International Analysis: Access to Private Insurance Key to High-Quality Health Systems

The best systems abroad seamlessly integrate competitive private insurance with targeted public subsidies

NEW YORK, NY — As competition for the Democratic presidential nomination intensifies, Medicare-for-All and the role of private health insurance are among the candidates’ most hotly contested topics. A new Manhattan Institute report by senior fellow Chris Pope evaluates how other Western nations handle this issue, showing that the most successful systems allow citizens to purchase private health insurance beyond what public assistance provides.

Pope’s report analyzes the health-care systems of eight countries, placing them into four broad categories: single payer (Canada and the U.K.); dual payer (Australia and France); competing payer (Germany, the Netherlands, and Switzerland); and segmented payer (United States). He finds that competing-payer systems, which put individuals (rather than the government or employers) in charge of purchasing health insurance, prove best at harnessing private resources while avoiding gaps in coverage. In contrast, single-payer systems, which don’t allow private insurance, deliver consistently worse access to specialty care or surgical procedures—without reducing individuals’ overall out-of-pocket health-care costs.

The report’s findings include:

• Across the Western world, health care is paid for by a mix of public and private funds, with governments in North America and Western Europe spending 6-10% of GDP on medical entitlements (the U.S. spends 8.5%).
• Private health-care spending in these countries varies from 1% to 9% of GDP (the U.S. spends 8.8%).
• Only in single-payer systems is the supply of health care completely fixed (based on the amount of government funds available), a condition that can drastically limit overall access to care.
• Single-payer systems also tend to entail long wait times for treatments. (For example, 18% of English patients requiring urgent cancer care do not receive treatment within two months of referral.)

Click here to read the full report.