In the past year, the seeming incapability of the US health system to deal with the COVID-19 pandemic with the same efficiency as other developed nations has reignited a debate about the need and possibility of health care reform. This article will delve into the current state of the US healthcare system and portray the pros and cons of the healthcare plans of other comparable nations.
The Current US Healthcare System
Despite spending much more than any other country on healthcare, the US healthcare system has achieved a mixed bag when it comes to outcomes for its patients. Healthcare expenses accounted for 17.7% of the US GDP in 2018. These expenditures come from a mix of private and public sources, with a majority (55%) of health insurance being voluntarily provided by employers. The government only provides insurance for certain groups, such as people with disabilities, people at or near the poverty line, veterans, and the elderly.
The US does not have universal health care, but nearly 92% of the US population currently has private or public insurance, or even both. Still nearly 30 million Americans remain uninsured, and many cite the prohibitively high costs of healthcare as reasons to avoid visiting the doctor even when they are sick.
Out of pocket expenses in the US were also the 2nd highest among OECD (Organization for Economic Cooperation and Development) nations, second only to Switzerland.
Moreover, the US also has the lowest life expectancy of the OECD nations - a full 2.1 years below the OECD average - as well as the highest suicide rates, the highest rate of obesity, the highest chronic disease burden, visit the doctor less often, and has the fewest doctors per capita of the OECD nations.
As such, it is no surprise that the US has not had the same success in combating the COVID-19 epidemic as efficiently as its peer nations. To date, as of July 31st, 2020, the US has had over 4.5 million reported cases and 152,000 deaths as a result of COVID at a mortality rate of 3.4% according to Johns Hopkins University. It can be argued that this is more a result of unwise personal decisions by many Americans and the government than an actual failure of the US medical system.
Despite this, the one metric in which the US healthcare system outperforms is peers is in prevention, with a relatively high percentage of the senior population being immunized and a similarly high percentage of middle-aged women being screened for Breast Cancer. In fact, the US is similarly excellent at the treatment of Breast Cancer as well, with the highest 5-year survival rate from Breast Cancer of any OECD nation.
The Canadian Healthcare System
Often lauded as one of the best in the world, Canadian Medicare, Canada's universal health care system, is a publically funded, single-payer healthcare system funded mostly through taxes, and is a source of pride for many Canadians. Each province in Canada is responsible for creating their own healthcare system with funding from the federal government, and the Canadian healthcare system is able to provide quality healthcare despite spending less per capita than the US. Similar to the US, physicians in Canada are private providers.
Canadian Universal Health Care doesn’t cover everything. Ambulances, certain medications, and dental and vision care need to be paid for out of pocket by Canadian citizens. As such, many Canadian citizens (approximately 67%) choose to supplement their publicly provided insurance with private insurance programs. Still, costs are generally much lower than those of the US Healthcare system.
The main disadvantage of Canadian healthcare is that the wait times are usually longer than those of US hospitals, to the point where wait-times for specialized non-urgent procedures may be considered ludicrous by the majority of American citizens. This complaint also extends across the pond to many European countries
From a COVID-19 Standpoint, Canada has been fairly effective in treating its citizens. As of July 31st, Canada has had less than 120k total cases, but with just under 9,000 deaths, it’s mortality rate of 7.6% more than twice that of the US.
Japanese Healthcare System
Similar to Canadian Medicare, Japan also has universal health care for its citizens and for Japanese residents who have lived there for more than a year. In Japan, medical insurance companies are forbidden from being for-profit companies. The Japanese government guarantees that it will cover 70% or more for all medical procedures. As such, Japan is able to have lower medical administrative costs because Insurance companies cannot turn down people with pre-existing conditions.
For decades, the prices for insurance have been set by the Central Social Insurance Medical Counsel in Japan, through a biennial review of the prices of all drugs and medical procedures in Japan. However, Japanese citizens reportedly overuse these healthcare facilities, with a reported 12.6 doctor visits per year per capita. This is in stark contrast to the 4 doctor visits per year for American citizens.
