(The following article is reprinted from Consortium News. It was published on March 23. Previous articles on this subject can be found on this site, including an interview with Andrew Spannaus done early in the month.)
During the March 15 Democratic presidential debate between Joe Biden and Bernie Sanders, moderator Jake Tapper of CNN asked how to avoid a situation like that in Italy, where in some areas doctors are forced to decide who gets urgent treatment and who does not to survive the coronavirus. When it was Biden’s turn to answer, he said “With all due respect for Medicare for all, you have a single-payer system in Italy. It doesn’t work there…That would not solve the problem at all.”
Biden then promptly called for guaranteeing treatment for everyone irrespective of cost, precisely the premise of a single-payer system: “We can take care of that right now by making sure that no one has to pay for treatment, period, because of the crisis. No one has to pay for whatever drugs are needed, period, because of the crisis.”
So, in “normal” times Biden doesn’t think it’s necessary to provide a guarantee of universal coverage. In an emergency, however, “We just pass a law saying that you do not have to pay for any of this, period.”
Apparently, health problems for people who don’t have insurance aren’t an emergency until they threaten others.
Sanders missed the opportunity to call Biden on this glaring contradiction, and also failed to directly answer the charge that a single-payer system like Italy’s is failing the test posed by the crisis. He focused instead on the U.S. system’s failure to provide healthcare to all people, stressing that the current crisis “is only making a bad situation worse.”
Biden suggested that the situation in Italy proves that a public system doesn’t work. Sanders, on the other hand, said he wanted to eliminate private insurance completely, on principle. Neither of these ideological positions reflects how the health system actually functions in Italy. While Sanders’ call for a public guarantee of care reflects a fundamental goal to be pursued, it is essential to also identify the short-term financial mentality that has pervaded healthcare in both public and private systems in recent decades.
Systems in Italy & U.S.
So how does healthcare function in Italy? And how does it compare to that of the United States?
Italy provides a universal guarantee of coverage — as do most European countries — in the context of a mixed public-private system. According to the OECD, the ratio between government and private spending on healthcare in Italy is 77 percent/23 percent.
Most European countries are in the same range, i.e. the system is not entirely public; many private providers exist, which allow patients to pay for services through both the public system or privately. So Sanders’ idea of eliminating private insurance altogether would not reflect the social democratic systems in Europe; even in Denmark, often taken as an example, private spending is close to 20 percent.
What about the United States? According to the same OECD statistics, government expenditures on healthcare are about 47 percent of the total. So public spending has a smaller, but still considerable role. If you’re covered by Medicare, Medicaid, or the Veterans Health Administration, you’re essentially using a single-payer system, but one that covers 30 percent less of the population’s needs than the one in Italy. You also have some out-of-pocket expenses for visits and drugs, but you are guaranteed a government-defined level of treatment.
In the United States, many seniors take out Medigap supplemental policies or Medicare Advantage plans, because the public system still leaves people facing costs for visits and treatments that can quickly become exorbitant, for drugs in particular.
In Italy, on the other hand, prescribed drugs cost very little, generally the equivalent of only about $2 per prescription. If you want a brand name drug, rather than the generic, you pay a little more, but still only about $5.
Doctor visits are different. In Italy’s public system, costs for visits or diagnostic exams have a co-pay that ranges from $30 to $60, similar to the cost in the U.S. with insurance.
The most visible drawback of the public system, however, is represented by waiting times for appointments. If you are not deemed an urgent case, you can wait months in some areas. Your primary care physician can override that by requiring a visit within three days, or by assigning a medium level of priority. But many people prefer to take out a private insurance policy that allows for visits within one-to-two weeks, and covers co-payments; these plans are often negotiated by labor unions or trade associations and offered for large categories of workers throughout the country.
Another difference is the ownership of healthcare facilities. In the United States only about 18.5 percent of hospitals are publicly owned, while 56.5 percent are non-profits, and the remaining 25 percent for-profit facilities (2018 data). In Italy, a slight majority of hospitals are publicly-owned (52 percent percent); significant, but less than what one might expect in a single-payer system. Almost half of the facilities are private, but the majority of services they provide are generally paid for through the public system.
