Healthy systems an elusive asset
HAVING been submerged over the course of nearly 80 years under more than 50 general anaesthetics, one has perhaps earned the right to comment on the state of healthcare and the eternal debate about whether it is a human right or a privilege.
As has been seen in the furore in the US over President Barack Obama’s reshaping of Medicare, healthcare is always and everywhere a vexed issue. In South Africa, we have the pending Competition Commission’s market inquiry into the private healthcare sector, initiated, says the Helen Suzman Foundation, after civil society and members of the healthcare sector raised concerns.
“These concerns centre on suspicions of anti-competitive behaviour, such as the sector’s high costs, and no doubt high profits, which may contravene stipulations in South Africa’s Competition Act.”
Chief among the reservations of the private medical aid industry are that “confidential” information might be revealed. This industry is highly competitive and the fight for
Unscrambling the healthcare omelette in any country is a nightmare
market share is no less bitterly fought than in banking, the automobile industry, retailing and so on.
This begs the question: Should healthcare as a product and service be treated as just another business enterprise subject to normal regulatory frameworks, or should it be treated as a social service funded 100% by taxpayers and available free to everyone? Or should it be a combination of both?
At Harvard University’s school of public health, the well-endowed FXB Centre for Health and Human Rights has focused on this vast moral dilemma since 1992.
There are four major models for healthcare, the least desirable of which is known as the out-of-pocket model. A Johns Hopkins study comments that systems based on this model rely on direct payments from people at the time they need care. They prevent hundreds of millions from accessing services and result in hardship for millions.
In India, 70% of healthcare expenditure is made by individuals in out- of-pocket expenses, whereas only 1% of GDP is spent on national health. Total Indian health spending is just more than 4% of GDP compared with 5% in China and Russia, and 9% in Brazil and South Africa.
In the US, some 18% of GDP is spent on healthcare. In that litigious society, doctors and hospitals can pay heavily for malpractice cover, although rates are apparently falling. And maybe it just has too many hypochondriacs.
Other models are the Beveridge (the UK and Cuba), the Bismarck (Germany, France, Belgium, the Netherlands, Japan and Switzerland) and national health insurance, which has elements of both Beveridge and Bismarck.
Bismarck-type health insurance plans have to cover everybody. They do not make a profit and they have no marketing expenses. Doctors and hospitals tend to be private in Bismarck countries. Although this is a multi-payer model — Germany has about 240 different funds — tight regulation gives the government similar cost controls to those in the single-payer Beveridge models.
The single payer (the state) tends to have considerable market power to negotiate lower prices. The classic national health insurance system is found in Canada, but some newly industrialised countries — Taiwan and South Korea, for example — have also adopted this model.
Unscrambling the healthcare omelette in any country is a nightmare. Those who believe that a free market in ideas, innovation and the pursuit of rewards results in better outcomes want the state to play as passive but constructive a role as possible. Certainly, the development of new drugs, medical equipment, techniques and treatments has taken place principally in societies in which the pursuit of financial return is the norm. As Ayn Rand taught, before wealth can be distributed, it must be created.
Now I am off to have my pacemaker replaced. Its technology originated in the UK, Australia, the US and Canada.