Costs of Political Intermediation and Sustainability of the European Social Model in Health Care: the Dutch Example
A previous version of this article was published in the October 2010, no. 15, issue of the “European Papers on the New Welfare”. Both are an expansion and updating of the contribution carried out by Giulio Ercolessi in the international conference “Per una politica sanitaria europea / Health Care Policy and Fundamental Rights in Europe” organised by the European Liberal Forum with the support of the Critica liberale foundation in Rome, Villa Spalletti Trivelli, 27th November 2008.
1) The European social model can be safeguarded only by agreeing to reshape it
Europe will not emerge from the Great Crisis to take up where it left off. Like it or not, and even if politicians, especially in Italy with few exceptions, do their best to reassure and treat their voters as small children from whom it is always advisable to hide the ugly truth (and voters do little to have somebody tell them), it would certainly not be possible to revive the old industrial society, its certainties, its rhythms, its stable and standardised prospects. Even the European social model, the economic, cultural and institutional accomplishment of twentieth-century social covenants and the identity flag of the European Union in the world, cannot be preserved in its essentials if we don’t undertake timely and far reaching reforms capable of ensuring its sustainability and equity over time.
This state of affairs belongs to the order of facts rather than opinions. Both advocates of a return to the stabilising and redistributive role of public spending after the sprees of the last two or three decades and defenders of the widest possible market self-regulation will have to consider the consequences of structural changes that took place in the social organisation, in the structure of labour relations, in international competition, and the consequences of technological, cultural and above all demographic changes that today separate us from the sort of Europe that existed in the second half of the twentieth century. It is not simply a dispute pitting those willing to maintain and develop a strong framework of social protection against the most merciless partisans of social Darwinism. Even those who believe that the European social model deserves to be preserved in its objectives and its essentials and those who believe liberal democracy should ensure the highest degree of equality of opportunities or social solidarity need to understand certain facts. They must understand that the widest possible preservation of the structures of the twentieth-century welfare state in the form and with their historically consolidating tools are no longer appropriate means to the end, and even risk becoming a source of unjust unintended consequences, especially but not only in intergenerational relations.
Indeed, insisting on the defence or reconfirmation of the old system of safeguards and of its well established rules may even cause an irreversible financial crisis for every social safety net, so as to make its dissolution inevitable in the medium term. That is, when all the present decision makers, politicians, industrialists, union leaders, have left the scene having got off scot-free, because only a few historians will seek to re-establish their responsibility, for the sole interest of a specialised audience.
The substantial dissolution of the universalistic European welfare system could then also be remembered as a crucial step in the real “downfall of the West” that seems to be unfolding today in a very different and opposite way to that originally stated by its early traditionalist theorists at the beginning of the twentieth century. In the direction, that is to say, of a further and final decline of liberal and individualistic Western democracy in favour of models of more authoritarian and organic global world organisation, increasingly less concerned with combining economic development with individual freedom and human rights, separating the two sides of the modernisation process until now considered by most of Western culture as naturally interconnected.
Responsible leaders, instead could, and should, discuss the desirable measure of redistributive intervention in public spending, compatibility, tax burden, equality or inequality in relation to need, merit and talent, and according to criteria of equity, effectiveness, growth or economic stabilisation. They should also discuss the quantification of the total expenditure to be allocated for social protection. In any case, whatever the general options in economic policies they should rethink the welfare structure from its foundations and its composition in the new actual situation.
Concerning the issue of retirement, in fact, where the stakes and interests involved, although subject of bitter controversy, are relatively understandable even to quite a large audience, the debate has been going on for years.
The political and even sometimes academic debate often tends to mix very dissimilar issues, as if they were different sides of the same ideological or principle-related argument. It should not be considered off topic, therefore, to underline that in a liberal perspective the debate on education policies, for example, should have very different contents and objectives. This is particularly so given that the socio-economic aspect of the matter is overlapped by an ethical-political one. This concerns citizenship education, the scope of parental responsibility, whether or not it includes an authoritative predetermination of the ideal or religious affiliation of children (also in light of the New York Convention on the Rights of the Children, and especially of those already naturally able to exercise a certain amount of fundamental freedom). It also concerns the role of public institutions protecting these freedoms and the free development of individual personalities. These assets and values are inalienable and should be solely and exclusively related to the individuals directly concerned, even if children are not personally and directly able to make a choice.
This debate is often completely overlooked in Italy, sometimes also, though usually without similar malice, in countries less subject to the daily challenges of religious fundamentalism and their political intrusiveness. In education however the role of public authorities cannot be measured solely or mainly as a purely socioeconomic question. Discussing public and private schools in fact often means a more concrete discussion of secular or denominational teaching, Republic or faction school, integrated or communitarian school, free or indoctrination school (though today indoctrination is more subtle and sophisticated in denominational schools, as it is in the media, far from the coercive practices of the past, that today are confined to other parts of the world).
Anyone who believes that the role of guarantor on the part of the public authorities in this field is superfluous, parents being the best interpreters of their children’s interests, should note how scarce or nonexistent the interest in citizenship education, or in civic matters in the broadest sense, is likely to be, in the eyes of many Italian parents from those large sectors of Italian society (perhaps the majority) whose attitudes were formed subsequent to when Dino Risi released “I mostri” a film that today appears to be a prophetic description of Italy at the beginning of this century. Many of those parents certainly want “what is best” for their children. In order to achieve this, however, they are probably far more inclined to incorporate them into what former presiding constitutional court judge Gustavo Zagrebelsky calls “i giri giusti” (the right circles), than help them develop a critical mind and cultural personality of their own.
In education in other words, unlike what is typically the case in the health care field, the problem does not lie in information asymmetries between supplier and purchaser of services, or in the real opportunity for the user/consumer/customer/citizen to make informed choices. Above all it lies in citizenship education and in ensuring that the directly concerned individuals have the greatest freedom to develop the full potential of their individual personalities in the face of the power, or claim, of others to predetermine and condition them (of course, “for the best” of those concerned, but in the subjective interpretation of those pro tempore exercising parental authority).
In any case, in the field of education policies, the issue of cost sustainability arises in a different way, as the essentially demographic factors that threaten the welfare system are not an issue, nor are those, both demographic and technological, that affect the future of health care. Rather the contrary is the case, given the progressive decrease in the school population in many Western countries.
2) The unsustainable political management of the Italian health care system
In Europe but especially in Italy when it comes to welfare the most difficult policies to discuss in a non-stereotyped way are those relating to healthcare. This is because the matter is objectively complex, and the resolution of conflicts concerns not just choosing among different interests and values, but first requires a proper setting out of the dilemmas and secondly the identification, sometimes counterintuitive, of the most useful tools for achieving the intended purposes. As already mentioned, it is inappropriate to reduce such reflections to the guidelines within which other social policies are debated. For years this debate has been hostage to a primitive political sketch, in which each vested interest and pressure group has developed an almost diabolical capability for presenting its own particular point of view as the one representing public interest. This applies to professional politicians, political parties, political consultants, politically appointed administrators, bureaucrats, trade-unions, medical and paramedical professionals and their sub-groups, entrepreneurial or cooperative organisations, players variously qualifiable as non-profit organisations, religious or profiteering-religious bodies. This game comes out easily given that in some ways the subject is a difficult one. Any non-trivial discussion concerning it requires the counterpart to pay serious attention that goes well beyond the two/three minutes attention span that the average TV viewer is ready to apply before grabbing the remote control to find something more relaxing, or that comforts him in confirming his/her acquired platitudes. Most viewers may also search for something that reassures them that they already equipped with sufficient necessary information to navigate the various political-ideological ideas on offer.
If this is the state of an average citizen who has no immediate need of health care services, health care users – call them patients or customers – when at their weakest, with very little information are in the hands of others in times of need. They naturally tend to form an opinion only through the interpretative filter provided by the individual health care operators, from among those with whom they come into contact and with whom they establish a higher level of syntony and empathy. Usually they have no clear idea of the overall way the system works, and above all of its costs and relative effectiveness or ineffectiveness, efficiency or inefficiency in relation to costs.
Often, however, their immediate interlocutors have no idea, of costs and sustainability either. European social systems are based on the principle according to which all actual health care needs must be met – a sacrosanct principle and one to be defended and implemented to the letter. In some countries health care is also an absolute right, enshrined in the constitution. Fulfilment of this principle, however does fall from the heavens above. With the exception of those required to provide financial resources and those required to provide health care within the limits of their budget, every player in the health care sector tends either to ignore or to widely underestimate the problem of costs and long-term, and often not only long-term, sustainability.
What economists call “moral hazard” is not only the attitude most people display, usually with little or no subjective awareness, when they tend to exploit, even beyond their real needs and advantages, all services provided free of charge, but it is also an attitude widely shared by those who directly provide these services. This occurs when, as often happens, they are not aware of the costs, nor of the fact that the resources needed are always, by definition, limited and always inevitably inadequate to meet needs.
