International Health Systems
Health care systems in the Organization for Economic
Cooperation and Development (OECD) countries primarily reflect
three types of programs:
- In a single-payer national
health insurance system, as demonstrated by
Canada, Denmark, Norway, and Sweden, health insurance is
publicly administered and most physicians are in private
- Great Britain and Spain are
among the OECD countries with national
health services, in which salaried physicians
predominate and hospitals are publicly owned and operated.
- Highly regulated, universal, multi-payer
health insurance systems are illustrated by
countries like Germany and France, which have universal
health insurance via sickness funds. The sickness funds
pay physicians and hospitals uniform rates that are
negotiated annually (also known as an “all-payer”
The OECD regularly publishes a CD-ROM
with 10+ years of comparative data for those interested in
pursuing further research.
Australia’s population size of 19 million people is
roughly the same as that of Texas. Its infant mortality rate
is 5 per 1,000 live births, and life expectancy at birth is
75.9 years for men and 81.5 years for women. In 1941, the
beginnings of Australia’s universal health care system
emerged. Australia spends 8.5% of its GDP
on health care, and its 1998 per capita expense was $2,043-US.
The government administers the compulsory national health
insurance program (Medicare). National health insurance is
funded by a mixture of general tax revenue, a 1.5% levy on
taxable income (which accounts for 18.5% of federal outlays on
health), state revenue, and fees paid by patients. The
government funds 68% of health expenditures (45% federal and
23% state) and has control over hospital benefits,
pharmaceuticals, and medical services. States are charged with
operating public hospitals and regulating all hospitals,
nursing homes, and community based general services.
Additionally, the states pay for the public hospitals with
federal government assistance negotiated via five yearly
agreements. Mainly not-for-profit mutual insurers (private
insurance) cover the gap between Medicare benefits and
schedule fees for inpatient services. Private insurance covers
1/3 of the population and accounts for 11% of health
Patients are free to choose their GP. Primary
care physicians act as gatekeepers, and physicians are
generally reimbursed by a fee-for-service system. The
government sets the fee schedules, but physicians are free to
charge above the scheduled fee or they may directly bill the
government when there is no patient charge. Prescription
pharmaceuticals have a patient co-payment, and out-of-pocket
payments account for 19% of health expenditures. Physicians in
public outpatient hospitals are either salaried or paid on a
Austria is home to 7.6 million people, approximately the
same number that live in North Carolina. The country has
universal access to health care through a compulsory system of
social insurance. A system of private insurance also exists.
About 8.2% of Austria’s GDP is
spent on health care, and the 1998 per capita expense was
Private doctors with contracts to the social insurance
funds are paid on a fee-for-service system with expenditure
limits based on the case and per doctor per pay period.
Hospital physicians are salaried. Approximately 50% of the
health expenditures are funded by progressive payroll taxes,
25% are financed by non-specific taxes, and the rest is funded
directly out-of-pocket or through private insurance companies.
The contributions to the health insurance funds (payroll
taxes) are split between employers and employees on a parity
Patients are free to choose their physicians, as long as
the physician has a contract with the insurer. Benefits and
prices of services are fixed in agreements between
representatives of the insured and representatives of the
providers. All medical and nursing education is free. The
infant mortality rate in Austria is 4.9 per 1,000 live births,
and life expectancy at birth is at 74.7 years for men and 80.9
years for women.
Belgium is home to about 10.2 million people, almost the
same number of people who live in the state of Ohio. Its
infant mortality rate is 6 per 1,000 live births, and its life
expectancy at birth is 74.8 years for men and 81.1 years for
women. Today, Belgium spends 8.8% of its GDP
on health care, and the 1998 per capita expense was $2,081-US.
The health care system is funded primarily through sickness
funds. Belgium’s health insurance program operates at four
distinct levels: the central government, national
associations, federations of local societies, and local mutual
aid societies. The general attitude in Belgium is that the
pluralism of the health insurance system stimulates each local
fund to work hard to attract and satisfy its members.
Patients have their free choice of any doctor. Primary care
physicians are paid via fee-for-service, directly from the
patient, or partially reimbursed, except with low-income
patients who are exempt from pay. They are reimbursed with a
negotiated fee, but extra billing is allowed. Specialists are
paid via fee-for-service and are not restricted to hospitals.
