Chapter 9 "Comprehensive BenefitsAnother important measure of health care systems is whether they offer all of theessential services individuals need. The difficulty lies in defining what is essential.Although all observers would agree that comprehensive health care must includecoverage forprimary care, agreement breaks down quickly when we begindiscussing specialty care. Some individuals, for example, consider coronary bypasssurgery an essential service, but others consider it an overpriced and overhypedluxury. Similarly, some favor offering only procedures necessary to keep patientsalive, but others support offering procedures or technologies such as hip replace-ment surgery, home health care, hearing aids, or dental care, which improvequality of life but don’t extend life.Any system that does not provide comprehensive benefits runs the risk ofdevolving into a two-class system in which some individuals can buy more carethan others can. To those who believe health care is a human right, such a sys-tem seems unethical. Others object to such systems on economic grounds, argu-ing that it costs less in the long run to plan on providing care for everyone thanto haphazardly shift costs to the general public when individuals who can’t affordcare eventually seek care anyway.AffordabilityGuaranteeingaccessto health care does not help those who can’t afford topur-chaseit. Consequently, we also must evaluate health care systems according towhether they make health care coverage affordable, restraining the costs notonly of insurance premiums but also ofco-payments, deductibles, and othercrucial services such as prescription drugs and long-term care. Although the ACAoffers some subsidies and tax credits to help people pay their premiums, it stillleaves millions with many bills for these latter costs.For health care to be affordable, individual costs must reflect individualincomes. As noted earlier, most insured Americans receive their insurancethrough employers. Typically, employers pay part of the cost for that insuranceand deduct the rest from each employee’s wages. Because low- and high-wageworkers have their salaries reduced by the same dollar amount, low-wage work-ers are effectively hit harder: Paying $3,000 per year for health insurance might,for example, force a wealthier worker to scale back his vacation plans but force apoorer worker to put off fixing his roof. For this reason, the US system is con-sideredfinancially regressivein that poorer people must pay a higher percent-age of their income than do wealthier people. In contrast, in countries such asGreat Britain and Canada, health coverage is paid for through graduated in-come taxes. Poorer persons pay alowerpercentage of their income for taxesand therefore for health care than do wealthier persons, creating afinanciallyprogressivesystem. Either way—whether through taxes or lowered wages—the nation’s citizens pay all the costs of health care" "Financial EfficiencyAnother critical measure of ...

1. Chapter 9
"Comprehensive BenefitsAnother important measure of health
care systems is whether they offer all of theessential services
individuals need. The difficulty lies in defining what is
essential.Although all observers would agree that
comprehensive health care must includecoverage forprimary
care, agreement breaks down quickly when we begindiscussing
specialty care. Some individuals, for example, consider
coronary bypasssurgery an essential service, but others consider
it an overpriced and overhypedluxury. Similarly, some favor
offering only procedures necessary to keep patientsalive, but
others support offering procedures or technologies such as hip
replace-ment surgery, home health care, hearing aids, or dental
care, which improvequality of life but don’t extend life.Any
system that does not provide comprehensive benefits runs the
risk ofdevolving into a two-class system in which some
individuals can buy more carethan others can. To those who
believe health care is a human right, such a sys-tem seems
unethical. Others object to such systems on economic grounds,
argu-ing that it costs less in the long run to plan on providing
care for everyone thanto haphazardly shift costs to the general
public when individuals who can’t affordcare eventually seek
care anyway.AffordabilityGuaranteeingaccessto health care
does not help those who can’t afford topur-chaseit.
Consequently, we also must evaluate health care systems
according towhether they make health care coverage affordable,
restraining the costs notonly of insurance premiums but also
ofco-payments, deductibles, and othercrucial services such as
prescription drugs and long-term care. Although the ACAoffers
some subsidies and tax credits to help people pay their
premiums, it stillleaves millions with many bills for these latter
costs.For health care to be affordable, individual costs must
reflect individualincomes. As noted earlier, most insured
Americans receive their insurancethrough employers. Typically,

2. employers pay part of the cost for that insuranceand deduct the
rest from each employee’s wages. Because low- and high-
wageworkers have their salaries reduced by the same dollar
amount, low-wage work-ers are effectively hit harder: Paying
$3,000 per year for health insurance might,for example, force a
wealthier worker to scale back his vacation plans but force
apoorer worker to put off fixing his roof. For this reason, the
US system is con-sideredfinancially regressivein that poorer
people must pay a higher percent-age of their income than do
wealthier people. In contrast, in countries such asGreat Britain
and Canada, health coverage is paid for through graduated in-
come taxes. Poorer persons pay alowerpercentage of their
income for taxesand therefore for health care than do wealthier
persons, creating afinanciallyprogressivesystem. Either way—
whether through taxes or lowered wages—the nation’s citizens
pay all the costs of health care" "Financial EfficiencyAnother
critical measure of a health care system is whether it operates in
a finan-cially efficient manner. Currently, the multitude of
private and public insurers inthe United States substantially
drives up the administrative costs of the health caresystem
(Himmelstein et al., 2014). At the same time, the atomized and
essentiallyentrepreneurial nature of our health care system
makes it virtually impossibleto impose effective cost controls.
For example, doctors have responded to financiallimits on
Medicare payments by raising the fees they charge to non-
Medicarepatients, a process known ascost shifting. Neither of
these problems wasaddressed by the ACA.Consumer
ChoiceFinally, we need to evaluate health care systems based on
whether they offerconsumers a reasonable level of choice.
Currently, wealthy Americans can pur-chase any care they want
from any willing provider. In addition, Americans whohavefee-
for-service insurancecan seek care from any provider as long as
theycan afford the copayments and deductibles, and if their plan
uses managed care,as long as their insurer approves the care.
Finally, those who have Medicaid orMedicare coverage can
obtain care only from providers willing to accept the rel -atively

