Healthcare Debates: Which Countries Have Free Healthcare? Does It Work?

In the supposed land of the free, healthcare is not. For many years running, the United States has held the dubious honor of being the most expensive, least effective healthcare system in the affluent world. In 2018, the U.S. spent $3.6 trillion on healthcare—an average of $11,172 per person—nearly double per capita than other high-income nations across the globe.

In a healthcare system that is neither free nor universal, the reasons behind this abysmal reality are multifactorial and cyclical. Pharmaceutical greed, monopoly pricing, and marketing pump the cost of drugs to be 112 percent higher than the rest of the monetarily wealthy world. High fees for physicians’ education lead to a need for salaries that are up to 96 percent higher than in other nations. The high price of state-of-the-art technology, in combination with the impact of hospital mergers, pushed the price of care to grow by 42 percent between 2007 and 2014.

Because American healthcare operates within an insurance company model, physicians and hospitals are disconnected from the true cost of care and have to play the money game as dictated by insurance companies. Excessive and unnecessary care is now an indelible part of how healthcare organizations stay fiscally solvent.

Spending 44 percent more on care than the next-highest spender of Switzerland ($7,147 per person), this is what the U.S. is paying for, in comparison to ten other wealthy nations:

*This average does not include the U.S. With the U.S., the average is pulled up to $645.

In a system where at $1,122 per capita, people pay nearly 67 percent more out-of-pocket than the average for other countries, free and universal healthcare is on the minds of many. Free healthcare is the state under which healthcare costs nothing (or very little) to citizens at the time of service. Universal healthcare is the state under which more than 90 percent of citizens have coverage. Free and universal healthcare, therefore, is a system in which all citizens have healthcare coverage and accessing healthcare costs them little or nothing out-of-pocket.

Many countries across the planet make the promise of free and universal healthcare, but healthcare is not free anywhere. Affordable healthcare is largely made possible through taxes and systems that nourish the availability of their services through intentional policy. Although systems vary from country to country, the low cost of healthcare in “free systems” is only possible through mandatory contributions made by individuals and employers. While many countries with free and universal systems do mitigate and minimize costs, even the most efficient systems require patients to share the cost of services, supplies, or devices through out-of-pocket payments.

While free healthcare currently exists mostly as an ideal, there are countries all across our globe that make this promise to their citizens and residents. The following analysis provides a brief explanation of how healthcare systems in four populous countries. It includes how healthcare is organized and funded, what patients pay for, and how these systems perform.

Although new budget cuts to healthcare may be in the process of creating systemic collapse, France’s healthcare system has been touted as one of the best in the world since the year 2000. After a seven-decade march, the country finally implemented a Couverture Maladie Universelle (Universal Health Coverage) in 2000, which extended baseline healthcare coverage to 99 percent of French residents. In 2016, changes to the legislation removed the barrier to access for the remaining 1 percent of residents, and all coverage gaps were filled.

According to The Commonwealth Fund (2020), 77 percent of all healthcare expenditures were financed by the public in 2017. Ninety-nine percent of public funding comes from taxes. Fifty-four percent of funding for NHI comes from payroll taxes; 34 percent comes from income tax; and 12 percent of funding comes from taxes on alcohol, tobacco, pharmaceutical, and voluntary insurance companies. A small part also comes from state subsidies.

Notably, 13.5 percent of the remaining healthcare expenditures come from private voluntary health insurance programs. Although all residents are covered by the national health insurance program, about 95 percent of French residents opt into secondary private complementary insurance through their employer or safety net vouchers. Employees pay 50 percent of the cost of private insurance.

Generally, NHI pays for 70 percent of a patient’s bill, and then the patient is responsible for 30 percent. Private secondary insurance will pay for some or all the remaining balance. The gap between insurance coverage and rate for services meant that In 2016, approximately 8 percent of spending on healthcare in France resulted from out-of-pocket payments. Per capita, France spent the equivalent of $4,931 per capita on healthcare, and $463 of those dollars came directly from patients. Much out-of-pocket spending is on dental or vision.

From a taxation standpoint, 21 percent of a worker’s income goes to the national healthcare system. Of that 21 percent, employers pay 13 percent, while the worker contributes 8 percent of their salary.

According to a 2016 study in The Lancet, France has a healthcare accessibility and quality (HAQ) score of 92 out of 100. Along with New Zealand, Denmark, Germany, and Spain, France is the sixth-best in the world at ensuring that people have access to quality services without imposing financial hardship. In regard to the 32 individualized causes where death should not occur when in the presence of effective care, France was observed to perform in the higher ranges across most measures. The only causes where France’s scores dipped below 70 were in the face of non-melanoma skin cancer (62/100), Leukemia (69/100), and in regard to adverse effects of medical treatment (63/100).

In addition to being highly ranked in terms of accessibility and quality, France’s life expectancy is 82.6 years. At only 60 per 100,000 in 2016, France also boasted the second-lowest rate of avoidable deaths in the wealthy world, tied with Norway, and outperformed only by Switzerland. In addition, France has high rates of consumer satisfaction relative to other nations. According to a survey conducted by the Commonwealth fund in 2016, 54 percent of respondents reported that only minor changes were needed to the French system, 41 percent felt that fundamental changes were needed, and only 4 percent felt that a complete rebuild was necessary.

Japan provides health coverage to most through their statutory health insurance (SHI) system. Ninety-eight percent of Japan’s population receives SHI through employment (59 percent) or through residence-based insurance (39 percent). The remaining 2 percent of Japan’s population receives insurance through a public assistance program for impoverished people.

Eighty-four percent of Japan’s healthcare expenditures in 2015 were funded by the public—half through taxes and half through mandatory individual contributions. Rates of mandatory contributions are determined based on a person’s salary.

