A Patient In Need Of Resuscitation — A Tale Of Different Healthcare Systems
By Suresh Kumar
The state of a nation’s health comes down to access, affordability, and quality of care. Robust health insurance — how much of the population is covered and the extent of coverage — is the measure of the well-being of a society. An insured population has greater access to care and is more secure and confident in future well-being. Politically, this means greater satisfaction in government.
America has not stinted on healthcare; it spends $3.5 trillion annually. Despite this, 30 million people remain uninsured, and shenanigans to undermine ACA without a credible alternative risk adding more to the ranks of uninsured. The U.S. spends more on healthcare but cannot demonstrate that its healthcare system is better than those of other large developed systems such as in Canada, U.K., and Europe. This month I visited two smaller, affluent countries with similar demographic makeups and well-being but each had different approaches to healthcare: a public-run system in Norway and a public-private-oriented structure in Singapore. The contrast and learning from the systems are profound. For example, securing patient health requires active government engagement. Co-opting citizens and the private sector — not abdicating the responsibility to them — is the smart approach to delivering population-appropriate care. Affordably delivering high-quality, patient-centric services at home and in community settings must be the bedrock of the future.
BEYOND METRICS, A SYSTEM THAT GENERATES NORDIC HAPPINESS
Norway spends 10 percent of its GDP on healthcare — substantially more than the OECD (Office of Economic Cooperation and Development) average, but significantly less than the U.S.’s 18 percent GDP. The government guarantees health security to all citizens, who with the rest of Scandinavia, rank among the happiest people in the world, according to the World Happiness Report. (That’s a vindication even beyond good return on investment!) Norway provides citizens an impressive array of patient services including primary and social care; planned and acute care; hospital, ambulatory, and rehabilitation services; outpatient prescription drugs support; mental health and disability services; palliative care; and dental care until 18 years of age. It also provides physiotherapy services with co-pay. A network of general practitioners (GPs) act as gatekeepers to medical services that are overseen by municipalities. The Ministry of Health is responsible for specialist care through its ownership in hospitals and oversight of Regional Healthcare Authorities (RHA). Predicated on keeping people out of hospitals as much as possible and being cost-effective, service delivery rests on monitoring outcomes. EHRs are widely used across the GP and specialist networks from admissions to discharge and from referrals to prescriptions to provide coordinated, patient-centric care.
Generic medicines are prescribed over branded drugs, and new drug approvals are based on health technology assessment (HTA). Maximum reimbursable price is set as the average of three lowest prices among a group of reference countries in the region and in Europe. Similar robust mechanisms cap prices of hospital services and procedures. GP and specialist visits, prescription drugs, and laboratory and radiology services all require co-pay and out-of-pocket contributions at capped levels. Parliament establishes an annual ceiling on out-of-pocket expenses; these currently run $250 for most services and $300 for physiotherapy and certain dental services. Despite the government’s goal to control hospital admissions and the country’s challenging terrain that can delay access to specialist care, the system generally brings a smile to patients’ faces and satisfies citizens.
A DIFFERENT ORIENTATION
With a population that is 10 percent larger than Norway, Singapore spends just 4.5 percent of its GDP on healthcare — significantly below the OECD average and about a quarter of the U.S. spending level. The government planned, built, and remains committed to adjusting the nation’s public healthcare system to provide affordable healthcare anchored on individual responsibility. The country effectively uses its “3 M’s” system of health insurance and savings programs.
- Medisave, a variation on the U.S. individual mandate and health savings accounts, requires individuals to save a fixed percent of wages, which is matched equally by employers, toward future healthcare needs.
- MediShield provides low-cost catastrophic health insurance for major or prolonged treatment in hospitals and some outpatient facilities (e.g., dialysis centers). Home-based services, nursing homes, and senior-care services are subsidized.
- Medifund, somewhat akin to Medicaid, is a government endowment to support the indigent to maintain public health and welfare.
Individuals and employers underwrite healthcare costs via private insurance, co-pays, and out-of-pocket expenses. The Ministry of Health regulates and administers public and private health insurance and delivers services through a network of health and hospital facilities to offer universal healthcare to its citizens. Private providers predominantly administer primary care, and salaried specialists who work in the public system may see nonsubsidized patients. The private sector provides about 20 percent of the secondary and tertiary levels of care. The Group Purchasing Office consolidates national drug purchases to keep prices of drugs, medical supplies, equipment, and informational technology services prices affordable and contained.
Jeremy Lim, surgeon, healthcare consultant, and author of Myth or Magic: The Singapore Healthcare System,compliments the government for embracing leading technologies and mobilizing the resources to track quality and outcome. His suggestion: Reassure citizens that government will continue to invest in healthcare and make more programs universal rather than means-tested.
WHAT DOES THIS MEAN FOR THE US?
Winston Churchill famously said, “You can always count on Americans to do the right thing … after they have tried everything else.” While it has tried several things, the U.S. has not learned from those experiences or from those of other countries. Vacillation and procrastination are not virtues when it impacts a fifth of the GDP and when there is consensus across party lines and the public on the immediate need to address the price of drugs, hospital services, health insurance premiums, co-pays, and deductibles. Inaction and delayed action are dereliction of government responsibility and abdication of the congressional mandate. U.S. healthcare policies and legislations are flawed and do not fulfill citizen expectations. Our healthcare spending is not sustainable, and outcomes do not justify the investments.
The Trump administration is apparently redirecting energy from repealing the ACA to hopefully driving long-term change for price transparency and bringing down prices, and not advancing near-term political calculus by proposing that:
- drug companies publish list prices on product packaging and advertising materials — as anticipated, drug companies that profit from the status quo have challenged the initiative, which will now wind its way through the courts
- hospitals disclose discounts negotiated with insurers; it is prudent to be prepared as no doubt, industry lobby groups will advance unsubstantiated arguments to protect the proverbial golden goose
- existing federal law be leveraged to allow states, or wholesalers in states, to set up pilot projects for safe reimportation of some drugs from Canada.
But bolder initiatives are lacking and need to be addressed sooner than later. For example:
- The administration has yet to propose capping prices of drugs in the U.S. at the average price of a drug in select developed countries (e.g., UK, France, Canada), as Norway does. Of note, all countries have lower drug prices than the U.S.
- We could mandate individual savings that can be defrayed in case of future medical needs, as Singapore does.
- We could seek congressional approval for government agencies to negotiate drug prices, as Norway, Singapore, and most developed countries do.
Demand for healthcare funds is rising while tax cuts and the now repealed individual mandate have depleted sources of funds. Today, 60 percent of Americans prefer universal healthcare versus 51 percent in 2016. People want change, and the time is right to drive bold policies. As a patient, the U.S. healthcare system is sick and in need of a quick resuscitation.
SURESH KUMAR serves on the board of Jubilant Pharmaceuticals and Medocity. Formerly, he was U.S. Assistant Secretary of Commerce and executive VP at Sanofi.