3. low rates of reimbursement offered by these programs, and
those whohave no health insurance can obtain care only from
the few places willing toprovide care on a charity basis. The
ACA, however, does seem likely to increasethe options
available for many Americans.As we will see later in this
chapter, in Mexico, China, and the DRC, somecitizens have far
greater choices in health care than do others, whereas
inGermany, Great Britain, and Canada, all citizens have similar
levels of health carechoice.HEALTH CARE IN OTHER
COUNTRIESWith these measures in mind, we can now look at
the health care systems inGermany, Canada, Great Britain,
Mexico, China, and the DRC. Germany,Cana da, and Great
Britain are all considered to be more developed nations,
andeach guarantees portable, affordable, and universal health
care coverage to its citi-zens. In contrast, both Mexico and
China may soon join the ranks of the moredeveloped nations.
Mexico is gradually improving its health care system,
butChina’s once exemplary record of providing health care to
its citizenry has suf-fered recently. Finally, the DRC provides
an example of the tremendous diffi-culties often faced by both
the public and health care providers in theleastdeveloped
nations. Despite their differences, however, most of the nations
dis-cussed in this chapter combine socialistic and
entrepreneurial elements" "health care systems. In contrast,
health care in the United States and the DRC isprimarily
organized as anentrepreneurial system, that is, a system based
onprivate enterprise and the search for profit. Table 9.1
summarizes the character-istics of these six health care
systems.Not surprisingly, each of the systems described in this
chapter has changedover time. More interestingly, the changes
seem to have moved various nationsat least somewhat
towardhealth care convergence, that is, toward becomingmore
similar to each other (Stevens, 2010). For example, the United
States,Great Britain, and Germany all now utilizediagnosis-
related groups(DRGs)to restrain costs.Two major causes of this
convergence areglobalizationand economicpressures.

4. Globalization has expanded access to medical and scientific
knowledge.Increasingly, doctors use medical journals and
Internet resources from around theworld to learn about new
treatments. Similarly, medical and pharmaceutical cor-porations
now market new technologies internationally. Thus, doctors in
manydifferent countries are adopting the same technologies and
placing similar eco-nomic pressures on their health care
systems.Second, whether a country’s economy is booming or
weakening andwhether its health care system is largely
capitalist or largely socialist, the cost ofhealth care can press
governments to reduce costs. Countries with largely
capitalisthealth care systems may do so byrestrictingthe role of
the market in health care,whereas countries with largely
socialistic health care systems may do so byencour-agingthe
role of the market in health care. The latter situation, in which
countriesbegin encouraging the private purchase of health care,
the private practice ofmedicine for profit, and the operation of
market forces in health care overall, isreferred to as
theprivatization of health care. As in the United States, privati-
zation reflects aneoliberalperspective.Germany: Social
Insurance for Health CareModern Germany is the product of a
tumultuous twentieth-century history,including more than a
decade of Nazism and the division of the country intwo after its
defeat in World War II. Yet despite the destruction wrought
bytwo world wars and the economic stresses that accompanied
the reunificationof East and West Germany in 1990, the nation
is a stable constitutional democ-racy and now enjoys one of the
strongest economies in Europe. The grossnational income (GNI)
per capita is $44,500, about one-quarter lower than inthe United
States (Population Reference Bureau, 2014). (These figures
aregiven in“international dollars,”in which $1 equals the
amount of goods andservices one could buy for $1 in the United
States.)Structure of the Health Care SystemHealth care in
Germany is based on asystem of social insurance
(Commonwealth Fund, 2013).Social insurancerefers to
insurance provided by large social groups (such as regions,

5. occupations,or industries) to their residents or members. This
system was adopted in 1883 bypoliticians who hoped that
offering workers accessible health care, as well"
"housing and unemployment and retirement benefits, would
diffuse politicaltensions that might otherwise lead to a more
radical redistribution of powerand wealth in German society
(Leith et al., 2009). Social insurance remains thecenter of the
current German health care system, although about 10 percent
ofGermans now also or instead purchase private
insurance.Purchasing CareAs in the United States,
nongovernmental insurance formsthe basis of the German health
care system (Leith et al., 2009). But whereas inthe United
States, insurance providers must compete to survive in a pr ofit-
driven market, in Germany about 90 percent of health insurance
is providedby nonprofit social insurance groups known
assickness funds. As of 2010, allGermans earning less than
about $70,000 must join a sickness fund. The costof belonging
to a sickness fund is about 15 percent of income (about half
paidby the individual for his or her entire family and the
remainder paid by theemployer). Because costs are based on
income, the system, like Britain’s, isfinancially
progressive.Paying Doctors and HospitalsGerman doctors are
paid differently dependingon the nature and location of their
work. Those who work in hospitals receiveannual salaries.
Other doctors typically are paid on a fee-for-service basis.
How-ever, increasingly insurers are“bundling”payments,
offering a set fee for doctorsand other providers, both in and out
of hospitals, who together care for patientswith a specific
condition such as diabetes or a hip joint that needs replacing.
Thehope is that integrating care across various providers will
result in better healthand lower costs. Hospitals receive their
operating budgets from the sickness fundsand receive their
capital budgets (for items such as new magnetic
resonanceimaging machines) from the government.Access to
CareAll Germans are required to have health insurance, and
allGerman health insurance programs are required to provide a

