PBS Frontline: Sick Around the World

Frontline is made possible

by contributions to your

PBS station by viewers like you.

Thank you.

With major funding from the John D and Catherine T Mac Arthur

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.

[Sirens]

ANNOUNCER: Tonight on FRONTLINE:

American health care 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.

>>Barack Obama: I believe the problem is not that

folks are trying to avoid getting health care.

The problem is they can't afford it.

>> John McCain: We are approaching a perfect storm of problems that

if not addressed by the next president,

will cause our health care system to implode.

>>Hillary Clinton: 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.

ANNOUNCER: In the middle of our national debate,

Washington Post reporter T.R. Reid journeys to five countries-

T.R. REID, Correspondent: Have you ever paid a medical bill?

BRITISH WOMAN: No, never.

ANNOUNCER: -and finds out how other

rich free-market democracies

provide health care for all.

T.R. REID: How many people in

Switzerland go bankrupt because of medical bills?

PASCAL COUCHEPIN: Nobody.

It doesn't happen.

It would be a huge scandal if it happens.

ANNOUNCER: Tonight on FRONTLINE,

what it's like to be Sick Around the World.

[Music]

T.R. REID: That's the capitol 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.

[Music]

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.

[Sound of jet]

[Music]

Even though the U.K. 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 U.S. or just some horrible socialist nanny state?

The Brits pay for health care 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.

David Sloman: I think people are proud of it.

Ninety percent 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.

T.R. REID: Would you say most British

people go their whole lives

and never get a medical bill?

DAVID SLOMAN: Every single person who's born in the U.K.

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.

T.R. REID: No medical bills. Sounds sweet to me.

And here's something else that's different.

There's no medical bankruptcy.

This is Jeremy Cadle.

His son, Tom, is being treated for

leukemia at the Whittington.

At least he doesn't have to worry about going broke.

JEREMY CADLE: He's had eight weeks in hospital.

Apart from the times when he needs chemotherapy,

we've got community health care that

comes in on a weekly basis

to take his blood.

Hasn't cost us a penny.

You know, it's astonishing the care you can get.

T.R. REID: 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 long-time NHS watcher,

Nigel Hawkes of The Times, for a more critical perspective.

Look, this all sounds really sweet. Does it work?

NIGEL HAWKES: It works in some respects.

I think primary care, the family doctor service,

is pretty good.

And 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 on 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 6 months,

and for most people about 2 or 3.

TONY BLAIR: There are 400,000 fewer people

on waiting lists than in 1997.

Waiting times--

T.R. REID: 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.

DAVID SLOMAN: Oh, of course, we compete.

You know, we do on our Web site-

-you book in, we'll make sure

you can book into our place as 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 was 6 months or 7 months.

Now in some specialties, I could proceed tomorrow.

T.R. REID: 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.

NIGEL HAWKES: 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.

[Music]

RALLY SPEAKER: What we've seen over the past 10 years is

a move away from Bevin's ideal of a NHS for all.

We've seen the creeping privatization of services--

T.R. REID: When I was in London,

I stumbled on this rally in 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.

Interviewer: You're probably 50, or even more than that.

Have you ever paid a medical bill?

Have you ever paid a medical bill?

PROTESTERS: No. No, never.

T.R. REID: Will you ever pay a medical bill in your life?

PROTESTERS: Not Likely. I hope not.

PROTESTERS: We don't want to.

2nd PROTESTER: This is why we're doing this.

We don't want to.

And even in 10 years' time, if we're not around,

we don't want our kids to do it, either.

T.R. REID: While the hospitals struggle with reforms,

the GPs have embraced them.

I went to visit one who practices in the West

London neighborhood of Shepherds Bush.

In Britain, health care starts here.

Nobody can to go directly to a specialist.

First you have to go to a gatekeeper, like Dr Ahmed Badat.

Dr. Badat: Nasty cough.

Narrator: 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.

Dr. Badat: Open your mouth.

Narrator: GPs are paid a fixed amount based

on the number of patients they have.

The average list is 1,800 people.

