Health care policy
POLI 352A
Does your health system need reform?
Fundamental reform?
Completely rebuild system?
Canada 59% 18%
United States 51% 28%
United Kingdom 60% 18%
Germany 66%
OK, but what’s the problem?
High cost / inadequate coverage?
Shortage of supply / Waiting times
Canada13%
8%
54%
27%
United States48%
25%
5%
3%
United Kingdom6%
8%
33%
39%
How responsive is the system?
Ranking
United States 1
Germany 5
Canada 7
United Kingdom 26
How fairly are costs distributed?
Ranking
Germany 6
United Kingdom 8
Canada 17
United States 54
Out-of-pocket costs
Amount / person / year
(US$)
Share of health spending
United Kingdom $40 3.1%
Canada $304 17%
Germany $306 11%
United States $696 16%
Overall performance
Responsiveness Fairness Cost-control
United States High Low Low
United Kingdom Low High High
Canada Medium Medium Medium
Germany High High Medium-low
Financing health care
• Unified financing: taxation– Cost distributed fairly
– Easy to cap spending
VS.
• Fragmented financing: Insurers– Hard to cap spending
– Unfair distribution if unregulated
Delivering health care
• Public delivery
• Private delivery (non- or for-profit)– May be more responsive
– But cost-control may be harder depending on
• Payment method – this is crucial– Fee-for-service more care, higher costs
• More common with private delivery
– Salary / capitation
Financing and delivering care
Unified
(Tax-financing)
Fragmented
(Insurers)
PublicUnited
KingdomFrance
(hospitals)
Private
(for- or non-profit)
Canada
Germany (social)
United States (private)
Financing
Delivery
Financing and delivering care
Unified
(Tax-financing)
Fragmented
(Insurers)
PublicNational health
service?
Private
(for- or non-profit)
National health insurance
Social or private
insurance
Financing
Delivery
Why policy differences?:Public opinion?
• Do voters get the health care system they want?
• Comparison– U.K., Canada, U.S. all individualist cultures
• Processes– Elite action in UK and Canada precedes public clamour
– Much NHI support in U.S.
Why policy differences?:Interests?
Could outcome reflect the power of interests for and against?
• Doctors– Oppose state dominance
– But to varying degrees, shaped by past policy
• Labor– Similar strength in Canada/US till 1960s
– Labor unrest in US in 1930s
– NHI not always creature of the Left
Explanation:Hacker on policy feedback
Three policy choices have big feedback effects:
1. Policies that encourage private insurance
2. Policies that target vulnerable groups first
3. Policies that promote medical technology
• Sequence matters.
Explanation:Hacker on institutions
Institutions determine when moves are made and which policies come first.
• Shape opportunities of organized opponents (veto points)
• Shape paths to influence of small, insurgent parties
Policy feedback in health care
• Group interests
• Costs of NHI• Objective
policy problems
• Public opinion
Difficulty of moving to NHI later
Early health policy choice
New politics
Policy feedback in Britain
• Social learning about 1911 failures
• Vested interests in status quo (inhibits reform)
• Shapes doctors’ interests
• Shapes public expectations
Early adoption of NHI (1911)
New politics
Britain: 1911
• Institutions allow early adoption of NHI (1911)– Single-party government
– Party discipline
• But early policy matters– Has to accommodate existing insurers
– Doctors’ interests shaped by poor prior conditions
Policy feedback in Britain
• New ideas
• Still-broken system
• Doctors’ weakened opposition
• Public support
Policy choice (1946):
Socialized finance and delivery
New politics
+ Institutions
Canada: 1945
• Popular support• Federal government support• Little MD-friendly private insurance
BUT
• Federalism as constraint
No reform
Policy feedback in Canada
• Spread of fee-for-service private insuranceNon-adoption of public insurance (1945)
New politics
Canada: 1950s - 1960s
NOW: Federalism as opportunity
1. Regionalism aids socialist insurgent party– CCF wins provincial office
– Launching pad for federal NDP
2. Fiscal equalization encourages innovation
Hospital insurance in SK
Imitation by BC, AB, ON
Policy feedback in Canada
Widespread private insurance + federalism
Public fee-for-service insurance (1966)
New politics
United States
• 1910s: Support for socialist and third parties– But electoral institutions no federal seats
• Weak national party competition, Republican nat’l dominance
Reformers had to fight in states– Inhospitable institutional terrain
• Large number of units• Fear of business exit because of lack of fiscal
equalization• Strong, business-friendly state courts
United States
• New Deal – huge potential opening but:– Veto points
– Lack of party discipline
No reform
• Repeated under Truman+
Policy feedback in U.S.
• Spread of employer-provided insurance– Satisfies doctors
– Satisfies unions
– Excludes old and poor
Non-adoption of public insurance (‘30s & ‘40s)
New politics
Public fee-for-service insurance for elderly and poor only
Policy feedback in U.S.
• Exploding public costs• Best-organized groups
satisfied• Vested interests in current
arrangements
New politics
Failure of Clinton plan (1994)
Health policy and feedback
• Current health policies NOT a direct reflection of nat’l values or public preferences– Narrow, well-organized interests matter– Current policy choices constrained by past choices
• Current organization of interests and public preferences shaped by past policy choices
• Sometimes policy is not chosen– Emerges through political interactions over time
• Especially strongly shaped by past policy choices, sequence
– Large role for investment
– Well-organized vested interests