6. comprehensivepackage of health care benefits. With the
exception of minimal copayments,insurance covers all costs of
dental care, maternity care, hospitalization, outpa-tient care,
prescription drugs, preventive measures such as vaccinations,
andincome lost because of illness. As a result, Germans have
few incentives to putoff obtaining needed care and see doctors
an average of ten times per person peryear, more than twice as
often as do US citizens (OECD, 2014). Germans cansee any
doctors they like, although they must get referrals from primary
caredoctors before seeing hospital-based specialists.Controlling
the Costs of CareA major factor driving up costs of health
carein Germany is the oversupply of doctors. To control this,
Germany forbids doc-tors older than age 68 from working for
the sickness funds, forbids doctors fromopening practices in
areas where many doctors already practice, and pays doctorsby
capitation rather than fee-for-service. Finally, to control drug
costs, the sick-ness funds encourage doctors and consumers,
through both education and eco-nomic incentives, to adopt more
cost-effective drugs." "To control hospital costs, Germany now
uses a system similar to the DRGssystem in the United States.
In addition, the government can restrain thepurchase and use of
unnecessary and expensive technologies because it deter-mines
hospitals’capital expense budgets.Two factors still hamper
efforts to constrain costs. First, hospitals haveopposed policies
designed to shift care when warranted to less expensive outpa-
tient settings because the hospitals fear their incomes will fall.
Second, the vastnumber of insurance providers in the German
system has kept administrativecosts high.Health
OutcomesWhether because of its health care system or because
of itshigh standard of living and commitment to providing
social services to its popu-lation, Germany enjoys a very high
standard of health. Although conditions inthe former East
Germany remain poorer than in West Germany, those differ-
ences are rapidly disappearing. Life expectancy in Germany
now averages 80,two years more than in the United States (and
with far less variation among itscitizenry). Infant mortality in

7. Germany is among the lowest in the world: 3.5 per1,000 live
births compared with 6.5 in the United States (Population
ReferenceBureau, 2014).Canada: National Health InsuranceLike
the United States, Canada is a financially successful democracy
made up ofvarious provinces and territories more or less
equivalent to US states. Althoughits GNI per capita of $42,600
is about one-quarter lower than in the UnitedStates, its economy
is strong. In addition, because of steady immigration,Canada’s
population is younger on average than populations in the
majority ofmore developed nations, which increases the
likelihood of having a relativelyhealthy population.Canada is
also, however, a huge country, with vast social differences
reflect-ing its vast geographic spaces. Its population is highly
concentrated along itssouthern border, as are most health care
personnel and facilities. Neither healthstatus nor health care
access is as good in rural areas or in its remote northernregions,
where many of the residents are poor Native Americans (known
inCanada as“First Nations”).Structure of the Health Care
SystemThe backbone of the Canadian healthcare system is the
Canada Health Act of 1984, which stipulates that health
caremust be universal, must cover all medically necessary
services, must be portablefrom province to province, must be
publically administered on a nonprofit basis,and must be
accessible to all regardless of ability to pay. The system is
builtaround public insurance paid for primarily by each
Canadian province, withassistance from the federal government
(Duncan, Morris, and McCarey, 2009;Commonwealth Fund,
2013). For this reason, the Canadian system is referredto
asnational health insurance, or (as the previous chapter noted)
asingle-payer system. In fact, however, the Canadian system is
a decentralized one" "with each province retaining some
autonomy and offering a somewhat differenthealth care system.
Underpinning the system are payments that the federal gov-
ernment gives the provinces yearly to run their health care
systems. To receivethese payments, provinces must offer
comprehensive medical coverage to all resi-dents through a

8. public, nonprofit agency. Although the details of coverage
varyacross provinces, each province must charge residents only
minimal fees and mustallow residents to move to another
province without losing their coverage.Purchasing CareThrough
a combination of federal and provincial taxes, thepublic health
insurance systems cover 70 percent of all health care costs,
includ-ing most costs for hospital and medical care and some
costs for prescriptiondrugs, dental care, long-term care, and
mental health services (Duncan et al.,2009). Because the system
is based primarily on graduated income taxes, it isfinancially
progressive: Wealthier persons pay a higher proportion of
theirincome in taxes and therefore pay more toward health care
than do others.The remaining 30 percent of health costs are
divided about equally betweenprivate insurers and private
individuals paying out of pocket. Private insurancetakes two
forms. Most commonly, Canadians purchase private insurance
tocover services not included in the national health insurance
system. In addition,some provinces now allow residents to
purchase private insurance that coversservices thatareincluded
in the national health system. Such insurance enablesindividuals
to buy these services immediately rather than having to wait
theirturn in the national health insurance system.Paying Doctors
and HospitalsHospital doctors in Canada are paid on
salary.Most non-hospital doctors work in private practices and
are paid on a fee-for-service basis by the government insurance
systems. Doctors submit theirbills directly to the health
insurance system using fee schedules negotiated annu-ally
between the provincial medical associations and provincial
governments.Unlike in the United States, in Canada, doctors
who consider these fees toolow can’tbalance bill(or“extra
bill,”as it is known in Canada): billing patientsfor the difference
between what the patients’insurance will pay and what
thedoctor wants to charge. In addition, some provinces control
costs by settingannual caps on the total amounts they will
reimburse doctors. In practice, thismeans reimbursing doctors
less for each service rendered as the total number ofservices

