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Robert Kelly is managing director of XTS Energy LLC, and has more than three decades of experience as a business executive. He is a professor of economics and has raised more than $4.5 billion in investment capital.
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Universal health care is a system that provides medical services to all people. The government offers it to everyone regardless of their ability to pay and largely funds it through taxes. Universal health care may offer free services, though participants might still pay premiums or copays. Still, costs are usually lower than in non-universal systems, with funding primarily derived from taxpayers.
Universal health care (UHC) comes in several different forms, but the basic idea is the same across the board: The government steps in with taxpayer money to ensure that every citizen has access to the medical care they need. With universal health care, no citizen is denied coverage based on their ability to pay.
The sheer cost of providing quality health care makes universal health care a large expense for governments. Medical coverage must be paid for by taxpayer-funded programs.
A substantial portion of countries around the world have UHC, including Canada, much of Europe, Asian countries such as Japan and South Korea, along with Australia and New Zealand. The U.S. has the distinction of being the only wealthy, industrialized nation without universal health care.
Although the U.S. does not have a UHC system, 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 (the elderly, low-income, and veterans, respectively).
Universal health care can work in several different ways, depending on the exact system. There are three main universal health care models: single-payer, mandatory insurance, and national health insurance.
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. To do this, government agencies must collect and analyze data and use their purchasing power to influence health care providers.
The United Kingdom helped advance the single-payer health care system with its National Health Service, in which the government not only pays for health services but runs hospitals and employs doctors. Other single-payer-based 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.
Countries often combine universal health coverage with other systems to introduce competition. These options can lower costs, expand choice, or improve care. In some cases, citizens can opt for better services with supplemental private insurance.
Countries that use a social health insurance model require everyone to buy insurance, usually through their employers. Employers deduct taxes from employee payrolls to cover the costs, and 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, which is also known as the Bismarck model. France, Belgium, the Netherlands, Japan, and Switzerland also use it. In the U.S., meanwhile, the Affordable Care Act, also known as "Obamacare," requires insurance, but there are many exemptions, and this rule is no longer enforced by penalties. It is also similar in that it provides subsidies to health insurance companies for low-income enrollees.
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 also has a lot of leverage to force medical costs down.
Canada, Taiwan, and South Korea, for instance, all use this model. The U.S. Medicare, Medicaid, and TRICARE systems are based on a national health insurance approach.
Here is a look at the UHC systems in some of the world's developed nations, and their costs.
Australia has a mixed health plan. The government provides public health insurance, called Medicare, and runs public hospitals. Everyone receives coverage, and people must pay deductibles before government payments kick in. If you earn above a certain level of income, you must also purchase private hospital coverage or pay a tax surcharge.
Many residents are willing to pay for additional private health insurance to receive a higher quality of care. Government regulations protect seniors, people considered economically disadvantaged, children, and rural residents.
As of 2022, health care costs totaled about 10.5% of Australia's gross domestic product (GDP). The per capita cost was $6,372, slightly above average for developed countries. Wait times for elective surgeries ranged from 17 days for a coronary bypass to 209 for knee replacement. Australia's infant mortality rate was 3.1% in 2021.
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 it reimburses doctors at a fee-for-service rate.
In 2022, health care cost about 12% of Canada’s GDP. The cost per person was $6,319. Wait times for elective surgeries ranged from six days for a coronary bypass to 122 for knee replacement. The infant mortality rate was 4% in 2021.
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. As of 2016, payroll taxes funded 64% of the costs, income taxes paid for 16%, and 12% came from taxes on tobacco, alcohol, the pharmaceutical industry, and private voluntary health insurance.
As of 2022, health care cost about 12% of GDP. That was $6,629 per person. The infant mortality rate was 3.7%. These statistics are all in the middle of the pack for developed nations.
Germany has a social health insurance program. Everyone who earns less than a certain amount must have public health insurance, but people earning more 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, addiction, and long-term care. Funding comes from premiums paid by employees and their employers.
As of 2022, health care cost 12.7% of GDP. It averaged $8,011 per person. Both figures are the highest among industrial countries outside of the U.S. In addition, most Germans can get next-day or same-day appointments with general practitioners. The infant mortality rate was 3%.
Switzerland has a social health insurance system for all residents. Coverage is provided by competing private insurance companies. Residents pay premiums, and the government provides income-based subsidies to some. People can buy supplemental insurance to access better hospitals, doctors, and services not covered by mandatory insurance.
As of 2022, health care spending was 11.6% of GDP. It was $8,049 per person. In 2021, the infant mortality rate was 3.1%.
The United Kingdom has single-payer health care that covers all residents. The National Health Service (NHS) runs hospitals and pays doctors as employees. As of 2016, the government paid nearly 80% of costs through income and payroll taxes. The rest was paid from copayments and people paying out-of-pocket for NHS services. The NHS pays for most medical care, including some dental and eye care, hospice care, and some long-term care. Copays are required for outpatient medications.
As of 2022, health care costs accounted for 11.3% of GDP. The cost was $5,493 per person. Wait times ranged from 55 days for a coronary bypass to 98 days for knee replacement. The infant mortality rate was 4% in 2021.
The United States has a mixture of government-run and private insurance.
As a result, in 2022, 65.6% of Americans had private health insurance, mostly from their employers. The government subsidizes private health insurance through Obamacare. Another 36.1% of Americans had public government coverage. This includes Medicaid, Medicare, Children's Health Insurance Program, and military coverage including the Veterans Administration (VA). Only 7.9% had no coverage at all.
All health care service providers, except for the VA, are private. Some Democratic candidates have promoted universal health care under the title "Medicare for All."
In 2022, health care cost a staggering $12,555 per capita in the U.S., or 17.3%. These costs are the highest of those reported in 53 countries by the Organisation for Economic Cooperation and Development.
The U.S. infant mortality rate was 5.4% in 2021, significantly higher than that of countries such as Australia, Germany, and all other developed countries reported on by the OECD.
One argument against universal health care is that wait times for patients could increase. Another is that the taxes needed to fund a universal system would be too high. And another major argument is that, because the U.S. is much larger and more diverse geographically and culturally than other industrialized countries with universal health care, such a system would be impossible in the U.S.
Universal health care may include free services for patients, but some systems require participants to pay insurance premiums, deductibles, or copays for services or medications. These costs will still usually be lower than in a system that does not provide universal coverage. However, universal health care is ultimately funded by taxpayers in one form or another.
