Assembly Holds Hearings on Universal Coverage in California: Day 2 – Health Care Systems in Other Countries

The Assembly Select Committee on Health Care Delivery Systems and Universal Coverage held the second part of its two-day hearing on healthcare delivery systems, focusing yesterday on universal coverage systems in other countries with the goal of informing a universal coverage system in California. Committee Co-Chairs Dr. Jim Wood and Dr. Joaquin Arambula and committee members provided opening remarks with Assemblymember David Chiu challenging stakeholders to use this hearing as a way to “break the status quo” in considering the state’s next steps towards universal health care. Assemblymember Laura Friedman was critical of California’s current healthcare system, calling it a broken system that needs to look towards other developed countries who outperform the United States in providing care to their citizens.

The panel began with an overview of universal coverage systems in other countries, led by Robin Osborn and Sara R. Collins of The Commonwealth Fund highlighting their recent comparative study which ranked 11 industrialized countries’ health care systems. The rankings were determined by measuring access, quality of care, equity, efficiency, and the number of healthy lives in the system. The U.S. spends far more on health care than any other country, with spending levels that rose over the past 30 years so that today 17% of its GDP goes to health care. Even though the U.S. spends much more in health care, we have poorer health and life expectancy than other countries, and placed last in health outcomes.

Due to a highly fragmented health care system, the United States fails to deliver services reliably and effectively to all who could benefit. Our country’s residents have poor access to primary care that leads to inadequate prevention and chronic disease management, delayed diagnoses, lack of treatment adherence, overuse of drugs and health technologies, episodic and costly emergency care, and lack of coordination. Unlike other industrialized countries, affordability and high cost-sharing remain the biggest barriers for Americans, even those with insurance.

If value is the combination of quality and cost, then the U.S. also fails at this and does not get meaningful value from what it spends on health care.

While the U.S. health care system has many serious shortcomings, it does have some strengths, like innovations in health technology and integrated care models, reliable care for high-need and high-cost patients, as well as good patient/doctor engagement.

According the panelists, strong access to primary care is and should be a necessary component of any universal coverage system. The panelists highlighted the Dutch healthcare system, where primary care is a hallmark of their successful universal coverage system. Osborne shared that the most remarkable component of the Netherland’s healthcare system is the strength of their primary care infrastructure, where primary care makes up two-thirds of providers compared to one-third of specialists, and where primary care doctors are paid just as much as specialists. In the United States, those proportions are the opposite.  Under the Dutch system, everyone is registered with a General Practitioner (GP).

Additionally, experts from the Commonwealth Fund discussed various health care system models in a number of countries that achieve universal coverage. They emphasized that universal coverage is a hallmark of many industrialized countries.  They noted that each country had its own political and social histories, as well as unique contexts that ultimately informed their current health care system. It took decades for other countries to completely transition into a universal coverage system: Canada took 60 years, while Taiwan took 20 years.

While a single payer system is often used to describe how other countries achieved universal coverage, in actuality, there are many other models and mechanisms that get those countries to universal health care coverage.

Other countries have efficient health care systems and better population health outcomes because they have a very strong sense of social entitlement and have explicitly stated universality in their values, which translates into their policy making. They see the importance and the role of a social support system that highly complements their health care system even between political parties. While there are slight differences in how each political party in other countries views entitlements, the differences between political parties is not as drastic as that seen in the United States. In addition, many of these countries spend $2 on social support programs for every $1 spent on health care.

Investments in both health and social services that address social determinants of health, such as income support, allow these countries to achieve balance that leaves their residents better off, both economically and in overall health quality and status.

In summary, experts identified five key features of any successful, high-performing health care delivery system:

  1. They all start with a commitment to universal coverage, where health coverage is considered an entitlement.
  2. There is an expectation that the government will have a role. Government involvement varies by system, but the government has an oversight role about standard setting, regulating markets, and setting benefits.
  3. Countries that perform the best have strong primary care systems. For these countries, population health is achieved by making sure every practice has panel of patients where the physicians manage the care of patients over time  rather than providing just episodic treatment.
  4. There is an explicit commitment to equity, which means that all consumers have the same health care. Citing the Swiss healthcare system, where even though consumers are required to buy insurance through nonprofit health plans, the government still provides even low income consumers subsidies to buy the same healthcare as the wealthy person. Everyone becomes a member of the same “pool” of consumers.
  5. Administrative complexity is lower – even with multiple payer sources – and the benefit packages are much clearer (often with a standardized benefit package), leading to consumer education about the system and helping to reduce administrative burden.