9. rises.Canadian hospitals (almost all of which are nonprofit)
annually receive anoperating budget and a capital expenditure
budget from their provincial insur-ance system. Hospitals can
spend their budgets as they like as long as they pro-vide care to
anyone in their region who needs services.Access to
CareCanadians average eight doctor visits per person per year
com-pared with four visits for US citizens (OECD, 2014).
Waiting times for tech-nologically complex care have been a
problem in Canada, although rarely inlife-threatening
circumstances. However, recent data suggest
considerableimprovement (Canadian Institute for Health
Information, 2010;" "2009). Most importantly, Canadians are
far less likely than US residents to gowithout needed health care
for financial reasons or to risk bankruptcy if theydo seek health
care. Moreover, although Canadians are less likely to receive
cer-tain high-technology procedures, such as coronary artery
bypass surgery, this mayreflectoverusein the United States
rather thanunderusein Canada. For example,one large study
found that after heart attacks, Americans were five times
morelikely than Canadians to receive coronary angiography and
almost eight timesmore likely to receive coronary bypass
surgery, but one-year survival rates forthe two groups were
identical (Tu et al., 1997).Controlling the Costs of CareCosts of
health care have risen rapidly inCanada, primarily because of
population growth and increased prices for drugsand advanced
technologies. Nevertheless, costs are far lower than in the
UnitedStates (OECD, 2014). The United States currently spends
17 percent of its grossdomestic product (GDP) on health care,
whereas Canada spends 11 percent.How does the Canadian
system restrain health care costs? Most important, asingle-payer
system dramatically reduces administrative overhead
(Himmelsteinet al., 2014). In a single-payer, nonprofit system,
no one need spend money sell-ing or advertising insurance,
paying profits to stockholders, sending bills to mul-tiple
insurers and individuals, or tracking down those who don’t pay
their bills.Nor is money spent collecting funds to run the system

10. because those funds arealready collected from the public
through existing taxation systems.The single-payer system also
saves money by centralizing purchasing power.As the sole
purchasers of drugs in Canada, the provinces have substantial
leverageto negotiate with pharmaceutical companies regarding
drug prices. Similarly, asthe sole payer of doctors’bills, the
provinces have considerable bargaining powerwhen negotiating
with doctors over how much to reimburse doctors per
service.Finally, as the sole payer of hospital budgets, the
government can implementefficient regional planning and avoid
unnecessary duplication of expensive facili-ties and
services.Nevertheless, costs have risen substantially. Paying
doctors on a fee-for-service basis makes it more difficult for
Canada to control medical costs.When, for example, the
provinces banned balance billing, doctors responded
byincreasing the number of services they performed (with the
provinces respondingby reducing the amount they reimbursed
for each service). Finally, Canadian hos-pitals, like US
hospitals, have reduced their costs by shifting toward
outpatientservices and shorter patient stays, thus moving some
costs from the health caresystem to family caregivers.Health
OutcomesDespite continuing problems in access to health care,
out-comes compare very favorably with those in the United
States. Infant mortalityin Canada is 5.1 per 1,000 births
compared with 6.4 in the United States, andaverage life
expectancy is three years longer in Canada. Of course, these
healthoutcomes tell us more about social conditions than about
the quality of healthcare. Nevertheless, these data suggest that
the Canadian health care system,although certainly not perfect,
is superior to the US system." "Great Britain: National Health
ServiceAs the home of the Industrial Revolution, Britain for
many decades was a lead-ing industrial power. Along with its
industrial strength came a strong labormovement as workers
united to gain political power within Britain’s parliamen-tary
government. As a result, a commitment to protecting its
citizens, including acommitment to universal health care

11. coverage, has long been central to Britain’sidentity. Beginning
in the 1980s, however, the nation’s economy declined
whilehealth care costs rose. To restrain those costs, subsequent
governments instituteda series of reforms designed to introduce
market principles into the health caresystem while retaining
universal health coverage (Lopes, Coppola, and Riste,2009).
Currently, GNI per capita in Britain is $35,800, about one-
quarterlower than in the United States.Structure of the Health
Care SystemAccording to the esteemed Common-wealth Fund,
Great Britain has the world’s top health care system (Davis et
al.,2014). Whereas Canada provides its citizens with national
healthinsurance, GreatBritain since 1948 has provided care
through itsNational Health Service(NHS)(Commonwealth Fund,
2013). In Canada, the government providesinsurance so
individuals can purchase health care from private practitioners.
InGreat Britain, on the other hand, the government directly pays
virtually allhealth care costs. As a result, the two systems look
quite similar to health careconsumers but differ substantially
from the perspective of hospitals, health careworkers, and the
government. This section focuses on the structure of theNHS in
England, one of the three countries that (along with Scotland
andWales) comprise Great Britain.Purchasing CareUnlike US
citizens, most English citizens rarely see a medicalbill, an
insurance form, or any other paperwork related to their health
care. TheNHS uses tax revenues to pay virtually all costs for a
wide range of health careservices, including medical care,
visiting nurses for the homebound, homemakersfor chronically
ill persons, and some aspects of long-term care.The NHS
receives its funds almost solely through general taxation,
withsmall supplements from employers and employees. As in
Canada, because thehealth care system is paid for through
graduated income taxes, it is financiallyprogressive.Paying
Doctors and HospitalsAs in Germany, almost all medical
specialistswork as salaried employees of the NHS at hospitals or
other health care facilities,although they can earn extra income
by seeing private patients. In contrast, mostEnglish general

