In virtually every country with national health insurance, politicians, health ministers, and other government officials are searching for ways to reform their health care systems. Increasingly, the reforms being adopted seek to replace socialism in medicine with privatization, competition and market incentives.

  • In 1989, the British government introduced radical market-based reforms in health care and began to allow private hospitals to compete against public hospitals for National Health Service funds. [1]

  • In 1987, the Netherlands introduced a voucher system which allows consumer choice among private and public insurance funds. [2]

  • In 1987, Germany introduced a new policy which encourages competition among hospitals. [3]

  • More recently, the government of New Zealand has signaled its intent to end 40 years of socialized medicine by giving people tax incentives to purchase private health insurance and by introducing market-based reforms in the public sector. [4]

  • Sweden, along with other European countries, has already introduced some "managed competition" into its national health insurance system, and with the recent change of government those reforms will undoubtedly continue. [5]

  • In Canada, pressures mount to allow private health insurance options and to institute user fees, and the father of Quebec's health care system (the oldest national health insurance scheme in Canada) has called for privatization and competition in the supply of health services. [6]

  • Russia's new health care reform plan calls for decentralization, "enterprise" and the introduction of financial incentives into health care. [7]

  • Chile has given its citizens financial incentives to opt out of national health insurance for the last decade, and most other Latin American countries are seeking ways to partially privatize their health care systems. [8]

As other countries struggle to reform their health care systems, they often look to the United States for guidance. Yet, many in this country are encouraging us to copy the health care system of some other country.

In Michigan, one prominent state representative has called for the state to copy Canada's "free and universal" care system. Many news reports suggest that our neighbor's socialized arrangement would be superior to any attempt at reforming our own. This study's heavy focus on Canada and its system, then,. is particularly timely and especially useful for the people and Legislature of Michigan.

National health insurance promises to make medical care a "right" and to grant all citizens equal access to it. But as this study shows, people in those countries which have adopted national health insurance are often denied access to modern medical technology, and the distribution of health care resources is far from equal. The special victims of national health insurance are the poor, the elderly, members of minority groups, and residents of rural areas.

This report does not focus on minor blemishes or easily correctable problems in the health care systems of other countries. Instead, it seeks an understanding of fundamental principles by identifying common patterns that tend to emerge in all countries with national health insurance and explaining why those patterns emerge inevitably from the politics of medicine.

As the United States wrestles with the problems of its health care system, it is tempting to look elsewhere for solutions. In general, countries with national health insurance spend less per person (and less as a percent of national income) on health care than does the United States. Those unfamiliar with other systems assume that the United States can control health care costs through national health insurance without any loss of benefits or deterioration of quality. In what follows, we briefly discuss this and other common myths about national health insurance.