The current stereotyped and dull debate, in Italy, but not only there, often seems to suggest that there are basically only two alternatives up for discussion. On the one hand there is privatisation of health care, identified tout court with the almost total deregulation seen in the American model, and, on the other, the all-out defence of the existing system, with the exception of a few shareable but marginal ideas for patching it up.
And yet there are objective reasons that will impose, and are in fact already imposing, changes that, if not properly managed, will very soon result in a progressive collapse of the current system. These are the change in living and working conditions that have taken place over the last few decades, the consequent rise of hard to satisfy expectations, technological progress – that everyone expects to be supplied as soon as available –, increased life expectancy – partly a consequence of improved technology but also involving a further inevitable rise in costs – and the changed demographic situation. Despite the decisive and beneficial presence of immigrants this last will inevitably lead to an increased number of users and a fall in the number of those paying for costs.
It is no wonder that health care is the area of welfare due for the greatest increase in spending in the coming decades, both in absolute terms and in proportion to GDP. This increase will lead the cost of health care to greatly exceed that of pensions. It is certain to be a very large increase, though how large is difficult and controversial to assess. Estimates vary between a minimum of 2-4 % as a proportion of GDP provided by Ecofin to 2060, and a maximum of 9.4 % established by OECD in 2050 taking into account factors other than simple demographics. This would lead to more than doubling current levels. That is the total expenditure: a stabilisation of the current public health care expenditure as a proportion of the Italian GDP at current levels would lead at least to a transition from the current coverage of 75 % of total health care expenditure to less than 50 % (that is, less than the contribution of the public expenditure on total health costs in the United States before the coming into force of the Obama reform).
Furthermore, in these conditions investing in research will become increasingly difficult also for those European countries that, unlike Italy, have not yet totally given up, even though health care is bound to become one of the most important sectors in the international economic competition over the coming decades.
These reasons already make it increasingly difficult to keep the promise of providing effective and timely universal coverage of actual health care needs, as established by the European social model, a promise that is now considered part of the very constitutional covenant. This is obviously also due to the impossibility of increasing spending limitlessly, as that would imply unsustainably ever-increasing taxation. Since that is impossible within an international context of open markets, the system’s economic sustainability is increasingly conditioned by its efficiency and by a clear definition of precisely what services it is necessary and fair to ensure to everybody.
The current party-political and monopolistic management of the Italian health care system is successful in strengthening the takeover of politics over society and in protecting the media image of its political managers. Structurally, however, it is much less concerned with, and lacking greatly in, economic efficiency or in the ability to effectively guarantee in timely fashion the services it is supposed to guarantee. This results in an effort to curb spending that is mainly achieved through a creeping cutting down of services, which in Italy is, for the most part, not even acknowledged. These cuts do not only consist in restricting services to the currently legally guaranteed basic level of care (“livelli essenziali di assistenza”). Rather, they are implemented by effectively making guaranteed services inaccessible due to long waiting lists, and often through an unstated attempt to restrict these services to those less able to demand them. This can actually happen because they do not have the financial or cultural means needed to understand that they can demand these services, how to do so or what degree of individual freedom of choice exists. Such freedom is often guaranteed by law, but often its practice is not recommended by those with far greater competence than the users, but who do not always share their interests and priorities.
Almost everywhere in Italy (though with significant differences among the various regional and local situations) regional governments and managers of the Local Health Authorities (ASL, “azienda sanitaria locale”) in whose hands lies the direct political management of the Italian health care system, have proved unable to withstand widespread electoral, territorial, religious, patronage related and vested interests pressure. In some extreme cases this pressure has been even downright criminal or linked to local mafias. As a result there has been an inevitable and immeasurable waste of taxpayers’ money.
Health care expenditure represents about 80 % of the budget of Italian regional governments and thus constitutes the core of their power. It is precisely the particular complexity of this matter, and hence its inevitable opacity in the eyes of the public and the electorate, the difficulty in understanding policy choices and evaluating their effectiveness, adequacy and efficiency that makes particularly abstract (or sinisterly concrete when viewed from the perspective of the political class and its interests) the almost unanimous, enthusiasm of all the major parties in recent years for the introduction of “fiscal federalism” on a regional basis.
It is a pitiful lie, repeated since ordinary regional governments were established in the early Seventies in accordance with the constitutional provision, but with a delay of more than twenty years, that political power is much more accountable to the people if geographically close to them. The proximity of politics does not depend on physical distance but on the media. And the most powerful and influential media are those structured at the geographic level most useful to politics and allowed by the collection of advertising. In the Italian case the area of diffusion of the Italian language is still a better advertising medium than local dialects (despite the claims of localist and separatist movements). Indeed the most influential and decisive among the Italian national media – especially television, which is the main channel of political information for 80 % of Italian voters – are nowadays little more than protrusions of the political system. Although mostly respectful and loyal to their political patrons, they are still obliged to provide a minimum of information. Thus the national political establishment is still obliged to put up with a minimal degree of visibility that, in some marginal niches at least, is not always totally idolising and submissive.
This is not generally the case with regional power. Regional administrations are the most powerful channel of redistribution of taxpayers’ money. In fact removed from real and widespread democratic control such redistribution of resources consequently tends to operate in a manner contrary to constitutional provisions, reinforcing, as it does, widespread political patronage is the most frequent result, rather than a compliance with the virtuous and equitable redistribution criteria established by the 1948 constitution. If many Italians are at least informed about their political rulers at a national level, very few of those who have no vested interests or are not members of pressure groups even remember the name of any important regional politician, apart perhaps from that of the president of their own region (or those of corrupt politicians undergoing criminal investigation). On the other hand, in a country where their city identity always important to people, municipal politics are still capable of arousing some genuine interest.
That’s why regional elections are always, much more than municipal ones, a mere test of the national political balance of power. An increasingly painful test of that mystery that Italian politics appears to be, if one sees it as does the rest of the Western world instead of through the filter of its reassuring Italian television representation.
Probably only those involved for professional and personal reasons and those belonging to vested interest and pressure groups cast their vote based on an informed assessment of health care policies and spending, the core of a regional administrations’ power.
It may appear even intolerable in these circumstances, and in the face of dramatic territorial imbalances which are not only persistent but also growing, to limit each individual to the opportunities for health care determined in each region as the consequences of electoral choices made in such a manner by the majority of their fellow citizens. There is no connection with the actual responsibilities of regional politicians. There is just the result of exchanges of favours, subdued media and public representations by contenders often completely divorced from reality and imposed, usually by national political parties’ headquarters with the advertising techniques of commercial marketing. Or at least that limitation might seem unfair and inappropriate, if only there were viable alternative ways of guaranteeing everybody adequate health care opportunities.
This is not to deny that, as indeed is obvious, there are significant individual and even frequent exceptions, due to the personal and unusual dedication of individuals capable of cultivating more demanding standards of fairness. Such exceptions are never entirely absent, at any level, among politicians and civil servants, not even in situations of increased decline. And there is no doubt that these unusually correct behaviours are even more frequent among health care workers, as might naturally be expected, in a sector very often entered into, at least initially, on the basis of strong vocational motivation. It is often the case, however, particularly among those who actually work from a strong and persistent vocational motivation, that the perception of the problem of economic choices in health care as a complex issue of public ethics is at the least very vague.
In order to counterbalance the physiological tendency of politicians to make irrationally expensive economic choices, in recent years frequent attempts were made to artificially re-create mechanisms similar to that of profit in the private sector. These were created for managers of Local Health Authorities or at times even for general practitioners guaranteeing them performance bonuses, based only, or primarily, on curbing expenditure. Not surprisingly, that provided further incentive for a non-declared reduction in health care services, exclusively damaging citizens incapable of defending themselves.
In some regions, health care costs have spiralled totally out of control, bringing regional governments to the brink of bankruptcy. These situations were saved by the arrival of inevitable rescue packages from the state, bound to reappear in election times, especially after the most severe stage of the global crisis is over, and if elections results are uncertain. It will be interesting to see how these rescue packages, usually also delivered to the advantage of friendly municipal administrations, will be justified in the near future by the advocates of “fiscal federalism”. The general public, however, with no direct vested interest involvement, will not even become aware of this. In the same way almost no Italian, for example, is aware of the repeated lavish state rescue packages for the city administration of Catania, graciously delivered, at the expense of all the country’s taxpayers, by the present allegedly “free market and federalist” national government to their incumbent Sicilian friends who had caused the bankruptcy.
Keeping open unreasonably small hospitals and wards, or those in irrecoverable condition, very expensive investments started and never completed and entire new public hospitals nearly finished but never opened or not even complying with legal requirements and in the meantime made unusable due to neglect and decay, patronising political recruitment of personnel, the creation of pointless hospital wards and management offices, the multiplication of bureaucracies, favouritism towards political clients and interference in the correct economic management of public health services – and even private ones operating within the national health service – are present almost everywhere, although in very diverse measure in different geographical areas, and are rather the rule than the exception.