Canada’s population size of 30.5 million people is
roughly the same as that of California. Its infant mortality
rate is 5.5 per 1,000 live births, and its life expectancy at
birth is 75.8 years for men and 81.4 years for women. National
health insurance had been discussed in Canada at the federal
level since 1919, but no real action was taken until 1944.
Today, Canada’s health system is characterized by
single-payer national health insurance, and the federal
government requires that insurance cover “all medically
necessary services.” Canada spends 9.5% of GDP
towards health care, and the 1998 per capita expense was
National health insurance (Medicare) is a public program
administered by the provinces and overseen by the federal
government. Medicare is funded by general tax revenues.
Federal contributions are tied to population and provincial
economic conditions, and provinces pay the remainder. Medicare
accounts for 72% of health expenditures. In addition, the
majority of Canadians have supplemental private insurance
coverage through group plans, which extends the range of
insured services, such as dental care, rehabilitation,
prescription drugs, and private care nursing. The private
sector (private insurance and out-of-pocket payments) accounts
for 28% of health expenditures.
Most physicians in Canada are in private practice and
accept fee-for-service Medicare payment rates set by the
government. Provincial medical associations negotiate insured
fee-for-service schedules with provincial health ministries.
Some physicians set their own rates but are not reimbursed by
the public system. Hospitals are mainly non-profit and operate
under global institution-specific or regional budgets with
some fee-for-service payment. Less than 5% of all Canadian
hospitals are privately owned.
Finland has a population size of 5 million people, which is
about the same number of people who live in the state of
Maryland. Finland has an infant mortality rate of 4.2 per
1,000 live births and its life expectancy at birth is 73.5
years for men and 80.6 years for women. The country spends
6.9% of GDP on health care, and its
1998 per capita expense was $1,502-US. In 1964, national
health insurance was enacted in Finland.
The Finnish health system is primarily funded (80%) by
general tax revenues collected by the local and national
governments. The basic administrative levels in Finland are
divided into communes and municipalities. The local
authorities in Finland number 445, averaging about 10,000
GP’s practice mostly in health
centers. They are salaried, but many are paid fee-for-service
for overtime. Hospital physicians, who must be specialists,
Denmark, a small country, is home to 5.3 million people -
the same number as in the state of Wisconsin. Its infant
mortality rate is 4.7 per 1,000 live births, and its life
expectancy at birth is 73.7 years for men and 78.6 years for
women. Denmark has had a single-payer national health system
since 1961. Approximately 8.3% of GDP
is spent on health care, and the 1998 per capita expense was
The Danish health care system is funded by progressive
income taxes, and is publicly administered. Hospitals are run
by the 14 counties and the City of Copenhagen. Physicians who
work with the hospitals receive salaries, which are determined
by negotiation between government and doctor’s unions. GP’s
are 40% per capita fee, and 60% fee-for-service. Specialists
are mostly fee-for-service. All medical and nursing education
There is strong incentive for patients to choose a GP
in their immediate area of residence. GP’s
will then make referrals to specialists. There are no co-pays
for physician or hospital care, but patients do pay a share of
drug costs - usually between 25 and 50%. Private insurance,
held by approximately 27% of the population, is used mainly
for medications and dental expenses.
France has a population close to that of the entire Midwest
- 60.9 million people. France has an infant mortality rate of
4.7 per 1,000 live births and a life expectancy at birth of
74.6 years for men and 82.2 years for women. The country has
had a national health insurance system since 1928, but
universal coverage did not occur until 1978. Approximately
9.6% of France’s GDP is spent on
health care, and its 1998 per capita expense was $2,077-US.
The French health care system is primarily funded by
Sickness Insurance Funds (SIF’s), which are autonomous,
not-for-profit, government-regulated bodies with national
headquarters and regional networks. They are financed by
compulsory payroll contributions (13% of wage), of employers
(70% of contributions) and employees (30% of contributions). SIF’s
cover 99% of the population and account for 75% of health
expenditures. The 3 main SIF’s
(CNAMTS, MSA, and CANAM)
cover about 95% of the population, and the remaining 5% of the
insured population are covered under 11 smaller schemes. The
remainder of health expenditures is covered by the central
government, by patients’ out-of-pocket payments, and by
Mutual Insurance Funds (MIF’s), which provide supplemental
and voluntary private insurance to cover cost-sharing
arrangements and extra billings. MIF’s
cover 80% of the population and account for 6% of health
expenditures. The major public authority in the French health
system is the Ministry of Health. Below this are 21 regional
health offices that regulate each of the 95 provinces.
