My first post was a 10,000 foot view comparing Norway to the USA in terms of healthcare metrics from a layperson news source. This post aims to dig a little bit deeper into those numbers from a more reliable source.
What does funding for a nationalized healthcare look like?
First and foremost, Norway has a publicly financed, universal healthcare system. For those not up to date on healthcare lingo, this means that there is only one healthcare “insurance company” in the county and it happens to be the government. One of the myths regarding universal healthcare is that it is “free” to all the citizens. However, this is simply not the case. In Norway, healthcare spending is a part of the national budget and if funded through taxation (which is far heavier than in the U.S.) Every citizen is entitled to healthcare, however, it is far from “free” – which is a common misconception about nationalized healthcare.
To get an idea of how much individuals actually pay for their healthcare let’s take look at this 2011 article from Inc. The article looks at the taxes of a CEO of a small company and compares what taxes he would pay if he lived in Norway vs. Massachusetts. To make a long story short, he would pay an effective tax rate of 43% if he lived in Norway whereas he would only be taxed at 33% in the U.S. What stands out the most from this article are the payroll taxes. In Norway he must pay a flat 7.8% of gross income the national insurance program (which amounts to a hefty $42k of his $537k salary). In the US he would pay 1.4% ($7.8k) to Medicaid and $6.6 to social security (6.2% of first $107k in income). This is an effective tax of 2.7% compared to Norway’s steep 7.8%. Granted, he would still be required to pay for healthcare insurance in the U.S. which would eat up a portion of the tax savings (average 2016 employee sponsored family healthcare plan costs 18k, with the employee paying a 5-6k premium per NCSL).
Furthermore, similar to the US, individuals must pay a deductible on healthcare services received. As of Feb 2017, this premium is about 2000 Kroner which equates to about $250. This deductible includes doctor visits and medications for acute illnesses (chronic medications are covered for free). This deductible is almost laughable when compared to some of the low-premium, high-deductible plans currently offered in the US.
Depressing statistics about America’s health fascinate me…..
The Commonwealth Fund, a private organization that conducts independent studies on healthcare systems, released a report in 2015 comparing the healthcare systems of 13 high income nations (which included both Norway and the US). Some might find the results to be surprising, but they are in keeping with what I reported in my initial post.
As previously mentioned, the US leads the globe in healthcare spending ($9k per capita annually in 2013). In this report Norway comes in third ($6170 per capita) just behind Switzerland ($6,325 per capita). Unfortunately, where this become really scary is that the US spends 17% of its GDP on healthcare, a fraction that has increased rapidly over the last 20 years when compared to other countries (and is trending even higher, which highlights our current healthcare crisis).
The fund took the analysis of per capita healthcare spending one step further and looked at the sources of financing for that spending. Much to my surprise, the US government spends almost as much public money per capita as Norway ($4197 vs. $4981, respectively). However, the “other payer” category (i.e. insurance companies) was vastly different with the U.S at $3442 and Norway at $24.
Naturally, no rant about American healthcare spending would be complete without some outcomes data to prove that all of our spending isn’t being us the best results. We once again see that the US leads the world in chronic disease burden and obesity. While 1 in 3 Americans are obese, only 1 in 10 of our Norwegian counterparts are. Infant mortality statistics always amaze me. The US has an abnormally high infant mortality rate when compared to all the countries in this report as well as many other countries around the world. Our rate is the same as that of Serbia, UAE, and Malaysia and higher than that of Cuba, Korea, Lithuania, and Estonia. With our lower life expectancy, higher burden of chronic disease, and rampant obesity I think it is safe to conclude that we have some serious work to do if we want any chance at improving our standing.
One figure I was surprised to see in this report was a measure of government spending on social services (e.g. retirement and disability benefits, employment programs, and supportive housing). Not surprisingly, the US is in the back of the pack on this measure as well. Even more surprising is that we are the ONLY country to spend more on healthcare than on social services. AND we spend nearly twice the amount on healthcare as we do on social care! Perhaps these spending patterns reflect a fundamental difference in philosophy between the nations – the US is known for its emphasis on individualism whereas many of the others have socialistic tendencies.
What can we conclude from all of this?
At this point, hopefully I’ve been able to convince you that the US healthcare system leaves something to be desired. It is growing more and more expensive and it is becoming increasingly difficult to navigate (for both patients and providers). It is failing to meet the needs of its patients as evidenced by our lagging outcomes. Something, somewhere is broken and needs fixing. What does this fix look like?? I have absolutely no idea….. My suggestions would be to look at what other countries are doing well and try to borrow from them. Perhaps there is a strong public health benefit to increasing social spending? Maybe we need to change our payment model? What if we tried to increase the patients’ ownership of their care? There are so many potential solutions out there, and it is time to start trying them.