As a result, Japanese doctors are always swamped with work - and they have to be, as a result of the low profit margins for Japanese hospitals. Moreover, Japanese doctors order the most specialized tests per million in the world to help improve profits. As such, Japan faces the problem of losing some of its doctors to private clinics and other countries such as the US due to low pay, long hours, and extreme stress as a result of Japan’s over-consumption of healthcare resources.
The Japanese health care system is also going to face the problem of it’s increasing elderly population, with more than 34% of its population over the age of 60, as compared to approximately 22% of the US population. This has already led to the portion of Japan’s GDP spent on healthcare to balloon in recent years, and costs are rising in Japan.
Despite this, Japan has been among the most successful countries in its treatment of COVID-19, with roughly 36,000 cases and 1000 deaths to date at a mortality rate of roughly 2.8%. This, however, is definitely, at least partially, attributable to the Japanese culture and lack of a social stigma surrounding mask-wearing in Japan.
Singaporean Healthcare System
Singapore is among the richest countries in the world and enjoys one of the highest GDP per-capita and standard of living. But in addition to this, Singapore also has one of the best healthcare systems, with universal health coverage similar to Japan and Canada. However, unlike those nations, Singapore has a multi-payer healthcare system, which means that there are multiple payment schemes for each doctor visit or treatment. Additionally, Singaporean citizens are allowed to choose private clinics instead of public hospitals if they want even better care. Despite this, Singapore’s healthcare system is highly efficient, costing only 4.5% of its GDP.
Singapore’s healthcare consists of three main programs:
MediShield Life: Universal health insurance for catastrophic expenses
MediSafe: A mandatory saving program in which workers pay 8-10% of their income to pay for out-of-pocket expenses.
MediFund: A final safety net for poor Singaporeans who still cannot cover their out-of-pocket expenses.
The Singaporean government generally allows competition and capitalism to maintain low prices and improve efficiency, but can intervene when the prices become too high. For years, this system has worked well to ensure that Singapore can provide quality and affordable healthcare.
The only downside of the Singaporean healthcare system is its potential inability to finance MediFund in the future, as it is essentially an investment- dependent on the fluctuations of the market and stock prices, and prices have risen slightly in recent years. However, if the government continues to be fiscally savvy, the Singaporean healthcare system is perhaps the least problematic of the systems on this list.
From a COVID standpoint, Singapore has had slightly more than 52k cases, but only 27 deaths. Yes, that’s the correct number. That’s a mortality rate of only 0.05%, far and away the lowest of the four countries in this article.
Key Takeaways:
It’s easy to look at this data and immediately decide that the US healthcare system is antiquated and lags far behind its peers. In fact, many Americans do believe this - according to a recent survey by the commonwealth health fund survey, 23% of Americans surveyed believed that their healthcare system had so much wrong with it that it needed to be completely rebuilt, the highest of any country.
Yet, the truth is not quite as clear-cut.
It is true that the US spends much more than any other country per capita on healthcare, coming it at over 10,000 in 2017, more than double the amount spent by other three countries in this article. However, when looking at the actual spending that patients have to pay out of pocket, the difference is not quite as drastic:
Out-of-pocket expenses per capita, 2017:
Japan - $595
Canada - $722
US - $1122
Singapore - $1273
The high per capita price of American healthcare can likely be attributed to 3 factors: First, the American population is not nearly as healthy as Canada, Singapore, or Japan. Nearly 40% of Americans are considered obese, with a BMI over 30, compared to 26% in Canada, 7% in Singapore, and only 4.4% in Japan. Obesity is known to bring a whole host of other medical problems with it, and it’s likely a large factor in the reason that the US life expectancy is several years lower than its peers. It also plays a role in the expense of the healthcare system, as treating obesity-related diseases adds to the sheer volume of healthcare resources that are used each year in the US.
