Institute for Research on Labor and Employment

Among the 19 rich democracies I have studied for the past 40 years, the United States is odd-man-out in its health-care spending, organization, and results. The Obama administration might therefore find lessons from abroad helpful as it moves toward national health insurance. In the past hundred years, with the exception of the U.S., the currently rich democracies have all converged in the broad outlines of health care. They all developed central control of budgets with financing from compulsory individual and employer contributions and/or government revenues. All have permitted the insured to supplement government services with additional care, privately purchased. All, including the United States, have rationed health care. All have experienced a growth in doctor density and the ratio of specialists to primary-care personnel. All evidence a trend toward public funding. Our deviance consists of no national health insurance, a huge private sector, a very high ratio of specialists to primary-care physicians and nurses, and a uniquely expensive (non)system with a poor cost-benefit ratio. The cure: increase the public share to more than 65% from its present level of 45%. In regards to funding the transition cost and the permanent cost of guaranteed universal coverage: no rich democracy has funded national health insurance without relying on mass taxes, especially payroll and consumption taxes. Whatever we do to begin, broad-based taxes will be the outcome. Three explanations of "why no national health insurance in the U.S.?" are examined.