12. practitioners work as private contractors, increasingly in
largegroup practices. General practitioners are paid by
capitation.Capitationrefersto a system in which doctors are paid
a set fee per year for each patient in theirpractice, regardless of
how many times they see their patients or what services
thedoctors provide. In such a system, doctors lose income when
they provide moreservices. In addition, general practitioners
receive financial supplements if they" "have low -income or
elderly patients; practice in medically underserved areas;
ormeet government targets for preventive services, such as
immunizing more thana certain percentage of children in their
practices.The vast majority of hospitals in England belong to
the government(although some now include beds for private
patients). The hospitals operatesemi-autonomously, but regional
NHS officials and hospital administratorswork together to
ensure that each hospital can offer quality care to
patients.Access to CareUnder the NHS, individual financial
difficulties no longer keepEnglish citizens from receiving
necessary medical care. Waits can be uncomfort-ably long for
nonemergency care, but any case delayed more than 18 weeks
isreported to national authorities for further action. In addition,
the NHS hasreduced substantially the geographic inequities that
for generations made medicalcare inaccessible to many rural
dwellers, although access to care remains a prob-lem in poor,
inner-city neighborhoods. Britons average five doctor visits per
per-son per year compared with four visits for US citizens
(OECD, 2014). Access tohigh-technology care and expensive
new drugs, however, remains lower than inthe United States.
That said, in the United States access to treatments is
limitedonly by the ability to pay, whereas in England a national
panel of medical expertsdecide which services should be offered
to citizens, based on their effectiveness,and then sets the prices
for those services. Those prices are considerably lowerthan
average prices in the United States and must be honored by drug
manufac-turers, private practice doctors, and anyone working
under NHS auspices. Forexample, until it was taken off the

13. market in 2011, many US health insurers(includingMedicare)
paid up to $100,000 per patient per year for the anti -cancer drug
Avastin, even though strong evidence suggested it was
ineffective(Kolata and Pollack, 2008). In contrast, the NHS
decided against covering itfrom the start, arguing that NHS
money would be better spent on less expensivedrugs with better
track records. In sum, both the US and UK systems limit
accessto care, but in very different ways with very different
consequences.Controlling the Costs of CareGreat Britain spends
about 9 percent of its GDPon health care, almost half the
percentage spent by the United States (OECD,2014). Like
Canada, Britain has made its health funds go further than they
other-wise would through national and regional planning and by
keeping salaries rela-tively low. Because the government owns
a large proportion of health carefacilities and employs a large
proportion of health care personnel, it can base deci -sions about
developing, expanding, and locating high-technology facilities
on arational assessment of how best to use available resources
and can avoid the unnec-essary proliferation of expensive
facilities. Similarly, because it is such a large buyer,the NHS
can negotiate drug prices effectively with pharmaceutical
firms.In addition, England has attempted to restrain government
health careexpenditures by promoting privatization: Private
companies can now run pri-mary care practices funded by the
NHS; private hospitals can compete forNHS contracts against
public hospitals; and NHS hospitals can now offer a vari-ety of
services on a cash basis. In addition, officially commissioned
groups of" "have low-income or elderly patients; practice in
medically underserved areas; ormeet government targets for
preventive services, such as immunizing more thana certain
percentage of children in their practices.The vast majority of
hospitals in England belong to the government(although some
now include beds for private patients). The hospitals
operatesemi-autonomously, but regional NHS officials and
hospital administratorswork together to ensure that each
hospital can offer quality care to patients.Access to CareUnder

14. the NHS, individual financial difficulties no longer keepEnglish
citizens from receiving necessary medical care. Waits can be
uncomfort-ably long for nonemergency care, but any case
delayed more than 18 weeks isreported to national authorities
for further action. In addition, the NHS hasreduced substantially
the geographic inequities that for generations made medicalcare
inaccessible to many rural dwellers, although access to care
remains a prob-lem in poor, inner-city neighborhoods. Britons
average five doctor visits per per-son per year compared with
four visits for US citizens (OECD, 2014). Access tohigh-
technology care and expensive new drugs, however, remains
lower than inthe United States. That said, in the United States
access to treatments is limitedonly by the ability to pay,
whereas in England a national panel of medical expertsdecide
which services should be offered to citizens, based on their
effectiveness,and then sets the prices for those services. Those
prices are considerably lowerthan average prices in the United
States and must be honored by drug manufac-turers, private
practice doctors, and anyone working under NHS auspices.
Forexample, until it was taken off the market in 2011, many US
health insurers(includingMedicare) paid up to $100,000 per
patient per year for the anti-cancer drug Avastin, even though
strong evidence suggested it was ineffective(Kolata and
Pollack, 2008). In contrast, the NHS decided against covering
itfrom the start, arguing that NHS money would be better spent
on less expensivedrugs with better track records. In sum, both
the US and UK systems limit accessto care, but in very different
ways with very different consequences.Controlling the Costs of
CareGreat Britain spends about 9 percent of its GDPon health
care, almost half the percentage spent by the United States
(OECD,2014). Like Canada, Britain has made its health funds
go further than they other-wise would through national and
regional planning and by keeping salaries rela-tively low.
Because the government owns a large proportion of health
carefacilities and employs a large proportion of health care
personnel, it can base deci-sions about developing, expanding,

