Health Care: The Bismarck Model

Part two of a six part series analyzing the healthcare systems of various countries around the world

Through studying the Bismarck system of health care over the past few weeks, it seems that if the U.S. is going to seriously adopt a different style of health care, this is most likely going to be the one it resembles.

The Bismarck system is present in one form or another in France, Germany, Japan and a few other countires, and each of these countries attempts it in a slightly different way. In short, it is what the United States health care system looks like for the average working U.S. citizen under 65 years of age, with some differences.

The Bismarck system present in these countries is run on largely private hospitals, doctors and insurance plans. This is contrary to the belief by Americans that think all European systems are socialized and don’t allow citizens any choice in coverage.

While many aspects of these systems include private entities, there is one major difference from the U.S.; their insurance companies do not make a profit and they are not allowed by law to drop someone for a “pre-existing condition.” This also goes along with the idea that every citizen in these countries is required to have some form of insurance.

While these systems may seem flawless at first glance, for the most part short waits, quality care, low costs and a simplified system have their downfalls. For example, the average doctor in these countries makes far less than one with an equivalent status in America. They still make a decent living and will be a part of a strong middle class, but they do not hold the same level of prestige as doctors in the United States.

Undoubtedly, these countries also have had substantial calls for reform. Germany’s system, while effective and efficient, is one of the most expensive in the world. It is still nowhere near the amount per GDP that the U.S. spends, but it is hefty. France, being rated by the World Health Organization for “Overall Health System Attainment,” also spends quite a bit of money to keep their citizens’ coverage at a low cost.

As stated in T.R. Reid’s book that I introduced in the previous article of this series, Japan is often envied by many as having one of the best systems in the world. They have some of the shortest waits and spend far less than you would expect. Other factors that play into this though include the fact that the Japanese are some of the healthiest people on earth.

The Bismarck system, as named after Otto von Bismarck, is going to be the best chance that the U.S. has of obtaining any type of serious health reform. Far too many people misunderstand foreign systems by lumping them all into nationalized and socialized medicine. As we have seen with these examples, this presumption is far from the truth.

I hope that this type of system can be a sort of meeting ground between the two oppositions in Washington. Instead of a single payer, or an unregulated privatized system, why not settle for private companies that are regulated and not for profit? Both sides will have to sway from their ideology slightly, but this seems like a rational way of establishing effective health care reform.

Health Care Quick Stats

  • It is estimated that health costs will reach $2.5 trillion dollars in 2009. This is approximately 7.6 percent of the gross domestic product (GDP).
  • With trends as they are, it is estimated that 50 percent of all national health spending will be towards Medicare and Medicaid within three years.
  • The cost of health care is rising faster than the GDP. It is estimated that health care costs will show an average 6.2 percent increase per year between 2008 and 2018. The GDP is estimated to increase only 4.1 percent each year.

Information from the National Coalition on Health Care’s website.

If you would like to read the first part of the story, visit The Health Care Debate.