The current health care debate across Europe makes for a decidedly unsettling counterpoint to the one-dimensional hoopla that passage of the new health reform bill has triggered off in most of the mainstream American media.

Most European policymakers are going in exactly the opposite direction to what ruling politicians and most media in the United States currently believe to be “progress.” While the U.S. is busy dramatically expanding government’s role in the health sector, European policymakers are persistently (in some cases desperately) seeking to rein in bureaucratic controls over health service delivery in their own health systems. While in the U.S. the federal government is adopting massive new financial obligations in the health sector, policymakers in much of Europe are exploring every strategy that could help reduce the public sector’s long-term financial commitments.

In Sweden, for example, one-third of all primary care is now delivered by private sector providers (both in primary health centers but also in general practitioners’ offices). Seeking to stimulate more flexibility and innovation as well as more timely access, a new national law went into effect in January requiring all 21 regional governments (which run most of the health care system in Sweden) to allow citizens to choose private as well as public primary care providers, and to allow “free establishment” of new private providers.

In Finland, rather similarly, the national government is poised to introduce new legislation to allow patient choice of public hospitals, and is internally debating the need to expand patient options inside the public primary care system (where private contracting is growing rapidly).

In Portugal, some 60% of all hospitals are now run as “public enterprises,” while in Spain there are five new types of “public hospitals under private law.” Similar efforts to roll back political control and governmental regulation on day-to-day hospital management have been introduced in the U.K. (“foundation trusts”), Norway (“state enterprises”), and in Central European countries like Estonia and the Czech Republic (publicly owned “joint stock companies”).  

In the U.K., headlines last week in the Financial Times quoted in bold letters a grandee’s conclusion that “the NHS is sleepwalking over a fiscal cliff,” referring to the massive public funding cuts that will necessarily be applied next year due to the U.K.’s disastrous public budget deficit (interestingly, a deficit that is 12% – compared to 13% this fiscal year in the U.S.).

In Germany in January 2009, the national government seized direct control over the funding of its officially private not-for-profit social health insurance system, imposing a single fixed premium rate (8% of earned income) on all German workers, to begin to reduce the cost of health care for German employers so as to make German exports more competitive in a world where Chinese and Indian, but also Polish and Slovakian workers have much lower labor costs.

In The Netherlands, a similar policy goal was accomplished in a major 2006 reform by channeling 100% of all health care costs through the individual (with employer reimbursement for 50%), to encourage cost consciousness, as well as by shifting the individual’s 50% share of health care costs from a percentage of salary to a fixed flat rate premium (with subsidies for very low wage earners – well below the Euro equivalent of the $88,000-a-year ceiling stipulated in the just-passed US legislation).

In Norway – Norway, for heaven’s sake, a country of only 5.3 million people which has a $400 billion dollar Sovereign Investment Fund of oil money set aside for future generations’ welfare needs – the Permanent Secretary of Health said publicly last October in an open seminar on the future of Nordic health systems: “The current method of delivering and paying for health services in Norway is not financially sustainable.”

The list could go on, however the point should be apparent. European health policymakers in 2010 are pre-occupied with reducing the role of government in the day-to-day management and operation of health sector service providers, and are facing major reductions in the amount of public funding that they have available to support those public services.

Returning to the U.S. from trips to Europe is like visiting a different planet. Here, the national government and its health policymakers are celebrating the establishment of major new operating and fiscal responsibilities for the federal government – that is, for corporate and individual taxpayers. One finds the ruling Democratic Party leadership in Washington increasing health care entitlements to new classes of citizens, and piling on new taxes and regulations to try to pay for them.

Moreover, consistent with past health reforms in the U.S. (except, interestingly and typically

unmentioned, the Medicare Drug expansion in 2004 that relied on private sector intermediaries) this dramatically more centralized and bureaucratized system that is being put in place in the U.S. will cost far more than official estimates predict. Reasonable estimates elsewhere in Washington total $2.5 trillion over the first six years of operation, not the $900 million claimed by the Congressional Budget Office.

Bill Gross, the dean of the bond market who is codirector of PIMCO Funds, was quoted on Bloomberg News on March 24 as saying that the newly passed health reform legislation would add $560 billion dollars to the federal deficit over the next 10 years, with only six years of new benefits.

Without question, many of the operating reforms contained within the newly passed U.S. legislation are long overdue, especially the new regulations to tame the private insurance companies. Indeed, many of these regulations mimic those in place in Netherlands, Switzerland, and other European countries that rely on private profit-making health insurers (one regulation that wasn’t adopted is the Swiss prohibition on insurers against making a profit on the so-called “basic package,” although those same companies do quite nicely on the supplemental policies that many of their insurees then buy). All of these regulations, however, cost money, and will raise – not lower – the cost of future health insurance premiums.

Moreover, defenders of the full U.S. bill can rightfully claim that the Europeans are reducing the public sector’s role and responsibilities from a very different, much more overwhelming public position, with full or near-full coverage already achieved.

Lastly, none of this is to promote the U.S. opposition Republican Party’s All-Market-All-of-the-Time solution to this country’s health care dilemma. That unconstrained and equally fantastical approach, as every European health policymaker will tell you, will necessarily lead to worsening not improving health service delivery, a dramatic drop in public prevention and health promotion activities, and higher not lower expenditures.

In short, what Europeans are seeking in 2010 is a better balance of State and Market, not capitulation to Raw Capitalism. They want a more flexible and innovative approach to service delivery that will cost less and make European economies more competitive globally.

In contrast, in the U.S., policymakers seem hell-bent on massive increases in state control, with vast numbers of new bureaucratic regulations and unsustainable new fiscal deficits. This is a strategy that will guarantee that the new health benefits bring with them a substantially less competitive economy, a lower standard of living, and, potentially, an Argentina-style default on public debt.

As the title says, it’s a tale of two continents. Something to think about as the Democrats break out the champagne.

Richard B. Saltman is professor of health policy and management at the Rollins School of Public Health of Emory University and associate director of research policy at the European Observatory on Health Systems and Policies in Brussels. RSALTMA@emory.edu; 404-727-8743.