The burden for mandatory individual contributions is shared by employers and employees, or by residents and governments/prefectures/municipalities. In terms of rates, about 10 percent of salaries and bonuses are collected for health insurance, with monthly caps of $1,370 for salaries and $57,300 for bonuses. Fourteen percent of healthcare expenditures are covered by out-of-pocket charges.

SHI pays for 70 percent of care and patients are expected to pay 30 percent for all health services and pharmaceuticals. Children under three only have a 20 percent co-insurance; adults over 70 have a 10 percent coinsurance; and low-income individuals incur no costs for care. In 2017, Japan spent the equivalent of $4,630 per capita on health care. Patients paid an average of $595 out-of-pocket that same year.

With a Lancet HAQ score of 94, Japan sits shoulder-to-shoulder with Austria and Canada in terms of providing the fourth-most financially accessible and high-quality healthcare on the planet. When looking at metrics regarding avoidable deaths, every metric was observed to be higher than 70 out of 100 and there is only one glaring low mark. It has been observed that Japan’s healthcare system does not do well when non-melanoma skin cancer is the cause, scoring only 27 out of 100.

Women in Japan had an observed life expectancy of 87.2 in 2017 and men lived until 81.1 years old. In 2019, The Organisation for Economic Co-operation and Development (OECD) reported that Japan had the third-lowest incidences of mortality for preventable causes (87 out of 100,000), and the ninth-lowest incidences of mortality from treatable causes (51 out of 100,000).

The right to health is a part of the Indian constitution and the burden for providing care is decentralized. Each state is India responsible for providing free and universal access to inpatient and outpatient healthcare.

Although reported as mostly ineffective, India has a wide variety of health schemes. Low-income Indians can access care for free at private facilities under the National Health Protection Scheme known as PM-JAY. Civil servants receive coverage under the Central Government Health Scheme. There are employment-based schemes specifically for defense and railway employees. Regional schemes exist for public-sector employees and senior citizens. Those employed in India can also enroll in voluntary and for-profit private insurance through their employer. As of 2018, only 37 percent of the Indian population held health coverage.

Forty percent of funding for public schemes at the national level (like PM-JAY), comes from the state, with the central government providing 60 percent of funding. Four percent of income tax is collected to support this scheme. For Employee State Insurance—which opened insurance to companies with ten employees or more—employees contribute 0.75 percent of their wages and employers contribute 3.25 percent of the employee’s wages. The state government will also contribute 12.5 percent of all expenditures, up to the equivalent of $25 per year.

If able to access care in a public health facility, there is no cost to patients. However, because public health care in the country is underfunded, there are often severe shortages of staff and supplies at government-run facilities. Many households must seek care at private high-priced facilities where they pay out-of-pocket. Despite promising a free and universal system, out-of-pocket payments were responsible for 65 percent of all health care expenditures. Per capita, India paid $209 for healthcare in 2017. Out-of-pocket payments in the same year were $136.

According to the Lancet, India’s HAQ score is 41 out of 100. Tied with Mauritania, India’s accessibility and quality is the 19th-worst in the world. Most of India’s observed performance in regard to causes of preventable death is below the 50 out of 100 range. The only places where India hits above that mark are in regard to whooping cough (51/100), tetanus (71/100), measles (52/100), chronic respiratory issues (62/100), gallbladder issues (59/100), diabetes (57/100), upper respiratory infections (100/100), and diphtheria (100/100).

Observed life expectancy in India for females in 2017 was 70.2 years, and 67.8 for males. The high out-of-pocket expenditures have resulted in almost eight percent of India’s population being pushed below the poverty line.

Health is defined as a universal right and state responsibility in Brazil’s constitution, and everyone—residents and visitors—can access free services that include care and prescription drug coverage without cost-sharing.

Sistema Único de Saúde (SUS) rests on three principles: care is a universal right at all levels; responsibility is decentralized across all levels of government (federal, state, and municipal); and the formulation, monitoring, and implementation of health policies is done through social participation. No application process is needed to access healthcare services, and 100 percent of residents are automatically enrolled in public insurance coverage. 23 percent of Brazilians—mostly middle- or high-income citizens—opt into private coverage offered through employers.

Brazil’s system receives funding through a mixture of governmental funding and taxation. The federal government pays for 43 percent of public expenditures, state governments contribute 26 percent, and municipalities cover the remaining 31 percent.

If accessing services within the public sector, there are no charges for care. However, 27 percent of total healthcare expenditures in 2017 were out-of-pocket. The primary reason for this is pharmaceuticals, as not all drugs are free under SUS. In 2017, Brazil spent the equivalent of $1,282 on healthcare per capita, and $351 of those per-capita dollars were out-of-pocket spending.

Brazil’s HAQ index is 64. Along with Peru and Trinidad and Tobago, this means that Brazil’s healthcare system quality and accessibility is 30th in the world. When looking at individual causes of deaths preventable in the face of care, Brazil is observed to be under the 70 out of 100 mark across most measures. The exceptions to this mid-low range performance are upper and lower respiratory infections, diphtheria, tetanus and measles (all 100/100), whooping cough (84/100), rheumatic heart disease (78/100), and gallbladder issues (76/100).

The observed life expectancy for females in 2017 was 79.1 years and 72 years for males. In 2014, 5.3 percent of households had to forego paying for non-health-related items as a result of high health expenditures.

There is much room for improvement within the United States with respect to the cost and quality of healthcare, as well as the citizen life expectancy and faith in the system. Part of the issue is agreeing on whether healthcare is a right or a privilege, a settled matter in most of the world. Additionally, the U.S. must decide whether it wants a single- or multi-payer system and the ethics of using AI and other technologies in the provision of care.