Countries that have high-performing health care systems tend to be universal coverage systems. Countries with universal coverage systems can be grouped into two broad categories: 1) publicly financed health care (publicly financed and mostly publicly delivered); and 2) publicly financed health insurance (publicly financed with private insurance as the intermediary and used for service delivery).

  • Examples of publicly financed health care are the United Kingdom (UK) and Canada. Citizens of both countries are entitled to coverage, yet do not provide coverage to undocumented individuals. In the UK, undocumented individuals only have access to emergency care and care for certain infectious diseases. In Canada, some provinces and territories may provide some limited services to undocumented individuals. In terms of financing, the UK finances its system with general taxation and payroll taxes, while Canada finances its system 75% with provincial revenues and 25% with federal revenues. Both countries also have public and private insurance coverage options, despite being publicly financed and delivered.
  • Examples of publicly financed health insurance are the Netherlands and Germany where citizens are mandated to have insurance and have automatic coverage. Their citizens buy insurance from private non-profit insurers, and the federal government sets standards for which benefits are covered. In terms of financing, both countries centrally collect national contributions and distribute them to insurers by risk. Similar to the UK and Canada, the Netherlands and Germany exclude undocumented individuals from buying insurance and only cover certain services for them like acute emergency and maternity care.

These countries with universal coverage systems still have shortcomings like lack of comprehensive coverage to undocumented individuals, limited benefits, and increasing consumer costs. Similar to the ACA, which excluded the undocumented from purchasing insurance through the marketplaces, other countries that claim universal coverage is not truly universal. Instead, they have near-universal coverage systems, which explicitly exclude the undocumented. To control costs, they also use various cost-containment mechanisms including cost-sharing for consumers with caps on out of pocket costs, use global budgets, engage in price controls, like the U.S.  For instance, Canada does not require coverage of prescription drugs or long term care and coverage of these benefits varies by province. Because of this, many people in these countries buy private supplemental coverage to offset costs that are not covered by their system. For example, 84% of Netherlands’ population has supplemental private insurance. The reliance on private insurance also varies, though almost all countries, including Britain and Canada allow some private insurance. How doctors are paid and how hospitals are financed also varies by country: no two countries seem to have the exact same combination of payment systems for providers. Assistance with affordability for low-income consumers is provided in different ways in different countries but every other country assures that no one would go bankrupt because of health care costs.

Panelists also underscored the United States unique challenges in providing universal care, highlighting the country’s failure to provide comprehensive care to their undocumented population. Other countries, like the United Kingdom and Canada, also fail to provide comprehensive coverage to their undocumented population, but the scale of the challenge in the United States – with over 11 million undocumented immigrants living in the US – is more than ten times the number of undocumented immigrants in the UK and Canada combined. Of the 3 million people in California still without health coverage, the overwhelming majority are undocumented immigrants. And although states like California have taken steps to cover part of the undocumented community, by expanding state-sponsored Medi-Cal to all eligible children under the age of 19, regardless of immigration status, the state as well as the rest of the nation remain a patchwork of limited access for undocumented persons.

Sara Collins, Vice President of Healthcare Coverage and Access at The Commonwealth Fund, admonished the US healthcare system in this regard, warning that the main reason the United States will not achieve universal coverage through the implementation of the Affordable Care Act is because of its exclusion of undocumented persons and failure to address how they will bring undocumented immigrants into the larger pool of coverage moving forward.

The path towards a universal health care system for the US is fraught with many challenges, due to the complex health care system we now start with. But we’ve made progress under the ACA, and in particular through Covered California, not just in reducing the number of uninsured but creating more pooled purchasing and standardizing benefits.

In the view of the experts from the Commonwealth Fund, there is not one single model to emulate, or even the ideal and best model, but certainly key principle and goals to continue to reform a fragmented, multi-layer, multi-risk pool, multi-payer, public and private system that currently exists in the U.S. These same countries also look to the U.S. for innovations in delivery and payment systems, which they have adopted in various forms, and we should preserve some of those elements as well. Some countries adopted their systems many years ago, others achieved their universal systems after iterative attempts more recently. Similarly, our steps forward can consider our existing delivery, business, and payment systems, and we work to improve and transition to an improved and interconnected system that does not disrupt care.