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Thursday, February 10, 2005 - Page updated at 12:00 AM

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Europe: Shopping for health care

Newhouse News Service

HAMBURG, Germany — Europeans once lived and died by their national health plans.

In exchange for steep taxes, they received a lifetime of free or low-cost medical care. They expected doctors to diagnose their ailments, drugs to make them feel better and hospitals to perform necessary procedures.

But this once-sacred social pact is starting to break down. Fed up with long waits and worried about the quality of medical care, more European patients are losing faith in government-run health systems. Informed by the Internet and motivated by cheaper travel, many now seek medical care abroad and buy private health insurance.

In response, some European governments are doing the unthinkable: handing parts of their public health-care systems to the private sector. The experiments promise to release patients from a government monopoly and improve care through competition. The outcome could make or break national budgets — and ultimately determine whether socialized medicine survives.

A study in contrast

The changes in Europe contrast with what is happening in the United States, where people are looking to government to address soaring medical costs and the 43 million people who have no health insurance.

"The government can guarantee you universal coverage. What the government can't guarantee you is the care that you want when you want it," said Robert Moffit, director of the Center for Health Policy Studies, part of the Heritage Foundation, a conservative think tank in Washington, D.C.

Franco Chiocca, a London clothing wholesaler, could have had a hip replacement near his home, for free, through England's National Health Service. But he was unwilling to wait months or years. Instead, he researched his alternatives online and found a clinic in Germany.

Hours after landing here, where he didn't speak the language, Chiocca, 52, lay on an operating table, sedated and cut open by doctors he had just met. Eleven days later, he walked out of the Endo-Klinik on crutches with a plastic joint that cost him 9,300 euros, or about $12,340.

"A professional person like me cannot wait too long," said Chiocca, who makes $211,000 a year before paying $77,000 in taxes — much of which funds England's health-care system. "Dealing with clients all day, I have to be on my feet."

The role of the Internet

Chiocca's decision to pay out-of-pocket and get back to work faster wouldn't seem unusual in the United States. But in Europe, his willingness to forfeit public benefits is part of a revolution in socialized medicine.

Today, more Europeans are using the Internet to shop around for medical procedures as easily as they would for a television. They are as comfortable catching a flight to a foreign city as they are driving to their country homes. And they can compare prices across borders more easily than their parents because half of Europe now uses the same currency, the euro.

In short, they are behaving more like American consumers.

"They're tending to know a lot more than they used to about how they can be treated and what's available, whether it's in [their] country or others," said Ken Anderson, an American in charge of negotiating private contracts for England's Department of Health. "Since those patients are also voters, politicians listen to them."

The waiting game

For European governments, limiting supply has been the traditional way to contain health-care costs. The downside is waiting lists.

Patients have had to wait not just for elective procedures, but even for medically necessary surgeries.

England, whose health service is one of the most generous in Europe, made patients wait an average of 18 months for an operation in 1997 — including for simple-to-fix but disabling conditions such as cataracts and worn joints. Since then, the average has fallen to less than nine months.

While England and other countries have taken measures to curtail waiting lists, "health tourism" remains strong.

"Three years ago, there were people who didn't want to wait two years for an operation," said Hans Finck, managing director of German Medicine Net, a medical broker who helps bring British patients to Germany for care. "Now, they don't want to wait nine months."

In June, the Stockholm Network, a European think tank that advocates market reforms, released a survey that showed patients across eight countries in Europe were losing faith in their health plans. More than four in five of 8,000 people surveyed said that without improvements, the quality of health care would stagnate or decline during the next decade. Most expressed a willingness to travel for treatment.

Maurice Williams, a 55-year-old construction business owner, said he turned to an Internet company called Treatment Choices because he faced a wait in England for heart-bypass surgery, which his doctor said he needed immediately. The company gave him a list of places where he could get the surgery right away.

