Universal Health Care in Different Countries, Pros and Cons of Each

Why America Is the Only Rich Country Without Universal Health Care

Image by Tim Liedtke © The Balance 2019

Universal health care is a system that provides quality medical services to all citizens. The federal government offers it to everyone regardless of their ability to pay. The sheer cost of providing quality health care makes universal health care a large expense for governments. Most universal health care is funded by general income taxes or payroll taxes. 

The United States is the only one of the 33 developed countries that doesn’t have universal health care. But its health delivery system does have specific components, such as Medicare, Medicaid, and the Department of Veterans Affairs, that provide universal health care to specific populations.

Advantages

  • Lowers overall health care costs: The government controls the prices through negotiation and regulation.
  • Lowers administrative costs: Doctors only deal with one government agency. For example, U.S. doctors spend four times as much as Canadians dealing with insurance companies.
  • Forces hospitals and doctors to provide the same standard of service at a low cost: In a competitive environment like the United States, health care providers must also focus on profit. They do this by offering the newest technology. They offer expensive services and pay doctors more. They try to compete by targeting the wealthy. 
  • Creates a healthier workforce: Studies show that preventive care reduces the need for expensive emergency room usage. Without access to preventive care, 46% of emergency room patients went because they had no other place to go. They used the emergency room as their primary care physician. This health care inequality is a big reason for the rising cost of medical care.
  • Early childhood care prevents future social costs: These include crime, welfare dependency, and health issues. Health education teaches families how to make healthy lifestyle choices, preventing chronic diseases.
  • Governments can impose regulations and taxes to guide the population toward healthier choices: Regulations make unhealthy choices, such as drugs, illegal. Sin taxes, such as those on cigarettes and alcohol, make them more expensive. 

Disadvantages

  • Healthy people pay for others' medical care: Chronic diseases make up 90% of health care costs. The sickest 5% of the population create 50% of total health care costs, while the healthiest 50% only create 3% of costs. 
  • People have less financial incentive to stay healthy: Without a copay, people might overuse emergency rooms and doctors.
  • There are long wait times for elective procedures: The government focuses on providing basic and emergency health care. 
  • Doctors may cut care to lower costs if they aren't well paid by cost-cutting governments: For example, doctors report Medicare payment cuts will force them to close many in-house blood testing labs.
  • Health care costs overwhelm government budgets. For example, some Canadian provinces spend almost 40% of their budgets on health care.
  • The government may limit those services with a low probability of success. This includes drugs for rare conditions and expensive end-of-life care. In the United States, care for patients in the last six years of life makes up one-fourth of the Medicare budget.

Advantages

  • Lowers overall health care costs

  • Lowers administrative costs.

  • Standardizes service.

  • Creates a healthier workforce.

  • Prevents future social costs.

  • Guides people to make healthier choices.

Disadvantages

  • Healthy people pay for the sickest.

  • People have less financial incentive to stay healthy.

  • Long wait times.

  • Doctors may cut care to lower costs.

  • Health care costs overwhelm government budgets.

  • The government may limit services that have a low probability of success

Types of Plans

There are three universal health care models. They are single payer, mandatory insurance, and national health insurance. 

Countries often combine universal health coverage with other systems to introduce competition. These options can lower costs, expand choice, or improve care. Citizens can also opt for better services with supplemental private insurance. The United States offers different models for populations such as the elderly, veterans, and low-income people. 

Single-Payer Model

In a single-payer system, the government provides free health care paid for with revenue from income taxes. Services are government-owned and service providers are government employees. Every citizen has the same access to care. This is called the Beveridge Model.  

When governments provide health care, they work to ensure doctors and hospitals provide quality care at a reasonable cost. They must collect and analyze data. They can also use their purchasing power to influence health care providers.

The United Kingdom developed the single-payer system. Other countries include Spain, New Zealand, and Cuba. The United States offers it to veterans and military personnel with the Department of Veterans Affairs and the armed forces.  