But often health care political management turns out to be, as has increasingly been brought to light by criminal investigations, the preferred channel for illegal financing of political parties and politicians. This is also the case for the improper and often illegal exchange of favours among politicians, entrepreneurial groups able to use politics to obtain illegal competitive advantage, religious, political-religious or para-religious Catholic organisations and the media system. One would need to be naive, to say the least, for example, not to see how the segments of the public or private health care system that are an organic part of the political cartels that manage health care, or are available to act as such, can benefit from a much better treatment than that reserved for public and private operators who only want to stay focused on providing health care services.
And it is impossible to ignore that this reality is the inevitable consequence of the monopolistic party-political management of the health care market by a political establishment that, particularly in recent decades, has fallen below any possible Western public ethics standard. In truth this has not caused too many jolts to Italian public opinion used, as it is to this situation and stultified as it also is by popular media. The latter largely serves the interests of politics and its masters, and public opinion is led to a great extent to connive with a political class with which it increasingly shares ethical standards that for some time have no longer been those of the West.
In these conditions, the basic monopoly for managing and / or buying health care services guaranteed to citizens, currently the responsibility of representatives of the political system in the regions and in the Local Health Authorities, is a fundamental element in the web of power involving politics, business, bureaucracy, the media, the unions, the Catholic church and other vested interest groups that, in reducing its polyarchic character, make Italian society the least “open” in Western Europe.
There is indeed a specific, or at least especially Italian facet in the debate on health care political management, that, in Italy or in any country marked by similar widespread corruption and political mismanagement, cannot be seen as secondary or insignificant. There is a reassuring image that is proposed for internal propaganda by the most influential media, almost all interwoven, driven or directly owned by politicians, beginning with television, during these years of deep and growing civil barbarisation. Despite this image, however, when it comes to public ethics and institutional decay Italy has been a country in free fall. In the ranking of corruption drawn up annually by Transparency International, it has now been propelled to 63rd place (worse than Malaysia and Namibia). It also fell to 49th place (worse than Jamaica and Ghana) in the ranking, annually produced by Reporters sans Frontières, that measures media freedom and independence, and with it the opportunity for widespread citizens’ scrutiny of politics and its use of public resources .
It is at least grossly naive in these circumstances to even consider ensuring effectiveness and appropriateness of guaranteed services, efficiency and wisdom in expenditure, fairness, transparency and priority of public interests. Such a consideration would be impossible while at the same time leaving in the hands of regional politicians – a political class even more unfit than the central one (apart from, it is always useful to repeat, the usual individual exceptions), and widely controlled by only minimally independent and authoritative media – the direct or indirect power to make top medical and managerial appointments, to drive recruitment out of a widespread system of patronage, to grant or deny accreditation and agreements to private health care providers (which are bound to be permanently dependent on the same political system as their almost unique customer and counterpart), to distribute billion sum contracts, to handle a total annual expenditure of around 110 billion Euros and to control its correctness largely by themselves. These same regional politicians would have to undertake a myriad of actual and specific decisions, largely discretionary, and, due to their technical nature, not liable to extensive and widespread democratic public control. In order to monitor and evaluate the fairness and effectiveness of such a huge expenditure it would be necessary, if possible and economically sensible, to hire legions of genuinely politically independent high-profile professional auditors and inspectors, all upright and incorruptible, and with broad multidisciplinary and multi-specialty expertise in the medical, pharmaceutical, bioengineering, economic, logistical, legal, administrative and sociological field.
Even the strongest supporters of an entirely public health care system generally acknowledge – indeed, are often the first to recognise and denounce – the weight of corruption, waste, mismanagement, and connections among politics, business, the media and religious powers, and in some regions at times even criminal ones. Yet they persist in believing that this could all be rectified while keeping such decision making and spending power more or less directly in the hands of public power, that is (in the end, at least and at best) of politicians. In today’s Italy (and in the context of cultural and civic decline devoid of antibodies in which two generations of future leaders have already been forming) there is unfortunately no historical or political sense in expecting a general or at least a prevailing honesty and fairness from this political class. Nor does it make sense to request that “political parties”, but not “politics” step aside, almost as if political parties were the leading players in misappropriation because of their supposed inherent monstrous and impersonal wickedness, rather than it being the result of the will and activity of those real individuals, regional politicians, their increasingly cross-party de facto connections, their national leaders, their representatives, trustees and clients, elected and appointed in the twenty regional administrations, in the 185 ASL and in the 95 local administrative bodies that run public hospitals.
And it is even more grossly naive to trust in the effectiveness of democratic control by an inevitably incompetent, careless, uninformed electorate, one that is systematically duped by a media apparatus largely subservient to politicians. Even when minor, less influential but truly independent media are involved, they in turn are easily misled by the most diverse and unsuspected organisations or vested interest groups.
Reform proposals that do not take into account the prevailing state of public ethics, widespread corruption or even just the frequent favouritism involved in administrative discretion, demonstrate, first and foremost, no sense of reality. The same applies to those that do not take into account the consequences of the legitimate volatility (often fatuity) of the choices of political majorities, which denies those health care market operators not organically linked to local political-administrative networks any serious planning opportunity – a condition vital for the efficient operation of the system. Nor yet are those reform proposals realistic that do not take into due account the physiological economic inefficiency, slowness and lack of responsiveness of the public administrative machine, or do not take account of the information asymmetries, inevitably huge in this area, and the consequent and structural perceptive distortion they lead to, preventing effective public and widespread democratic control. All the proposals, in short, that ultimately depend on the will and capacity for self-reform of the current Italian political establishment.
The objection suggesting that, since health care is a primary need, the sector deserves a set of rules capable of relieving it from subjection to the “logic of profit” has in itself only the value of a rhetorical statement. Food also is a primary need, but removing the production and distribution of food from the “logic of profit”, where it was attempted, did not result in a better satisfaction of food needs. And the demand to purely and simply exclude health care from the market and from free economic enterprise means entrusting one of the key sectors of global competition and economic, scientific and technological development to one of the worst political classes in today’s Europe: with the obvious consequence of being largely marginalised internationally and forcing further brain drain.
3) The American private-enterprise model before and after the Obama reform
On the other hand, the only model for a non political management of health care taken into consideration in the current stereotyped public debate has been the American one, which is deemed by most Europeans, Italians included not unreasonably, a remedy worse than the evil. Michael Moore’s amusing film, “Sicko”, released in 2006, may have been mistaken in not even addressing the problem of the costs of the European health care services (and even in taking seriously the presumed efficiency of the Cuban health care system), but it portrayed well the failure of the American model, based on “free” individual bargaining between single customers and private insurance companies.
The American system is capable of ensuring America’s success in achieving excellence and an uncontested primacy in research. It does not however address the objective of guaranteeing adequate health care to all the citizens of the most powerful nation on this planet. This is a goal that was not even achieved with the recently passed health care reform through the initiative of president Obama, the first of its kind since the days of Lyndon Johnson, and the umpteenth and eventually, in large part, successful attempt to establish a true health welfare system, after almost seventy years of previous attempts, starting with Truman, an attempt that succeeded after a crushing political defeat was suffered on the same subject by the previous Democratic administration, that of Bill Clinton.
Despite the fact that the president staked all his weight, his prestige and his political destiny, although this time the Democrats had the largest majority in both Houses ever enjoyed by any administration in nearly forty years, even after the troubled passage of the Obama reform, between 15 and 22 million individuals (the estimate is surprisingly the subject of bitter dispute), out of a population of about 305 million, will still not be able to afford any health care coverage. In this sense, even after the reform, the American system is bound to remain even less economically efficient than that of all the countries in Western Europe in terms of the cost-benefit ratio, at least as far as the protection of its people’s health is concerned. In other words, the efficiency of the American system cannot be assessed in terms of results achieved in terms of the protection of the people’s right to health care.
According to OECD 2009 data on 2007, Americans spend 16 % of their GDP on health care, the highest percentage in the world, much more than all Western Europeans. And costs are growing uncontrollably: in absolute terms in 2007, they tripled compared to 1990 and were eight times higher than in 1980. By comparison, in the EU, the highest expenditure is that of France, with 11 % of GDP, followed by Germany with 10.4. Italy spends 8.7 % of its GDP on health care; the Eurozone average is 9.6, which is less than two-thirds of what Americans spend. The average in OECD countries is 8.9.
Many of the most advanced medical research centres in the world are American. But today, before the implementation of the reform, between 45 and 54 million Americans (a number that was growing before the reform, but this estimate too is far from precise and unanimous) has no health insurance coverage whatsoever. Although this includes a small number of wealthy people who are not insured because they can cope with any eventuality in case of need, and a larger number of younger and healthy people who, while theoretically able to afford, with some effort, to pay the cost of insurance, prefer to run the risk and give priority to other expenses, most of these people simply cannot afford the cost of insurance. At best they take advantage of what is offered by charitable organisations in case of need. This will still be the case for those bound to remain excluded from any cover even after the implementation of the reform.
