Exploring Global Healthcare Systems Solutions

Frontline is made possible by contributions to your PBS station from viewers like you. Thank you. With major funding from the John D. and Catherine T. MacArthur Foundation, helping to build a more just world. And additional funding from the Park Foundation, committed to raising public awareness. With additional funding for this program from the Colorado Health Foundation, the Commonwealth Fund, and the Colorado Trust. Tonight on Frontline, American healthcare is in big trouble. It's the world's most expensive medical system, yet it leaves 47 million people without coverage and drives hundreds of thousands into bankruptcy each year. I believe the problem is... It's not that folks are trying to avoid getting healthcare. The problem is they can't afford it. We are approaching a perfect storm of problems that if not addressed by the next president will cause our healthcare system to implode. I am not running for president to put band-aids on our problems. I want to get to universal health care for every single American. In the middle of our national debate, Washington Post reporter T.R. Reid journeys to five countries. Have you ever paid a medical bill? No, never. And finds out how other rich free market democracies provide health care for all. How many people in Switzerland go bankrupt because of medical bills? Nobody. Doesn't happen. It would be a huge scandal if it happens. Tonight on Frontline, what it's like to be sick around the world. That's the capital of the richest, most powerful nation in history. But when it comes to providing health care for people, that great country, our country, is a fourth-rate power. The World Health Organization says the U.S. health care system rates 37th in the world in terms of quality and fairness. All the other rich countries do better than we do, and yet they spend a heck of a lot less. How do they do it? That's what this film is about. We're going to go around the world to see what lessons we can learn to fix America's sick, sick health care system. I've covered the world as a foreign correspondent and right now I'm writing a book about health care systems overseas. First stop on my tour is Great Britain where our family lived for five years. Even though the UK is our closest European ally, its health care solution, that is the government-run National Health Service, may seem too close to socialism for most Americans. Still, we can learn something here. For about half of what we pay per person, the NHS covers everybody and has somewhat better health statistics. Longer life expectancy, lower infant mortality. Britain's National Health Service is dedicated to the proposition that you should never have to pay a medical bill. In the NHS, there's no insurance premium, no co-pay, no fee at all. The system covers everybody. And you know, when we lived here, my family got really... good care from the NHS, although we often had to wait to see a doctor. And yet, the newspapers here are full of NHS horror stories, rationing, waiting lists, terrible mistakes. So I've come to London to see this NHS. Is it an answer for the US, or just some horrible socialist nanny state? ...out of tax revenue. So the government owns the hospitals. Like this one, the Whittington Hospital in North London. The doctors who work here are salaried government employees. Does that sound like socialized medicine? Well, according to the hospital CEO, David Sloman, the Brits like it that way. I think people are proud of it. 90% of people who use the NHS think it's good or excellent, so people think very, very highly of it. People who don't use it don't think so well of it, actually. Would you say most British people go their whole lives and never get a medical bill? Well... Every single person who's born in the UK will use the NHS at one point in their lives. The majority of people will use it as the only provider of their medical care, and none of them will be presented a bill at any point during that time. No medical bills. Sounds sweet to me. And here's something else that's different. There's no medical bankruptcy. This is Jeremy Cato. His son Tom is being treated for leukemia at the Whittington. At least he doesn't have to worry about going broke. We've had eight weeks in hospital. Apart from the times when he needs chemotherapy, we've got community healthcare who comes in on a weekly basis to take his blood. It hasn't cost us a penny. You know, it's astonishing the care you can get. On your picture? Of course, it's not free. The Brits pay much higher taxes than we do to cover health care. But even so, does it sound a bit too good to be true? To find out, I sought out a longtime NHS watcher, Nigel Hawkes of The Times, for a more critical perspective. Look, this all sounds really sweet. Does it work? It works in some respects. I think... I think primary care, the family doctor service, is pretty good. Emergency care works quite well. Where I think it can fall down is on elective care. Hip replacements, heart operations, this kind of thing. It used to be of the order of 18 months to get a new hip. That's been greatly reduced by the current government over the last 10 years. It's down to certainly less than six months and for most people about two or three months. There are 400,000 fewer people on waiting lists than in 1997. In the last decade in Britain, Tony Blair and other politicians have reduced the waiting lists. They did it by spending more money and by bringing some market mechanisms into a government-run system. Today, government-owned hospitals like the Whittington compete against each other for government money. In today's NHS, patients can choose which hospital to go to. Oh, of course we compete. You know, we do on our website, you book in, we'll make sure you can book into our place at least as quick as all the other places around here. But we're all competing around what I think are now respectable margins. Whereas previously, you know, it's six months or seven months. Now in some specialties, I can proceed tomorrow. It's easy to see why choice might suit patients, but what do government-run hospitals get out of it? We don't understand why people would compete when you can't make more money. In America, people compete to make profit. Yes, that's a very fair point. I mean, here you would compete in order to survive, because if you start losing patients to another hospital, your services are going to be under threat. What we have seen over the past 10 years is a move away from Bevan's ideal of an NHS for all. We've seen the creeping privatisation of services. When I was in London, I stumbled on this rally and... Trafalgar Square, and I discovered that many NHS staffers are angry about these new trends that could close some of the less popular hospitals. They were also protesting government plans to privatize some NHS services. You're probably 50 or even more than that. Have you ever paid a medical bill? This is a very tough... Have you ever paid a medical bill? No, never. Will you ever pay a medical bill in your life? I hope not. We don't want to pay a medical bill. This is why we're doing this. We don't want to. And even if it takes 10 years'time, we're not around. We don't want our kids to do it either. While the hospitals struggle with reforms, the GPs have embraced them. I went to visit one who practices in the West London neighborhood of Shepherd's Bush. In Britain, health care starts here. Nobody can go directly to a specialist. First you have to go to a gatekeeper, like Dr. Ahmed Badat. He's a family doctor, a general practitioner. GPs hold down costs for the system and give people what the Brits call a medical home. My family had one just down the street, and we liked it. You really got to go and have an x-ray done here. Open your mouth. GPs are paid a fixed amount based on the number of patients they have. The average list is 1,800 people. And get this. They make a bonus for keeping their patients healthy. So when Dr. Bhadat does a good job of caring for patients with diabetes and heart disease, he gets paid more. How much more? It works out about 90,000 pounds. So that's increasing your salary by 180,000 dollars a year. That's not bad. Yes. I'm reading the newspapers that these docs are doing well here. I can't complain. Dr. Badaad has had personal experience with U.S. medicine. He had a heart attack while on vacation in Las Vegas and was rushed to the county hospital. The treatment was absolutely fantastic. But, you know, I was there eight days. The total bill came to $67,000. That is preposterous. Critics say Britain has the opposite problem. Care costs the patients too little here. Do you have patients who come twice a week or something? Yes. Are they sick? No. I think these lonely people, they always sit there and somebody to chat to. But then there are people I never see at all. Yeah. When they come and register, I don't see them for three years, five years. With access this easy, the doctor and the system have a strong incentive to keep people healthy. The result? Britain has become a world leader in preventive medicine. Just look at all these services GPs here aggressively promote and talk to their patients about. To sum up then, there's a lot to like in Britain. No bills. NHS waiting lists are getting shorter. There's excellent preventive medicine. But there's probably still too much government here for American tastes, even if the NHS is trying to be more market savvy. The next country on my tour couldn't be more different. Our family lived there twice. I was the Tokyo correspondent for the Washington Post. Japan has 130 million people and whenever I come to this station in Tokyo I feel like every one of them is right here. It's a ferociously capitalist economy. They have no natural resources, but they've built the second richest country in the world. And you know, it's 130 million healthy people. They have better national health than we do. They cover everybody and get this, they spend half as much as the United States on health care per capita. How do they do that? One thing's for certain, Japanese health care is a bargain. For just 8% of GDP, that's less than even the British spend, the Japanese have built a system with fabulous health