Social Health Insurance Model

Countries that use a social health insurance model requires everyone to buy insurance, usually through their employers. The taxes go into a government-run health insurance fund that covers everyone. Private doctors and hospitals provide services. The government controls health insurance prices. It also has a lot of clout to control the private-providers’ prices.

Germany developed this system. France, Belgium, the Netherlands, Japan and Switzerland also use it. The U.S. Obamacare system also requires insurance, but there are many exemptions. It is also similar in that it provides subsidies to health insurance companies for low-income enrollees.

National Health Insurance

The national health insurance model uses public insurance to pay for private-practice care. Every citizen pays into the national insurance plan. Administrative costs are lower because there is one insurance company. The government has a lot of leverage to force medical costs down. 

Canada, Taiwan, and South Korea use this model. The U.S. Medicare, Medicaid, and TRICARE systems also use this model

Examples of Seven Developed Countries With Universal Health Care

Australia: Australia has a mixed health plan. The government provides public health insurance, called Medicare, and runs public hospitals. Everyone receives coverage. People must pay deductibles before government payments kick in. Many residents are willing to pay for additional private health insurance to receive a higher quality of care. Government regulations protect seniors, the poor, children, and rural residents.

In 2018, health care cost 9.3% of Australia's gross domestic product. That’s fairly low. The per capita cost was US$5,005, about average for developed countries. There were 42.6% of patients who reported a wait time of more than four weeks to see a specialist. Australia had one of the best infant mortality rates of the compared countries at 3.1%.

Canada: Canada has a national health insurance system. The government pays for services provided by a private delivery system. Private supplemental insurance pays for vision, dental care, and prescription drugs. Hospitals are publicly funded. They provide free care to all residents regardless of their ability to pay. The government keeps hospitals on a fixed budget to control costs, but reimburses doctors at a fee-for-service rate. 

In 2018, health care cost 10.7% of Canada’s GDP. The cost per person was US$4,974. A whopping 62.8% of patients waited more than four weeks to see a specialist. The infant mortality rate was 4.3%, among the countries compared.

France: France has a social health insurance system that provides care to all legal residents. That includes hospitals, doctors, drugs, and some dental and vision care. It also pays for homeopathy, spa treatments, and nursing home care. Of that, payroll taxes fund 64%, income taxes pay for 16%, and 12% is from tobacco and alcohol taxes.

In 2018, health care cost 11.2% of GDP. That was US$4,965 per person. Half of all patients reported a wait time of more than four weeks to see a specialist. The infant mortality rate was 3.4%. These statistics are all in the middle of the pack for developed nations. 

Germany: Germany has a social health insurance program. Everyone must have public health insurance, but those above a certain income can choose private insurance instead. The state-sponsored insurance covers hospitalization, except for meals and accommodation. It also covers rehab for hospital stays, mental health, and addiction. It even covers long-term care. Funding comes from payroll taxes. 

In 2018, health care cost 11.2% of GDP. It averaged US$5,986 per person. Both figures are about average. Only 28.1% of patients reported a wait time of more than four weeks to see a specialist. That is among the lowest of the developed countries. In addition, most Germans can get next-day or same-day appointments with general practitioners. The infant mortality rate was 3.1%. 

Switzerland: The country has a social health insurance system for all residents. Coverage is provided by competing private insurance companies. Residents pay premiums up to 8% of their income. The government reimburses them for any higher costs. People can buy supplemental insurance to access better hospitals, doctors, and amenities. 

In 2018, health care spending was 12.2% of GDP. It was USD $7,317 per person. Only 27.3% of patients reported a wait time of more than four weeks to see a specialist. The infant mortality rate was 3.7%. 

United Kingdom: The United Kingdom has single-payer health care that covers all residents. Visitors receive care for emergencies and infectious diseases.The National Health Service runs hospitals and pays doctors as employees. The government pays 80% of costs through income and payroll taxes. The rest is paid from copayments and people paying out-of-pocket for NHS services. It pays for all medical care, including some dental and eye care, hospice care, and some long-term care. There are some copays for drugs. In 2015, 10.5% of U.K. residents had private insurance for elective medical procedures.

