List of Countries with Universal Healthcare

Update 1/21/2013: With the Supreme Court’s decision to uphold the ACA (aka Obamacare), and President Obama’s inauguration to a second term today, the US will have universal health care in 2014 using an insurance mandate system.

Thirty-two of the thirty-three developed nations have universal health care, with the United States being the lone exception [1]. The following list, compiled from WHO sources where possible, shows the start date and type of  system used to implement universal health care in each developed country [2]. Note that universal health care does not imply government-only health care, as many countries implementing a universal health care plan continue to have both public and private insurance and medical providers.

Country Start Date of Universal Health Care System Type
Click links for more source material on each country’s health care system.
Norway 1912 Single Payer
New Zealand 1938 Two Tier
Japan 1938 Single Payer
Germany 1941 Insurance Mandate
Belgium 1945 Insurance Mandate
United Kingdom 1948 Single Payer
Kuwait 1950 Single Payer
Sweden 1955 Single Payer
Bahrain 1957 Single Payer
Brunei 1958 Single Payer
Canada 1966 Single Payer
Netherlands 1966 Two-Tier
Austria 1967 Insurance Mandate
United Arab Emirates 1971 Single Payer
Finland 1972 Single Payer
Slovenia 1972 Single Payer
Denmark 1973 Two-Tier
Luxembourg 1973 Insurance Mandate
France 1974 Two-Tier
Australia 1975 Two Tier
Ireland 1977 Two-Tier
Italy 1978 Single Payer
Portugal 1979 Single Payer
Cyprus 1980 Single Payer
Greece 1983 Insurance Mandate
Spain 1986 Single Payer
South Korea 1988 Insurance Mandate
Iceland 1990 Single Payer
Hong Kong 1993 Two-Tier
Singapore 1993 Two-Tier
Switzerland 1994 Insurance Mandate
Israel 1995 Two-Tier
United States 2014? Insurance Mandate

Will the United States join this list in 2014?

[1] Roughly 15% of Americans lack health insurance coverage, so the US clearly has not yet achieved universal health care. There is no universal definition of developed or industrialized nations. For this list, those countries with UN Human Development Index scores above 0.9 on a 0 to 1 scale are considered developed.

[2] The dates given are estimates, since universal health care arrived gradually in many countries. In Germany for instance, government insurance programs began in 1883, but did not reach universality until 1941. Typically the date provided is the date of passage or enactment for a national health care Act mandating insurance or establishing universal health insurance.

System Types:

Single Payer: The government provides insurance for all residents (or citizens) and pays all health care expenses except for co-pays and coinsurance. Providers may be public, private, or a combination of both.

Two-Tier: The government provides or mandates catastrophic or minimum insurance coverage for all residents (or citizens), while allowing the purchase of additional voluntary insurance or fee-for service care when desired. In Singapore all residents receive a catastrophic policy from the government coupled with a health savings account that they use to pay for routine care. In other countries like Ireland and Israel, the government provides a core policy which the majority of the population supplement with private insurance.

Insurance Mandate: The government mandates that all citizens purchase insurance, whether from private, public, or non-profit insurers. In some cases the insurer list is quite restrictive, while in others a healthy private market for insurance is simply regulated and standardized by the government. In this kind of system insurers are barred from rejecting sick individuals, and individuals are required to purchase insurance, in order to prevent typical health care market failures from arising.

US Doctors Are Overeducated

US medical students study for 8 years prior to residency, compared to 5-6 years of study in the rest of the world. This discrepancy increases health care costs by $25 Billion annually without contributing to quality.

In the UK, medical students study for five years after high school before beginning residency. They can expect to become practicing doctors by their late 20’s. This is true in Australia as well, where it’s possible to become a practicing doctor after less than 10 years of post-secondary education.

In much of Europe, medical students study for 4-6 years before beginning vocational training, and this process is slowly being standardized throughout the EU. Finally, in Japan, Brazil, China, India, and many other countries, medical education involves a 5-6 year degree followed by optional specialty training.

Since medical students in the US have a career path two years longer than in most other countries, their initial salary requirements must inevitably be higher to compensate for two years of extra tuition and lost salary. Using a career ROI calculation, it’s possible to estimate that US doctors must be paid an additional $30,000 per year as a result of this additional schooling [1]. With roughly 800,000 physicians in the US, that amounts to $25 Billion per year in additional compensation!

Why does the US stand almost alone in requiring aspiring doctors to study for eight years before training for another 3-8 years prior to practicing medicine? Is it possible that American doctors are better at their profession as a result? In fact, a small number of accelerated six-year medical programs exist in the US, and these programs have extremely competitive admissions. In a 6 year program, typical Bachelors-level general college education is curtailed while still accommodating a full four years of medical school. This model should become the norm rather than the exception, enabling medical students to enter careers more quickly and with less, thereby saving the entire health care system money!

[1] Using the spreadsheet used to perform Career ROI calculations, we can first adjust the medical student’s career path to shorten it by two years. This will raise the NPV and rate of return. We can then lower the expected salary to the point that the NPV is equivalent to the original NPV – the difference in salary is the salary amount made necessary by the extra schooling.

