Romney praise of Israeli system draws unfavorable contrasts with U.S.
While eyes around the planet last week were focused on the London Olympics, U.S. politicians were providing truly world-class entertainment on healthcare. Let us focus on Mitt Romney, the presumptive Republican presidential nominee. Romney has been all over the map on healthcare issues, and last week he was all over the globe on the same. On a grand tour of Europe, Romney raised eyebrows with his sometimes puzzling, anti-diplomatic remarks. When he made a stop in Israel, some statements attracted the attention of healthcare policy aficionados.
Romney, of course, is the former Massachusetts governor who signed the state’s landmark health reform law. It’s a plan based on conservative proposals from the 1990s and is the forerunner of the Patient Protection and Affordable Care Act, often referred to derisively as Obamacare. Despite his advocacy of the state law, Romney is now running away from it because the GOP detests the model plan for Obamacare. And, as we have pointed out repeatedly, the conservatives who once championed exchange-based schemes with individual mandates have turned against their own proposals since they were adopted by President Barack Obama.
So when Romney praised Israel’s performance on healthcare, it evoked some cognitive dissonance.
“Do you realize what healthcare spending is as a percentage of (gross domestic product) in Israel? Eight percent. You spend 8% of GDP on healthcare. And you’re a pretty healthy nation,” he said at a fundraiser, according to the New York Times. “We spend 18% of our GDP on healthcare, 10 percentage points more. … We have to find ways—not just to provide healthcare to more people, but to find ways to fund and manage our healthcare costs.”
It’s not clear how much Romney knows about the Israeli health sys- tem, but he probably wouldn’t endorse it if he did—and at the same time wanted Republican votes. That’s because the Israeli system is heavily regulated and funded by government. The system derives its revenue mostly from a progressive payroll tax and general revenue. The state is responsible for providing health services to all residents. Some in the U.S. would denounce it as socialized medicine. Don’t like the individual mandate here? All Israelis are required to carry insurance and must choose from one of four competing, not-for-profit health maintenance organizations. The government requires the plans to cover everyone regardless of health status (no pre-existing condition exclusions there), and it sets the benefits package the policies must provide.
According to a September 2011 report in the journal Health Affairs, the insurance plans have to provide coverage within the budget set by government. Most care is delivered through government-owned facilities, and the government sets a cap on hospitals’ annual revenue from each plan.
In contrast, the ACA’s cost-containment provisions are tepid.
And do the Israelis like their system? The Health Affairs article describes a “very high level of public satisfaction.” Israel had the fourth-highest life expectancy of any country from 200510, according to the United Nations. The U.S. came in at No. 38.
We don’t know what Romney may have learned in Israel, but a couple of lessons from that nation and other advanced countries could be applied here. Countries that ensure universal access to care achieve better health outcomes. Because everyone is in the system, all parties— patients, providers, insurers, government—have a stake in controlling costs and manage to do so far better than the U.S.
So in the healthcare Olympics, America is spending lots of gold but winning very little.