statistics. They have the longest healthy life expectancy in the world and the lowest infant mortality rate. Now, part of that's due to diet and lifestyle, but the health system must be doing something right. Everybody's covered, but unlike the Brits, the Japanese don't pay for all of it through taxes. Instead, everybody has to sign up for a health insurance policy. You get it at work or through a community-based insurer. The government picks up the tab for those who are too poor. This system is known as social insurance, and it's a model that's used in many wealthy countries. As for the health care itself, that's certainly not socialist. Eighty percent of the hospitals are private, more than in the U.S. And almost every doctor's office is a private business. Dr. Kono Hitoshi is a typical doctor. He runs a private 19-bed hospital in the Tokyo neighborhood of Soshigaya. The Japanese are prodigious consumers of health care. They go to the hospital every day. ...to the doctor three times as often as Americans do, and since there are no gatekeepers, they can go see any specialist they want. Do they have to make an appointment to come in? Yeah, no. Never? Never. How long do you see the doctor? Probably three minutes. It seems like such a short visit. Some of the... It's physically impossible. There's not enough time. If you're a long-term patient, you just need to measure your blood pressure, take your medication, and go home. It's like a one-minute health checkup. Some patients are quick, so on average it's three to five minutes. Surveys show the Japanese are highly satisfied with their health system. The medical checkup is very helpful. pretty much takes care of the bills. I have a health insurance policy for the medical sector, so I think Japan should follow this. Oh, I see. So I think the Japanese health care system is really good. I know nothing about other countries. What do people in your country think about your health care system? Here's something else that's different. Japanese patients have much longer hospital stays than Americans, and they love technology like scans. They have nearly twice as many MRIs per capita as Americans, eight times as many as the Brits. So how do they keep costs under control? Well, it turns out the Japanese health ministry tightly controls the price of health care, right down to the smallest detail. Every two years, the physicians and the health ministry will be able to pay the cost of health care. negotiate a fixed price for every single procedure and drug. Like the items in this sushi bar, everything from open-heart surgery to a routine checkup has a standard price. And this price is the same everywhere in Japan. If a doctor tries to boost his income by increasing the number of procedures, well, then guess what? At the next negotiation, the government lowers the price. That's what happened with MRIs, which are incredibly cheap in Japan. I asked the country's top health economist, Professor Naoki Ikegami, to tell us how that happened. I live, if you get an MRI of your neck region, it's $1,200. And the doctor we visited in Japan says he gets $98 for an MRI. So how do you do that? Well, in 2002, the government said that that the MRIs we are paying too much. So in order to be within the total budget, we will cut them by 35%. So if I'm a doctor, why don't I say, well, I'm not gonna do them then, it's not enough money. You forgot that we have only one payment system. So if you want to do your MRIs, unless you can get private patients, which is almost impossible in Japan. you go out of business. So that shafts the medical device makers and must limit innovation, right? Well, no. Japanese manufacturers of scanning equipment, like Toshiba, found ways to make inexpensive machines they could sell to doctors. And guess what? Now they're exporting these machines all over the world. But price regulation also hits the doctors hard. Dr. Kono can't charge what he wants. He can only charge what the official price book dictates. If somebody comes in with a cut that's less than six square inches, so a fairly small cut, he can charge what he wants. He gets 450 yen, $4.30 to sew that up. It seems incredibly cheap. He then told me what it costs to stay in his hospital. Okay, you'll love this. So you know how much it costs to spend the night in the hospital here, according to this? Price book, if you stay in a room with four people, $10 a night. If you have a private room, $90 to spend the night in the hospital in a private room here. That's because the government set the price. All of Japan. All of Japan. All the same price. And in the Soshigayaku in Tokyo, in the Michikai Island, in the Minami in Okinawa, in the Michikai Island. That's right. Is that fair? Is that fair? Fair. Oh, it is? It's very fair. The doctors have to live with the price book, but Japanese patients have to play their part in financing the system by paying into a social insurance fund. If you lose your job in Japan, you don't lose your health insurance. Unlike the U.S., you switch to a community insurer. And these insurance companies have very little in common with their American counterparts. Can they turn her down if she has heart disease or something? That is forbidden. These health care plans covering basic health care for a worker and his family, do they make a profit? No, because they are not allowed to make a profit, and anything left over is carried over to the next year. And if there's a lot carried over, then the premium rate would go down. Insurance companies barred from making a profit. National price regulation. That's all good news for patients. The average premium for a Japanese family is just $280 a month with the employer paying at least half, a lot less than most Americans pay. It's good news for Japanese employers as well. JR Tokai, the company that runs this bullet train to Osaka, told me that its health care costs are about half of 1% of operating expenses. General Motors pays eight times as much as that. So here's a country with the longest life expectancy, excellent health results, no waiting lists, and rock-bottom costs. What's not to like? But the president of the Nagoya Central Hospital, Professor Saito Hidero, showed me the downside. I think our system is pretty good, pretty good. But no system is perfect. Yes. But now 50% of hospitals are in financial deficit now. No, I didn't know that. In Japan. 50% in Japan. So I'm afraid hospitals may be one of the endangered species in Japan. 50% in financial deficit? That sounds unsustainable. So here's the weakness. While we spend too much on medicine, the Japanese seem to spend too little. In a country with $10 per night hospital stays, the prices are just not high enough to balance the books. But the Japanese system is so popular that they're not going to rip it apart. The experts say they'll have to increase prices a little to save the hospitals from going broke. Back home, our problem is patients going broke. In Japan, how many people go bankrupt for medical costs? I don't know. Perhaps, Mr. Ito know. No. We never heard of it. Almost never heard of it. Before leaving Tokyo, I went to the Meiji Jingu Shrine, a deeply spiritual place. I was there for a long time. I left a prayer asking for something I think almost all of us can agree on. A health system where, as in Japan, everybody gets care and nobody goes broke paying doctor bills. Next, to a country a bit more like the U.S. The nation that gave us aspirin and x-rays, the third richest economy in the world. It's Germany. In many ways, they're just like us. Except, that is, for their healthcare. That imposing figure behind me is Otto von Bismarck, the Prussian Chancellor in the 1880s, and he's the guy who invented the concept of healthcare systems. The notion that a government has to provide mechanisms so all its people can get medical care when they need it. And today the Bismarck model is used all over the world. Thanks to the Bismarck model, everybody in Germany is offered health care. While the rich are allowed to opt out and pay privately, about 90% of Germans choose to stay in the national system. And that system is famous not only for covering all the basics, plus mental health, dental and optical, they also pay for alternative therapies like homeopathy. They'll pay you to go to a spa. The system's even been known to cover belly dancing lessons. As in Japan, the delivery of health care is largely a market affair carried out by private doctors and private hospitals. I visited Dr. Kristina von Kerkritz, a family doctor practicing in the small town of Klato, south of Berlin. If I call your office and say, oh, my shoulder kind of hurts, I'm not sure what's wrong, how long would it take me to see you? One or two weeks. Two weeks, I see. It's serious, same day. Serious, same day, yeah. If I come in here and you look at my shoulder and say, well, I think maybe an orthopedic specialist should look at it, Then how long would I have to wait to see that? It's different. Perhaps another week or two. Yeah? Yes. What if the orthopedic specialist said, well, we have to operate on your shoulder? Do you know how long I would have to wait for that? Not too long. Three weeks. Three weeks before I could get in. I guess, yes. Yeah, right. Hello. That's about the same waiting time as the U.S. It's faster than Britain, but not as quick as Japan would be. To finance health care, Germans pay premiums based on income to one of 240 private insurers. They call them sickness funds. A worker earning $60,000 would split a $750 monthly family premium with her employer. It's more expensive than Japan and the U.K., but still a bargain by U.S. standards. About two-thirds of ours. It is a system where the rich pay for the poor. Well, that's it. Ill are covered by the health. This is Professor Karl Lauterbach, a member of the German parliament and one of Germany's foremost experts on health policy. So it is a nice social support system which is highly accepted by the population. Katie Haser is one of those patients. She's having her third baby. I'm very satisfied with the system. especially during my pregnancy. I think it's maybe not perfect, but it's the best I can imagine. What does she pay? Actually nothing. I don't have to pay anything. Okay. While