Saturday, November 03, 2012

A Case Study in Sustainable Health Care

Now that Obamas reelection is more or less a question of time rather than probability (by no means only due to Sandy), we can define ACA as a permanent fixture in the American society. This of course is in line with the general trend of the US to become like Europe; an old democracy on its way down to insignificance and probably disaster. 

But why would I judge that the ACA will won't work in the US. Well, first of, it is built on the unsustainable patterns of European (mostly French, German and UK) templates with a mix of Canadian health care thrown in. However, unlike the more diligent and better trained Bureaucrats in Europe, the American system is less efficient and more prone to unreadable legislation. 

The health care systems in central Europe are broken, one and all. It is actually only a matter of time, which system will explode first in the low-growth countries of Central/Western Europe. The British NHS is already on the verge of tearing up and might do so, if the crisis continues for a few years. Either that or service quality will get unbearable. 

The German case is different, as it has been reformed a couple of times to make it more competitive. Also, the general debt of Germany is lower than the other two European super-powers. The French system is the worst and might see drastic service reduction due to high French debt and low economic growth. Actually, I think that the losses of the French system will be internalized in debt. While this might buy some time, it will make Frances economic status even more volatile to the European crisis going on around it. Maybe even the crisis will force France to change its health care system fundamentally. 

But which one will be the first to blow up? That more or less depends on the economic growth in the next years and the population growth. While the German system might remain more efficient in the long run and might even balance its budget, the disadvantage is low birth rates. France has still the highest birth rates in Europe (approx. 2 childs/citizen - you can see birth rates, thanks to GOOGLE!!, of all 3 countries here) and thus might evade the downside of its health care expenses for quite a while. The UK is on the middle ground and its debt/GDP ratio is not looking good. Of course, all of these issues are only indicators. F.e. the UK could reform its system in a year or two and change the whole story. Linear Trends are rarely realistic, especially in policy fields that depend on which party is more prone to changing a running system.

Now, none of these systems can be imported to the US. Even the most reformed German one, despite the US having a strong Germanic population base. Mostly this is due to the fact that the US is more divers than France or Germany and even more heterogenic than Great Britain.
This leads to worse legislation in the context of efficiency and thus even though the system works in Germany, it wouldn't in the US. Mostly this is due to subpar public institutions (just look at the DMV compared to the German KFZ-Stelle - one is a nightmare, the other is a service oasis). 
The same is true for France or the UK, and this might be the reason, why adopting European schemes and not improving on them is a bad idea. On top of that mistake, you can also put the idea to mix all three systems and not take the best of each, but rather a mixture of the worst.

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