Thus, according to the latest data available, which obviously cannot yet take into account the effects of the reform, that will be fully operational only in 2014, the US ranks 41st in terms of life expectancy. The citizens of all the major countries of Western Europe (including Italy, ranking 13th) live longer than the Americans. It may be objected that this result, like similar ones that could be mentioned, is not only a consequence of the organisation of the health care system. There are many other relevant factors that could be mentioned concerning lifestyles, eating habits, social and cultural inequalities, average propensity to risk, crime rate, transport security and so on. Many of these factors actually penalise America, whereas, incidentally, they mostly enhance the corresponding statistical scores of Italy. Yet, according to WHO data, even infant mortality in the US is 0.63 % in the first year of life and 0.78 within the first five years (in Italy, the worst country in the Eurozone, it is 0.5 and 0.61 respectively; the best in the EU are the Swedes, with 0.32 and 0.4).
The reasons for this result, unacceptable from a European perspective, are well known. A system based on individual bargaining between private individuals and insurance companies is ruled by the mechanism of “adverse selection”. The insurance company is most of all interested in acquiring as customers only those young and healthy individuals who are statistically less costly, but for this very reason also need health insurance cover less than others. In the event of unexpected accidents, these insured parties will often be guaranteed the most excellent standard of care (as often also happens to foreigners who stipulate a temporary health insurance policy with travel agencies when travelling to the US) – provided contracts do not include unconscionable binding clauses. It is precisely those in greater need of health insurance – those suffering from chronic or recurrent illnesses or the elderly or those at risk – who are instead the customers private insurance companies wish to do without.
Hence not only the refusal or the unsustainability of insurance costs for individuals belonging to these categories – the refusal was possible without limitation until the Obama reform – but also the inevitability of real reciprocal swindles. On the one hand insurance companies entice people into signing standard form contracts filled with unconscionable clauses, often impossible to understand for those without expertise in this field and bound to leave the innocent customers with no cover for many serious and even disabling illnesses. On the other hand, it is equally obvious that this sort of system also encourages those wishing to take out a policy to act in an equally dishonest manner. Generally speaking, customers tend to hide their conditions or lie on risk factors when they take out an insurance policy. Hence the need for a large number of preliminary medical tests before signing a contract, many of them often useless and possibly even potentially harmful to the would-be customer’s health, but necessary in the exclusive interest of the insurance companies. These tests are entirely paid for by customers and that has resulted in sky-high overall costs of health care in the US.
To these additional costs to the system, useless for the protection of the health of individuals, one must add the enormous cost of litigation due to the inclination of insurance companies, in the absence, or virtual absence so far, of effective public regulators, to pay for as few services as possible At times competition is frozen by means of cartel agreements that are obviously difficult to uncover for both consumers and regulatory agencies, and that increases costs even more. Similar waste of money is caused by the largely useless or potentially harmful further clinical tests that are often prescribed for the sole purpose of preparing a legal defence in the event of litigation following possible fatal or undesired outcomes of medical or surgical procedures.
Further huge costs result from the propaganda and lobbying campaigns that for decades have been used to induce the majority of Americans and their political representatives to preserve as it was, and partially still is, such an irrational, iniquitous and inefficient system. These costs too have to be covered by the customers of insurance companies. Seen from Europe, the violent reactions of many American citizens against any meaningful health care reform project in recent months, that are likely to cost the Democratic Party dear, could seem incomprehensible. But the cost of American health care is also so high because with their policies Americans are also paying for a huge propaganda machine aimed at preserving the current system as much as possible, for the sole benefit of insurance companies. Lobbyists working in this area are among the best in the world, and are paid, and pay, a lot. But it is quite striking to watch good and active citizens so determined to defend the indefensible against their own interests. This should suggest some reflections on the poor health of contemporary democracy and on the rationality of the making of public choice.
Since the Sixties, the American health care system includes federal programs benefiting the elderly and the poor (Medicare and Medicaid) as well as war veterans. Together, these public programs cover – before the reform implementation – about half of the total US health care expenditure. This is no surprise, given the tendency of the costs of all health care systems to concentrate always in a similar proportion to cover the needs of about 5 % of the population most at risk because of age or condition. To this large public contribution to the total health care expenditure one should also add the cost of tax allowances granted for the payment of insurance policies. But even this remarkable share of public spending does not offset the disadvantages described above nor does it spare the American health care system its enormous costs, so much higher than the European ones, or its social iniquity. A telling example is that of young children of disadvantaged families with no health insurance that cannot be excused with the typical argument of extreme social Darwinism, according to which all individuals should always be considered responsible for their own lot, regardless of the different opportunities they were offered. And yet the immense economic and lobbying influence of insurance companies over American politics had even managed to prevent the extension of federal insurance programs to disadvantaged minors until the Obama reform. An attempt by Congress to achieve this was in fact vetoed by former President George Bush, Jr.
The Obama reform has now largely expanded the number of beneficiaries of health care services and limited the arbitrary power of insurance companies in some key points, beginning with the prohibition on refusing to contract with customers who already suffer from pre-existing conditions and setting fixed ceilings of reimbursement thus limiting treatments for patients suffering from particularly costly diseases. The reform has imposed the inclusion of university students, even when no longer minors, in family policies, has widened the social strata covered by the Medicaid program and extended the obligation to provide health insurance to employers with more than fifty employees. It has introduced an obligation to take out insurance, albeit limited to some, however wide, income brackets, for those not covered by employment contracts. It has introduced federal subsidies for small businesses willing to provide cover for their employees even when they are not obliged to do so and for lower income families.
In the end the Obama reform has indeed deeply reformed the system, but failed to reshape it at the root. And it is even less likely that the reform, when fully implemented, will lead to a containment of the total costs of the American health care system capable of bringing them down to Western European levels. Nor has it attempted to achieve a standardisation of the evaluation systems of the different policies offered on the market, which would have allowed consumers to make clearer and more informed choices. The most controversial and most “Old Europe-style” proposal was dropped: it aimed at introducing a “public option”, i.e. a public federal insurance scheme, competing with the private ones, a move that was considered at the beginning the only appropriate instrument for pegging down policy prices in a market structured, firmly settled and layered such as that in the US today.
Last but not least, every system based on individual bargaining between the insured party and private insurance companies is bound to become increasingly unfair as a consequence of predictive medicine. If in the future mapping the individual genome provides an increasingly precise individualisation of risks, the very mutualistic character of the insurance principle will disappear. Those at risk of developing expensive diseases, or maybe incurable ones, not only would be almost unable to obtain insurance to at least alleviate the consequences, but would also unnecessarily and inevitably be placed in the anxious condition of fearing for their unhappy fate years or decades in advance, without being able to do anything at all to prevent those events.
It should be remarked that within European health care systems too, Italy included, the public health service is only obliged to provide a basic package of health care (hence not stating the aforementioned non-acknowledged creeping cuts to due services) – levels that, as mentioned above, are bound, rebus sic stantibus, to suffer significant reductions in the future. This fact will inevitably lead to a rise in the number of those resorting to taking out supplementary private insurance, to be negotiated separately from the basic insurance package, for all that is not guaranteed by the public service, but not for this reason less necessary for guaranteeing tolerable life conditions. Consequently, in the near future these systems risk suffering the disadvantages typical of both systems. Without timely reforms, the cost of the “adverse selection” mechanism will increasingly be added to those caused by patronage, waste, corruption and the weight of politics and bureaucracy.
4) The future of European health care: new prospects from the Netherlands
While all European countries have been attempting for years to preserve universal health care cover mainly through added patches bound to prove insufficient in the long term, the 2006 Dutch reform has been in our opinion the most intelligent and original reform experiment so far.
The Dutch reform, that replaced a previous dual public and private system, did not question the European social model, and universal health care coverage, available and accessible to everyone, as its fundamental pillar. On the contrary, it set the conditions for such cover being guaranteed with greater certainty also in the future. It did so by abolishing at root-level all costs of political intermediation in the direct management of health care services, and promoting an almost total privatisation of the funding system. The strict regulation laid down by the reform, far from compromising the correct functioning of a really competitive market, allows on the contrary its effectiveness in a sector where relying on simple laissez faire, for the aforementioned reasons, prevents its functioning. In the Netherlands the rules necessary for the development of effective competition have been set in a market by its nature incapable of producing them spontaneously and for what is probably the most effective system of containment of costs and accountability of all providers of services. In assessing the model and in order to take into consideration its profound differences from the American one, one must consider that the Netherlands are one of the European countries where social inequalities in accessing and taking advantage of health care services are relatively minor.
The reform provides for a compulsory and universal insurance system for all residents in the Netherlands, and also an obligation to contract respecting equal treatment and conditions on the part of companies offering health care insurance. As a consequence, all useless or harmful preliminary clinical tests and all those mainly aimed at evaluating the persisting profitability of the contractual relationship for insurers become pointless. All costs and inequities typical of adverse selection are thus averted.