Dr. Badat: it's infected.

Narrator: And get this.

They make a bonus for keeping their patients healthy.

So when Dr. Badat does a good job of caring for patients

with diabetes and heart disease, he gets paid more.

How much more?

AHMED BADAT: It works out about 90,000 pounds.

T.R. REID: [on camera] So that's increasing

your salary by $180,000 a year.

That's not bad.

Dr. AHMED BADAT: Yes. [laughs]

T.R. REID: I'm reading the newspaper.

It says docs are doing well here.

Dr. AHMED BADAT: I can't complain.

T.R. REID: Dr. Badat 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.

Dr. AHMED BADAT: The treatment was absolutely fantastic.

But you know, I was there eight days.

The total bill came to $67,000.

I mean, that is preposterous.

T.R. REID: [laughs.]

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?

Dr. AHMED BADAT: Yes. There's always like that.

T.R. REID: Are they sick, or--

Dr. AHMED BADAT: No. I think they're just lonely people,

they are, so just want somebody to chat to.

But then there are people I never see at all.

T.R. Reid: yeah.

DR. BADAT: And they come and register,

I don't see them for three years, five years.

T.R. REID: 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?

[Music]

One thing's for certain: Japanese health care is a bargain.

For just 8 percent 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 Soshigoya.

T.R. REID: The Japanese are prodigious

consumers of health care.

They go 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?

Dr. KONO HITOSHI: No appointment is necessary.

T.R. REID: Never.

Dr. KONO HITOSHI: Never.

T.R. REID: How long do you see the doctor?

Dr. KONO HITOSHI: Three minutes.

T.R. REID: It seems like such a short visit.

T.R. REID: Surveys show the Japanese

are highly satisfied with their health system.

[talking to female patient] You know, I--excuse me-

she says, you know,

"This annual physical is really a great idea.

I think that's why I've stayed so healthy, because

they really look out for me and check out all my problems."

[talking to male patient] Yeah.

"Well, it's not bad, as a matter of fact.

You can't call it bad because everybody has the insurance

and the insurance pretty much takes care of the bills."

[female patient] "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?" she says.

T.R. REID: 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 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 check-up 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.

In Denver, where 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?

NAOKI IKEGAMI: Well, in 2002, the government says that the MRIs,

"We are paying too much.

So in order to be within the total budget,

we will cut them by 35 percent."

T.R. REID: So, if I'm a doctor, why don't I say,

"Well, I'm not going to do them, then.

It's not enough money"?

Prof. NAOKI IKEGAMI: You forgot that we have only

one payment system.

So if you want to do your MRIs,

unless you can get private-pay patients,

which is almost impossible in Japan, you go out of business.

T.R. REID: 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 those 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.

T.R. REID: If somebody comes in with a

cut that's less than 6 square inches,

so a fairly small cut, he gets 450 yen-

-$4.30--to sew that up.

That's incredibly cheap.

Dr. KONO HITOSHI: It's extremely cheap.

T.R. REID: He then told me what it

costs to stay in his hospital.

OK, you're going to love this.

So you know how much it costs to

spend the night in a 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 a hospital in a private room here.

That's because the government sets the price.

T.R. REID: Is that fair?

Dr. KONO HITOSHI: It's fair.

T.R. REID: Oh, it is.

Dr. KONO HITOSHI: But doctors can't get rich. [laughs]

T.R. REID: 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?

NAOKI IKEGAMI: That is forbidden.

T.R. REID: These health care plans

covering basic health care

for a worker and his family, do they make a profit?

NAOKI IKEGAMI: No, because they are not

allowed to make a profit,

and anything left over is carried over to the next year.

If there's a lot carried over,

then the premium rates would go down.

T.R. REID: 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.

J.R. Tokai, the company that runs this bullet train to Osaka,

told me that its health care costs are about

half of 1 percent 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.

SAITO HIDERO: I think our system

is pretty good, pretty good, but no system is perfect.

T.R. REID: Yes.

Dr. Saito Hidero: But now 50 percent of hospitals

are in financial deficit now.

