Americas Health Care System – The Last Thing We Need is A European Model

By Bill Steigerwald
Its hard to find anyone who likes Americas health care system, including John Goodman, president and founder of the National Center for Policy Analysis. But youll never find Goodman saying that health care is better in places like Europe, where socialist governments provide free universal health care for everyone.

Goodman dubbed the father of Health Savings Accounts by The Wall Street Journal has written nine books, including Handbook on State Health Care Reform and Patient Power: Solving Americas Health Care Crisis.

To find out what he thinks Americas health care system should look like and why Europes government health systems are the last things we should copy Bill Steigerwald called Goodman on Wednesday, Feb. 11, at his offices in Dallas:

Q: Many people mostly people who think health care should be provided free to everybody by the government point to Europe as a model. Should they?

A: The people who praise European health care say that the average country in Europe spends half as much as we do and they have very similar health outcomes. What they dont tell us is that the typical European country is disguising costs, shifting costs, to hide what it really spends. And if we look over the last 40 years at the average spending per person in real terms, the growth rate in the United States is right at the European average.

Q: How does what Europeans get for their money compare with what Americans get for their money?

A: Well, life expectancy looks as good or better in Europe than it does in the United States. But life expectancy is primarily determined by genes and how people live their lives, not by doctors and hospitals. If you look at things that doctors can do something about, like cancer, and you ask, What is the five-year survival rate for major forms of cancer?, we are the best in the whole world.

Q: Do you have the sense that most Americans know what Canadian or European health care systems really are like?

A: No. Americans dont think about the health care systems of foreign countries. But the health policy community is heavily dominated by people who would like to socialize the entire American health care system. They are constantly pointing to the health care systems of other countries and claiming that those systems work better than ours.

Q: Are they blind to the facts or what?

A: Remember, we are at sort of a stalemate. The people who would like to have national health insurance have not won. They havent eliminated private-sector health care in this country. So were at an impasse. I do believe we need reforms but they need to be pro-free-enterprise reforms.

Q: What is a market-driven reform you would like to see?

A: Our institute originated the idea of the health savings account. There are 12 million people now managing their own health-care dollars. That seems to be working very well and those types of plans are growing very fast. Wed like to see consumers control more dollars and we think that wherever the patient is in control of dollars the markets work better. When patients are managing their own dollars, they are more careful, more judicious consumers. They compare prices. That helps the employee but that also helps the employer.

Q: Is there anything in European health care systems that we can copy or at least learn from?

A: Were always looking at what is happening in other countries. There are some interesting models. I think the most interesting model outside the United States is the Swiss health care system. In Switzerland, everyone is required to have health insurance but its mainly private insurance. Its also individually owned and portable insurance, so people can take it with them from job to job. I think in our own country were going to have to go to a system of individually owned portable insurance because I think the employer-based system probably cant survive in its current form.

Q: One of the problems in Europe that most people here do not know about is that theyre promising a lot more health care in the future than they are going to be able to pay for. Can you explain what the problem is over there?

A: Looking to the future, Europe is in worse shape than we are because they have promised health care to everybody; they have aging populations; they have health care costs rising at twice the rate of growth of income, just like we do; and they have put no money aside there is no saving, no investment for future health care spending.

Basically, the average European country has an unfunded liability in todays dollars thats four times the size of its national economy.

Q: Obviously, something is going to have to give. What is most likely to give?

A: When you make promises you havent funded and were going to have the same problem here as well you either have to raise taxes or cut benefits or do both. There will be some combination but theres going to be a lot of pain. The pain is that retirees are not going to get all the health care they thought they were going to get and taxpayers are going to get hit with a higher tax bill than they thought they were going to pay.

Q: On your blog someone asked if 21st-century democracies are capable of creating a fiscally sound set of social welfare programs that dont cannibalize or wreck their own economies in the long run. How would you answer that?

A: Were going to find out. On the plus side, about 30 countries have reformed their social security retirement plans. Chile is the most notable, but 29 other countries have also created private (social security) accounts and are in the process of reform.

But no country has really tackled the health care problem and set up a way that people can pre-fund the health-care expenses that they know they will have in their retirement years. Well see if the countries can do that and still remain democracies.

Q: And are you an optimist or a pessimist about this?

A: Well, you have to be an optimist. Why would I be doing what I am doing?

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