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Warning Signs from Europe

The health plan wonderland of middle Europe has some issues of its own that Americans might factor into their own debate.

Europe, as everyone knows, has just and decent health coverage; America doesn't. But three years ago the streets of Swiss and German cities rang with noisy labor marches — drums, chants, whistles, hand-drawn signs — consisting of doctors in hospital scrubs. It was disturbing to watch. First you thought: Who let all those doctors out of the hospital? Are the patients OK? Then you thought: Wait, why are doctors protesting?

National health care schemes in Germany and Switzerland (and many other countries) rely on the government's power to cut deals with major industry groups, including doctors, to keep expenses down. European doctors who work in the statutory insurance market earn scaled salaries set in agreements with the government.

The result is a class of doctors that feels increasingly underpaid and overworked. German hospital doctors earn about one-fifth of their American counterparts — an average of $56,000 per year, as opposed to $268,000 in the states. When negotiations with the government fall short, the doctors behave like any other group of workers in Europe: They take to the streets.

The marches in 2006 were the largest in German history, triggered by government reforms aimed at controlling costs in the national health care system.

Only part of the problem was pay. Another problem, from the doctors' point of view, were the so-called bonus-malus laws, which punished them for prescribing expensive drugs and rewarded them for prescribing generics. The idea was to keep down pharmaceuticals prices, but the doctors felt the hot breath of government on their necks. "This ethically objectionable bonus-malus legal gimmickry — akin to bribing physicians not to treat to the best of their ability — was one of the sparks of the doctor protest movement," wrote Alphonse Crespo, a libertarian-minded Swiss orthopedic surgeon.

The reforms finally pushed through by Angela Merkel's government gave Germany its current system, which uses a central fund to compensate insurance companies for patients according to the patients' risk. The government dropped its bonus-malus rules in 2008. But Germany's specific problems with its health care system are less relevant than their cause, which is the same as the cause of America's crisis: ballooning costs. Doctor salaries are the least of it. The German system is full of administrative corruption within the nation's many insurance companies.

So is insurance itself the problem?


"We've become so used to health insurance [in America] that we don't realize how absurd it is," writes David Goldhill in a recent unconventional survey of America's health care trouble. "... Imagine sending your weekly grocery bill to an insurance clerk for review, and having the grocer reimbursed by the insurer to whom you've paid your share. An expensive and wasteful absurdity..."

But the main complaint in Europe is that both doctors and patients feel increasingly irrelevant in a battle over budgets between insurance companies and the government. That should sound familiar in America. The only real cure is to give patients themselves more say in their own coverage — a true competitive market, in other words, which the largely nonprofit German system lacks.

Forcing people to buy insurance, European-style, might be the wrong way to go. Crespo argues that Swiss health care has deteriorated since the government made insurance mandatory in 1994. It had one unwanted result of bringing the Swiss insurance companies closer to the business of lawmaking. Doctors at the time, Crespo writes, "did not predict that this measure would spawn a powerful insurance cartel whose power would be used against them and their patients."

The mandatory-insurance law didn't change much in terms of enrollment, anyhow: About 90 percent of the Swiss were already enrolled in some kind of health plan. The reason for that may be the size of the nation, and the nature of the Swiss. But for decades before, the government also mandated a simple "basic benefits package," and kept competition between private insurance companies strong, which kept insurance prices relatively low.

So is such a thing possible in America? A competitive market for insurance, with just enough central regulation to provide basic care for everyone? Well, if America can't figure that one out, then who can?

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