The big question is how these differences affect outcomes. Neither system is purely public, nor is either one purely private. But which is better at caring for the population?
The World Health Organization ranks Italy’s health system No. 2 in the world; the United States is 37. Ranking systems is a complex process, as it’s not easy to distinguish between the performance of treatment, and other elements that affect the health of the population. Italy has one of the highest life expectancies in the world (82.7), while the United States is again far behind (77.8). However, these figures certainly reflect other factors such as diet, poverty, and gun violence; all points on which Italy has an advantage. Measuring the overall health of the population and how the health system deals with pathologies are two different things.
In terms of treating specific diseases, the United States can at least come close to the oft-repeated claim of having “the best healthcare in the world.” OECD statistics place the U.S. first for patient survival of breast cancer, fourth for ischemic strokes, fifth for colorectal cancer and seventh for heart attacks. Italy is behind on all of these measures, although it still ranks among the most advanced countries in the world.
Despite these figures, many Italians with whom I have spoken find it hard to recognize the strong points of the U.S. system, because they think it’s crazy for the United States not to guarantee “free” (in other words, taxpayer-supported) healthcare to everyone. This brings us to the obvious problems in the United States: cost, and inequality.
As people who are familiar with both systems know, if you have good insurance in the U.S., you can get excellent care: cutting-edge treatment, short waits, and the same doctor over time (often not possible in public systems). But there are tens of millions of people without health insurance. By some estimates, as much as 45 percent of working age adults were either uninsured or underinsured in 2018.
Americans put off medical care because it costs too much: on average 21.5 medical treatments, tests, or follow-ups per 100 patients due to costs, compared to only 3.2 in Italy. Thus people get sicker, have multiple conditions, and treatment is ultimately too little, too late. Not only does this make life measurably worse for tens of millions of Americans in normal times, but when it comes to an epidemic — as Sanders rightly pointed out during the last debate — it means that everyone is at greater risk. Faced with the COVID-19 pandemic, the weaknesses of the U.S. system may be magnified.
Importance of a Public Guarantee
In Italy, despite divisions among politicians over how much to incentivize private facilities, both left and right are clear that the strength of the country’s system lies in its universality. Giulio Gallera is the regional health councilor for Lombardy, currently the hardest-hit area in the world. On March 20, Gallera, who represents the center-right Forza Italia party, told Consortium News that despite the difficulties, “the Italian system is holding up, thanks to its universal nature.” It would be a huge risk, in his view, “to treat only some, and not others.”
Carlo Borghetti, a health expert in the center-left Democratic Party, is the vice president of the Lombardy Regional Parliament. He also said the system is doing well considering the circumstances, while stressing the importance of local monitoring to identify new infections rapidly and thus avoid the spread of the virus. “Thank goodness there’s a public system here,” he added, “I don’t know how things would go in a country without one.”
Yet it’s hard not to question Italy’s preparedness for this crisis. The system in Lombardy has been overwhelmed by the high number of COVID-19 cases, highlighting a lack of sufficient intensive-care units, respirators, and personal protection devices such as masks, which the country doesn’t produce.
In addition, Italy is having difficulty moving towards widespread testing, which is needed to implement the type of local monitoring mentioned by Borghetti. The problem is not a lack of swabs to take samples, but principally the small number of laboratories that can process them, only three in all of Lombardy, a region with 10 million inhabitants.
Efforts are underway to increase capacity, and the Italian company DiaSorin S.p.A. has just developed a new testing method, which allows for reducing the response time from four hours to 20 minutes. Italians proudly note that even the U.S. Food and Drug Administration is relying on DiaSorin, including by providing financing for the development of the new technology.
A statistic that stands out is the low number of hospital beds in Italy: 3.2 per 1,000 people, compared to 8 in Germany, and over 12 in South Korea. Yet the United States does even worse, at 2.8. In terms of acute care beds, however — a key factor in today’s crisis — the United States appears to be far ahead, despite discrepancies in statistics from different sources.
Borghetti says that hospital beds are no longer the way to measure healthcare; investment in drugs and technology is becoming the priority; and Italy is rapidly increasing capacity to face the crisis, going from 5,400 intensive-care beds to over 8,000 in recent weeks, according to Angelo Borrelli, the national commissioner for the coronavirus emergency. And another Italian company, from the city of Modena, has now developed a respirator that can treat two patients at once.