15. and locating high-technology facilities on arational assessment
of how best to use available resources and can avoid the unnec -
essary proliferation of expensive facilities. Similarly, because it
is such a large buyer,the NHS can negotiate drug prices
effectively with pharmaceutical firms.In addition, England has
attempted to restrain government health careexpenditures by
promoting privatization: Private companies can now run pri -
mary care practices funded by the NHS; private hospitals can
compete forNHS contracts against public hospitals; and NHS
hospitals can now offer a vari-ety of services on a cash basis. In
addition, officially commissioned groups of" "importance of
eradicating syphilis and attempting to reduce the stigma of
seekingtreatment for syphilis by defining the disease as a
product of the corrupt formerregime rather than a matter of
individual guilt. Those identified as likely to havesyphilis were
tested and treated if needed. These methods—coupled with
testing,among others, persons applying for marriage licenses,
newly drafted soldiers, andentire populations in areas where
syphilis was especially common—dramaticallyreduced
theprevalenceof syphilis in China.Physician ExtendersThe
second innovative strategy for which China has wonacclaim is
its use of physician extenders in addition to medical doctors
trainedin Western and (rarely) traditional medicine. In urban
areas,street doctorsoffer both primary care and basic emergency
care, as well as health education,immunization, and assi stance
with birth control. Street doctors have little formaltraining and
work in outpatient clinics under doctors’supervision.In rural
areas,village doctorsplayed a similar role. Novice village
doctorswere selected for health care training by their fellow
workers based on their apti-tude for health work, personal
qualities, and political“purity.”After about threemonths of
training (supplemented yearly by continuing education), village
doc-tors returned to their rural communes, where they divided
their time betweenagricultural labor and health care. Beginning
in the late 1970s, however, villagedoctors were largely replaced
byassistant doctors, who receive three years ofpostsecondary

16. training in Western and traditional Chinese medicine and
whocan provide both primary care and minor surgery.
Unfortunately, there are fartoo few assistant doctors, and so
rural areas remain seriously underserved.Purchasing CareAs
China’s economy has changed from a largely socializedand
centrally controlled system toward a more decentralized,
economically het-erogeneous model, so has its health care
system (Chen, 2001; Wang et al., 2007).For the majority of
urban residents, these shifts have brought few changes. As inthe
past, the government pays most costs of health insurance and
health care forgovernment employees, military personnel, and
students. Public industries andurban industrial collectives also
pay for care for their workers. The growing andnow significant
numbers of urban residents who work in private
enterprises,however, often lack any health insurance.For rural
Chinese—about 60 percent of China’s population—recent
yearshave brought dramatically reduced access to health care
(Wang et al., 2007).Before the 1980s, rural residents received
their care at little or no cost throughthe agricultural communes
where they lived and worked. Within these commu-nes,
members shared all profits and costs, including those for health
care. Eachcommune had between 15,000 and 50,000 members,
several village doctors, anda clinic staffed by assistant
doctors.Beginning in the early 1980s, most agricultural
communes reverted to theiroriginal noncommunal village
structures, with each family given land to farm bythe village.
Families now keep their profits but are responsible for their
own wel-fare if costs exceed profits. Because of this shift in
financing, the former commu-nes no longer earn sufficient
revenues to continue providing health care. Many" "village
doctors returned to full-time agricultural work, and most
assistant doctorsmoved to township or city clinics. Almost all
rural residents now receive theirprimary health care on a fee-
for-service basis, and financial difficulties haveforced some to
cut back on needed care. In addition, waning government sup-
port for large-scale public health activities has allowed

17. previously conquered dis-eases to reemerge. For example,
schistosomiasis, a debilitating and sometimesdeadly disease
once eradicated by mass campaigns that killed the snails
thatcarry it, is again endemic in some rural areas (Yardley,
2005).Paying Doctors and HospitalsCurrently, non-hospital
doctors in Chinawork primarily on a fee-for-service basis, and
hospital doctors work on salary.In addition, many townships
(made up of six or more rural villages) have a clinicwhere
doctors work on salary but are allowed to divide among
themselves anyprofits that the clinic generates. As a result,
doctors have an incentive to orderunnecessary tests and
procedures (Wang et al., 2007).Unlike most medical care,
hospital care has remained largely a public enter-prise. Almost
all hospitals receive their operating and capital budgets from
federalor local governments. In recent years, however, budgets
have been cut and greatpressure has been placed on hospitals to
generate income through selling drugsand services and by
starting other enterprises. As a result, hospital patients
runconsiderable risk of receiving unnecessary (and potentially
dangerous) drugs, sur-geries, and other treatments (LaFraniere,
2010).Access to CareBecause of the changes in China’s health
care system, prices forhealth care have risen and access has
diminished, especially in rural areas, wherefewer hospital beds
and doctors are available per capita. Although primary
careremains affordable, even for those who lack health
insurance, there are very fewprimary care doctors per person.
As a result, people often turn to hospitals—whichcan be
prohibitively expensive—even for very basic care (LaFraniere,
2010).To equalize access to care, the government has
established a national fund tosupplement the health care budgets
of poorer regions and an insurance programfor childhood
immunizations. Those who, for a small premium, purchase
thisinsurance receive free immunization for children up to age
seven and freetreatment if a child develops one of the infectious
diseases the immunizationprogram is supposed to prevent. More
than half of all children in the countrybelong to this program.

