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Social justice
9 March 2012

Healthcare systems compared

Alongside fiscal stimulus, the other great policy iniative of the Obama administration is healthcare reform. Few would doubt that the US system is in need of change. Indeed, from a policy making perspective, America pretty much foots the league of desirable healthcare models.

To add insult to injury, the country that comes out top is France – at least accordining to the World Health Organisation. But here's the thing: In terms of essential characteristics: the French and American systems are remarkably similar.

In a thought-provoking piece for the Atlantic, Pascal-Emmanuel Gobry sets out the facts:

  • First of all, the French healthcare system is built on a large, highly-regulated private sector. Unlike Britain's NHS, the government doesn't own everything. Some hospitals are public, but many are private and for-profit. Indeed, there are publicly-traded hospital chains, just like in the US...
  • Secondly, there's a crucial feature at the heart of the French healthcare system that is also at the heart of the US healthcare system--and that all US wonks hate: employer-provided insurance. 

So, why is the French model so much better than its American twin? Gobry doesn't dodge the complexities, but this is his main conclusion:

  • I think the defining thing is: costs. Costs are just much higher in the US. You see this with doctors: American doctors just make way, way more money than French doctors, which drives up costs across the board.

As to what explains this differential, the answer is basically this: The US Government allows its healthcare sector to get away with it, the French Government doesn't. Perhaps it all comes down to one fundamental principle: Say yes to competition, but no to vested interests.


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