pregnant women pay nothing, there is a co-payment for most patients. But you'll love this. It costs 10 euros. That's about 15 bucks. And you only have to pay that once every three months. If you lose your job, what happens to your health insurance? Health insurance continues with no change if you lose your job. We do know very well that people who become unemployed are at an increased risk of becoming ill. And therefore, becoming unemployed is about the worst time to lose health insurance. So therefore, everyone who loses their job remains in exactly the health insurance system he is in. German insurance plans actively compete among themselves for customers, even though they're not allowed to make a profit. So what's in it for them? Sickness funds do not want to perish. They want to survive and grow. And the management is better paid if the sickness fund is growing. I think the German health care system is a nice third way between a for-profit system on the one hand and a single. It all sounds good to me, but how does the German system compare with ours? To get a U.S. view, I went to McGurry's Cafe in the former East Berlin to meet Mike McGurry, an American who's been living in Germany for six years. Good to see you. I haven't seen you since Klotto. It's been a while. I love the new bar. It looks great. Ah, thank you very much. Ich merke, ein großes Dankles trinken bitte. Gerne. That's all the German I know. I want a big beer. That's all you need. I think that's it. Yeah. You ever have to go to the doctor? I mean, you've used the health care system? Oh, absolutely. Yeah. And what do you think? How would you rate it? Top-notch. Oh, really? What's good? You have many different choices, and the cost is a fraction of... of what is covered in the States. Most of your prescriptions are covered with very, very small co-pays. And how's the quality? I mean, do you think you're getting good health care here? Excellent. Excellent. I see no difference as far as quality goes between here and... when I was in the States. Really? Yeah. Surveys show Germans are satisfied with their health care. The system is also efficient. Medical providers and sickness funds negotiate standard prices, and this cuts administrative costs. They're only around 6%. That's a quarter of what they are in the U.S. And drugs are a bargain here, too. The same drugs are way cheaper in Germany than in America because obviously if all sickness funds negotiate with the drug companies for a single price, then the market power of the sickness funds is fully used. Every year, the sickness funds also negotiate standard prices with medical providers. And just as in Japan, some of these doctors feel undervalued and underpaid. Professor Detlev Ganten is chairman of... Berlin's giant Charité Hospital. So do you think your hospital is paid enough for the services it provides people? No, as I mentioned, it's not being paid enough because we are providing very expensive care at a university hospital. So we have to economize enormously within the university system also. An American hospital that felt it wasn't getting enough money for its services would raise its prices. Could you do that? No, we cannot do that. These prices are negotiated every year, and this is done by states. So within Berlin, all the hospitals get the same kind of DRG or recombination. We cannot raise our prices. By U.S. standards. doctors who work in hospitals here are not paid very well. A 35-year-old might earn about $80,000 a year, about half of what he'd earn in the U.S. It's not a high salary, and people correctly complain, because they work not eight hours, they work 12 hours, 14 hours, 16 hours, and sometimes seven days a week. And I think they deserve more. Dr. Kristine von Kirkritz also feels shortchanged by the system. A family doctor makes around $120,000 a year, about two-thirds of what she'd earn in the U.S. But then she has a lot lower overhead. Her malpractice premium is just $1,400 a year. about a tenth of what she would pay in the U.S. And medical school didn't cost her a penny. In America, we have an image of a doctor as a pretty rich person. Yes. Drives a Lexus to the country club and takes vacations in Majorca and stuff like that. It's been like this in Germany until, I think, 80s, the 80s of the last century, perhaps 90s, but it changed in the mid of 90 years. Yeah. So, Dr. Ed normally has a small car today. But he still goes to Mallorca. Still goes to Mallorca, yeah. And skis in Samaritz? No. But a lot of doctors aren't laughing. In March of 2006, they felt sufficiently angry to stop work and take to the streets in the heart of Berlin. Dr. Christina was one of them. She marched three times that spring. I think about 18 or 20 thousand doctors, and doctors don't usually demonstrate. But nothing changed. For Americans, there's nothing particularly foreign about German health care. You get health insurance through your employer and the company makes you pay for it. And the coverage is great. They got mental, they got surgical, they got dental. If your doctor says you're tired, the health insurance... pays to send you to a spa. And the Germans have made this work. They provide universal coverage for a lot less money than we do. They did it by taking a profit out of health insurance. And they also pay doctors a lot less than we do. I think there's a lot here that we could learn from. In just three countries, I've picked up lots of ideas. The Brits pay no doctor bills and have great preventive care. In Japan, there's no waiting time. And doctors still make house calls. In Germany, insurance companies compete for business, even though they can't make a profit. What if you could pick and choose the best ideas from around the world? Well, that's exactly what one small Asian nation did. Taiwan's an island nation of about 23 million that became rapidly industrialized and went from poor to rich in about 20 years. And when Taiwan got rich, the government said, wait a minute, we need a rich country's healthcare system. So you know what they did? They did. They set up a committee and they looked all over the world at different health care systems looking for good ideas and then designed their own. In the late 1980s, Taiwanese health care was even worse than America's is today. About half the population had no coverage at all. Hongjian Chang was one of the officials charged with designing a new health care system from scratch. Taiwan is a small island. We always look abroad, internationally, for ideas. Chinese saying we say the track of the previous card is the teacher of the following card. So if the other guy's ox card has found a good route to universal health coverage, follow those tracks. If they were trapped in the trouble, avoid that trap. Find a new track. So they consulted experts from around the world and asked William Hsiao, a Chinese-born Harvard health economist, to head a Blue Ribbon Panel. What do you want to repeat of the mistakes other people make? You want to pick up what people have done well and then move beyond that. Another expert they consulted was the Chinese. the Taiwanese-American health economist Chung-Mei Ching. How many different countries did they look at, do you know? Over 10, maybe 10, 13, 15 countries they looked at. And so in the end, the program that they finally set up in 1995 really is like a car that was made of different parts, imported from overseas, but manufactured domestically. We examined quite extensively the major systems, quite a dozen. Europe, the British, France, Germany, the Nordic countries, the Swedes, the Dutch, the Americans... Well, did you look at the richest country in the world, the United States? Yes, the best system in the world we thought. Yeah, you thought, and when you studied it, what did you find? Well, American is not really a system that you can copy. It's a market. So if you let things happen, it will be like the United States. There are many supporters, but in the end we said, no, this is not the way we want to go. They wanted a system that gave everybody equal access to health care, free choice of doctors with no waiting time, and a system that encouraged lots of competition among medical providers. To finance the scheme, they chose a national insurance system that forced everybody to join in and pay. But Professor Hsiao thought Taiwan could improve on other countries, like Japan and Germany. We try to correct their mistakes. Japan has many funds. Yes. And we unified it. Germany let the rich people up out. We did not let the rich people up out. So we're building on what they have done correctly, but trying to overcome their deficiencies. The solution? To have one government insurer. collecting the money, and no chance to opt out. The result? A system that works a bit like the U.S. Medicare system for the elderly, and in fact a lot like Canada's. It has drug benefits, vision care, traditional Chinese medicine, kidney dialysis, inpatient care, outpatient care, just about everything under the sun. And to satisfy the patients in Taiwan, there's no gatekeeper and no waiting time. Clinics are open on weekends. This street clinic was bustling at 5.30 on a Saturday afternoon. If I woke up in Taiwan some morning and my shoulders really hurting, how long would it take me to see an orthopedic specialist? We'll go now. This morning I could see one? Yeah. I don't have to go to a GP and get a recommendation? No. Our people don't like the idea of gatekeepers. They want to keep themselves. I don't know. They want to decide by themselves. Hitech Taiwan designed its new health system using state-of-the-art information technology. Everybody here has to have a smart card like this to go to the doctor. The doc puts it in a reader, and the patient's history, medications, etc., all show up on the screen. And then the bill goes directly to the government insurance office and is paid automatically. So Taiwan has the lowest administrative costs in the world, less than 2%. Compare that to the endless paperwork and all the denied claims we get with for-profit U.S. health insurance. The smart card can also be used in other ways. If a patient goes to see a doctor or hospital over 20 times a month, or 50 times in a three-month period, then the IT picks that person out and then gets a visit from the government. the Bureau of National Health Insurance, and they have a little chat. And this works very well. That may be too much like Big Brother to get by in the U.S., but surveys show that Taiwanese are highly satisfied with their health care. How many people in Taiwan every year go bankrupt because of medical bills? None. So the patients are safe from bankruptcy, but just like Japan, the system itself is under strain. How much of Taiwan's GDP are you spending on health care now? We spend some 6.23%. And do you know the number in America? Yes, it's about 15%. 