Tue, 20 Mar 2007

Pros and Cons of US and French Health Care Systems

Here's a homework assignment I had to do for Comparative Economic Systems. The reading assignment was Paul Dutton's Health Care in France and the United States: Learning from Each Other.

Pros and Cons of US and French Health Care Systems

The US health care system is criticized for lack of universal health insurance coverage in comparison to the French system. Because French insurance is essentially compulsory, health care costs are more broadly distributed amongst the entire population. Although laws in the US that mandate certain types of medical care be provided to uninsured (and otherwise non-paying) patients raise medical costs for the insured, these higher medical costs are borne by those others seeking medical care rather than society at large. Except for the case of highly communicable diseases, the treatment of which provides a large social benefit, this is arguably a more just outcome.

In both the US and France, patients have a number of choices in seeking medical care. In France, patients can generally get treatment from a specialist directly, whereas in the US, the growth of HMO's means that many patients must get the approval of a "primary care physician" before seeking specialized treatment. This latter system can be frustrating to patients, but may also conserve the resources of more costly medical care when the primary care physician deems it unnecessary. Patients in the US have the option of purchasing PPO insurance, which has either a higher premium or deductible, but which provides the patient with the option of seeking specialists' treatment directly. Even under an HMO, the threat of lawsuit means that all but the most trivial concerns would likely be approved for specialist review.

Differences in malpractice awards, and thus insurance premiums, contribute to widely divergent costs for medical care in the two countries. Although per capita medical spending in the US is twice that of France's, only a portion of the difference goes towards malpractice insurance and repaying debt incurred in medical school, the bill for which is footed by the government in France. Doctors enjoy much higher salaries in the US. Medical care providers have much more leeway to negotiate fee schedules with US insurance companies than their French counterparts whose negotiations occur between physician associations and the quasi-public insurance funds.

Doctors in the US may also profit from increased productivity through the use of technology when compared to French physicians. On the other hand, standardization of billing processes in France does reduce billing costs. Health care providers in either country which can both standardize and automate administrative tasks should profit by doing so.

Both the US and French health care systems suffer high costs associated from the use of "insurance" for routine medical care in which the primary beneficiary does not bear the full cost of services. Regulation also prevents insurance providers from properly pooling policies by risk group, raising insurance premiums overall. Health care systems in general would benefit from decreased regulation and a move towards a system in which insurance returns to a role of providing for contingent, devastating medical emergencies among groups for which the likelihood of such events is approximately equal.

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The state is that great fiction by which everyone tries to live at the expense of everyone else. - Frederic Bastiat