updated 5/7/2009 9:34:52 AM ET 2009-05-07T13:34:52

Joe Kutzin, regional adviser for health systems financing for the World Health Organization Regional Office for Europe, tells what he thinks of universal health care, the Dutch insurance model, and effects on the tax payer.

What is the main problem with the health care system in the United States?
There are two main problems within the system, and one broader problem that Americans need to be concerned about. The system is unfair, in the sense that the services people get often relate more to their income and insurance status rather than their medical need, and that, not infrequently, families are put in a position of being forced to choose between potentially impoverishing themselves to pay for care or not getting the care that they need. The system is also terribly inefficient, with much higher levels of spending but no better results (and sometimes worse) than other high-income countries.  This inefficiency creates a broader economic problem: growing health care costs (and their translation into the rising cost of employee benefits) have become a drag on employment, compromise the international economic competitiveness of U.S. industries, and pose a high risk to the viability of many small businesses.

Is the current U.S. system sustainable? In other words, what will happen down the road if nothing is changed?
It is "sustainable" in the sense that it will continue to exist, but the consequences of the problems described above will continue to get worse if fundamental changes are not made.  Large employers are likely to continue cutting back on health benefits, leaving more people at risk for high health care costs. Small businesses will increasingly drop health benefits entirely, putting themselves and their employees in precarious circumstances. The number of uninsured will grow, and as a result, the demands on state and local governments (via Medicaid and public hospitals) will grow as well.  So in a sense, one might hope that the current U.S. system is not sustainable politically, and that the growing pressures will finally enable us to overcome the obstacles to meaningful reform.

How should the United States alter its system and is universal health care feasible?Universal coverage is feasible, but the U.S. has to define a path to get there that involves addressing a fundamental problem in the system: fragmentation.  This is why people “fall through the cracks,” why insurers invest substantial sums trying to avoid potentially high-cost clients, why hospitals and doctors have to spend a lot of time and money dealing with the different paperwork requirements of different insurers, why people are faced with the enormous challenge of trying to understand and compare different health benefit packages, etc. There are many ways that the system could be reformed, but any meaningful strategy will need to focus on addressing fragmentation and its consequences, recognizing that doing so is on the “critical path” towards the goals that we want to achieve, such as universal coverage, fairness, and greater efficiency. Hopefully, it will be possible to get a consensus on these goals; if we don’t have this, the risk is high that the policy debate will degenerate into an un-resolvable ideological fight rather than a serious assessment of which measures will move us closer to the goals.

How would universal health care impact the taxpayer?
Almost certainly, there will be some transitional costs, because putting in place the technical pre-conditions for universality (e.g. standardized information systems) will require investments.  The potential for reducing costs is tremendous, however, and if done right, the medium or long term impact on the taxpayer could well be lower costs than would happen if the existing system continues to spin out of control.  Doing it right really means ensuring that the policy makers keep their eye on the ball — addressing fragmentation and the high costs associated with it.

Is there another country’s system, or combination of elements of other systems, that the United States should adopt to improve its coverage?
Health systems are, to a great extent, an expression of societal values and a reflection of a country’s culture, preferences and historical development.  While it is therefore not useful to consider adopting another country’s system in its entirety, all countries can learn useful lessons from the experiences of others and adapt relevant experiences to their own context.  To help move towards a universal coverage system from what exists today in the U.S., I believe that the Dutch experience may be of particular value and interest.  In the Netherlands, health insurance and most health care provision is in the private sector, while government plays a strong regulatory role to ensure that everyone is covered (including subsidizing the premiums of the poor), to improve the ability of citizens to make an informed choice among insurers, and to lessen incentives for insurers to avoid “sicker” clients.  This latter involves a “risk adjustment” mechanism to enable the amount of revenues received by each insurer to reflect the relative health risk of their clients (e.g. insurers serving older persons with greater health needs would receive more revenues per capita than insurers serving a young and healthy client base).  The Dutch experience shows that it is possible to blend market competition and universality; getting there doesn’t require big government, but it does require smart government.

Do you think President Obama will lead the country in the right direction regarding health care coverage? What advice would you have for him?
He has put the issue of universal health care high on the political agenda, and that is a good sign.  My advice would be to avoid a search for villains (e.g. insurance or pharmaceutical companies) or panaceas (e.g. the electronic medical record), neither of which will be very productive.  Instead, Americans need an intelligent public policy debate that both builds strong consensus for the goal of universal coverage and fosters understanding of the consequences of the structural fragmentation of the existing system and why this has to be addressed.  Expanding coverage without tackling this underlying problem will be very costly, so equal attention needs to be given to both fairness and efficiency if the U.S. is to move towards a system that is both universal and affordable.

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