T.R. REID: No, I didn't know that. In Japan?

Dr. SAITO HIDERO: Fifty percent in Japan.

So I'm afraid hospitals

may be one of the endangered species in Japan now.

T.R. REID: Fifty percent 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 from medical costs?

Dr. SAITO HIDERO: I don't know. We never heard of it.

Yeah, almost never hear of, yeah.

T.R. REID: Before leaving Tokyo,

I went to the Meiji Jingu Shrine,

a deeply spiritual place.

[Music]

I left a prayer, asking for something

I think almost all of us can agree on:

a health system where, as in Japan, everyone gets care,

and nobody goes broke paying doctor bills.

[Music]

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 health care.

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 health care 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 percent 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 Christina von Kockritz, a family doctor

practicing in the small town of Kladow, 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?

CHRISTINA VON KOCKRITZ: Well, two weeks.

T.R. REID: Two weeks?

Dr. CHRISTINA VON KOCKRITZ: If it's serious, same day.

T.R. REID: 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 wait to see the--

Dr. CHRISTINA VON KOCKRITZ: It's different.

Perhaps another week or two, yes.

T.R. REID: 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?

Dr. CHRISTINA VON KOCKRITZ: Not too long. Three weeks.

T.R. REID: Three weeks before I could get in.

Dr. CHRISTINA VON KOCKRITZ: A guess, yes.

T.R. REID: 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.

KARL LAUTERBACH: It is a system

where the rich pay for the poor

and where the ill are covered by the healthy.

T.R. REID: This is Professor Karl Lauterbach, a member

of the German parliament and one

of Germany's foremost experts on health policy.

Prof. KARL LAUTERBACH: So it is a nice

social support system

which is highly accepted by the population.

T.R. REID: Katie Haaser is one of those patients.

She's having her third baby.

KATIE HAASER: 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.

T.R. REID: What does she pay?

KATIE HAASER: Actually, nothing.

I don't have to pay anything.

T.R. REID: 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?

Prof. KARL LAUTERBACH: 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 a job remains in

exactly the health insurance system that he is in.

T.R. REID: [voice-over] 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?

Prof. KARL LAUTERBACH: 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.

So I think the German health care

system is a nice third way

between a for-profit system, on the one hand,

and let's say, single-payer system on the other hand.

T.R. REID: It all sounds good to me.

But how does the German system compare with ours?

To get a U.S. view, I went to McGury's Cafe

in the former East Berlin

to meet Mike McGury, an American whose been

living in Germany for six years.

Good to see you. It's been since Kladow.

Wow, I love the new bar. It looks great.

[speaks in German]

[laughs]

That's all the German I know. I want a big beer.

MIKE McGURY: Oh, that's all you need! [laughter]

T.R. REID: Do you ever have to go to the doctor?

I mean, you've used the health care system?

MIKE McGURY: Oh, absolutely.

T.R. REID: Yeah. And what do you think?

How would you rate it?

MIKE McGURY: Top notch.

T.R. REID: Oh, really? How come? What's good?

MIKE McGURY: You have many different choices,

and the cost is a fraction of what is covered in the States.

Most of your prescriptions are covered with very,

very small co-pays.

T.R. REID: And how's the quality? I mean,

do you think you're getting good health care here?

MIKE McGURY: Excellent. Actually, I see no difference

as far as quality goes between here

and when I was in the States.

T.R. REID: Really?

MIKE McGURY: Yeah.

T.R. REID: 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 percent.

That's a quarter of what they are in the U.S.

And drugs are a bargain here, too.

Prof. KARL LAUTERBACH: 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.

T.R. REID: 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 Charite Hospital.

So do you think your hospital is paid

enough for the services it provides people?

Prof. DETLEV GANTEN: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.

T.R. REID: An American hospital that felt

it wasn't getting enough money

for its services would raise its prices.

Could you do that?

Prof. DETLEV GANTEN: 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 re-compensation.

We cannot raise our prices.

T.R. REID: 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.