Lowering Healthcare Costs: Supply and Demand

Most discussions around healthcare these days focus on covering all Americans, and on lowering healthcare costs. President Obama has recently focused on the second issue, noting that ballooning healthcare costs could cripple the federal government’s finances and kill economic growth. But how can healthcare costs be reined in? In the partially private US healthcare system, prices are still somewhat subject to the law of supply and demand. Healthcare prices (and therefore costs) can thus be lowered by either reducing demand or increasing supply. Here’s a quick list of ideas:

Increasing Supply:

1. Increase the number of medical professionals. Unemployment among healthcare professionals remains near 1%, far lower than any other field. Increasing the number of medical, dental, and nursing school seats in the US will increase supply over time, creating more balance in the healthcare work force and driving down wage increases.

2. Shorten the length of medical school. Doctors in the UK and other countries finish their medical education in six years or less before going on to training programs (residency), while US doctors spend eight years between college and medical school. Accelerated six year medical programs exist in the US, and there is no evidence that their doctors’ education suffers as a result. Shortening medical, dental, and pharmaceutical programs to six years will increase the supply of practitioners, and decrease the starting salaries they demand since their schooling and debt burden are lower.

3. Doctors aren’t needed for routine healthcare. Nurse practicioners, midwives, pharmacists, and other medical providers can provide much of the routine care needed. National laws (or at least guidelines) making it easier for these practitioners to do their jobs will further increase the supply of qualified medical professionals, driving down prices.

4. Warranties on Medical Care. While pay for quality has been heavily discussed, it is quite difficult to measure and implement in practice. It’s far easier to require warranties on procedures, so that medical providers must provide care free of charge when issues as a result of mistakes during a procedure. Medicare could put this in place, incentivizing the industry to move towards higher quality.

Decreasing Demand:

1. Measure cost effectiveness of treatments within Medicare. As long as Medicare pays for healthcare by quantity, without any regard for cost-effectiveness, expensive and marginally effective treatments will continue to drive health care inflation. Patients should be given the option to pay for treatments that are not cost-effective, should they desire.

2. End employer health care tax deduction. As I’ve previously discussed, this $250B+ subsidy inflates demand, causing price increases for all, including those without insurance. Removing this subsidy would decrease health care spending by up to 10% [1], and could provide funding for other initiatives including universal health care or deficit reduction.

3. End tax breaks on medical goods and services. Sales taxes are generally not levied on healthcare products like the $285B pharmaceutical industry, providing them with a $20B subsidy relative to other goods [2]. Property taxes and income taxes are not collected on many not-for-profit hospitals, though some generate significant income and serve very few uninsured patients. Ending these subsidies would further reduce demand and prices.

4. Enact consistent end-of-life guidelines for Medicare. 27% of Medicare spending (almost $100B) is incurred for patients in their last year of life. While higher costs towards the end of life are expected, there are wide variations in spending in different regions of the US. Enacting a consistent set of guidelines which emphasizes palliative care would help decrease end-of-life healthcare demand.

Why doesn’t this list mention the approaches typically touted like electronic medical records, administrative efficiencies, and the like? Unfortunately, while efficiency improvements would result in one-time reductions in cost, they would not change the supply-demand fundamentals of the US healthcare delivery system. The solutions mentioned above would address these issues, creating permanent decreases in healthcare costs while potentially expanding availability.

[1] $250B is slightly more than 10% of healthcare spending in the US today, so eliminating this subsidy would reduce spending by that amount at most. In practice, the reduction would be somewhat less, since falling prices would cause some offsetting increase in healthcare consumption.

[2] Assuming a 7% sales tax (most states’ sales tax is higher), 7% of $285B is roughly $20B.

US Healthcare Reform: Possible Choices

The United States’ health care system is a patchwork of private care, Medicare for seniors, Medicaid for some of the poor, and emergency-only care for the 47M uninsured. Both presidential candidates insist that change is needed, with increased coverage and decreased costs as primary goals. Neither candidate mentions how public dollars will be rationed, though government resources are limited.

Here’s a list of a range of health care systems in place around the world, with the most market-oriented systems listed first, and the most government controlled systems listed last. The future of American health care will mostly take the form of one of the middle options, as both extremes appear politically unpalatable.

US Health Care System Choices:

Health Care System Description Found Where
Traditional Free Market Little government intervention, patients pay health care providers directly. Those without financial means rely on charity hospitals or receive no care. India, many developing countries
Public Senior Care + Semi-Free Market The government provides health care for seniors, while others rely on a regulated private health insurance market (whether purchased individually or through an employer). United States
Public Care for Children and Seniors The government provides health care for seniors and children, while others rely primarily on the private health insurance market (whether purchased individually or through an employer). Barack Obama’s health care plan approximates this
Mandatory Health Insurance The government requires that all individuals purchase health insurance, and provides subsidies to assist the poor and unhealthy in purchasing coverage. Massachusetts, Hillary Clinton’s Plan
Dual Public-Private System The government provides health care for all residents not enrolled in private care, and provides incentives for employers to provide health care and for individuals to purchase care. Individuals may also pay extra to supplement their basic government plan. Australia
Single Payer, Private Premium Care The government provides health care for all residents, and individuals can choose to pay extra for premium health care services (like private rooms, experimental treatments, etc). France, other European countries
Single Payer Only The government pays for all health care, and does not allow private market health care transactions. Canada