Germany Shows Universal Healthcare is No Panacea

November 5, 2019

To some, universal healthcare is a panacea that can bridge economic disparities and make the poor monumentally better off. But, in fact, there’s far more to healthcare outcomes than just taxpayer spending on medicine. Look no further than Germany, the first country in the developed world to implement a national, government-centric medical system. The government mandates, standardizes, and subsidizes care, and yet, struggling citizens still get subpar care. Germany’s experience should be a lesson for all of those calling for Medicare for All.

Reporting on healthcare access in a handful of poor neighborhoods in Hamburg, NPR contributor Shefali Luthra notes, “Entering these areas felt like stepping into another city, where even though people have universal insurance, high rates of chronic illnesses such as diabetes, depression and heart disease persist. Treatment and preventive care are difficult to access.” The lessons here are complicated, yet difficult for advocates of government-managed care to comprehend. State-centric solutions often fail to deliver the goods, while ignoring the real reasons why medical problems persist. Working-class Americans can see a cleaner bill of health, but only through greater choice and competition.

In her reporting, Luthra observes that the life expectancy for people living in the poor Hamburg neighborhoods of Veddel and Billstedt trails wealthier city areas by 13 years, similar to the rich-poor gap in major American cities. Walking in neighborhoods such as Veddel (Hamburg) and West Oakland (California), one notices striking commonalities in healthcare access despite different national and state policies. Residents of both neighborhoods can find at least some healthcare in clinics underwritten by taxpayer funds, whether by Medicaid-supported facilities in the US or the Poliklinik Veddel in Hamburg.

But these taxpayer ventures are doomed to fall flat when they fail to move the needle, and decrease choices for consumers. There’s a lack of medical personnel in places like Veddel precisely because, in the words of Luthra, there’s “a shortage of doctors willing to work in this part of town.” When asked to relocate to a rough area of town without a significant bump in pay, many physicians will simply decline and continue to work in neighborhoods where they feel more comfortable. There’s already a large, related problem in the U.S., where physicians with a large percentage of Medicaid payments must accept lower salaries than their private insurance-funded counterparts. For this reason, roughly three in ten physicians don’t accept Medicaid patients. The physicians that do accept Medicaid tend to offer lower-quality care in worse settings.

This system of low reimbursement would just get worse if Senator (and presidential hopeful) Bernie Sanders’ (I-Vt.) “Medicare for All” proposal became the law of the land. Medical facilities across the U.S. would lose nearly $1 trillion in reimbursement revenue over the next decade. This would likely be too much to bear for physicians and hospitals in rural and underserved areas, a quarter of which are already on the brink of closure. Assuming some semblance of private insurance would be allowed to survive (not a safe assumption), the best hospitals and clinics would merely be clustered in the best neighborhoods populated by people able to dole out for luxury insurance. This is the case in Germany, where one tenth of the population can buy more extensive coverage and expedited visits. In fact, many healthcare “outposts” in poor German neighborhoods don’t have doctors at all and rely on counselors instead.

But America shouldn’t need to choose between the current, limited system of faulty government insurance and the more expansive dumpster-fire of “Medicare for All.” The reimbursement rate problem faced by low-income communities can be solved by lowering underlying healthcare prices across the country, a feat nearly unheard-of in developed, government-run healthcare systems around the world.

One surefire way to bring prices back down from the stratosphere is to increase competition amongst providers and empower nurse practitioners to prescribe basic medications normally left up to physicians. States such as Alaska and New Hampshire were among the pioneering states to give nurses broader authority to interact with patients, resulting in lower bills for patients with acute care needs. Meanwhile, Medicare should work with the Accreditation Council for Graduate Medical Education to increase the number of medical residencies, and allow foreign doctors to enter the U.S. after completing high-quality foreign residencies. These changes could decrease prices for patients while actually increasing the availability of doctors across rich and poor neighborhoods.

America doesn’t have to look like Germany—we can lead the way in commonsense healthcare reforms instead.