Prof. DETLEV GANTEN: It's not a high salary,

and people correctly complain

because they work not 8 hours,

they work 12 hours, 14 hours, 16 hours,

and sometimes seven days a week.

And I think they deserve more.

T.R. REID: Dr. Christina von Kockritz

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 dollars 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,

who drives a Lexus to the country club and takes vacations

in Majorca and stuff like that.

Dr. CHRISTINA VON KOCKRITZ: It be like this in Germany

until I think '80s, the '80s,

perhaps '90s, but it's changed in the mid of '90 years.

So your doctor normally has a small car today. [laughter]

But he still goes to Majorca.

T.R. REID: Still goes to Majorca, yeah.

And skis in St Moritz?

Dr. CHRISTINA VON KOCKRITZ: No. [laughter]

T.R. REID: 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.

Dr. CHRISTINA VON KOCKRITZ: I think about 18,000

or 20,000 doctors,

and doctors don't usually demonstrate.

But nothing changed.

T.R. REID: 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 the 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 health care system."

So you know what 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 the America's is today.

About half the population had no coverage at all.

Hongjen Chang was one of the officials

charged with designing

a new health care system from scratch.

HONGJEN CHANG: Taiwan is a small island.

We always look abroad internationally for ideas.

Chinese saying, we say,

"The track of the previous cart is the teacher

of the following cart."

T.R. REID: So if the other guy's oxcart has found

a good route to universal health coverage,

follow those tracks.

Dr. HONGJEN CHANG: Follow those tracks.

If they were trapped in trouble, avoid that track.

Find a new track.

T.R. REID: So they consulted experts from around the world,

and asked William Hsiao,

a Chinese-born Harvard health economist,

to head a blue ribbon panel.

Prof. WILLIAM HSIAO, Harvard School of Public Health:

Why do you want to repeat the mistakes other people make?

You want to pick up what people have

done well and then move beyond that.

T.R. REID: Another expert they consulted was

Taiwanese-American health economist Tsung-mei Cheng.

How many different countries did they look at, do you know?

TSUNG-MEI CHENG, L.L.B., Princeton University: 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.

Dr. HONGJEN CHANG: We examine quite

extensive the major systems

of quite a dozen, Europe, British or France,

Germany, the Nordic countries, Swiss or the Dutch--

T.R. REID: Well, did you look at--

Dr. HONGJEN CHANG: --America.

T.R. REID: --the richest country in the world,

the United States?

Dr. HONGJEN CHANG: [laughs] Oh, yes, yes, yes.

It was the best system in the world, we thought.

T.R. REID: Yeah, you thought.

And when you studied it, what did you find?

Dr. HONGJEN CHANG: 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."

[Music]

T.R. REID: They wanted a system that

gave everybody equal access

to health.

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.

Prof. WILLIAM HSIAO: We try to correct their mistakes.

Japan has many funds, and we unified it.

Germany let the rich people opt out.

We do not let the rich people opt out.

So we're building on what they have done correctly,

but trying to overcome their deficiencies.

T.R. REID: 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.

TSUNG-MEI CHENG: It has drug benefits, vision care,

traditional Chinese medicine, kidney dialysis,

inpatient care,

outpatient care, just about everything under the sun.

T.R. REID: 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 shoulder's really hurting,

how long would it take me to see an orthopedic specialist?

Dr. HONGJEN CHANG: We go now. [laughter]

T.R. REID: This morning I could see one?

Dr. HONGJEN CHANG: Yeah.

T.R. REID: I don't have to go to a

GP and get a recommendation?

HONGJEN CHANG: No, we-- our people don't

like the idea of gatekeepers. [laughs]

They want to keep-- keep themselves.

They want to decide by themselves.

T.R. REID: High-tech 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, et cetera, 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 world, less than 2 percent.

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.

TSUNG-MEI CHENG: 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.

T.R. REID: That may be too much like

Big Brother to get by in the U.S.,

but surveys show the Taiwanese are

highly satisfied with their health care.

How many people in Taiwan every year go

bankrupt because of medical bills?