The contents of the basic benefit package are set by law. Premium fees comprise a fixed sum (sc. nominal part), which is the same for all those insured and paid directly to the insurer, and a sum proportional to individual income which is transferred to a risk equalisation fund collected and redistributed by the state to the insurance companies to compensate for financial imbalances deriving from the obligation to enter a contract with any applicant, regardless of one’s personal health conditions. This certainly implies that the annulment of the parasitical costs of political intermediation in the strictest sense achieved with the reform did not also entail an equally radical reduction of bureaucratic intermediation costs, but that is how the principle of the universal mutualistic sharing of costs is safeguarded.
Minors are exempt from paying the premium (this is the only part of the funding of the health care system that is paid for exclusively through general taxation proper). Lower income individuals get subsidies for the payment of the premium proportional to income.
Insurance companies determine the nominal part of the premium fee for the basic benefit package (that amount was on average 1051 Euros in 2007 and raised to 1085/1200 in 2010). They can also compete freely in offering supplementary insurance policies, that are cheap enough to be taken out by over 90% of the population and may include dental care, physiotherapy and visual aids including those for adults, but also alternative medicine and plastic surgery. This latter point will deserve a closer examination later, given its theoretical and principle-related implications.
Insurance companies can choose the final providers of health care services – and in this case, differently from political bodies, choices will be made exclusively on the basis of the quality-price ratio offered by providers. However, they provide information on the service quality but allow the insured to freely choose their doctors and hospitals. The point, as will be examined later on, is crucial for the effective functioning of real competition, not only among insurers but also among service providers. The insured can choose among different insurance products and have the right guaranteed by law to change insurance company every year at no additional cost, this being an instrument essential to ensure effective competition, a control of costs and real freedom of choice by customers. All customers, regardless of the kind and legal categorisation of their job or decisions made by employers, are entitled to the same opportunities of choice. They also have the right to be compensated for care received abroad within the expense limits established for the same services in the Netherlands.
The reform meant to ensure cost containment by competition among insurance companies, an instrument clearly more effective than internal controls implemented by the same public authorities that also directly manage health care themselves in countries where ethical standards are comparatively poor (in Italy, by the regional governments that provide the service, appoint the managers and personnel of public health care providers and conclude agreements with the private ones).
It is noteworthy that, in a system of this kind, if consequently developed, funding universal health care cover could have a reduced impact on public finances. This is crucial, above all in times of economic crisis and recurring disturbances in the financial markets, and especially for countries with high levels of public debt like Italy. Increases in health care costs – inevitable, as already said, over the coming decades – could not direcyly result in huge imbalances of public accounts that would lead to a rise in the debt service, with the well-known relevant systemic consequences of wealth redistribution to the benefit of financial revenue on government securities. Higher risks of default and consequent difficulties in the placement of public debt securities are also much less likely.
In the Netherlands, after the passage of the reform, a lot of discussions focused on the very wide freedom of choice so far guaranteed to the insured with respect to final health care providers. This freedom of choice, it is argued, would have negative effects on the competition among providers, as competition among insurers currently focuses more on the cost of premiums than on the quality of health care, which might otherwise be the case if companies decided to contract selectively with health care providers. Initially, as mentioned, the choice of providers was made mostly by final users. But they, it is argued, do not have the same expertise and knowledge of facts and records, as companies have, to ascertain quality and effectiveness of health care provided, due to information asymmetries, overwhelming for final users on the health care market. Afterwards, credibility and reliability of the information of services quality has raised, and has steadily grown as the crucial factor. Trust in the selection of services made by insurers requires however a very high degree of confidence in them, a confidence that, in the hypothetical case of a transplant of the Dutch model to the Italian situation, would probably and understandably be lower, at least initially. How difficult the assessment of the quality of health care is, was however revealed by an estimation contained in a Dutch government study, according to which, still in the second year of enforcement of the reform, insurers themselves were not yet able to make definitive comparative evaluations on the quality of health care supplied by different individual providers.
Anyway, in a system like the Dutch one, economic interest is the tool for ensuring economic efficiency and the overall soundness of the system, rather than the goodwill and the presumed foresight of the sole political class and bureaucracy. This tool implies more demanding productivity standards than those usually enforced by political management and is probably more effective also in curbing prescription drugs abuse (despite some pessimistic forecasts, the Dutch pharmaceutical spending is now equal to half that of the US). But it is probably more efficient, above all, in ensuring the primary objective of achieving the sustainability of health care coverage for the entire population, which is, as mentioned at the beginning, everywhere at high risk for very objective reasons.
Neither should the strong economic interest that pushes Dutch insurance companies to invest significant resources in information campaigns and to offer their customers significant economic incentives aimed at promoting lifestyles and behaviours that favour effective prevention be underestimated.
The Dutch experience seems to suggest so far that Europeans are culturally less inclined than Americans to exceed in irrational and wasteful health care expenditure, since, as already said, competition among insurers, fuelled by an unexpected willingness of customers to exercise the power to change company upon annual expiry of policy at no additional cost, is mainly carried out on the grounds of the price to be paid. This behavioural pattern has also been fostered at the beginning by the provision for group negotiation (for professional categories, consumer associations, groups of employees, members of sports clubs, etc.), which actually covers about 50 % of all contracts. The provision for group negotiation does strengthen the bargaining power of the insured, but is considered by some to be a feature of the health insurance market that could in the future prove an obstacle to the readiness, that initially was quite strong, as already mentioned, to reassess annually the persisting expediency of the previously chosen option.
A legislator willing to take on the Dutch reform model could obviously provide for the possibility of copayments by the insured parties for services actually used, similar to that experienced in Italy with the system of prescription charges (oddly called “tickets” – in English – by the Italian media), that proved quite effective even if low-priced, in order to avoid uncontrolled growth of costs fuelled by health care consumerism stimulated by market strategies or by “moral hazard” rather than by effectiveness or soundness of treatments and screenings. This risk, as is well known, is one of the main objections usually raised against any form of privatisation of health care services in Europe. And of course there would be nothing to prevent a legislator from possibly providing that contracted copayments be proportional to income, even if it is quite obvious that any such allowance would then have to take into consideration the possible iniquities due, especially in countries like Italy, to the state and performance of the entire public machine in charge of revenue monitoring.
In the event of the Dutch system being broadly transplanted to other countries other possible forms of copayment could be required of insured parties engaging in unhealthy behaviours and lifestyles (smoking, alcohol, psychotropic substances, pharmaceutical drugs, overeating, etc.), obviously in cases where these can be detected by medical tests. This might be the case especially if these behaviours persist even after the individual concerned has already taken advantage of medical treatments needed to deal with their consequences. Further treatments should not be made conditional on advance copayment, but it should be enjoined afterwards and possibly also be proportionate to the harmfulness of the behaviour concerned. From a liberal perspective it is not the job of society to defend its adult and sane members from themselves or from harmful lifestyles they have freely chosen – this point deserves a closer examination further on. This, however, should not mean that the contribution required of every taxpayer (or every insured individual) for the sake of universal health care coverage be pushed to the point of forcing them to settle the economic costs of others’ harmful or irresponsible behaviour.
In the Netherlands, the containment of unnecessary treatments has been pursued more schematically, first through a 255 Euro rebate for those who in the previous year did not take advantage of any treatment (other than routine medical tests, prevention services and those related to maternity and childbirth). In 2005, for example, about a quarter of the insured were granted the rebate. From 2008 on, the containment has been pursued through the provision of a mandatory annual deductible of 150 Euros (increased to 165 in 2010) from which the chronically ill are exempt. Voluntary deductibles up to 500 Euro can be negotiated in exchange for reduced premium. It should however be again remarked that compulsory insurance only covers the legal basic benefit package, subject to continuous review and reassessment in order to exclude (all and only) frivolous, unnecessary and non-essential treatments.
The first four years under this new Dutch system have proved the reform’s promoters right. In fact from the very start, despite its profoundly innovative features, the reform has been appreciated by a large majority of the Dutch, although opinions are obviously not unanimous. The system has maintained its level of excellence in Europe, according to the results of the Euro Health Consumer Index 2009 drawn up by Health Consumer Powerhouse, a leading independent international research centre based in Stockholm (that ranks Italy 15th in Europe). At the same time it has so far proved able to slow down the cost increases especially compared to those occurring in the last five years of implementation of the previous system. Dutch health care spending is now 9.8 % of GDP, just above the Eurozone average (9.6), an area where national health care systems are mostly public. And no doubt the introduction of the new system has created a general and keen awareness, unparalleled in Europe, of the actual cost of health care and costs trends.
If it is still too early to assess the long-term results of the Dutch reform, two main factors will be very important in the future. On the one hand the effectiveness of monitoring competition among insurers and of antitrust regulations. From this point of view, concerns are raised over the strong competition on premiums in order to gain market share occurred in the first years of implementation of the new system. The consequent losses incurred by all insurers and the limited number of insurers operating in this field on the Dutch market after the concentration process that took place – four of them currently cover 89 % of the market – could trigger a forthcoming significant increase in premiums, once the number of competitors is further reduced. Perhaps it might also be advisable to prevent insurance companies from controlling or being associated with companies and institutions running hospitals or directly providing services, so as to ensure that control and containment of expenditure remain a priority interest for the insurance companies.
