Insurance Discussion

But three other wealthy nations – the Netherlands, Switzerland and Germany – offer much closer parallels, as well as lessons.

Health care systems in the three nations more closely resemble the U.S. system of insurance-based coverage. Holland and Switzerland rely exclusively on private insurance, and all three rely on private doctors. The three European nations deliver universal coverage and world-class quality at a fraction of what Americans spend.

All of them require that everyone purchase insurance, make sure everyone can afford it and ban insurers from such practices as refusing to cover the sick that are common in the United States.

“We’ve got something worse than socialized medicine in this country,” said Alain Enthoven, a Stanford University economist known as the father of the Dutch system.

“We have doctors causing hospital infections by not washing their hands because the incentives don’t punish them for hospital infections, and we’ve got something that is financially destroying our economy. It’s a disaster.”

In many ways, the legislation in Congress builds on a broken system, experts said, reinforcing such features as relying on employers to buy health insurance rather than letting workers shop for their own plans.

European health care is universal, but contrary to popular perception, it is not all nationalized. Facing rapidly aging populations, many European countries have gone much further than the United States in using market forces to control costs. At the same time, regulations are stronger and often more sophisticated.

Most of Europe spends about 10 percent of its national income on health care and covers everyone. The United States will spend 18 percent this year and leave 47 million people uninsured.

Europe has more doctors, more hospital beds and more patient visits than the United States. Take Switzerland: 4.9 doctors per thousand residents compared with 2.4 in the United States. And cost? The average cost for a hospital stay is $9,398 in relatively high-cost Switzerland and $17,206 in the United States.

“In Switzerland, rich or poor, they all buy the same health insurance,” said Regina Herzlinger, chairwoman of business administration at Harvard University and a leading advocate of the Swiss system. “The government gives the poor as much money as the average Swiss has to buy health insurance.”

The Swiss and Dutch buy their own coverage from competing private insurers. Both systems address market failures that pervade U.S. health care: Insurance companies must provide a core benefit package and everyone must buy coverage. Consumers can shop for value and pocket the savings, as opposed to U.S. patients who hand the bill to someone else. Switzerland does not have a public program like Medicare or Medicaid.

Far from leading to poor quality and rationing, both countries and Germany, where government has a much larger role in health care, outperform the United States on many quality measures. These are not just broad measures such as life expectancy that could reflect higher U.S. poverty or obesity. Even Britain, much maligned by opponents of government-run health care in America, has made greater strides in preventive care.

“The data are pretty clear,” said Peter Hussey, a Rand Corp. analyst. “Everybody (in the United States) is at risk for poor-quality care.”

Americans often confuse intensive care with quality, said Beth Docteur, a consultant and former health official at the Organization for Economic Cooperation and Development, a group of 30 industrialized countries.

U.S. doctors face powerful economic incentives to do more, whether or not it improves a patient’s health. These include fee-for-service payments that reward volume, fears of malpractice lawsuits that encourage more tests and procedures, and heavy marketing by drug and device makers.

The Germans apply especially rigorous scientific analysis to determine which medical procedures work and which don’t. Critics here argue that such “comparative effectiveness research” leads to rationing or even “death panels.” Recommendations this month by a U.S. government panel to cut back on mammograms have heightened such fears.

Karl Lauterach, director of the Institute of Health Economics at Germany’s University of Cologne, described Germany’s approach as “protecting patients against ineffective and highly inefficient care.”

“If Americans experience a more intensive medicine, is this higher quality? The answer is absolutely not,” Docteur said. “A lot of these surgeries and procedures may not even be appropriate for the patient. People are being exposed to risks of hospitalization and risks of adverse events that can exceed the actual benefits.”

The Dutch address what experts consider a critical market failure: The profit-maximizing incentive among health insurers to dump sick people. In Holland, insurers can profit by covering the sick. Some even market plans to diabetics, a practice that would be unthinkable here. The Dutch do this through a complex scheme that pays insurers more for covering the sick.

“Get this wrong, and your public option will fail,” warned Cathy Van Beek, acting chairwoman of the executive board of the Dutch Healthcare Authority. Health care reform, she said, “is highly complex and requires great time and effort to get things partly right some of the time.”

Legislation in Congress would borrow from the Dutch by creating an “exchange” where some people could buy insurance. But Enthoven believes these are doomed to fail because they are missing key ingredients of the Dutch plan such as access for all.

Moreover, “there is virtually nothing in the bills that is going to control costs,” said Gerard Anderson, a professor at the Johns Hopkins Bloomberg School of Public Health. On the plus side, he said, “In terms of making sure people are insured and making sure that you can’t be denied coverage, that’s much more like the European systems.”

E-mail Carolyn Lochhead at clochhead@sfchronicle.com.