Can a Hybrid State-Privatized Healthcare System Work in the United States?

The debate over healthcare systems in the United States has been ongoing for decades. While many argue for a fully public system or a complete shift to privatization, an interesting model is the hybrid state-privatized healthcare system seen in countries like Italy. Could this system work in the US, and if so, how would it function?

The Italian Hybrid Healthcare System

Italy offers a unique model that combines both public and private sectors within its healthcare system. Although Italy is not a federal state, the National Health Service (NHS) is decentralized, with regions having a role in managing healthcare services. However, the financing and essential service standards are determined by the state. Here’s a closer look at how the Italian system operates:

Types of Healthcare Services in Italy

Generally, Italy's healthcare services can be categorized into three types:

Public Hospitals: These hospitals are run by local companies that cover the costs of manpower and supplies. They receive payments from the regional NHS for each treatment. Universities often partner with hospitals through economic agreements. Private Hospitals and Health Centers: These operate under the same terms as public hospitals, providing additional services such as private rooms and shorter waiting times. They can also offer services outside the NHS guidelines. Completely Private Hospitals: These independent hospitals deal directly with clients and operate without state funding.

Patient Costs and Financing

Costs for hospital treatments under the NHS are determined nationally. Patients pay a fee for treatments that don't occur in the hospital, typically based on their economic situation and health status. For example, someone in the highest-paying class might pay $4 for each drug box, up to $90 for hospital services, but nothing for pre-existing conditions like diabetes or genetic cholesterol.

Each patient is assigned a family doctor who manages all types of prescriptions. Doctors are paid a fixed annual amount by the NHS, with nothing expected from patients. The remainder of the costs are paid by the regional NHS, and expenses paid by patients are partially tax-deductible. Patients in this class pay 18% as basic personal taxation, with a marginal rate of 42%.

Quality and Profitability

The Italian healthcare model is designed to encourage regional quality improvements and cost reduction. There is no labor exploitation, as healthcare workers have national contracts with predefined wages. Profits arise from better organization, such as efficient management, rather than cost-cutting.

While private hospitals focus more on hotel services and improved patient care, high-quality medical care is mainly found in public hospitals, university-affiliated hospitals, and public research centers. These institutions can afford better equipment and specialized care.

Challenges and Comparison with the US

When considering a similar hybrid system in the US, several challenges arise. Unlike Italy, the US’ proposed hybrid model would require a significant shift from the current fully public system. In the Italian system, citizens contribute through taxes, building savings for old age. This system ensures that young people pay for healthcare in their youth, even if they are not in need of services.

In the US, older people do not have this savings, leading to earlier death and higher health costs. Life expectancy in the US is shorter than in Italy, a fact directly linked to the country's healthcare system.

Therefore, the proposed US model may face challenges, while the Italian model has shown significant success. The Italian system rewards efficiency and quality through public-private partnerships, maintaining a balanced approach to healthcare delivery.

Conclusion

A hybrid state-privatized healthcare system can potentially work in the United States, but with significant adaptations. The Italian model offers valuable insights into balancing public and private sector roles while emphasizing efficiency and preparedness for future healthcare needs.