On the other hand effective monitoring of the quality of services provided is also essential. In the Netherlands this task is assigned to an independent authority (IGZ, Inspectie voor de Gezondheidszorg) that has no political, propagandistic, electoral, reputational or patronage related reasons to defend or make programs or management choices made by insurers look smart, as is instead the case where it is the same political power that directly appoints, or exercises its influence over the appointment of, its own controllers. That is inevitably the case in the Italian system and entails a permanent source of obvious and inherent conflict of interest. Equally important is the circulation, reliability and availability of information offered to the public on the actual results historically obtained by health care providers and on the actual scope of the cover provided by insurance companies. Similarly, in a system that allows a wide freedom of choice and demands individual responsibility, health education has even greater importance, both in schools and in the media.
In the Netherlands the results achieved by insurance companies are also evaluated annually by a comparative quality index published on a ministerial website (KiesBeter.nl) that includes software that helps individuals to identify the best deals on the market, matching their objective condition and subjective preferences.
What is essential is constant monitoring by truly independent bodies. Independent, that is, both of private economic interests and of those of politicians and their more or less hidden stakeholders with their own electoral, patronage related and economic agendas. In addition circulation of information made available for public evaluation and discussion by the media, consumer organisations and users is also essential. These are the best instruments for avoiding the typical risks to every health care system based on private insurance. These include competition only on the price of premiums, on the length of waiting lists, staff courtesy and the quality of accommodation in hospitals or other merely whimsical and imaginary needs. These are things that can be evaluated by all users. What ordinary users are generally not able to evaluate is the quality, effectiveness and appropriateness of health care according to scientifically reliable criteria – at least for those who do not consciously want to reject them: assuming, however, in this case, as will be argued further on, full personal responsibility. In this area, the behaviour of other European consumers – at least that of the British, that has already been the object of specific studies – seems much less experienced so far than that of Americans.
For the moment no more than 1.5 % of Dutch citizens have violated the obligation to buy insurance, a violation punishable with a fine amounting to 130 % of the cost of the basic insurance package. Many of these people are part of the extreme fundamentalist Christian minority who believe that they should not receive treatment because diseases are God’s will. This is similar to the percentage of citizens that consistently refuse free and compulsory vaccinations.
As already mentioned, the current Dutch health care system has only been in force for four years. But its guidelines follow, in a more accomplished and consistent way, a pattern of private but closely regulated health care system already in place in Switzerland since 1996, its only fully comparable precedent. The two systems share a high degree of satisfaction among customers and a high level of quality of services supplied (Switzerland ranks 5th in Europe according to the aforementioned Euro Health Consumer Index 2009, behind only the Netherlands, Denmark, Iceland and Austria). Both also score among the highest, compared to other European countries, in achieving the lowest levels of social inequality in the access to and use of health care services. It should however be acknowledged that the Swiss system is also quite expensive, costing 10.8 % of GDP, a level exceeded only by France in the EU, and one point higher than the Dutch one, which in turn is not among the lowest. Since, as mentioned, the competition on premiums, unleashed in the first years of implementation of the reform in the Netherlands, had forced insurers to operate at a loss in the first year of implementation of the new system, and has triggered a concentration process so far not averted by law or regulators, the question is raised whether it is just a matter of time before a similar increase in costs occurs there too.
Four specific features of the Swiss system, that make it different from the Dutch one, could indeed be responsible for high costs. One is the lack of uniform legislation, as most of the implementation rules in Switzerland are enacted by individual cantons, making it less easy to distinguish the economic effects of the different regulations. Another is the mandatory domestic and non-profit character of health care insurers in Switzerland that could perhaps result in lower competitiveness and relatively inadequate management efficiency. A third feature is the possibility of accessing specialist care without previous general practitioner prescription, provided in Switzerland by many contractual schemes (no gate-keeping function of GPs, as usual in the US), a possibility excluded instead in the Netherlands (as is mostly the case throughout Europe). Finally, and most importantly, high Swiss costs might also be the consequence of a much less sophisticated regulation of risk adjustment factors for the allocation of the risk equalisation fund (the fund resulting from solidarity contributions required of policyholders and redistributed by the state among insurers). In Switzerland, like in the Netherlands, insurers are not allowed to refuse a contract based upon the individual health risk profile of buyers. However the factors for risk equalisation are not only calculated differently in individual cantons, but, at least until 2011, only relate to age and sex (after 2011 hospital admissions in the previous year will also be taken into account), whereas in the Netherlands parameters are much more well structured and detailed upon the health profile of the insured party. Consequently many Swiss insurance companies chose, or were forced, to leave the health care sector, or introduced strict selective contracting in the offer of supplementary policies. This is a trend that certainly triggered, for the reasons argued in the discussion of the American system, a general cost increase in Switzerland, but that phenomenon is quite limited in the Netherlands, at least for the time being.
It is therefore prudent to postpone a definitive judgement on the measure of the aptitude of the new Dutch system to achieve an effective containment of the growth of costs of a health care system available to all citizens. So far, however, the reform seems to have proved it is possible to avoid both waste and the risk of misappropriation and abuse that characterise the Italian-style party-political management of health care, along with the diseconomies and iniquities that characterise the total deregulation of the American system.
5) Freedom of choice in health care: significance and implications
As already mentioned, in the Dutch model companies can compete to gain market share also by offering supplementary insurance and that can also include non-essential treatments or treatments that are the subject of recurrent philosophical or moral controversies, such as cosmetic surgery and alternative medicine. The point is interesting as it stimulates a discussion on the scope that should be recognised to individual “freedom of choice” in health care in a free and pluralistic society: the formula is usually merely related to the choice of service providers.
Defining what is a medical treatment that is socially necessary to guarantee to every individual, and distinguishing it from what is not, entails a discussion in which effectiveness of treatment, equity and social solidarity issues are overlapped by others. These concern different personal views of the world and different lifestyles. In open and increasingly plural societies, even medical treatments can be, and as a rule increasingly are and will be, the subject of very different evaluations.
First, what is to be considered essential to guarantee everyone a decent life can no longer be taken for granted or merely determinable on the basis of technical and “objective” criteria. This is a good reason for limiting treatments guaranteed on solidarity bases solely to those proved necessary and effective according to the evaluation of the international scientific community and the need for which is almost unanimously shared by society. This limitation not only enables us to concentrate all the available funds raised through taxes (or through the contribution required of all the insured in the Dutch and Swiss systems), that are by definition scarce, on the full satisfaction of those needs, thus ensuring their sustainability over time. It also allows the leaving out of compulsory contribution those charges that a more or less sizeable part of society may regard as non-essential, at least if compared to others, or even inappropriate, but that can equally be considered by others as absolutely essential for an acceptable quality of life. On the other hand, in a strictly regulated insurance market such as that implemented with the Dutch reform, even non-essential treatments that would otherwise be out of reach for many could become relatively affordable. It is in fact also through the offer of supplementary insurance that companies can compete for market share and thus entice customers into buying their basic package.
Enforcing a strict distinction between essential and non-essential care also means preserving the health care funds forcibly taken from all beneficiaries from the abuse that the widespread rise of political populism and anti-scientific irrationalism will otherwise make “democratically” inevitable. Just consider for example the field of “alternative” medicine, the trust placed in this by both Western Third-Worldists distrustful of technological medicine, and by many immigrants (such as many Chinese), now a consolidated and stable part of the European population, increasingly European citizens themselves. Or think of treatments deemed ineffective by the scientific community, but the subject of extraordinary investment of trust by very large sectors of public opinion, who place in them quasi-religious hopes.
Years ago in Italy an unprecedented squandering of public health care resources took place, in order to finance a large-scale clinical trial of a treatment, the “Di Bella treatment”, considered ineffective by the scientific community and therefore completely useless and reckless. The mass clinical trial was imposed on the government by massive public demonstrations, supported and instigated by irresponsible political and media charlatans. Their pressure was impossible to resist by those in charge of the public health care system, as the instigators cynically played on the desperation of patients suffering deadly disease, and their relatives. The funds necessary for that useless trial were obviously taken away from treatments of proven effectiveness in the same field, that of cancer care, or in other branches of medicine. Despite the damage caused to public finance and to taxpayers by this irresponsible initiative, the instigating politicians who had organised that campaign not only were never held accountable in any way, not even politically. Instead they were allowed to gain profit in terms of visibility, popularity, electoral approval and political power, in that particular case, managing to win the regional government of Lazio and its health care machine, causing, not surprisingly, its complete financial breakdown.