Dr. HONGJEN CHANG: None.

T.R. REID: So the patients are safe from bankruptcy.

But just like Japan, the system itself is under strain.

How much of the Taiwan's GDP are

you spending on health care?

Dr. HONGJEN CHANG: We spend some 6.23 percent.

T.R. REID: Do you know the number in America?

Dr. HONGJEN CHANG: Yes, it's about 15 percent.

T.R. REID: Sixteen percent. Yes, 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.

TSUNG-MEI CHENG: So actually, as we speak, the government

is borrowing from banks to pay what

there isn't enough to pay the providers.

T.R. REID: 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 percent of GDP.

Now, there's a problem the U.S. would love to have.

[Music]

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

acupuncture for my bum shoulder.

I hurt 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 changed 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.

[Music]

Like Americans, the Swiss tend to

think they're exceptional.

They don't follow the crowd.

It's a nation of eight 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 Dreifuss back then was health

minister of the left-leaning

Social Democratic Party and later

the first female president

of the Swiss Federation.

She spearheaded a new law called LaMal, 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.

RUTH DREIFUSS: 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.

T.R. REID: 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 Couchepin, from the center-right

Free Democratic Party,

is the current president of Switzerland.

Originally unenthusiastic about LAMal,

today he's a supporter.

PASCAL COUCHEPIN: Everybody has the right to health care.

T.R. REID: Yeah. Now, see, that's striking for an American

because we would certainly say everyone's

entitled to an education--

Pres. PASCAL COUCHEPIN: Yes.

T.R. REID: --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.

Pres. PASCAL COUCHEPIN: 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.

T.R. REID: Dreifuss, from the opposite

political camp, agrees.

RUTH DREIFUSS: 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.

T.R. REID: But I wondered about

LAMal's impact on drug and insurance companies.

Pierre Marcel Revaz is CEO of Groupe 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, a lack of profit has

not meant a lack of competition.

T.R. REID: 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"?

T.R. REID: Groupe Mutuel has a strong

incentive to keep administrative costs low.

T.R. REID: Do you know what that figure

is in American health insurance companies?

The average administrative cost is about

22 percent, and you're running at 5 percent.

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?

RUTH DREIFUSS: It was the same argument here in Switzerland.

T.R. REID: I'm sure.

RUTH DREIFUSS: 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.

And when you hear them, they are not

crying about the bad shape of their industry.

T.R. REID: That may be because Swiss

drug companies still make more than

a third of their profits from the less

-regulated U.S. market.

One of the problems we have in America

is that many people -- it's 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?

Pres. PASCAL COUCHEPIN: Nobody. It doesn't happen.

It would be a huge scandal if it happens.

T.R. REID: But here's Switzerland's challenge.

Having achieved universal health care, 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 raise the premiums.

And it's already the second most expensive

health care 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 capitalist country

see limits now to the free market.

Could a 100 percent free market system work in health care?

Pres. PASCAL COUCHEPIN: No, I don't think that.

If you do that, you will lose

solidarity and equal access for everybody.

T.R. REID: Which is what you were

finding in the late '80s.

Pres. PASCAL COUCHEPIN: Yes. We think that

is a basic value of living in our society.

Sen. HILLARY CLINTON (NY), Democratic

Presidential Candidate:

My plan combines employers and individual responsibility,

while maintaining Medicare and Medicaid. I think that--

T.R. REID: Back in the U.S., in an election year,

everybody's talking about health care.

Sen. BARACK OBAMA: My belief is that if we make it affordable,

if we provide subsidies

to those who can't afford it, they will buy it.

T.R. REID: 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.

Sen. JOHN MCCAIN: The solution, my friends, isn't a

one-size-fits-all big government takeover of health care.

T.R. REID: 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.

[Music]

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.

Can Americans accept ideas like that?

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 million without

health insurance, we're just another poor country.

[Sirens]

But almost all of us can agree that

this fragmented health care mess cannot be ignored.

The longer we leave it, the sicker it becomes,

and the more expensive the cure.

[Music]