16%, that's right. So we spend too much on health care and don't even cover everybody. But the Taiwanese spend too little, less even than Japan. They just don't bring in enough money to pay for all the services they offer. So actually... As we speak, the government is borrowing from banks to pay what there isn't enough to pay the providers. Taiwan's politicians are reluctant to increase premiums. They think voters will punish them. So that's their problem. They know the solution is fairly straightforward. Increase the spending a little to maybe 8% of GDP. Now there's a problem the U.S. would love to have. Like the other countries we've seen, Taiwan is struggling to balance the hopes of patients and the expectations of doctors against the price people are willing to pay for health care. Before leaving Taiwan, I tried some acu... from my bum shoulder. I heard it years ago in the Navy. Of course, Chinese medicine is covered by Taiwan's plan too. Taiwan's achievement got me thinking about what it takes to carry out health care reform. But to create a universal health system in an emerging Asian nation is one thing. To get there in a mature free market economy is something else. So my final stop was in a country more like us that did take on health care reform. Some people say it's politically impossible to fix a health care system and in fact the last time we tried it in 1994 the result was disastrous failure. But that same year here in Switzerland, a country famous for huge insurance companies and drug companies, they did take on health care reform and change the system. Today they have universal coverage with high quality. We've come to Switzerland to see why they made the change and how it's working. Like Americans, the Swiss tend to think they're exceptional. They don't follow the crowd. It's a nation of 8 million people right at the center of Europe, but it won't join the European Union. It denied women the right to vote until... Are you ready? 1971. And it has higher gun ownership than the USA. In 1994, Switzerland's health care system resembled America's. Medical insurance was voluntary, generally linked to employment. If you lost your job, you could lose your coverage, and many did. Ruth Dreyfus back then was health minister from the left-leaning Social Democratic Party, and later the first female president of the Swiss Federation. She spearheaded a new law called La Malle, or the sickness. It mandated that everybody buy insurance, with the state paying for the poor. In return, it guaranteed a comprehensive package of medical care. for all. Amid opposition from drug companies and insurers, the Swiss voted in a referendum. The difference between the yes and the no was a very teeny one, a very slight one. And the result was quite 50-50, just with a little bit more on the yes side so that the law was passed. After that, insurance companies could not cherry-pick the young and healthy to avoid the old and the sick. And they were not allowed to make a profit on basic care, although they could profit from supplemental policies. People who refused to get coverage were automatically assigned to an insurance company and had to pay the monthly bills. More than 10 years later, Lamal is well accepted. Pascal Couchpin From the center-right Free Democratic Party is the current president of Switzerland. Originally unenthusiastic about Lamal, today he's a supporter. Everybody has the right to health care. Yeah, now see, that's striking for an American, because we would certainly say everyone's entitled to an education. Yes. Everyone is entitled to legal protection if you get in trouble with the law. But we don't say that everyone's entitled to health care. Why? Because it is a profound need for people to be sure that if they are struck by destiny, by a stroke of destiny... They can have a good health system. Dreyfus, from the opposite political camp, agrees. I think it's a basic human right. This is really the aim and this is really the reason why I think that everybody now, or a large, large majority, would renew the confidence in this system because they see what it means to have a universal coverage. But I wondered about Lamal's impact on drug and insurance companies. Pierre-Marcel Ravaz is CEO of Group Mutuel, one of Switzerland's biggest insurance companies. What's different here is that many Swiss insurers were already non-profit, so the transformation was easier than it might be for us. Ten years on, the insurers are doing fine. As in Germany, on the service and on the price. The benefit package here is fixed. It's the same for everybody. So companies compete in other ways. Is this one of the ways you compete with other companies? You say, we'll pay faster? It's one of the elements of competition. The main element is the price, of course. And with... Group Mutuel has a strong incentive to keep administrative costs low. The Swiss average is, I think, about 5.5%. So it's a very good performance. Do you know what that figure is in American health insurance companies? The average administrative cost is about 22%. And you're running at 5%. But where the Swiss insurance companies can make a profit is on supplemental coverage for, say, better hospital rooms. This is also how they attract more customers. But what about the drug companies? In America, the drug companies say, well, if you cut the price we get for the drugs, then we won't have as much money for research and innovation. Is that a legitimate argument? It was the same argument here in Switzerland. But I can say also that the Swiss... pharmaceutical industry 10 years after this struggle is not bad. In the international competition, I think the Swiss are still belonging to the top 10. Yes. And when you hear them, they are not crying about the bad shape of their industry. That may be because Swiss drug companies still make more than a third of their profits from the... the less regulated U.S. market. One of the problems we have in America is that many people, a huge number of people go bankrupt because of medical bills. Some studies say 700,000 people a year. How many people in Switzerland go bankrupt because of medical bills? Nobody. It doesn't happen. It would be a huge scandal if it happens. But here's Switzerland's challenge. Having achieved universal healthcare, it has to decide how much citizens are willing to pay. Today, an average monthly premium for a Swiss family is about $750. But there's pressure to make it work. pressure to raise the premiums. And it's already the second most expensive healthcare system in the world, although still much cheaper than ours. What's interesting about Switzerland is that after Lamal's success, people in this proud, as countries see limits now to the free market. Could a 100% free market system work in health care? No, I don't think that. If you do that, you will lose solidarity and equal access for everybody. Which is what you were finding in the late 80s. Yes, we think that is a basic value of living in our society. My plan combines employers and individuals. ...responsibility while maintaining Medicare and Medicaid. Back in the U.S., in an election year, everybody's talking about health care. My belief is that if we make it affordable, if we provide subsidies to those... who can't afford it, they will buy it. Although, if you listen carefully, none of the candidates talks about the lessons we could learn from other rich democracies, like the ones I visited. The solution, my friends, isn't a one-size-fits-all, big government takeover of health care. What I've found is that it's not all socialized medicine out there. Many countries provide universal coverage with private insurance, private doctors, private hospitals. Using market ideas that might work for us. But here's the thing. These capitalist countries don't trust health care entirely to the free market. They all impose limits. There are three big ones. First, insurance companies must accept everyone and can't make a profit on basic care. Second, everybody's mandated to buy insurance, and the government pays the premium for the poor. Third, doctors and hospitals have to accept one standard set of fixed prices. Hey, Mr. Fultz. Can Americans accept ideas like that? Just came in to get your temperature and your blood pressure. Well, the fact is, these foreign health care ideas aren't really so foreign to us. For American veterans, health care is just like Britain's NHS. For seniors on Medicare, we're Taiwan. For working Americans with insurance, we're Germany. And for the tens of millions without health insurance, we're just another poor country. But almost all of us can agree that this fragmented healthcare mess cannot be ignored. The longer we leave it, the sicker it becomes. And the more expensive the cure. This report continues on our website, where you can watch the full program again online. Get this, they spent half as much as... Find out more about correspondent T.R. Reid and his reporting of this story. Everybody has the right to health care. Read our interviews with some of the world's leading health care experts. A for-profit system on the one hand... And learn more about how the U.S. health care system compares to those in other countries. And then join the discussion about this program at pbs.org. Frontline is made possible by contributions to your PBS station from viewers like you. Thank you. With major funding from the John D. and Catherine T. MacArthur Foundation, helping to build a more just world. And additional funding from the Park Foundation. With additional funding for this program from the Colorado Health Foundation, the Commonwealth Fund, and the Colorado Trust.