Patients are free to choose their providers and have no
limits on the number of services covered. GP’s
have no formal gatekeeper function. Private physicians are
paid on a fee-for-service basis and patients subsequently
receive partial or full reimbursement from their health
insurance funds. The average charge for an office visit to a GP
and a specialist are $18 and $25, respectively. Private
hospitals are profit-making and non-profit making, usually
with fee-for-service physicians. Public hospitals employ
salaried physicians, who make up 1/3 of all GP’s
in France. All medical and nursing education is free.
Germany is home to approximately 82 million people, nearly
1/3 of the U.S. population.
Germany’s infant mortality rate is 4.7 per 1,000 live
births, and its life expectancy at birth is 74.5 years for men
and 80.5 years for women. In 1883, Germany was the first
country to establish the foundations of a national health
insurance system and has since gradually expanded coverage to
over 92% of the population. Today, Germany spends 10.6% of its
GDP on health care, and the 1998 per
capita expense was $2,424-US.
Everyone in Germany is eligible for health insurance, and
individuals above a determined income level have the right to
obtain private coverage. The German health care system is
predominantly characterized by Sickness Insurance Funds (SIF’s),
which are funded by compulsory payroll contributions (14% of
wage), equally shared by employers and employees. SIF’s
cover 92% of the population and account for 81% of health
expenditures. The rest of the population (the affluent,
self-employed, and civil servants) is covered by private
insurance, which is based on voluntary, individual
contributions. Private insurance accounts for 8% of health
GP’s have no formal gatekeeper
function. Private physicians, over half of which are
specialists, are paid on a fee-for-service basis.
Representatives of the sickness funds negotiate with the
regional associations of physicians to determine aggregate
payments. Physicians who work in hospitals are full-time
salaried specialists, whose work is entirely devoted to
in-patients. All medical and nursing education is free.
Japan has a population of 122 million people, nearly half
that of the United States. The infant mortality rate in Japan
is 3.6 per 1,000 live births, and life expectancy at birth is
at 77.2 years for men and 84 years for women. Approximately
7.6% of GDP is spent on health care,
and the 1998 per capita expense was $1,822-US. Japan’s
current system of universal health care was initiated in 1958.
The Employee’s Health Insurance System is financed by
compulsory payroll contributions (8% of wage), equally shared
by employers and employees, and covers employees and their
dependents. The National Health Insurance System covers the
self-employed, pensioners, their dependents, and members of
the same occupation. The local governments act as insurers,
and premiums are calculated on the basis of income, the number
of individuals in the insured household, and assets. Premiums
account for 57% of health expenditures. The federal government
contributes 24% to medical care expenditures and local
governments contribute 7%.
About 80% of hospitals and 94% of private clinics are
privately owned and operated. While some public not-for-profit
hospitals exist, investor-owned for-profit hospitals are
prohibited in Japan. Patients are free to choose their
ambulatory care physicians, who are reimbursed on the basis of
a negotiated, uniform fee-for-service schedule. Physicians
have no formal gatekeeper function. Due to the combination of
medical and pharmaceutical practices a large part of a
physician’s income is derived from prescriptions. Hospital
physicians have fixed salaries.
The Netherlands has a population of 15.8 million, which is
approximately the same number of people who live in the state
of Florida. In 1997, 72% of the population had
government-assured health insurance coverage. The infant
mortality rate is 5.2 per 1,000 live births and life
expectancy is at 75.2 years for men and 80.7 years for men.
The Netherlands spend 8.6% of its GDP
on health care, and the 1998 per capita expense was $2,070-US.
The health care system in the Netherlands is very similar
to that in Belgium; health care is primarily financed by
employer-employee social insurance. Health care is provided by
private not-for-profit institutions, and the compulsory health
insurance system is financed through sickness funds. 70% of
the population is in the public health care system. 30% of the
population (mostly civil servants and high-income groups) has
private insurance, because they are not eligible for social
health insurance. There are currently plans to convert the
entire system to a tax-based one.
Most primary care physicians are in a solo office practice
(54%) or practice in small groups. Reimbursement is by
capitation for “public patients” (2/3) and via
fee-for-service (1/3). Specialists are salaried and are
restricted to hospitals.
New Zealand has a population size close to that of Atlanta,
Georgia - 3.5 million people. In 1941, it achieved universal
coverage and was the first country with a free-market economy
to do so. Radical health sector restructuring occurred in
1993, which introduced a set of market-oriented ideas.