"I felt pretty let down," he said while convalescing at a cardiac center in Lahr, Germany. "Living in England all those years, paying all that money into the system. ... Now I'm sick, knocking at death's door, and I can't get help."

European discontent with national health systems also is reflected in the trend toward private health insurance, once almost unheard of in countries with socialized medicine. The number of Britons with private coverage, for example, grew 10 percent during the past five years, according to the health-care analysts Laing and Buisson.

The British spent $7.7 billion on health-insurance policies in 2003. Private medical insurance covered 12.7 percent of the population, while 8 percent had health cash plans, which are similar to health savings accounts in the United States.

The free-market principles governing America's health-care system encourage competition between health insurers and providers who want to sign up patients and clients.

Such competition was rare in Europe until recently. One unexpected outcome of the expansion of the European Union, which grew to 25 countries in May from 15, is that national health-care systems must now compete.

The EU requires member countries to allow the free flow of goods, services and people across national borders. For decades, the pledge excluded health care, which was planned and administered by each country.

But a recent series of rulings from the European Court of Justice compel EU members to reimburse citizens for care they get in other countries, whether they are there for work, vacation or simply to seek care in a "reasonable" time frame.

As a result, "health tourism" is rapidly becoming a mainstream alternative to socialized medicine across Europe.

In another decade or so, traveling internationally for care will become standard worldwide, said James Rice, an American international health-care policy expert.

"Eventually, it's going to be a broader pattern of people looking for services and products where they can find good values, and they won't respect political borders."

Some European nations already are poaching patients from their neighbors. Hungary, Slovakia and the Czech Republic are starting to promote health tourism as a way to capitalize on low-wage but highly trained medical staff.

In the Hungarian border town of Mosonmagyarovar, Germans come in droves to choose from dozens of dentists. In former Iron Curtain getaways such as the Hungarian capital of Budapest and the Czech resort of Karlovy Vary, previously known as Karlsbad, investors are trying to turn resorts and sanitariums into medical clusters drawing patients for everything from cosmetic surgery to diagnostic tests, eye surgery and joint replacements.

Officials concerned

The prospect of losing patients to neighboring countries, or accommodating floods of foreign patients, has become a budgetary and planning nightmare for many European health bureaucrats.

"Health-care systems in Europe are becoming increasingly interconnected and patients increasingly mobile," said David Byrne, the former European commissioner for health and consumer protection. "These developments need a coherent political response. The issues will not go away, and patients rightly expect that we address them."

After scouring the world for answers, some of Europe's top health officials believe they have found salvation for socialized medicine in an unusual place: the United States and other countries where capitalism guides health care.

Sweden and the Netherlands were two of the first in Europe to enlist more private investment in health care. More recently, regions of Germany and Spain began selling state-owned hospitals to for-profit companies to raise money and increase efficiency. The Irish government wiped out waiting lists by shipping patients to private facilities in Ireland, Northern Ireland and England. France and Italy are just starting to explore ways to farm out public health care to the private sector.

Going private

The most radical changes are happening in England, whose powerful National Health Service is purported to be the world's third-largest employer after China's Red Army and India's railways. The NHS, as it is known, employs 1.3 million people in the United Kingdom, out of a total population of 60 million.

Historically, the government built, owned and ran all public hospitals in England. Citizens supported the service through income tax and a 17.5 percent "value added tax" on nearly every purchase.

Now, England's Department of Health, which oversees the NHS, is borrowing heavily from private health-care models pioneered in the United States, such as outpatient surgery centers.

In effect, the government is shifting to a system where it acts as more of a regulator than a primary provider.

Last year, officials began awarding contracts to outside companies to build, finance and operate outpatient medical centers to perform procedures such as body scans and cataract surgery. By 2008, the government expects to farm out as much as 15 percent of its elective procedures — up to $8.7 billion worth a year — to for-profit and nonprofit investors.

Copyright © 2005 The Seattle Times Company

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