what its title mainly suggested: that health care would be affordable. Americans spend far more than any of their counterparts in the western world. Now, the United States has some options on how it can tackle the exorbitant costs of health care. One option, which was not politically feasible in the United States, is the single-payer system option. This system is the one used in Canada and Australia's Medicare and the United Kingdom's National Health Service. Basically, the system is mostly funded through tax revenues and all citizens get the same coverage. This, of course, is sometimes referred to disparagingly in the United States as “socialized medicine.”

What this “socialism” does is actually help private business. It frees all businesses from worrying about employee health benefits. This is a significant source of savings for a small business. It also attracts big companies to do business in Canada. The New York Times article "Canadian Autoworkers Ratify Chrysler Deal" explains that American car manufacturers previously opened plants in Canada for the low cost. Two of the main reasons cited were that the companies didn't have to pay their employees’ health benefits and that the dollar was weaker. The dollar is now on par, but the health care advantage remains with our system.

Where does this leave the United States? The U.S. reiterated its pledge to keep health care in the private sector. Now, of course, there are examples the American government will need to follow to make the whole system more affordable. It should look to countries that have private insurance companies, yet provide universal care at a far lower cost, such as Germany and Japan. Japan is a useful example of how a private system can provide for its citizens cheaply and efficiently. NPR's "Japanese Pay Less for More Health Care" explains that Japan spends approximately half the amount the United States does. It also notes that 80 percent of hospitals are private, most doctors own their own business, and insurance is provided through the workplace or community. The government pays for those who can't afford it.

The main difference that keeps Japan's costs low is government intervention in regard to insurance companies and prices. Insurance companies cannot make a profit. Leftover money must go back into the system, either carried over to the following year or used as an indicator to reduce prices. The Japanese government also fixes the price on procedures and drug costs. In an interview with the New York Times, “Health Care Abroad: Japan,” John Campbell, professor emeritus at the University of Michigan and co-author of “The Art of Balance in Health Policy: Maintaining Japan's Low-Cost, Egalitarian System,” explains what the United States could learn from Japan. He says that Japan had the same cost problem in the 1980s. He explains, “...the Japanese government learned how to influence medical care provision without rationing by manipulating how it paid for services….” He continues, “Like France and Germany, it has been able to control costs by tightly regulating multiple insurers.”

Similarly, Germans have their health care mostly funded through payroll taxes and employer contributions. They pay based on the amount they earn. Germans, however, can opt out of this system and buy private, for-profit insurance. However, this dual system does not seem affect the non-profit system; a large majority of Germans still use the semi-public system. This reveals that in a dual system, the private sector will not necessarily leave the public one underfunded and with less quality services.

It appears that the United States will have to follow the lead of other countries or be overwhelmed by an out-of-control spending problem. The legislation passed did create some basic provisions, which will make the transition easier. However, either President Obama or former Governor Romney will need to take some steps to stop the prices from getting out of control. They might follow Japan's model and force companies to put profits back into the system, or they might use Germany's model and have both a payroll and private system competing for clients. Finally, although unfeasible politically, a single payer option would free many companies from health obligations and could create many more jobs—just what the United States needs.


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