Frontline is made possible by contributions to your PBS station from viewers like you. Thank you. With major funding from the John D.

and Catherine T. MacArthur Foundation, helping to build a more just world. And additional funding from the Park Foundation, committed to raising public awareness. With additional funding for this program from the Colorado Health Foundation, the Commonwealth Fund, and the Colorado Trust.

Tonight on Frontline, American healthcare is in big trouble. It's the world's most expensive medical system, yet it leaves 47 million people without coverage and drives hundreds of thousands into bankruptcy each year. I believe the problem is... It's not that folks are trying to avoid getting healthcare. The problem is they can't afford it.

We are approaching a perfect storm of problems that if not addressed by the next president will cause our healthcare system to implode. I am not running for president to put band-aids on our problems. I want to get to universal health care for every single American. In the middle of our national debate, Washington Post reporter T.R. Reid journeys to five countries.

Have you ever paid a medical bill? No, never. And finds out how other rich free market democracies provide health care for all.

How many people in Switzerland go bankrupt because of medical bills? Nobody. Doesn't happen.

It would be a huge scandal if it happens. Tonight on Frontline, what it's like to be sick around the world. That's the capital of the richest, most powerful nation in history.

But when it comes to providing health care for people, that great country, our country, is a fourth-rate power. The World Health Organization says the U.S. health care system rates 37th in the world in terms of quality and fairness. All the other rich countries do better than we do, and yet they spend a heck of a lot less.

How do they do it? That's what this film is about. We're going to go around the world to see what lessons we can learn to fix America's sick, sick health care system. I've covered the world as a foreign correspondent and right now I'm writing a book about health care systems overseas. First stop on my tour is Great Britain where our family lived for five years.

Even though the UK is our closest European ally, its health care solution, that is the government-run National Health Service, may seem too close to socialism for most Americans. Still, we can learn something here. For about half of what we pay per person, the NHS covers everybody and has somewhat better health statistics. Longer life expectancy, lower infant mortality.

Britain's National Health Service is dedicated to the proposition that you should never have to pay a medical bill. In the NHS, there's no insurance premium, no co-pay, no fee at all. The system covers everybody.

And you know, when we lived here, my family got really... good care from the NHS, although we often had to wait to see a doctor. And yet, the newspapers here are full of NHS horror stories, rationing, waiting lists, terrible mistakes.

So I've come to London to see this NHS. Is it an answer for the US, or just some horrible socialist nanny state? ...out of tax revenue. So the government owns the hospitals. Like this one, the Whittington Hospital in North London.

The doctors who work here are salaried government employees. Does that sound like socialized medicine? Well, according to the hospital CEO, David Sloman, the Brits like it that way.

I think people are proud of it. 90% of people who use the NHS think it's good or excellent, so people think very, very highly of it. People who don't use it don't think so well of it, actually. Would you say most British people go their whole lives and never get a medical bill? Well...

Every single person who's born in the UK will use the NHS at one point in their lives. The majority of people will use it as the only provider of their medical care, and none of them will be presented a bill at any point during that time. No medical bills.

Sounds sweet to me. And here's something else that's different. There's no medical bankruptcy. This is Jeremy Cato.

His son Tom is being treated for leukemia at the Whittington. At least he doesn't have to worry about going broke. We've had eight weeks in hospital. Apart from the times when he needs chemotherapy, we've got community healthcare who comes in on a weekly basis to take his blood.

It hasn't cost us a penny. You know, it's astonishing the care you can get. On your picture?

Of course, it's not free. The Brits pay much higher taxes than we do to cover health care. But even so, does it sound a bit too good to be true? To find out, I sought out a longtime NHS watcher, Nigel Hawkes of The Times, for a more critical perspective. Look, this all sounds really sweet.

Does it work? It works in some respects. I think...

I think primary care, the family doctor service, is pretty good. Emergency care works quite well. Where I think it can fall down is on elective care. Hip replacements, heart operations, this kind of thing.

It used to be of the order of 18 months to get a new hip. That's been greatly reduced by the current government over the last 10 years. It's down to certainly less than six months and for most people about two or three months.

There are 400,000 fewer people on waiting lists than in 1997. In the last decade in Britain, Tony Blair and other politicians have reduced the waiting lists. They did it by spending more money and by bringing some market mechanisms into a government-run system. Today, government-owned hospitals like the Whittington compete against each other for government money.

In today's NHS, patients can choose which hospital to go to. Oh, of course we compete. You know, we do on our website, you book in, we'll make sure you can book into our place at least as quick as all the other places around here.

But we're all competing around what I think are now respectable margins. Whereas previously, you know, it's six months or seven months. Now in some specialties, I can proceed tomorrow. It's easy to see why choice might suit patients, but what do government-run hospitals get out of it?

We don't understand why people would compete when you can't make more money. In America, people compete to make profit. Yes, that's a very fair point.

I mean, here you would compete in order to survive, because if you start losing patients to another hospital, your services are going to be under threat. What we have seen over the past 10 years is a move away from Bevan's ideal of an NHS for all. We've seen the creeping privatisation of services.

When I was in London, I stumbled on this rally and... Trafalgar Square, and I discovered that many NHS staffers are angry about these new trends that could close some of the less popular hospitals. They were also protesting government plans to privatize some NHS services. You're probably 50 or even more than that. Have you ever paid a medical bill?

This is a very tough... Have you ever paid a medical bill? No, never.

Will you ever pay a medical bill in your life? I hope not. We don't want to pay a medical bill. This is why we're doing this. We don't want to.

And even if it takes 10 years'time, we're not around. We don't want our kids to do it either. While the hospitals struggle with reforms, the GPs have embraced them. I went to visit one who practices in the West London neighborhood of Shepherd's Bush.

In Britain, health care starts here. Nobody can go directly to a specialist. First you have to go to a gatekeeper, like Dr. Ahmed Badat. He's a family doctor, a general practitioner. GPs hold down costs for the system and give people what the Brits call a medical home.

My family had one just down the street, and we liked it. You really got to go and have an x-ray done here. Open your mouth. GPs are paid a fixed amount based on the number of patients they have. The average list is 1,800 people.

And get this. They make a bonus for keeping their patients healthy. So when Dr. Bhadat does a good job of caring for patients with diabetes and heart disease, he gets paid more.

How much more? It works out about 90,000 pounds. So that's increasing your salary by 180,000 dollars a year.

That's not bad. Yes. I'm reading the newspapers that these docs are doing well here.

I can't complain. Dr. Badaad has had personal experience with U.S. medicine. He had a heart attack while on vacation in Las Vegas and was rushed to the county hospital. The treatment was absolutely fantastic.

But, you know, I was there eight days. The total bill came to $67,000. That is preposterous. Critics say Britain has the opposite problem. Care costs the patients too little here.

Do you have patients who come twice a week or something? Yes. Are they sick?

No. I think these lonely people, they always sit there and somebody to chat to. But then there are people I never see at all.

Yeah. When they come and register, I don't see them for three years, five years. With access this easy, the doctor and the system have a strong incentive to keep people healthy.

The result? Britain has become a world leader in preventive medicine. Just look at all these services GPs here aggressively promote and talk to their patients about. To sum up then, there's a lot to like in Britain. No bills.

NHS waiting lists are getting shorter. There's excellent preventive medicine. But there's probably still too much government here for American tastes, even if the NHS is trying to be more market savvy.

The next country on my tour couldn't be more different. Our family lived there twice. I was the Tokyo correspondent for the Washington Post.

Japan has 130 million people and whenever I come to this station in Tokyo I feel like every one of them is right here. It's a ferociously capitalist economy. They have no natural resources, but they've built the second richest country in the world.

And you know, it's 130 million healthy people. They have better national health than we do. They cover everybody and get this, they spend half as much as the United States on health care per capita.

How do they do that? One thing's for certain, Japanese health care is a bargain. For just 8% of GDP, that's less than even the British spend, the Japanese have built a system with fabulous health statistics. They have the longest healthy life expectancy in the world and the lowest infant mortality rate.

Now, part of that's due to diet and lifestyle, but the health system must be doing something right. Everybody's covered, but unlike the Brits, the Japanese don't pay for all of it through taxes. Instead, everybody has to sign up for a health insurance policy.

You get it at work or through a community-based insurer. The government picks up the tab for those who are too poor. This system is known as social insurance, and it's a model that's used in many wealthy countries.