18. Finally, a similar insurance program offers prenatal
andpostnatal care to women and infants; it is not known how
many are covered bythis program.Health OutcomesAlthough
China’s economy is developing rapidly, it stillspends only about
5.2 percent of its GDP (about $400 per person) on healthcare,
considerably less than that spent in the more developed nations
(OECD,2014). Nevertheless, China’s commitment to equalizing
both income and healthcare has allowed it to attain health
outcomes far greater than its economic statusor investment in
health care might predict. Although median income in
Chinaremains similar to that in many otherless developed
nations, China boasts" "health outcomes only slightly below
those of the more developed nations.Whereas in 1960 infant
mortality was 150 deaths per 1,000 and life expectancywas 47
years, currently infant mortality is 21 per 1,000 and life
expectancy is 74,only four years lower than in the United States
(Population Reference Bureau,2014). Although large and
increasing differences in health status remain betweenrural and
urban dwellers, China now stands on the cusp of
theepidemiologicaltransi tion, with chronic and degenerative
diseases increasingly outpacing infec-tious diseases as the
leading causes of death.Nevertheless, some regions of China
continue to face health problems thathave long characterized the
less developed nations, such as insufficient access toclean
drinking water. The rise of a market economy has contributed to
theseproblems as pressure to develop profitable industries has
increased water and airpollution and decreased occupational
safety, especially in rural areas (Chen,2001). Similarly,
pressures on the health care system to control costs and
generateprofits has led to a decreased emphasis on preventive
care and increased emphasison profit-generating treatments and
diagnostic procedures.Despite these problems, however, China
does offer some lessons in how toimprove health in the less
developed nations. As Chapter 4 described, three fac-tors seem
to explain how China (like Sri Lanka, Costa Rica, Vietnam, and
Cuba)achieved excellent health outcomes at low cost (Caldwell,

19. 1993; Riley, 2007).Not surprisingly, health outcomes improved
when access to medical careimproved. But improved health
outcomes depended even more on emphasizingfamily planning;
raising education levels among men; and, especially, raising
edu-cation levels among women. Once women’s educational
levels increased, theirpower in the family increased, giving
them greater control over family planning.Women’s lives thus
were less often cut short by childbirth, and their babies
wereborn healthier. In addition, as women’s status rose, they
and the children whodepended on them more often received a
fair share of the family’s food, thusreducing malnutrition and
increasing life expectancies.Mexico: Moving toward Equitable
Health CareUnderstanding Mexico’s health care system is
particularly important for US citi-zens because Mexico shares a
long and permeable border with the United States.People
routinely travel across the border in both directions for work or
pleasure,bringing their diseases with them. In addition, both
MexicansandUS citizenssometimes cross the border to the other
country to seek health care, althoughMexicans more often travel
north to seek medical care for life-threatening healthconditions,
and US citizens more often travel south to seek inexpensive
cosmeticsurgery, dental work, or medical drugs.Mexico has only
recently entered the ranks of the more developed nations
andstill has much in common with thelessdeveloped nations. As
Mexican industry hasdeveloped, many have moved off the land,
and now more than three-quarters ofMexico’s population live in
cities. Those cities contain both middle-class neigh-borhoods
that enjoy health and living conditions similar to those found in
themore developed nations and impoverished slums that lack
such basic facilities as" "running water and sewer systems.
These slums are inhabited primarily by migrantsfrom rural
areas. Rural areas, especially those inhabited primarily by
Indians,generally are poor, and about 40 percent lack sewer
systems (Pan American HealthOrganization, 2012). GNI per
capita remains only $16,100—considerably higherthan in China
but far lower than in the United States or in the European

20. nationsdiscussed in this chapter (Population Reference Bureau,
2014).Structure of the Health Care SystemUnlike any of the
other countriesdescribed in this chapter, Mexico has a three-part
system for health care: (1) pri-vate health care and health
insurance for the wealthiest, (2) a government-provided
insurance program for salaried workers (Social Security), and
(3) aseparate government-provided insurance program for
everyone else (SeguroPopular) (Frenk et al., 2006). This three-
tiered system is a product of Mexico’sunique history, in which
revolutionary fervor and conservative sentiments havealways
counterbalanced each other and in which the social and
economic divisionbetween Indians (who now make up less than
10 percent of the population) andothers (who are primarily a
mix of Spanish and Indian) has remained important.Over the
centuries, Mexico has experienced several revolutions—some
vio-lent and some at the ballot box. Throughout the twentieth
century, these revo-lutions resulted in gradual improvements in
the health care available to Mexico’scitizens. In 1917, Mexico’s
new constitution first gave the federal governmentresponsibility
for health care. The government soon began providing funds
forrural clinics staffed by health aides and, by the 1930s, began
requiring all newphysicians to work for a year in a rural
community.The next major change in the health care system
occurred in 1942, whenthe government established the Social
Security program and opened a networkof modern health clinics
and hospitals around the country for Social Securitymembers.
However, that program covers only salaried workers—about
half thepopulation—leaving many others with no access to
health care or with crushingdebts if they seek such care.
Consequently, in 2003, Mexico passed a law aimedat reforming
this system (Knaul et al., 2012). Under the 2003 law, all
Mexicansnot eligible for Social Security can instead obtain
membership in anothergovernment-run health insurance
program, known as Seguro Popular (PublicInsurance).
Membership is free for the poorest 20 percent of Mexicans and
avail-able on a sliding scale to all others. Less than a decade

