"Look Where the Money is Flowing"

New Developments in European Health Care

by Daniel Hauser, M.D., Switzerland

There seems to be a consensus that health care systems in the industrial countries have changed tremendously in the course of the past few years. Newspapers from all those countries headline the question of how to stem raising health care costs. As patients we become aware of these rising costs when we are confronted by the increasing premiums of our health care insurances. While paying higher and higher premiums, we are also having to accept poorer service and greater restrictions. Politicians – independent of party leanings – announce in their speeches that we are facing an "explosion" in health care costs, but no one dares to raise the question what the real costs are.1 How is it possible that net profits of health care insurance companies run to millions, while at the same time they argue that premiums must be raised due to "rising costs"? Dr. Fred Nahas answers this question by simply saying: Look where the money is running and then you will understand why.

The state of any country's health is measured by the child mortality rate, life expectancy, the number of facilities like hospitals, and physicians in private practices. In addition, the doctor's quality of education is frequently taken into account as well. In medical science a certain kind of "noble competition" exists among industrial countries. However, the question whether all patients in a country or just those who can afford some kind of medical treatment is usually not measured. Here significant differences exist. Switzerland, for instance, has long been proud of its well developed health system to which every one has access, no matter what his or her income or social background is. Everyone has access to high quality medical treatment. Unfortunately, only few realise that this access is going to be limited and that this is a development which is in various stages of progress in nearly all countries. All Italians, for example, have to pay their regular premium (except for children and old age pensioners) and if they intend to consult a specialist for a particular illness, they have to pay the consultant out of their pockets unless they have additional private insurance. Many Italians complain that the general service level is fairly poor and are therefore even prepared to travel abroad to get treatment, e.g. in Germany or Switzerland, whenever they can afford it. There is a similar situation reported in Germany, where the quality of treatment can vary greatly depending on whether one has a general or private medical health insurance policy.

Articles have also appeared in European newspapers on the recent consequences of the National Health Service (NHS) in The United Kingdom. To alleviate severe deficits in British medical care foreign doctors from other European countries have been temporarily employed. The operations carried out by these doctors on British patients serves to shorten the disgracefully long waiting lists for surgical treatment. In a Swiss medical journal there was a note that a patient finally received notice that he could have heart surgery. He had already died several months earlier. At the same time, patients with additional or "private" insurances are almost able to choose their treatment date. Clearly, a trend is emerging according to which patients are being segregated either into a group of wealthy patients, who are treated far more obligingly, or into a group of second class patients.

The state of a country's health used to be a subject of major interest for members of the government and parliament. Great investments in health systems were made, for hospitals, medical education and scientific research, etc. In many countries, health insurances were a sort of social security on a non-profit basis. In accordance with regulations of the World Trade Organisation (WTO), whereby every signed member has to fulfil distinct criteria, many countries liberalized their health systems. This meant that health insurance was no longer the terrain of non-profit organisations controlled by the state, but began to be subjected to the same mechanisms as any other business. Politicians argued that competition among health insurances would lower premiums. But the exact opposite happened. In the United States where this liberalism in the health care system started much earlier than in European countries many millions of US citizens cannot even afford very basic health insurance. Health insurance companies not only began to earn a lot of money, at the same time they even started to influence medical treatment. Doctors were no longer free to treat their patients to the best of their knowledge and experience. While this development is far more advanced in the US the same development has started in many European countries: Many insurances force their patients to first consult a designated doctor (also called gate-keeper). Such gate-keepers only receive payment if he or she does not refer too many patients to a specialist or hospital for further treatment. There is also a tendency to stipulate that some illnesses can only be treated in hospital for a certain number of days. Although insurance companies still have to pay for any hospital treatment of illnesses, they already demand detailed arguments for longer hospital stay.

Traditionally, we think of insurance as a means to protect ourselves from the unexpected expense of loss or damage. In the case of car insurance, we pay premiums every year to cover any damage that is done to our car. Imagine what would happen if the car insurance evaluator went to the garage and told the mechanic what tools to use, what paint to use and only allowed him a short period of time in which to complete all the repairs. This would never happen in the real world. People want their cars repaired properly, with the best materials available and are prepared to allow for whatever period of time is required to do the job correctly. Why should patients be treated differently?

Health insurances have increased their profits tremendously. As a result, there is no real lack of financial means for public health. Those means are distributed badly. If the flow of money is looked at carefully it is easier to understand why the health care system is "diseased".

There is no question that the consequences of this liberalism in the health care system have already progressed far more in the US than in Switzerland, Germany or any other European country. Switzerland, however, did not sign the WTO agreement until 1995. It is interesting that many arguments used in favour of liberalising the US health care system at the time are very similar to those of the movement to liberalise the health care systems in European countries. Thus, reading the article by Dr. Fred Nahas provides us with something of a glance into the future.

1 In Switzerland there is no proof as to whether there is an "explosion" in health care costs as frequently indicated by the government and other "experts". When evaluating real costs, according to statistics published by the Federal Office, it is clear that there has been a continuous (linear) increase for the last 40 years, i.e. since 1960. This means that no link exists between the exploding monthly premiums people are now being forced to pay and health care costs.