On today's Planet Money:
Is hope unfulfilled worse than no hope at all? Medieval historian Philip Daileader says it might be. People in places like 12th and 13th century France lived far more constrained economic lives than we do, but they had no expectations that their situations would ever improve.
Link from the podcast: 123 recommendations for the Australian health care system.
Bonus: After the jump, a guy in Israel wonders how Americans put up with their health care system.
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Reuven M. Lerner, who lives in Israel, caught Friday's podcast on health care. He writes:
For years, I have wondered how it could be that Americans aren't rioting in the streets over the abysmal state of health care in the country. We lived in Chicago from 2003-2007 while I was in graduate school; during that period, we had a baby and my wife was diagnosed with a serious condition requiring expensive treatment. Thank goodness we had good health insurance, allowing us to pay "only" about $1500/month in premiums, copayments, and fees. I'll admit that the care we received was excellent, but if I hadn't been consulting on the side, and if we hadn't been fortunate enough to buy into a group plan, we would have been totally sunk.
Let me contrast that with the Israeli health system: You pay 5% of your income as an insurance premium, or a much smaller amount if you're unemployed. (There's basically no such thing as someone lacking health insurance in Israel.) You can choose from four providers ("sick funds"), each of which is a non-profit entity that must accept you no matter what, and which must offer the same baseline set of services and medicines that the government mandates. Each sick fund can offer additional services above and beyond this, including everything from dental care, to personal nurses in case of hospitalization, to alternative care. You can choose your doctor from among those registered with your particular fund (and many doctors work with several funds).
Overall, the system seems to work remarkably well: I can choose my doctor, and see him whenever I want, paying a co-payment of $1 (yes, one
dollar) for the first visit I make each quarter. When we need to see a specialist, we go to see the doctor of our choice from within the fund.
If we want to see someone from outside of our sick fund, we must ask for permission in writing, but to date we have been approved for just about everything. Hospital visits, MRIs, and CTs are completely covered — no co-pays, and no intolerable waits. (Yes, you will wait several weeks to get an MRI if it isn't urgent. But so what?) Medicines can be expensive, but the government uses its bargaining power to negotiate prices far lower than what you pay in the United States.
Private care is also available, if you prefer; many doctors work off-hours in private clinics, and many hospitals allow doctors to perform everything, including surgery, on a private basis. There seems to be a reasonable balance between public and private needs — so you'll generally get fine treatment as a regular patient, but you can always opt to use private treatment, if you need. There also seem to be perennial funding problems at government-owned hospitals, which the government then funds out of tax money. And of course, if the medicine that you need is outside of the government-mandated (and negotiated, and subsidized) "basket," you're forced to pay market prices. Every year, additional treatments are added to the medical service basket, but I don't envy those who have to decide what goes in and what stays out.
I'm not saying that everything is perfect with the Israeli health system; there are funding problems, and doctors sometimes strike (yes,
strike!) to protest the decent, but far from exceptional, salaries that they receive. (No private helicopters here!) But by having a number of competing non-profits whose rates are capped by law, and whose services must adhere to a government-set minimum, you end up with a high-quality, low-cost health system that removes many of the worst profit incentives from the insurance industry, replacing them with incentives to keep people healthy. My impression is that Germany has a similar system, but I don't know enough about it to compare.
A quick closing anecdote: Several months ago, when Bibi Netanyahu was elected prime minister, he floated a bunch of trial balloons while putting together his initial budget. One of the items that caused the greatest amount of protest was his plan to charge about $2.50 (yes, two and a half dollars) per *night* that someone would stay in the hospital — up from the current amount, which is zero. There was a firestorm of protest, with people saying that Netanyahu was so heartless that he wanted to charge people to be sick! The proposal was immediately taken off of the table.
The bottom line, then, is that the system here is pretty good, and costs a fraction of what health care does in the United States (where you have 50 times as many citizens, and thus greater potential for economies of scale). I simply don't understand how Americans can continue to claim that they have such a great system, when it's so easy to find alternatives that cost less and do at least as much.
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