The American political commentator Robert Kagan once claimed that ‘Americans are from Mars, Europeans from Venus’. If so, I have just spent a week in the capital of Mars. And, back on Venus, I have watched from afar the debate, if that is the right word, on the reform of the Martian healthcare system.
I am not sure about the Mars-Venus ascriptions. But I am more convinced than ever that in many fundamental respects, and in spite of their common roots, Europe and America inhabit different worlds. Indeed there are reasons to claim that Europe – with all its failings – has its two feet on planet earth while America is, well, on some other planet; this is certainly true with respect to healthcare, the focus here, but in fact in many other areas, too.
That will doubtless strike many readers as Eurocentric cultural snobbery. But is it?
Most educated Europeans know that not far short of 50 million Americans lack health insurance – that’s almost one in six – a unique situation amongst developed countries. Almost half of the uninsured are adult workers (not ‘undeserving poor’) and of course coverage rates are lower for low than highly paid workers (details here). Worse, this number is not a constant stock: in any one year a far greater number are at risk of becoming uninsured (through unemployment or because their employer ends coverage or hikes contribution rates to unaffordable levels).
Even worse, precisely those most in need of coverage are most likely to be without it. This is because insurers are allowed to weed out those with or suspected of having an existing medical condition. Less widely recognized, but probably even more important, is the fact that the US principle of ‘employment at will’ interacts fatally with the health system – and I use that adverb advisedly: between around 20 and 50 thousand Americans are estimated to die every year because of lack of insurance. Unlike in Europe, where employers normally have to justify dismissals (and health insurance cover is anyway essentially universal), in the US an employer can simply dismiss a sick worker. Given the dominance of employer-based health coverage, this means a simultaneous loss of good health, one’s job (and thus income) and – precisely when it is most needed – health insurance. This Damocles’ sword hangs over many if not most private-sector workers.
Now, American and some European commentators have defended this set-up – in the Mars-Venus vein – in terms of American individualism, self-reliance and an emphasis on market efficiency over a European focus on state-enforced equity and redistribution. Yet the US system is not only inequitable it is grossly inefficient. Health spending per capita and as a percentage of GDP is way above any of the other OECD countries – twice as much per person as in countries such as France and Germany (even allowing for price-level differences). Not only that, public spending – if you like, ‘socialised spending’ – on health is higher in the US per capita than in every OECD country except Norway and Luxembourg. Administration gobbles up twice the OECD average proportion of health spending. And above all: US health outcomes are extremely mediocre. The broadest measure – so-called potential years of life lost (PYLL) – ranks the US third-last for women and fifth-last for men in the OECD, albeit this also reflects other factors than healthcare.
If you have been following the US healthcare debate, you may well feel that such facts do not justify seeing the US on another planet compared to Europe: ‘sure, the US healthcare system is broken. But now it has been fixed with the passing of the health bill’. Err, no. Consider first the outcome, and then the process.
The outcome – Obamacare for short – has been described as historic. In some ways that is true: Obama has succeeded where a string of illustrious presidents going back to Harry Truman after WWII has failed. Yet ten full years down the line, it is forecast merely to have halved the number of people currently uninsured, still leaving some 23 millions without cover (although without the reform the number would rise to 54 million). Ten years after the historic victory, God’s own country will be keeping company with Turkey and Mexico, rather than more advanced countries like, say, Poland, within the OECD family – that is, of course, unless these emerging markets overtake the US in the intervening period. I think that is likely. Moreover, Obamacare does little to rein in the exploding costs of American medical madness. There are grave doubts about the longer-term financial sustainability of the system even after the reform.
Perhaps even more relevant for the ‘other planet hypothesis’ is the fact that this minimal reform – which, for all the media hype and dancing in the aisles of Congress, leaves the US with what can only be described as a unique healthcare system – has generated such vitriolic opposition. Despite widespread dissatisfaction with the current system, voters are, to say the least, cautious, and many viscerally hostile. Republicans railed against socialism, communism and a whole lot of other –isms (and thirty-four Democrats voted against in the House). The bill was turning back the clock of history, Congressman Devin Nunes said: ‘For most of the 20th century people fled the ghosts of communist dictators. And now you [Democrats] are bringing the ghosts back into this chamber.’ Mr. Nunes seems to be unaware that all of the European countries that threw off the Communist yoke twenty years ago now have ‘socialised medicine’. Such views are ‘on another planet’ in another, perhaps more insidious sense: a willing blindness in America to the fact, documented in hundreds of independent international studies, that the US health system performs worse than just about any system in the developed world – all of which are more or less completely ‘socialised’.
It is true that this is still focusing on healthcare alone. (Actually I think that is justified, not just because this is the topic of the hour, but also because healthcare is, well, a matter of life and death.) Yet I could write a year’s worth of monthly columns describing one social indicator after another in which the US is ‘off the chart’ compared with Europe. Given that I don’t have time to write them nor you to read them, here are some illustrative examples.
Of the thirty OECD member countries (which include Mexico and Turkey; data mostly from here) the USA was the fourth most unequal (Gini) and had the third-highest poverty incidence. It had the second-lowest cash transfers as a share of disposable income (but only the tenth-lowest tax burden), and the second-highest rate of teenage pregnancies. Of a smaller sample of twenty OECD countries, the US records the second-lowest average unemployment benefit replacement rate and the lowest employment protection (dismissal) legislation. On a global ranking of ‘economic security’ by the ILO, the US ranks 25th. The US is the only advanced country that has no statutory provision on paid holiday – it is the no-vacation nation – nor for paid sick leave. US incarceration and capital punishment rates are the highest in the developed world, as are its per capita carbon emissions.
I’ll stop before I get onto religion. I hope the message is clear. In one socio-economic field after another, when you rank the world’s rich countries, the US is at the very edge of the distribution.
So what’s the lesson for Europeans? You might be forgiven for thinking so, but my point is not to engage in America bashing. The US has much to admire. The issue is that implicitly and often explicitly the US has served as Europe’s role model. The défi américain – the challenge of catching up with the US – has dominated elite thinking in Europe since at least the 1960s. It lay behind the (failed) Lisbon strategy of the ‘noughties’. Increasingly, meeting this challenge came to mean adopting, or moving in the direction of, American social and regulatory institutions. My point is that Europe (or America) is different.
If the financial crisis should give pause in importing untrammelled financial capitalism, the healthcare debacle should stiffen Europe’s resolve regarding the role of its public sector and publicly financed service provision; more broadly, the sort of social indicators mentioned above should persuade European policymakers of the need to look with an unjaundiced eye at the institutions constituting the ‘European Social Model’ and the need to reform them. ‘Planet Europe’ should be open to learning from other parts of the world, but should be built according to the wishes of European citizens.