Time to abandon single-payer healthcare?

All public healthcare systems share one problem: Which technical solution should be used to
funnel typically 8 – 11 % of national income into healthcare services? There are in Europe – with a few exceptions – two ways of doing so:

“Bismarck” healthcare systems (named from the German statesman introducing the first European “welfare state” during the 1880´s, with public pensions, healthcare and so on): In countries organizing healthcare this way, healthcare is funded through social insurance, with a multitude of insurance organisations, Krankenkassen etc, who are organisationally independent of healthcare providers. Here you often talk also of social insurance or multi-payer models.

“Beveridge” systems (from the inventor of the NHS, William Beveridge, in the 1940´s outlining the British welfare system): In these countries financing and provision are handled within one organisational system. This means that financing bodies and providers wholly or partially belong to one organisation, such as the NHS of the UK, counties of Nordic states etc. They are often called single-payer or tax-funded models.

For more than half a century, particularly since the formation of the British NHS 1948, the largest Beveridge-type system in Europe, there has been intense debating over the relative merits of the two types of system. Already in the EHCI 2005, the first 12-state comparison pilot attempt, it was observed that “In general, countries which have a long tradition of plurality in healthcare financing and provision, i.e. with a consumer choice between different insurance providers, who in turn do not discriminate between providers who are private for-profit, non-profit or public, show common features not only in the waiting list situation …”

Bismarck in top

Looking at the results of the EHCI 2006 – 2009, it is very hard to avoid noticing that the top
performers consist of dedicated Bismarck countries, with the small-population and therefore more easily managed Beveridge systems of the Nordic countries squeezing in. Large Beveridge systems seem to have difficulties at attaining really excellent levels of customer value. The largest Beveridge countries, the U.K. and Italy, keep clinging together in the middle of the Index.

There could be (at least) two different explanations for this described outcome:

Managing a corporation or organisation with 100 000+ employees calls for considerable
management skills, which are usually very handsomely rewarded. Managing an
organisation such as the English NHS, with close to 1½ million staff,
would require absolutely world class management. It is doubtful whether public organisations offer the compensation and other incentives required to recruit those managers.

Further, in Beveridge organisations, responsible both for financing and provision of healthcare, there would seem to be a risk that the loyalty of politicians and other top decision makers could shift from the customer/patient to the organisation these decision makers, with justifiable pride, have been building over decades.

The map shows that the best combined performance is to find in the Green countries. Among these all belong to the multi-payer culture, with exception for the small Nordic countries. Single-payer healthcare systems are common among the Yellow countries, with less well-serving healthcare.

This description is quite brief and there are no doubt large many aspects to take into consideration trying to make a choice between these two systems, from a performance view. Soon ten years of Health Consumer Powerhouse measurements and analysis points to advantages all over the field, suggesting that “Bismarck beats Beveridge”. Or to put it another way: single-payer countries could do well questioning the way they are today funding and running healthcare, in favour of multi-payer solutions.

Please feel free to use this material, referring to the source: Euro Health Consumer Index 2013.