As for the health care itself, that's certainly not socialist. Eighty percent of the hospitals are private, more than in the U.S. And almost every doctor's office is a private business. Dr. Kono Hitoshi is a typical doctor.

He runs a private 19-bed hospital in the Tokyo neighborhood of Soshigaya. The Japanese are prodigious consumers of health care. They go to the hospital every day. ...to the doctor three times as often as Americans do, and since there are no gatekeepers, they can go see any specialist they want. Do they have to make an appointment to come in?

Yeah, no. Never? Never. How long do you see the doctor? Probably three minutes.

It seems like such a short visit. Some of the... It's physically impossible.

There's not enough time. If you're a long-term patient, you just need to measure your blood pressure, take your medication, and go home. It's like a one-minute health checkup.

Some patients are quick, so on average it's three to five minutes. Surveys show the Japanese are highly satisfied with their health system. The medical checkup is very helpful. pretty much takes care of the bills. I have a health insurance policy for the medical sector, so I think Japan should follow this.

Oh, I see. So I think the Japanese health care system is really good. I know nothing about other countries.

What do people in your country think about your health care system? Here's something else that's different. Japanese patients have much longer hospital stays than Americans, and they love technology like scans. They have nearly twice as many MRIs per capita as Americans, eight times as many as the Brits. So how do they keep costs under control?

Well, it turns out the Japanese health ministry tightly controls the price of health care, right down to the smallest detail. Every two years, the physicians and the health ministry will be able to pay the cost of health care. negotiate a fixed price for every single procedure and drug. Like the items in this sushi bar, everything from open-heart surgery to a routine checkup has a standard price.

And this price is the same everywhere in Japan. If a doctor tries to boost his income by increasing the number of procedures, well, then guess what? At the next negotiation, the government lowers the price. That's what happened with MRIs, which are incredibly cheap in Japan. I asked the country's top health economist, Professor Naoki Ikegami, to tell us how that happened.

I live, if you get an MRI of your neck region, it's $1,200. And the doctor we visited in Japan says he gets $98 for an MRI. So how do you do that?

Well, in 2002, the government said that that the MRIs we are paying too much. So in order to be within the total budget, we will cut them by 35%. So if I'm a doctor, why don't I say, well, I'm not gonna do them then, it's not enough money. You forgot that we have only one payment system.

So if you want to do your MRIs, unless you can get private patients, which is almost impossible in Japan. you go out of business. So that shafts the medical device makers and must limit innovation, right? Well, no. Japanese manufacturers of scanning equipment, like Toshiba, found ways to make inexpensive machines they could sell to doctors.

And guess what? Now they're exporting these machines all over the world. But price regulation also hits the doctors hard. Dr. Kono can't charge what he wants.

He can only charge what the official price book dictates. If somebody comes in with a cut that's less than six square inches, so a fairly small cut, he can charge what he wants. He gets 450 yen, $4.30 to sew that up. It seems incredibly cheap.

He then told me what it costs to stay in his hospital. Okay, you'll love this. So you know how much it costs to spend the night in the hospital here, according to this? Price book, if you stay in a room with four people, $10 a night. If you have a private room, $90 to spend the night in the hospital in a private room here.

That's because the government set the price. All of Japan. All of Japan. All the same price.

And in the Soshigayaku in Tokyo, in the Michikai Island, in the Minami in Okinawa, in the Michikai Island. That's right. Is that fair?

Is that fair? Fair. Oh, it is? It's very fair.

The doctors have to live with the price book, but Japanese patients have to play their part in financing the system by paying into a social insurance fund. If you lose your job in Japan, you don't lose your health insurance. Unlike the U.S., you switch to a community insurer. And these insurance companies have very little in common with their American counterparts.

Can they turn her down if she has heart disease or something? That is forbidden. These health care plans covering basic health care for a worker and his family, do they make a profit?

No, because they are not allowed to make a profit, and anything left over is carried over to the next year. And if there's a lot carried over, then the premium rate would go down. Insurance companies barred from making a profit.

National price regulation. That's all good news for patients. The average premium for a Japanese family is just $280 a month with the employer paying at least half, a lot less than most Americans pay. It's good news for Japanese employers as well.

JR Tokai, the company that runs this bullet train to Osaka, told me that its health care costs are about half of 1% of operating expenses. General Motors pays eight times as much as that. So here's a country with the longest life expectancy, excellent health results, no waiting lists, and rock-bottom costs.

What's not to like? But the president of the Nagoya Central Hospital, Professor Saito Hidero, showed me the downside. I think our system is pretty good, pretty good. But no system is perfect. Yes.

But now 50% of hospitals are in financial deficit now. No, I didn't know that. In Japan.

50% in Japan. So I'm afraid hospitals may be one of the endangered species in Japan. 50% in financial deficit?

That sounds unsustainable. So here's the weakness. While we spend too much on medicine, the Japanese seem to spend too little.

In a country with $10 per night hospital stays, the prices are just not high enough to balance the books. But the Japanese system is so popular that they're not going to rip it apart. The experts say they'll have to increase prices a little to save the hospitals from going broke.

Back home, our problem is patients going broke. In Japan, how many people go bankrupt for medical costs? I don't know. Perhaps, Mr. Ito know.

No. We never heard of it. Almost never heard of it. Before leaving Tokyo, I went to the Meiji Jingu Shrine, a deeply spiritual place. I was there for a long time.

I left a prayer asking for something I think almost all of us can agree on. A health system where, as in Japan, everybody gets care and nobody goes broke paying doctor bills. Next, to a country a bit more like the U.S.

The nation that gave us aspirin and x-rays, the third richest economy in the world. It's Germany. In many ways, they're just like us. Except, that is, for their healthcare.

That imposing figure behind me is Otto von Bismarck, the Prussian Chancellor in the 1880s, and he's the guy who invented the concept of healthcare systems. The notion that a government has to provide mechanisms so all its people can get medical care when they need it. And today the Bismarck model is used all over the world.

Thanks to the Bismarck model, everybody in Germany is offered health care. While the rich are allowed to opt out and pay privately, about 90% of Germans choose to stay in the national system. And that system is famous not only for covering all the basics, plus mental health, dental and optical, they also pay for alternative therapies like homeopathy. They'll pay you to go to a spa.

The system's even been known to cover belly dancing lessons. As in Japan, the delivery of health care is largely a market affair carried out by private doctors and private hospitals. I visited Dr. Kristina von Kerkritz, a family doctor practicing in the small town of Klato, south of Berlin.

If I call your office and say, oh, my shoulder kind of hurts, I'm not sure what's wrong, how long would it take me to see you? One or two weeks. Two weeks, I see. It's serious, same day. Serious, same day, yeah.

If I come in here and you look at my shoulder and say, well, I think maybe an orthopedic specialist should look at it, Then how long would I have to wait to see that? It's different. Perhaps another week or two. Yeah? Yes.

What if the orthopedic specialist said, well, we have to operate on your shoulder? Do you know how long I would have to wait for that? Not too long.

Three weeks. Three weeks before I could get in. I guess, yes. Yeah, right.

Hello. That's about the same waiting time as the U.S. It's faster than Britain, but not as quick as Japan would be. To finance health care, Germans pay premiums based on income to one of 240 private insurers. They call them sickness funds.

A worker earning $60,000 would split a $750 monthly family premium with her employer. It's more expensive than Japan and the U.K., but still a bargain by U.S. standards. About two-thirds of ours. It is a system where the rich pay for the poor.

Well, that's it. Ill are covered by the health. This is Professor Karl Lauterbach, a member of the German parliament and one of Germany's foremost experts on health policy.

So it is a nice social support system which is highly accepted by the population. Katie Haser is one of those patients. She's having her third baby. I'm very satisfied with the system. especially during my pregnancy.

I think it's maybe not perfect, but it's the best I can imagine. What does she pay? Actually nothing. I don't have to pay anything. Okay.

While pregnant women pay nothing, there is a co-payment for most patients. But you'll love this. It costs 10 euros.

That's about 15 bucks. And you only have to pay that once every three months. If you lose your job, what happens to your health insurance?