In 2018, health care costs were 9.8% of GDP. The cost was US $4,069 per person. But 46.4% of patients reported a wait time of more than four weeks to see a specialist. The infant mortality rate was 3.6%.  

Comparison to the United States

The United States has a mixture of government-run and private insurance.  

As a result, 67.2% of Americans have private health insurance, mostly from their employers. The government subsidizes private health insurance through Obamacare. Another 37.7% of Americans have government coverage. These include Medicaid, Medicare, Children's Health Insurance Program, and military coverage including the Veterans Administration. Only 8.5% had no coverage at all. 

All health care service providers, except for the VA, are private. Many democratic candidates promote universal health care under the title "Medicare for All."

In 2018, health care cost 16.9% of GDP. That was a staggering US$10,586 per person. About 28% of patients reported a wait time of more than four weeks to see a specialist. That’s about the same as Germany and Switzerland. Despite this cost, the quality of care in other areas is worse than comparable developed countries. The infant mortality rate was 5.6%, almost double that of Australia and Germany. The third leading cause of death was a medical error.

Universal Health Care Comparison Chart (2018) 

Country Type % of GDP Per Capita Wait 4+ wks Infant Mortality Rate (2017)
Australia 2-tier 9.6% $4,798 22% 3.0
Canada Single 10.6% $4,752 56.3% 4.5
France 2-tier 11.0% $4,600 49.3% 3.5
Germany Mandate 11.3% $5,550 11.9% 3.1
Singapore 2-tier 4.9% $2,000   2.2
Switzerland Mandate 12.4% $7,919 20.2% 3.7
United Kingdom Single 9.7% $4,193 29.9% 3.7
United States Private 18.0% $9,892 4.9% 5.7

* Data collected from 2016. Except for France, 2013.

Sources for Table: % of GDP. Per Capita. Wait 4+ wks for specialist. Infant mortality rate.

Brief History of Universal Health Care in America

The demand for universal health care began in 1948, the year the World Health Organization declared health care a basic human right. The United States was slow to abandon its model based on company-sponsored health insurance.

In 1993, President Bill Clinton pushed for universal health care to lower the Medicare budget. Hillarycare, led by First Lady Hillary Clinton, suggested managed competition. Health insurance companies would compete to provide the best low-cost plans. The government would control the costs of doctor bills and insurance premiums. Doctors, hospitals, and insurance companies lobbied to defeat it in Congress.

In the 2008 presidential campaign, Senator Barack Obama outlined a universal plan. Obama's health care reform plan offered a publicly-run program similar to that enjoyed by Congress. People could choose it or buy private insurance on an exchange. The federal government would expand Medicaid funding and add subsidies.

In 2009, President Obama proposed the Health Care for America Plan. It would have provided Medicare for all who wanted it. That would have lowered health care costs by 1% per year.

Instead, Congress passed the 2010 Patient Protection and Affordable Care Act. It relied on mandatory health insurance, but allows many exemptions. States don’t have to expand Medicaid. Trump's tax plan removed the mandate in 2019. 

Many 2020 presidential candidates propose Medicare-for-all universal health plans. Americans would have no deductibles, copayments, or out-of-pocket expenses. It would also cut doctors’ administrative costs due to managing the variety of insurance plans available. U.S. health care administrative costs are double that of Canada.

The Bottom Line

For universal health care to work, everyone, including healthy people, must pay premiums or additional taxes to pay for health care. This funds the security health blanket for all citizens. Ideally, with a health care system under government regulation, everyone will have access to quality treatments at low costs. Such a system would provide very affordable preventative care and implement strict control of pricing and quality of drugs and medical services.

U.S. health care is not as inclusive as other developed countries. Instead, it has different models for targeted populations. Obamacare is the closest to universality the United States has ever implemented, but it falls short because of its many exemptions. 

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