In a free society, citizens have a right to be superstitious, as there is no objective criterion, that is not arbitrarily discriminatory, to distinguish superstition from the increasingly diversified beliefs definable as religious. Nor are there possible objective dividing lines between what is and what is not “religious”. The job of public authorities, in a free society, does not include defending from themselves adult and sane citizens who want to harm themselves – or do what Western-minded people like this author, the better informed, the majority (perhaps, and for the time being) of public opinion, the scientific community or the still reasoning sectors of the political establishment consider to be self-injury. But, increasingly, maintaining the political monopoly over the management and direction of health care will inevitably make it compulsory to “democratically” take into account a variety of insights on the world that now irreversibly include those scornful of “scientism” and who equate scientific knowledge and superstition, technological medicine and “traditional” medicine. New “Di Bella cases” will certainly arise in the future and, again, even the most upright politicians will be forced to bow, if they want to survive politically, to the uncontainable pressure of political and media charlatanry. Separating the fields also permits the limiting of claims for solidarity contribution to health care funding to those necessary for the provision of really essential treatments, of proven effectiveness and on which there is general consensus in the scientific community, without causing resentment or otherwise unavoidable collective psychosis, and without discriminating against the hopes, beliefs, religions and superstitions of the supporters of the new rising primitivism and irrationalism.
Nothing should prevent those so wishing from purchasing on the market and at their own expense all the other “alternative” treatments they think they cannot do without. They should be able to do so, if they wish, by entering into private contracts supplementary to the mandatory health care insurance, perhaps provided that the concerned treatments though maybe utterly useless, are not proven harmful, and provided they are not fraudulently advertised as having proven therapeutic effectiveness and risks are not hidden.
What really matters in health care expense containment is that everybody has timely access to treatments considered effective by the international scientific community. Every possible expense for further non-essential, ineffective or redundant treatments that individuals want to make for their health, their wellbeing, their contentment, their gratification, their serenity, their beliefs, should not engender any detriment to the funds allocated for essential treatments and universal health care coverage, and collected through compulsory contribution, imposed, one way or another, on everybody on the ground of solidarity, in order to achieve that primary goal. What matters is that further possible expenses do not put at jeopardy the feasibility and sustainability of the primary objective of guaranteeing everyone all those treatments to which they should be entitled. Once that goal is ensured, once the two fields and their funding sources are clearly separated, it should be held politically and economically irrelevant that single individuals decide to spend their own money on cosmetic surgery, alternative medicine, spas, wellness, pilgrimages to Lourdes or propitiatory rites. It should be as irrelevant as spending the same money in clothing, cars, popular exclusive intelligent or demential holidays, or whatever other consumer goods – including even lethal legal drugs such as tobacco and spirits, so long as the consequences of their use is not paid for by others.
The irresistible urge of a political class accustomed to playing the master (also) in the domain of health care, to superimpose their own whims above the assessments of the international scientific community, recently came to the fore once again. This time it was in the controversies against putting the RU-486 abortion pill on the Italian market, and the method of its administration which part of the political establishment would not only like to make this more difficult and painful. They would also like to make it unnecessarily expensive (again at the expense of other health care needs being satisfied and other items of health care expenditure), by imposing with a political decision a mandatory hospitalisation that is not provided for by international medical protocols. A similar political meddling in medical proceedings was evidenced in the rebellion of some politicians against the abolition of prescription for post-coital contraception (“morning-after pill”). This has been a well-established practice for decades in Western Europe and beyond. In these cases the politicians involved were not supported by, nor were they able to stir up, any mass populist campaigns, but operated as a political wing of a powerful religious pressure group representing a clear minority in Italian society. Even in these controversies, however, politicians with no scientific or professional qualifications were ready to interfere, solely on behalf of their “democratic” legitimacy and representativeness, and not only with ideological or religious arguments, but also with allegedly “scientific” ones.
Even if it were possible to exclude such bizarre interference by a primitive national political establishment – perhaps just the forefront of a continental regressive trend, as has previously been the case in Italian history – the way back to a trusting reliance of “patient” citizens upon decisions taken paternalistically by “those who know more” would in any case be unworkable. This is not just because it would suppose that a general reliability and intellectual integrity of all operators might be taken for granted, starting with top political decision makers themselves (it would be naive in the first place to assume what all users should be convinced of). It would also be unworkable because two prerequisites have long disappeared: the indisputable supremacy of scientific knowledge and the univocality of ethical choices. Contemporary culture has, rightly or wrongly, irreversibly called into question, the epistemological foundation of the first assumption and irrevocably asserted the irreducibility and the full legitimacy of diverse ethical choices. This is also why all the recurrent recriminations against “do-it-yourself medicine” are bound to remain hopelessly ineffective. It is simply impossible to expect to solve problems through a simple reference to the principle of authority – if it were only the authority of a hypothetical pure science, capable, though it is not known how, of being detached from any compromise with industrial or political interests and from economic constraints. Rather, it would be useful, necessary and appropriate to engage doctors, researchers and journalists in health education, starting at school level.
Incidentally, although the argument obviously deserves much more than a passing reference, leaving greater room for individual self-determination and freedom of choice in health care, and releasing health care from the unlimited discretion of political rule does not necessarily imply running the risk of expenditure increases or unleashing the most irresponsible health consumerism (at taxpayers’ expense in a system almost entirely public, or, according to the approach hereby proposed, at their own expense). In some cases, indeed there may even be opposite effects.
This is particularly clear when, as unfortunately happens in Italy, sophisticated and very expensive medical treatments can be, and in fact are, imposed against the will of people unable to properly and validly express their consent at the very time when such treatments are carried out on their bodies but who had expressly refused their consent to such treatments in a living will drawn up when they were in full possession of their mental faculties. In a pluralistic society aggressive and futile care cannot be determined by political or supposedly “technical” standardized decisions that can be imposed on all by politicians. That would be nothing but an abuse and an act of violence on the part of politicians against the dignity and freedom of individuals. Political parties and parliamentary majorities will never realistically enforce such abuse on grounds of the ethical and philosophical assessments usually put forward, noble, albeit controversial, though they may be. Instead, as indeed has happened in Italy in recent years, it will be enforced only on the grounds of political, patronage related and electoral convenience, with a view to creating parliamentary and social alliances, gaining the support of pressure groups and organised active minorities, and so on. Only in very rare cases, through the work and authoritarian beliefs of a few minor politicians revealed to the more naive and traditionalist electorate as a decoy, will it have anything to do with their subjective good faith. Even in that event, however, it will be a case of political hybris, ideological arrogance, overbearing expressions of religious pride imposed as a compulsory lifestyle even on those opposed to them in their lifetime – or rather, imposed on others’ bodies against the express will of those individuals, by people long aware of no longer being able to convince their consciences.
In a pluralistic society it should be acknowledged that politics should have only the power to produce, with great care, a default solution, to be enforced in the absence of express individual decisions. Only the individual, however, can decide below which level of quality of life his/her continuing to live is not only no longer beneficial, but for him/her becomes a mere burden. A burden that usually not only entails unacceptable physical or psychological suffering and forced submission to a violent loss of individual dignity on the part of the individual personally concerned. It also means a huge economic waste of valuable health care resources, at the expense of the availability and timeliness of other treatments for the benefit of others. Rarely in these discussions, in fact, is this side of the issue even considered. Very often the intensive treatments needed to keep alive individuals whose will concerning the end of their life is ignored, are also extremely costly. In such cases, respecting individual self-determination would not only avoid offending the personal dignity of those concerned, but could also turn into a very tangible benefit for the health of others: a virtuous social, and even indirectly or unintentionally “altruistic” consequence of the respect for individual self-determination.
In any event, and whatever one’s opinion on social issues (i.e. those referred to in Italy as “controversial ethical issues”), the question of freedom of choice in health care goes well beyond the choice of doctors and hospitals. The flag in the struggle for “freedom of choice” in health care was initially raised in other countries on that very ground, but in Italy this problem is less acute than in countries where national health care services unlike in our case, allow users (or until recently allowed them) little or no personal choice in the matter, not even regarding their preferred medical doctors. The problem of freedom of choice concerns individual self-determination in a much broader sense, involving the pluralism of values inherent to contemporary Western societies.
It is perhaps no coincidence that some of the most ardent and knowledgeable Italian advocates of an entirely public and politically managed health care system, based their reflections on health care policies, and well beyond the complex technicalities of their specific subject, came to a passionate defence of communitarianism, understood as an overall principle of social organisation opposed to what they call “individualism”. Elsewhere I have tried to contribute to the elucidation of the different linguistic uses of this term in different national historical contexts and consequent misunderstandings. Here it is worth simply recalling the sinister meaning, resounding for a century in sociological reflections, of the idea of compulsory belonging to a “community” (Gemeinschaft), as opposed to the voluntary membership of a social organisation (Gesellschaft) based upon agreed and shared rules. It is also worthwhile objecting that, in plural societies like ours, expecting that a forced and all-absorbing communitarian cohesion might be artificially recreated can only produce social disintegration and, eventually, a segmentation of society into micro communities along ethnic, regional, cultural, generational or religious lines. Sometimes, it is only these, regrettably, that can, by fair means or foul, impose on themselves the social uniformity that it is no longer possible to enforce on society as a whole. The result is a number of opposing micro communities, in a struggle for hegemony or at least for a division of public resources, precariously co-existing until they feel able to overpower each other.