However, the new system performed poorly and was thus
restructured 3 years later. Today, New Zealand spends 8.1% of
GDP on health care and the 1998 per capita expense was
$1,424-U.S. The infant mortality rate is 6.8 per 1,000 live
births and life expectancy is at 75.2 years for men and 80.4
years for men.
The health system is funded through taxation and
administered by a national purchasing agent, the Health
Funding Authority (HFA). Health care is provided by 23
hospital provider organizations (Hospital and Health
Services), GP’s (most of whom are
grouped as Independent Practitioner Associations, IPA’s),
and other noncrown providers of child care, disability support
services, etc. These parties compete for the provision of
health services. Public funding accounts for 76% of health
expenditures. Complementary, non-
profit, private insurance, on the other hand, covers about 1/3
of the population and accounts for 7% of health expenditures.
It is most commonly used to cover cost-sharing requirements,
elective surgery in private hospitals, and specialist
outpatient consultations. New Zealand’s government is a
purchaser and provider of health care and retains the
responsibility for legislation and general policy matters.
Health care is free for children, and all patients have
their free choice of GP. Out-of-pocket
payments account for 17% of health expenditures. GP’s
act as gatekeepers and are independent, self-employed
providers. They are paid via fee-for-service, partial
government subsidy, and negotiated contracts with HFA
through IPA’s. The payment system
is currently moving from fee-for-service to capitation.
insurance and out-of-pocket contributions pay the remainder.
Hospitals are mostly semiautonomous, government-owned
companies that contract with the HFA. Specialists
are commonly salaried, but may supplement their salaries
through treatment of private patients.
Norway is home to approximately 4.4 million people, about
the same number that live in Washington DC.
Norway has had a single-payer national health insurance
system since 1966. The National Insurance Act guaranteed
citizens universal access to all forms of medical care.
Norway’s health system is funded by progressive income tax,
and from block grants from central government, with 8.9% of GDP
being spent on health care, and in 1998 the per capita expense
Patients are free to choose their own physician and
hospital, however, registration with local GP’s
who act as gatekeeper, will begin in 2001. Patients are
responsible for co-pays for some physician visits,
approximately $15. Patients are also responsible for co-pays
for prescription drugs, up to $216 per year. Once that level
of expense has been reached, prescription drugs are covered at
100%. All hospital care is covered at 100%.
Hospital physicians have fixed salaries. GP’s
have either fixed salaries or fee-for-service agreements. All
medical and nursing education is free. The infant mortality
rate in Norway is 4 per 1,000 live births, and life expectancy
at birth is at 75.5 years for men and 81.3 years for women.
Spain’s population size is close to that of Texas and New
York combined - about 39.1 million people. The country has had
a comprehensive, single-payer national health service since
1978. The Constitution of 1978 explicitly affirms everyone’s
right to health care. Spain spends 7.1% of its GDP
on health care, and its 1998 per capita expense was $1,218-US.
The Spanish health care system is funded by payroll taxes
through the National Institute of Health program (INSALUD),
which in 1984 was 75% financed by employers and 25% financed
by employees. Those with higher incomes have the option of
obtaining private medical care. Public hospitals are run by
one of the provinces or municipalities. The INSALUD
program operates a large network of hospitals and ambulatory
care clinics. Hospital physicians are on full-time salaries.
All medical and nursing education is free. The infant
mortality rate in Spain is 5 per 1,000 live births, and its
life expectancy at birth is 74.8 years for men and 82.2 years
Sweden has a population close to that of New York City -
8.8 million people. The country has an infant mortality rate
of 3.6 per 1,000 live births and a life expectancy at birth of
76.9 years for men and 81.9 years for women. Sweden spends
8.4% of its GDP on health care, the
1998 per capita expense was $1,746. Sweden has had its current
universal health care system since 1962. Tuition for medical
and nursing education is free, and students generally take
loans for living expenses of around $9,000-US per year.
The Swedish health care system is financed by both incomes
and patient fees. County councils own and operate hospitals,
employ physicians and run the majority of general practices
and outpatient facilities. Other physicians work in private
practice and are paid by the counties on a fee-for-service
Co-pays, which were mandated in 1970, are capped, with
limits on how much a person is required to contribute
annually. For example, patients over age 16 pay $9 per day for
hospitalization. The maximum individual expense for hospital
and physician services is approximately $108 per year. The
maximum individual expense for prescription drugs is $156 per
year. Once these sums are met, care is covered at 100%.