Effects of Austerity
Yet it’s undeniable that austerity policies, driven by the demand to cut public budgets to placate investors on the financial markets, have had a harsh effect on Italy’s public system.
Massimo Garavaglia was the budget councilor for the Lombardy Region from 2013 to 2018, and subsequently the deputy finance minister in the short-lived “populist” government formed by the League and the Five Star Movement in 2018. On March 20, he sent Consortium News a series of statistics from the Ministry of Finance on how much money was cut by the national government during the 2010s, which has reduced spending for health needs by 8 percent in less than 10 years, from 6.86 percent to 6.32 percent of GDP (see chart).
Overall spending on education, health, and transportation was cut by 14 percent from 2009 to 2017. So there’s no question that budget policies have made things worse, feeding the argument made by some on the right that government-run healthcare always ends up cutting costs and, as a result, the quality of care.
Yet this outcome is at least partially due to a conscious attempt to gradually privatize Italian healthcare. Market mechanisms introduced in 1990s coincided with the overall wave of deregulation and liberalization measures implemented to pursue the policies of globalization demanded by the European Union in accordance with the desires of Western financial elites.
Despite claims from the free-market supporters, research also shows that the process of privatization did not improve outcomes at all: “Greater spending on public delivery of health services corresponded to faster reductions in avoidable mortality rates.”
Fabio Dragoni, the manager of a private health facility in Empoli (Tuscany) and an economic analyst for the newspaper La Verità, put it bluntly in a phone interview with Consortium News on March 21: “It’s math. Austerity has imposed a reduction of the number of services covered by the national system. As a consequence, the citizen either pays out-of-pocket or with private insurance, or doesn’t get care.”
Financial Mentality vs. Well-being
The United States is essentially in the same boat. First of all, almost half of health spending is public, as we have seen above; it’s not a “private” system, but a mixed one in which the poor, the elderly, and veterans have a public guarantee through Medicaid, Medicare, and the VA, while the rest of the population is split between those who are well-off and get excellent care, and tens of millions who have to choose between their health and financial ruin when they get sick.
The U.S. public side is also continuously subject to the same type of budget considerations as in Europe, from both Democratic and Republican administrations. President Barack Obama repeatedly presented the Affordable Care Act as a way to reduce the deficit, while the Trump White House’s recent budget proposal goes in the opposite direction of the promise “not to touch” health spending.
The dramatic expansion of a profit-seeking, financial approach to healthcare, triggered by the development of HMOs in the 1970s, has proved negative for overall care: according to a 2008 study published by the National Institute of Health: “The poor performance of U.S. health care is directly attributable to reliance on market mechanisms and for-profit firms, and should warn other nations from this path.”
So, the threat to healthcare from a bookkeeper’s mentality comes from both directions: on the one hand austerity, which places monetarist parameters over well-being, and on the other, the search for sources of financial profit, which leaves out those who can’t pay.
As for choosing which type of system is better, it would be best to leave behind an ideological approach. Few countries have a purely public or private system. Most have a mix between the two, and it makes sense to maintain the practices in both which lead to the highest level of care.
The challenge is how to provide that to everyone, avoiding any form of de facto rationing, whether through government decisions or the mechanisms of the market.
The lack of preparedness for the current crisis highlights the contradiction in Biden’s approach: the idea that we don’t need a government system, but in an emergency, we should provide a public guarantee of free healthcare for everyone.
If it is the role of government to ensure the health of all its citizens, then it should be unacceptable to leave anyone behind, even in periods when it’s easier to ignore their plight. A pandemic like COVID-19 merely exacerbates the problem, demonstrating that the financial mentality that has become pervasive in both public and private healthcare systems, has left us unprepared to deal with the threats we must face today.
Andrew Spannaus is a journalist and political analyst based in Milan, Italy. He is the founder of Transatlantico.info, which provides news and analysis to Italian institutions and businesses. His latest book is “Original Sins. Globalization, Populism, and the Six Contradictions Facing the European Union,” published in May 2019.