Perhaps the defence of communitarianism put forward by health care economics specialists might not fully take account of all the possible and sinister implications of such an approach. Or it might be an expedient not to have to acknowledge that it is actually the political class that again has the last word in every publicly ruled health care system, they being the ones, on the end, entitled to express the binding will of the “community”. In the current cultural climate, in Italy as well as elsewhere, “community”, to many, could perhaps seem a less compromised and more acceptable word than “political class” or “parties”, or sound – what it is not – gentler, more inoffensive and amiable. But claiming that it should be the task of «the community to define what health is» – “health”, note, not just “health care” – is a very demanding application indeed of a quite radical brand of communitarianism that may sound threatening to critical and free spirits.
Increasingly, across Europe, communitarianism is the political theory opposed not only to the brand of individualism interpreted as a barely diluted form of social selfishness (rather than, as would be historically more correct, as the attempt to defend the individual and his/her critical autonomy from uniformity and standardisation), but to the liberal and democratic idea that the foundations of a free society should be the respect for individual liberty, for the rule of law and the voluntary consent of citizens to the constitutional covenant, rather than a forced homogeneity of values imposed on society by binding political orders. Consent to the constitutional covenant is itself the expression of a choice of values, significant if minimal, that according to democratic liberalism should be generally shared. However communitarians demand much more. Homogeneity is often required as a product of universal faithfulness, that, it is claimed, must be natural and spontaneous, to the “roots” and ancestral values held to be the only possible foundation of genuine and cohesive social bonds. Such roots are nowadays, and in some cases have for centuries been alien to the personal cultural and family heritage of many members of our societies. To opponents who resist social compulsory homogeneity, who do not find it spontaneous and natural at all to adapt, it seems communitarians demand that they bow to the lifestyles and values imposed on society by political majorities. (Perhaps it is not entirely a coincidence that the country that found what is in our view such a virtuous balance between the demands for equity and social solidarity and individual self-determination in its health care system is also one of the few to have also regulated for active voluntary euthanasia).
To return in conclusion to the more limited scope of the reform of health care policies, the crucial point of this reflection is that it is not a matter of making private management of health care the object of the same uncritical trust that has mostly disappeared, and for well-founded reasons, in political management. It is a matter of taking the distinctive character of health care economics seriously. It is worthwhile, therefore evaluating the possibility of extending to other countries a system, already successfully tested to some extent, and no less universalistic than those currently enforced elsewhere in Europe. This is a system in which both buyers and providers of health care services are encouraged to pursue an independent economic self-interest to contain health care costs, while at the same time being forced to compete in quality and effectiveness of treatments and customer satisfaction. It is a system in which the political establishment and the civil service continue to act as regulators and controllers, but no longer directly manage health care (let alone act as citizens’ spiritual directors). They are therefore, as far as possible, prevented from the possibility of making illegal economic or electoral profits out of insoluble conflicts of interest – so that the only hope for improving the ethical quality and fairness of their behaviour is not placed in their miraculous collective repentance and conversion. It is a system in which the increase in health care costs, to some extent inevitable in the coming decades as a result of demographic change and technological advances, cannot put an additional burden on public finance causing further imbalances, bound eventually to lead to a redistribution of wealth to the benefit of recipients of financial income on government securities, thus largely frustrating, if not reversing, the actual equitable or redistributive intent of all welfare policies.
From the liberal point of view of the author of these lines, the Dutch reform has also the not unimportant merit of once again recalling that the free market is not purely a synonym for laissez faire, and that unlimited laissez faire is no synonym for liberalism.
We should be realistic enough not to be under any illusions. In Italy we would have to be on the brink of a final and irreparable financial collapse of the entire system before we could persuade politicians and vested interests pressure groups to give up. Nonetheless the task of this article is to put up for discussion, perhaps even for a future debate, solutions that politicians – and above all politicians, on average of the lowest level in Europe such as the Italians, mostly demagogues and outlaws or inept followers of opinion polls, rather than responsible leaders – do not have the strength or the will to address until inescapably obliged by the coercive force of events. In this case these will be the decreasing sustainability of the current health care system’s costs over time and the political impossibility of continuing to conceal beyond a certain limit the inevitable reduction of the effective availability of health care services.
 An overall rather sympathetic and comparative description of the Italian health care system in Nerina Dirindin, Paolo Vineis, Elementi di economia sanitaria, Bologna, Il Mulino, 1999. A fundamental defence of the existing system in Rosy Bindi, La salute impaziente. Un bene pubblico e un diritto di ciascuno, Milano, Jaca Book, 2004 (the author is a former health minister). A more critical approach in Erminio D’Annunzio, Sanità malata, Roma, Castelvecchi, 2010 (the author is a former member, responsible for health care, of the regional government of Abruzzo). Franca Maino, La politica sanitaria, Bologna, Il Mulino, 2001. A historical perspective in Saverio Luzzi, Salute e sanità nell’Italia repubblicana, Roma, Donzelli, 2004.
 Fabio Pammolli, La sanità in Italia: sostenibilità dei conti pubblici e nuovi assetti istituzionali, in Le riforme che mancano. Trentaquattro proposte per il welfare del futuro, edited by Carlo Dell’Aringa e Tiziano Treu, Arel, Bologna, Il Mulino, 2009.
 Nerina Dirindin, Paolo Vineis, 1999, p.87.
 F. Pammolli , G. Papa, N. C. Salerno, La spesa sanitaria pubblica in Italia: dentro la “scatola nera” delle differenze regionali. Il Modello Saniregio, Cerm, Quaderno 2/2009.
 Paolo Cornaglia-Ferraris, Eugenio Picano, Malati di spreco. Il paradosso della sanità italiana, Roma-Bari, Laterza, 2004. Rapporto sullo Stato sociale 2006. Welfare state e crescita economica, edited by Roberto Pizzuti, Novara, De Agostini Utet 2006, p 214 fol.
 Ivan Cavicchi, La privatizzazione silenziosa della sanità. Cronache sul razionamento del diritto alla salute, Datanews, Roma, 2003. Id., Il pensiero debole della sanità, Bari, Dedalo, 2008.
 Mark Pearson, Head, Health Division OECD, Disparities in health expenditure across OECD countries: Why does the United States spend so much more than other countries?, Written Statement to Senate Special Committee on Aging, 30th September 2009, OECD, 2009. Gavino Maciocco, La spesa sanitaria americana, saluteinternazionale.info, 30/11/2009.
 The overwhelming influence of social factors in public health results is highlighted in Public Health, Ethics and Equity, ed. by Sudhir Anand, Fabienne Peter and Amartya Sen, Oxford University Press, 2004.
 A synthesis on the Dutch system, compared to the British one in Claire Daley and James Gubb, Health reform in the Netherlands, CIVITAS Institute for the Study of Civil Society, 11/2007. A discussion on the Dutch reform compared to the American system in Maggie Mahar and Niko Karvounis, Going Dutch for health reform ideas, The Health Care Blog, 22/6/2008. Marco Romanelli, Sistema sanitario olandese, saluteinternazionale.info, 3/3/2010.
 Rudy Douven, Marco Ligthart, Esther Mot, Marc Pomp, Early experiences with the Dutch health care reform, EUROFRAME-EFN Autumn 2007 Report, CPB Netherlands Bureau for Economic Policy Analysis.
 Arne Björnberg, Ph.D., Beatriz Cebolla Garrofé, Ph.D. and Sonja Lindblad, Euro Health Consumer Index 2009 Report, Health Consumer Powerhouse, Stokholm 2009.
 The Health Care Inspectorate in short, http://www.igz.nl/english/
 Robert E. Leu, Frans F. H. Rutten, Werner Brouwer, Pius Matter, and Christian Rütschi, The Swiss and Dutch Health Insurance Systems: Universal Coverage and Regulated Competitive Insurance Markets, The Commonwealth Found, January 2009. This report was jointly produced by two country teams at the request of the Dutch Ministry of Health, Welfare and Sports, the Swiss Federal Office of Public Health, and the Swiss Secretary of State for Economic Affairs.
 A discussion of the implications of the global crisis for the Dutch health care system in Hans Maarse, Cost Control in the Netherlands: Testing Market Practices, in Cost Control and Health Care Reform: Act 1, Commentary from the Health Care Cost Monitor blog, May–September 2009, The Hastings Center, 2009.
 Paolo Vineis, Nerina Dirindin, In Buona salute. Dieci argomenti per difendere la sanità pubblica, Torino, Einaudi, 2004, p.76.
 The Dutch reform was first presented to the attention of the Italian public in November 2008, at the international conference “Per una politica sanitaria europea / Health Care Policy and Fundamental Rights in Europe”, organised in Rome by the European Liberal Forum with the support of the Critica liberale foundation. The proceedings have been edited in English by Beatrice Rangoni Machiavelli and Francesco Velo, Brussels, European Liberal Forum, 2009. See also Giampaolo Galli, Ci può essere un futuro per un sistema sanitario universale e responsabile, in Le riforme che mancano, cit., p. 245.