Taiwan enacted its single-payer national health insurance
program in 1995; in all estimates, it has been very
successful. Taiwan enacted the program (from multiple
insurance companies, like the United States) to the
single-payer system with no measurable increase in costs,
while insuring more than 8 million Taiwanese citizens who
previously lacked insurance. While utilization did increase,
its costs were largely offset by the enormous savings under
single-payer. Taiwan also did not report any increase in
queues or waits for services.
The United Kingdom
Britain has a population size of 57 million, nearly three
times the number of people in Texas. The infant mortality rate
in the United Kingdom is 5.7 per 1,000 live births, and life
expectancy at birth is 74.6 years for men and 79.7 years for
women. Britain has had a National Health Service (NHS) since
1948. 6.7% of GDP goes towards
health expenditures, and the 1998 per capita expense was
The British government is a purchaser and provider of
health care and retains responsibility for legislation and
general policy matters. The government decides on an annual
budget for the NHS, which is
administered by the NHS executive,
regional, and district health authorities. The NHS
is funded by general taxation and national insurance
contributions and accounts for 88% of health expenditures.
Complementary private insurance, which involves both
for-profit and not-for-profit insurers, covers 12% of the
population and accounts for 4% of health expenditures.
Physicians are paid directly by the government via salary,
capitation, and fee-for-service. GP’s
act as gatekeepers. Private providers set their own
fee-for-service rates but are not generally reimbursed by the
public system. Specialists may supplement their salary by
treating private patients. Hospitals are mainly
semi-autonomous, self-governing public trusts that contract
with groups of purchasers on a long-term basis.
The British government this year has announced a huge
funding increase for the NHS. Specifically,
it will receive 6.2% more in funding every year until 2004.
Current plans to improve the system over the next five years
include hiring 7,500 more specialists, 2,000 GP’s
and 20,000 nurses; providing 7,000 more acute beds in existing
hospitals and building 100 new hospitals by 2010; demanding
that GPs see a patient within 48 hours of an appointment; and
finally, guaranteeing that patients wait no more than three
months for their first outpatient appointment with a
specialist and no more than six months after that appointment
for an operation.
The Resources and Priorities for the NHS
(PDF File). A statement made by the UK’s
Secretary of Health.
Multiple Country References
Health Data 2000. .
- National health systems of the
world, Volume 1: The countries, Roemer, MI,
1991, New York: Oxford University Press.
- Multinational comparisons of
health care: Expenditures, coverage, and outcomes,
Anderson, G (with Axel Wiest),
Oct. 1998, The Commonwealth Fund.
- Primary care: Balancing health
needs, services, and technology, Starfield, B,
1998, New York: Oxford University Press.
Single Country References
“Questionnaire on the Austrian health system”, Widder,
Joachim, MD, PhD, Vienna
University General Hospital Department of Radiotherapy and
“Questionnaire on the Austrian health system”, Theurl,
E, Austria University, Institut
fur Finanzwissenschaft der Universitat Innsbruck, A-6020
- Belgium and the Netherlands:
“Belgium and the Netherlands revisited”, Van Doorslaer,
E & Schut, FT,
Journal of Health Politics, Policy and Law, Oct.
Health care in Denmark, published by The Ministry of
“Health care under French national health insurance”,
Rodwin, VG & Sandier, S,
Health Affairs, Fall 1993.
“The German health system: Lessons for reform in the
United States”, Jackson, JL, Archival
of Internal Medicine, 1997.
“The German health-care system”, Wahner-Roedler, DL,
Knuth, P & Juchems, RH,
Mayo Clinical Proc, 1997.
“Japanese health care: Low cost through regulated
fees”, Ikegami, N, Health
Affairs, Fall 1991.
“The health care system in Sweden”, published by The
Swedish Institute, May 1999.
“The Health and Medical Services Act”, promulgated
June 30, 1982.
“Does Universal Health Insurance Make Health Care
Unaffordable? Lessons From Taiwan,” Lu, J-F R and Haiao,
W C. Health Affairs, May/June
- United Kingdom:
“Britain’s health care, and ours”, Sidel, VW,
Letter to the Editor, The New York Times, Feb. 14,
Profiles of the international health systems were
compiled by Jacqueline Le.