Secondarily, medications in the US are often much more expensive for consumers than in other countries where the prices are regulated, and there is often a lack of information for consumers regarding the availability of generic brands for medication. This results in US residents having to spend $400 more per capita on medications than Canada or Japan, but it contributes even more to the $10,000 spent by the government per capita as insurance companies, whether public or private, cover much of the cost of the uber-expensive medications. On the other hand though, the US has access to a larger variety of medications than the other nations.
Third, the US performs many more specialized procedures than most other nations. For example, the US has more than 3 times as many MRI machines per million in the population as Canada and Singapore, and performs more than 2 times as many MRIs per 100 as Canada. Japan, however, performs even more MRIs and has more machines than the US, largely due to the aforementioned low profit-margins for doctors and rampant and wasteful overuse of medical resources by its citizens. These procedures are fairly expensive, and are often performed with real need to do so here in the US.
Still, for those that are covered by insurance in the US, the treatment they receive is on par with other industrialized nations, if not better. The US healthcare system is more efficient than its competitors with shorter hospital stays on average for acute treatment such as illness and traumatic injuries - with times that were roughly ⅓ of Japanese times on average. Similarly, residents of the US enjoy more prompt service for specialist care and elective surgeries especially as compared to Canada, with a shocking 30% of Canadians having to wait for more than 2 months for an appointment with a specialist, compared to only 6% of Americans.
Since the US is driven by the market, hospitals are incentivized to improve their services and be efficient or risk losing their customers to other clinics. As such, the US healthcare is much more open to fine-tuning their operations than its counterparts, and care received in the US is likely to be more personal, as hospitals have to keep the satisfaction of their patients in mind.
Additionally, the US sees world-class results in two main areas: breast cancer survival rate, and immunizations. These areas indicate that preventative care is one of the strong-suits of the US healthcare system.
To relate back to the COVID-19 situation, mortality rate is far-and-away a better indicator of healthcare success than total cases: the total number of cases is too largely grounded in the culture of a nation and the policies of its government. COVID-19 deaths should seemingly be correlated to one factor other than strength of care - age demographics.
Percentage of population above 65, 2017:
Singapore - 12.9%
US - 15.6%
Canada - 16.9%
Japan - 27.7%
Compare this to the mortality rate from COVID-19 of these countries:
Singapore - 0.05%
US - 3.4%
Canada - 7.6%
Japan - 2.8%
Clearly, there’s a drastic difference between these values, likely an indicator that the Canadian healthcare system has not been as good at dealing with the pandemic as the US, Japan, or Singapore, at least from a mortality standpoint. This could be due to the fact that the Canadian healthcare system is being overrun by cases due to fewer beds open for acute treatment.
Overall, the US health system is not bad treatment-wise, but has much room to improve when it comes to the actual pricing of these treatments. Private insurance companies and the business interests of the rich and powerful are too deeply entrenched in the medical industry to make an extensive overhaul of the current US healthcare system a plausible option - instead, the fix will have to come from societal and policy changes to combat the currently excessive prices. Over the next couple of generations, societal and governmental attempts will be required to minimize the obesity epidemic in the US. Medical consumers deserve to be more informed of the availability of alternative generic versions of prescribed medications, and the government will have to do more to subsidize medication costs to aid consumers. Similarly, the public deserves to be educated on their options for medical procedures to minimize the unnecessary use of specialized and expensive procedures. These changes should hopefully bring down prices for all Americans, and increase the trust that the most needy Americans have in the medical system. Additionally, some resources should be allocated to a MediFund-like program as a safety net for those who still cannot afford to pay for healthcare, ensuring that everyone has the right to healthcare.
TL;DR - US is one of the only industrialized nations without universal health coverage. The US spends a lot more on healthcare than its counterparts, but its medical industry remains extremely expensive for consumers. Despite this, the actual care of its hospitals and clinics is top-notch. The current system is too deeply entrenched to remove completely, so it’s best to adjust the system through policy and cultural changes to improve the overall health of Americans.
For more information:
I definitely recommend checking out the commonwealth fund for more information
US sources
Canadian Sources
Japanese Sources
Singaporean Sources
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