Health insurance continues with no change if you lose your job. We do know very well that people who become unemployed are at an increased risk of becoming ill. And therefore, becoming unemployed is about the worst time to lose health insurance.

So therefore, everyone who loses their job remains in exactly the health insurance system he is in. German insurance plans actively compete among themselves for customers, even though they're not allowed to make a profit. So what's in it for them? Sickness funds do not want to perish. They want to survive and grow.

And the management is better paid if the sickness fund is growing. I think the German health care system is a nice third way between a for-profit system on the one hand and a single. It all sounds good to me, but how does the German system compare with ours? To get a U.S. view, I went to McGurry's Cafe in the former East Berlin to meet Mike McGurry, an American who's been living in Germany for six years.

Good to see you. I haven't seen you since Klotto. It's been a while.

I love the new bar. It looks great. Ah, thank you very much.

Ich merke, ein großes Dankles trinken bitte. Gerne. That's all the German I know.

I want a big beer. That's all you need. I think that's it.

Yeah. You ever have to go to the doctor? I mean, you've used the health care system?

Oh, absolutely. Yeah. And what do you think? How would you rate it?

Top-notch. Oh, really? What's good?

You have many different choices, and the cost is a fraction of... of what is covered in the States. Most of your prescriptions are covered with very, very small co-pays. And how's the quality?

I mean, do you think you're getting good health care here? Excellent. Excellent. I see no difference as far as quality goes between here and... when I was in the States.

Really? Yeah. Surveys show Germans are satisfied with their health care. The system is also efficient. Medical providers and sickness funds negotiate standard prices, and this cuts administrative costs.

They're only around 6%. That's a quarter of what they are in the U.S. And drugs are a bargain here, too. The same drugs are way cheaper in Germany than in America because obviously if all sickness funds negotiate with the drug companies for a single price, then the market power of the sickness funds is fully used. Every year, the sickness funds also negotiate standard prices with medical providers.

And just as in Japan, some of these doctors feel undervalued and underpaid. Professor Detlev Ganten is chairman of... Berlin's giant Charité Hospital. So do you think your hospital is paid enough for the services it provides people? No, as I mentioned, it's not being paid enough because we are providing very expensive care at a university hospital.

So we have to economize enormously within the university system also. An American hospital that felt it wasn't getting enough money for its services would raise its prices. Could you do that? No, we cannot do that. These prices are negotiated every year, and this is done by states.

So within Berlin, all the hospitals get the same kind of DRG or recombination. We cannot raise our prices. By U.S. standards.

doctors who work in hospitals here are not paid very well. A 35-year-old might earn about $80,000 a year, about half of what he'd earn in the U.S. It's not a high salary, and people correctly complain, because they work not eight hours, they work 12 hours, 14 hours, 16 hours, and sometimes seven days a week.

And I think they deserve more. Dr. Kristine von Kirkritz also feels shortchanged by the system. A family doctor makes around $120,000 a year, about two-thirds of what she'd earn in the U.S.

But then she has a lot lower overhead. Her malpractice premium is just $1,400 a year. about a tenth of what she would pay in the U.S.

And medical school didn't cost her a penny. In America, we have an image of a doctor as a pretty rich person. Yes.

Drives a Lexus to the country club and takes vacations in Majorca and stuff like that. It's been like this in Germany until, I think, 80s, the 80s of the last century, perhaps 90s, but it changed in the mid of 90 years. Yeah.

So, Dr. Ed normally has a small car today. But he still goes to Mallorca. Still goes to Mallorca, yeah. And skis in Samaritz?

No. But a lot of doctors aren't laughing. In March of 2006, they felt sufficiently angry to stop work and take to the streets in the heart of Berlin.

Dr. Christina was one of them. She marched three times that spring. I think about 18 or 20 thousand doctors, and doctors don't usually demonstrate. But nothing changed.

For Americans, there's nothing particularly foreign about German health care. You get health insurance through your employer and the company makes you pay for it. And the coverage is great.

They got mental, they got surgical, they got dental. If your doctor says you're tired, the health insurance... pays to send you to a spa. And the Germans have made this work.

They provide universal coverage for a lot less money than we do. They did it by taking a profit out of health insurance. And they also pay doctors a lot less than we do. I think there's a lot here that we could learn from.

In just three countries, I've picked up lots of ideas. The Brits pay no doctor bills and have great preventive care. In Japan, there's no waiting time.

And doctors still make house calls. In Germany, insurance companies compete for business, even though they can't make a profit. What if you could pick and choose the best ideas from around the world? Well, that's exactly what one small Asian nation did.

Taiwan's an island nation of about 23 million that became rapidly industrialized and went from poor to rich in about 20 years. And when Taiwan got rich, the government said, wait a minute, we need a rich country's healthcare system. So you know what they did?

They did. They set up a committee and they looked all over the world at different health care systems looking for good ideas and then designed their own. In the late 1980s, Taiwanese health care was even worse than America's is today.

About half the population had no coverage at all. Hongjian Chang was one of the officials charged with designing a new health care system from scratch. Taiwan is a small island. We always look abroad, internationally, for ideas.

Chinese saying we say the track of the previous card is the teacher of the following card. So if the other guy's ox card has found a good route to universal health coverage, follow those tracks. If they were trapped in the trouble, avoid that trap.

Find a new track. So they consulted experts from around the world and asked William Hsiao, a Chinese-born Harvard health economist, to head a Blue Ribbon Panel. What do you want to repeat of the mistakes other people make?

You want to pick up what people have done well and then move beyond that. Another expert they consulted was the Chinese. the Taiwanese-American health economist Chung-Mei Ching.

How many different countries did they look at, do you know? Over 10, maybe 10, 13, 15 countries they looked at. And so in the end, the program that they finally set up in 1995 really is like a car that was made of different parts, imported from overseas, but manufactured domestically. We examined quite extensively the major systems, quite a dozen.

Europe, the British, France, Germany, the Nordic countries, the Swedes, the Dutch, the Americans... Well, did you look at the richest country in the world, the United States? Yes, the best system in the world we thought. Yeah, you thought, and when you studied it, what did you find? Well, American is not really a system that you can copy.

It's a market. So if you let things happen, it will be like the United States. There are many supporters, but in the end we said, no, this is not the way we want to go.

They wanted a system that gave everybody equal access to health care, free choice of doctors with no waiting time, and a system that encouraged lots of competition among medical providers. To finance the scheme, they chose a national insurance system that forced everybody to join in and pay. But Professor Hsiao thought Taiwan could improve on other countries, like Japan and Germany.

We try to correct their mistakes. Japan has many funds. Yes.

And we unified it. Germany let the rich people up out. We did not let the rich people up out. So we're building on what they have done correctly, but trying to overcome their deficiencies.

The solution? To have one government insurer. collecting the money, and no chance to opt out.

The result? A system that works a bit like the U.S. Medicare system for the elderly, and in fact a lot like Canada's. It has drug benefits, vision care, traditional Chinese medicine, kidney dialysis, inpatient care, outpatient care, just about everything under the sun. And to satisfy the patients in Taiwan, there's no gatekeeper and no waiting time.

Clinics are open on weekends. This street clinic was bustling at 5.30 on a Saturday afternoon. If I woke up in Taiwan some morning and my shoulders really hurting, how long would it take me to see an orthopedic specialist? We'll go now.

This morning I could see one? Yeah. I don't have to go to a GP and get a recommendation? No.

Our people don't like the idea of gatekeepers. They want to keep themselves. I don't know. They want to decide by themselves.

Hitech Taiwan designed its new health system using state-of-the-art information technology. Everybody here has to have a smart card like this to go to the doctor. The doc puts it in a reader, and the patient's history, medications, etc., all show up on the screen. And then the bill goes directly to the government insurance office and is paid automatically. So Taiwan has the lowest administrative costs in the world, less than 2%.

Compare that to the endless paperwork and all the denied claims we get with for-profit U.S. health insurance. The smart card can also be used in other ways. If a patient goes to see a doctor or hospital over 20 times a month, or 50 times in a three-month period, then the IT picks that person out and then gets a visit from the government. the Bureau of National Health Insurance, and they have a little chat. And this works very well.