21. later, more than 50 millionpeople had enrolled in the program,
giving Mexico essentially universal healthinsurance coverage
(Knaul et al., 2012).Nevertheless, inequities remain within the
system (Knaul et al., 2012). SocialSecurity provides a more
comprehensive package of health benefits than doesSeguro
Popular, and urbanized and wealthier regions continue to have
more andbetter health care providers and facilities than do rural
and poorer regions underboth Social Security and Seguro
Popular. Although these inequities are diminish-ing, the system
as a whole remains underfunded, so problems are likely to
continue.Purchasing CareMexicans typically pay only small
copayments or other feesfor their health care. Fees are waived
for the poorest Mexicans."
"Health OutcomesAlthough Mexico remains rife with social and
economic in-equities and resulting inequities in health, it has
nevertheless achieved notable im-provements in health
outcomes for much of its population. Consequently, by
somemeasures, Mexico appears to have completed the
epidemiological transition—cancer and heart disease now kill
more Mexicans than do infectious diseases, andlife expectancy
is 76, only two years less than in the United States
(PopulationReference Bureau, 2014). Infant mortality, child
mortality, and maternal mortalityall decreased substantially
between 2000 and 2010 (Knaul et al., 2012).These health
outcomes have been achieved at relatively little cost.
Mexicospends less than $1,000 per person on health care—
about 6 percent of its GDP,compared to 16 percent in the United
States (OECD, 2014).Democratic Republic of Congo: When
Health Care CollapsesCurrent conditions in the DRC are the
result of more than a century of corruptand unstable
governments. During the 1880s, King Leopold II of
Belgiumgained control over what was then known as the Congo
Free State, holding itas his private property. Although Belgian
administrators helped to develop basicinfrastructure such as
roads and hospitals, they also exploited natural resources
forBelgium’s benefit, used brutal force when it suited their

22. purposes, kept virtuallyall power in Belgian hands, and flamed
ethnic conflict among different Congo-lese ethnic groups to
keep them from uniting against Belgian control.Belgium
relinquished control over the DRC in 1960. Since then, the
coun-try has been governed primarily by a series of corrupt,
ruthless dictators (oftenfunded by the United States for its own
purposes). To make matters worse,beginning in 1998, the
country was torn by a ferocious civil war that was fueledby
inter-ethnic conflict and competition over valuable minerals.
The numbers ofdead from that war approach those from World
War II, and the widespread useof mass rape as a weapon
stunned the world.Although the civil war officially ended in
2003, the violence continues, andthe central government’s
control over the military, paramilitary groups, and thepublic
remains fragile. Moreover, years of warfare led to
environmental destruc-tion, the abandonment or destruction of
agricultural lands, and large-scale move-ment of citizens away
from rural war zones into substandard, temporary housing
incities. All these factors have fed malnutrition and disease,
including preventableoutbreaks of cholera; measles; malaria;
and, most ominously, Ebola virus disease(Doctors Without
Borders, 2014). The DRC remains one of the world’s
poorestnations, with a GNI per capita of only $680 (Population
Reference Bureau, 2014).Structure of the Health Care SystemOn
paper, the health care system in theDRC consists of a network
of hospitals, primary care clinics, and public healthworkers
distributed around the country’s numerous health districts
(Inungu,2010). These days, however, it is difficult to even talk
about a health care systemin the DRC. During the civil war,
many doctors fled rural areas or fled thenation altogether, many
hospitals were damaged or destroyed, and man" "pharmacists
lost access to basic medications. Although conditions have
improvedsince then in urban areas (primarily because of
disease-specific health programssponsored by the World Bank,
World Health Organization, and other interna-tional nonprofit
organizations), the situation remains dire. In areas where

23. conflictcontinues, health care personnel have been harassed or
threatened, and manyclinics have been abandoned (Doctors
Without Borders, 2014).Purchasing CareAlthough treatment in
state-run clinics and hospitals is sup-posed to be offered at low
prices, in reality, patients and their families are oftenexpected
to pay for everything, including medicines, bandages, and other
supplies.Moreover, even the lowest of fees are too high for
many Congolese to pay. Othersmay decide against going to a
doctor because they know they can’t afford any med-icines that
the doctor might prescribe (Doctors Without Borders,
2014).Because of both cultural traditions and a lack of access to
Western medicine,many Congolese rely on homemade herbal
remedies or seek care from tradi-tional midwives or traditional
healers calledngangas(Inungu, 2010).Ngangasarebelieved able
to determine whether an illness was caused by natural or
supernat-ural forces and to prescribe appropriate treatments,
such as wearing a talisman toward off evil or drinking an herbal
potion. Some of the treatments used by tra-ditional practitioners
undoubtedly help (if only through aplaceboeffect), butothers
undoubtedly harm.Paying Doctors and HospitalsIn theory,
doctors and hospitals receive regularsalaries and budgets from
the federal government. In practice, many doctors havebeen
paid little or nothing for years, so they support themselves by
charging feesto patients and their families (Michon, 2008).
Most hospitals now receive most oftheir funding from
international nonprofit organizations and donations from
themore developed nations.Access to CareAs this discussion
suggests, most citizens of the DRC—especially in rural areas—
have extremely limited access to modern medical care.Many of
the rest rely on temporary facilities staffed by international aid
workers.Meanwhile, the wealthiest Congolese can travel to
South Africa or elsewherewhenever they need care (Inungu,
2010).Health OutcomesBy all measures, health outcomes in the
DRC are abysmal.Average life expectancy is only 48 years, far
below that in most nations aroundthe world. Similarly, 114 of
every 1,000 babies die in infancy—18 timeshigherthan in the

24. United States (Population Reference Bureau,
2014).IMPLICATIONSA critical approach to health care reform
suggests that for true structural changesto occur in the US
health care system, we must be willing to challenge thepower
dynamics underlying the current system—something that did not
happen"