Kent Conrad Makes German Health Care Relevant!

Ezra Klein offers us Kent Conrad’s thoughts on health care abroad:

Let me just conclude for my progressive friends who believe that the only answer to getting costs under control and having universal coverage is by a government-run program. I urge my colleagues to read the book by T.R. Reid, “The Healing of America.”

I had the chance to read it this weekend. He looks at the health-care systems around the world. And what he found is in many countries they have universal coverage. They contain costs effectively. They have high-quality outcomes, in fact higher than ours. They’re not government-run systems in Germany, in Japan, in Switzerland, in France, in Belgium — all of them contain costs, have universal coverage, have very high quality care and yet are not government-run systems.

It’s true, I suppose, that the system in Germany isn’t “government-run” in some sense. What happens in Germany is that the vast majority of the population is required to buy insurance from one of about 200 non-profit “sickness funds” that are prohibited from discriminating against people with pre-existing conditions. In addition, funds with healthier client pools need to transfer some of their money to funds with higher-cost pools. Fund administrators are paid more money for signing up more customers. There’s an official organization of stakeholders (health providers, sickness funds, employers, labor unions, public officials) that more-or-less sets payment rates and sets them lower than they are in the United States. The poor get subsidies to pay their premiums to the funds.


And, last, about ten percent of the population is rich enough to opt out of the sickness fund pool and sign up for more expensive private health insurance that pays doctors more and thus tends to get priority service for its clients.

It’s true that this meets a technical definition of “not government-run.” But the extent to which the Germany system isn’t government run doesn’t extend to dealing with any of the concerns of private industry. Which is fine by me, but nothing in Conrad’s talk of co-ops and such has suggested that he’s serious trying to put for-profit health insurance out of business, which is exactly what the German model does.