That may be too much like Big Brother to get by in the U.S., but surveys show that Taiwanese are highly satisfied with their health care. How many people in Taiwan every year go bankrupt because of medical bills? None.

So the patients are safe from bankruptcy, but just like Japan, the system itself is under strain. How much of Taiwan's GDP are you spending on health care now? We spend some 6.23%. And do you know the number in America? Yes, it's about 15%.

16%, that's right. So we spend too much on health care and don't even cover everybody. But the Taiwanese spend too little, less even than Japan.

They just don't bring in enough money to pay for all the services they offer. So actually... As we speak, the government is borrowing from banks to pay what there isn't enough to pay the providers.

Taiwan's politicians are reluctant to increase premiums. They think voters will punish them. So that's their problem.

They know the solution is fairly straightforward. Increase the spending a little to maybe 8% of GDP. Now there's a problem the U.S. would love to have.

Like the other countries we've seen, Taiwan is struggling to balance the hopes of patients and the expectations of doctors against the price people are willing to pay for health care. Before leaving Taiwan, I tried some acu... from my bum shoulder.

I heard it years ago in the Navy. Of course, Chinese medicine is covered by Taiwan's plan too. Taiwan's achievement got me thinking about what it takes to carry out health care reform. But to create a universal health system in an emerging Asian nation is one thing. To get there in a mature free market economy is something else.

So my final stop was in a country more like us that did take on health care reform. Some people say it's politically impossible to fix a health care system and in fact the last time we tried it in 1994 the result was disastrous failure. But that same year here in Switzerland, a country famous for huge insurance companies and drug companies, they did take on health care reform and change the system. Today they have universal coverage with high quality.

We've come to Switzerland to see why they made the change and how it's working. Like Americans, the Swiss tend to think they're exceptional. They don't follow the crowd. It's a nation of 8 million people right at the center of Europe, but it won't join the European Union. It denied women the right to vote until...

Are you ready? 1971. And it has higher gun ownership than the USA. In 1994, Switzerland's health care system resembled America's. Medical insurance was voluntary, generally linked to employment. If you lost your job, you could lose your coverage, and many did.

Ruth Dreyfus back then was health minister from the left-leaning Social Democratic Party, and later the first female president of the Swiss Federation. She spearheaded a new law called La Malle, or the sickness. It mandated that everybody buy insurance, with the state paying for the poor.

In return, it guaranteed a comprehensive package of medical care. for all. Amid opposition from drug companies and insurers, the Swiss voted in a referendum.

The difference between the yes and the no was a very teeny one, a very slight one. And the result was quite 50-50, just with a little bit more on the yes side so that the law was passed. After that, insurance companies could not cherry-pick the young and healthy to avoid the old and the sick. And they were not allowed to make a profit on basic care, although they could profit from supplemental policies.

People who refused to get coverage were automatically assigned to an insurance company and had to pay the monthly bills. More than 10 years later, Lamal is well accepted. Pascal Couchpin From the center-right Free Democratic Party is the current president of Switzerland.

Originally unenthusiastic about Lamal, today he's a supporter. Everybody has the right to health care. Yeah, now see, that's striking for an American, because we would certainly say everyone's entitled to an education. Yes. Everyone is entitled to legal protection if you get in trouble with the law.

But we don't say that everyone's entitled to health care. Why? Because it is a profound need for people to be sure that if they are struck by destiny, by a stroke of destiny...

They can have a good health system. Dreyfus, from the opposite political camp, agrees. I think it's a basic human right. This is really the aim and this is really the reason why I think that everybody now, or a large, large majority, would renew the confidence in this system because they see what it means to have a universal coverage. But I wondered about Lamal's impact on drug and insurance companies.

Pierre-Marcel Ravaz is CEO of Group Mutuel, one of Switzerland's biggest insurance companies. What's different here is that many Swiss insurers were already non-profit, so the transformation was easier than it might be for us. Ten years on, the insurers are doing fine.

As in Germany, on the service and on the price. The benefit package here is fixed. It's the same for everybody. So companies compete in other ways. Is this one of the ways you compete with other companies?

You say, we'll pay faster? It's one of the elements of competition. The main element is the price, of course.

And with... Group Mutuel has a strong incentive to keep administrative costs low. The Swiss average is, I think, about 5.5%.

So it's a very good performance. Do you know what that figure is in American health insurance companies? The average administrative cost is about 22%.

And you're running at 5%. But where the Swiss insurance companies can make a profit is on supplemental coverage for, say, better hospital rooms. This is also how they attract more customers. But what about the drug companies? In America, the drug companies say, well, if you cut the price we get for the drugs, then we won't have as much money for research and innovation.

Is that a legitimate argument? It was the same argument here in Switzerland. But I can say also that the Swiss... pharmaceutical industry 10 years after this struggle is not bad.

In the international competition, I think the Swiss are still belonging to the top 10. Yes. And when you hear them, they are not crying about the bad shape of their industry. That may be because Swiss drug companies still make more than a third of their profits from the... the less regulated U.S. market. One of the problems we have in America is that many people, a huge number of people go bankrupt because of medical bills.

Some studies say 700,000 people a year. How many people in Switzerland go bankrupt because of medical bills? Nobody. It doesn't happen.

It would be a huge scandal if it happens. But here's Switzerland's challenge. Having achieved universal healthcare, it has to decide how much citizens are willing to pay.

Today, an average monthly premium for a Swiss family is about $750. But there's pressure to make it work. pressure to raise the premiums.

And it's already the second most expensive healthcare system in the world, although still much cheaper than ours. What's interesting about Switzerland is that after Lamal's success, people in this proud, as countries see limits now to the free market. Could a 100% free market system work in health care? No, I don't think that.

If you do that, you will lose solidarity and equal access for everybody. Which is what you were finding in the late 80s. Yes, we think that is a basic value of living in our society.

My plan combines employers and individuals. ...responsibility while maintaining Medicare and Medicaid. Back in the U.S., in an election year, everybody's talking about health care. My belief is that if we make it affordable, if we provide subsidies to those...

who can't afford it, they will buy it. Although, if you listen carefully, none of the candidates talks about the lessons we could learn from other rich democracies, like the ones I visited. The solution, my friends, isn't a one-size-fits-all, big government takeover of health care.

What I've found is that it's not all socialized medicine out there. Many countries provide universal coverage with private insurance, private doctors, private hospitals. Using market ideas that might work for us. But here's the thing. These capitalist countries don't trust health care entirely to the free market.

They all impose limits. There are three big ones. First, insurance companies must accept everyone and can't make a profit on basic care.

Second, everybody's mandated to buy insurance, and the government pays the premium for the poor. Third, doctors and hospitals have to accept one standard set of fixed prices. Hey, Mr. Fultz.

Can Americans accept ideas like that? Just came in to get your temperature and your blood pressure. Well, the fact is, these foreign health care ideas aren't really so foreign to us. For American veterans, health care is just like Britain's NHS. For seniors on Medicare, we're Taiwan.

For working Americans with insurance, we're Germany. And for the tens of millions without health insurance, we're just another poor country. But almost all of us can agree that this fragmented healthcare mess cannot be ignored.

The longer we leave it, the sicker it becomes. And the more expensive the cure. This report continues on our website, where you can watch the full program again online.

Get this, they spent half as much as... Find out more about correspondent T.R. Reid and his reporting of this story.

Everybody has the right to health care. Read our interviews with some of the world's leading health care experts. A for-profit system on the one hand... And learn more about how the U.S. health care system compares to those in other countries.

And then join the discussion about this program at pbs.org. Frontline is made possible by contributions to your PBS station from viewers like you. Thank you. With major funding from the John D. and Catherine T. MacArthur Foundation, helping to build a more just world.

And additional funding from the Park Foundation. With additional funding for this program from the Colorado Health Foundation, the Commonwealth Fund, and the Colorado Trust.

Transcript for:Exploring Global Healthcare Systems Solutions

Transcript for:
Exploring Global Healthcare Systems Solutions