Last updated 06 June 2021- Average reading time: over 10 minutes
In this web dossier, we will share the results of a white paper created with several of our customers and the feedback we collected on the impact of smart cards used in their environments.
Socialized medicine and healthcare systems [2017 - study]:
- Overview of insurance systems and models around the world
- Origins of healthcare and health insurance systems
- Pros and cons of universal healthcare
- The three main shared challenges facing organizations when providing health care
- Benefits of smart cards in healthcare
Universal Health Coverage is a target defined in the UN Sustainable Development Goals. It is achieved when everybody receives the health care they need without suffering financial hardship.
Types of healthcare systems
The healthcare sector is an essential part of our society due to its resources, roles taken by the state or regional authorities, and many stakeholders that it links, either directly or indirectly.
Indeed, government programs for healthcare, retirement benefits, family allocations, and health insurance are national traditions' legacies.
They have developed according to four different models.
What is universal health care? Discover this video from the World Health Organization.
Benefits of universal health care (the World Health Organization)
Let's discover the four basic models and some mixed schemes.
#1 The Bismarck model
This universal healthcare model was created in Germany by Bismarck, who enacted social legislation between 1881 and 1889.
Therefore, health insurance and access to health care are linked to employment in this system. The model is financed through social contributions rather than taxes.
It relies on health insurance funded through social contributions (by employers and employees), managed by companies and employees' representatives.
The state must decide on the scope of intervention of health insurance funds and take the appropriate measures if a financial imbalance arises.
The German example was used as a blueprint in Austria.
It was also the case in Belgium, France, with the decrees of 1945, Luxemburg, and the Netherlands.
In all countries that have adopted the Bismarck model, protection has been extended to include population categories that were not protected initially (students, independent workers, etc.) and "risks" not taken into account, to begin with.
In France, the CMU now PUMa (Protection Universelle Maladie - universal coverage) has been voted in 1999, implemented in 2000, and modified in 2016. De facto, France, is one of the many countries with universal health care.
#2 The Beveridge model
Implemented in 1942 in the United Kingdom following Lord Beveridge's report, this social protection system is based on the principle of universal access to health care, nondependent on employment.
This access to healthcare is not considered contingent on employment but rather as an intrinsic part of citizenship. Public authorities fund this system through taxes rather than through social contributions.
A centralized system is in place in the United Kingdom and Ireland (NHS for National Health System).
Denmark, Finland, Norway, Spain, Sweden, and New Zealand have adopted this model.
In Italy, the National Health Service (Servizio sanitario Nazionale or SSN created in 1978) provides universal coverage. It automatically covers all citizens and residents.
More on how to get an Italian health insurance card (tessera sanitaria) on this page in English.
In contrast, a decentralized system has been adopted by Mediterranean countries (Greece, Spain, and Portugal).
#3 The Semashko model
This model, which was developed during the 1920s in the Soviet Union, spread to the USSR's satellite states after 1945. It is named after Nicolai Semashko, the USSR's health minister, from 1918 to 1930.
This socialized medicine is, of course, the product of a specific political ideology.
Healthcare services belonged to the state, and the state paid healthcare professionals. Services were usually free, but patients had to pay out-of-pocket fees for medication, for example.
The system provided universal access to health care. It was broadly a benefit in the kind system. Central authorities defined coverage levels and the amounts set aside for healthcare spending (share of GDP).
Health care and health insurance systems are currently undergoing a radical change in the Central and Eastern European countries.
#4 The out-of-pocket model
The fundamental principle of the American healthcare system is that health is a matter of individual responsibility and private insurance.
So what's the story here?
In practice, then, there is no compulsory national system and a preponderance of private organizations (two-thirds of Americans under the age of 65 are covered by employment-related insurance).
These two programs started in 1965 under the administration of Democrat L.B. Johnson.
- Medicare is a federally funded and managed healthcare system for citizens over 65
- Medicaid is a jointly funded system between the federal and state governments for families with low incomes and resources.
Both Medicare and Medicaid are the federal agency's responsibility, Centers for Medicare and Medicaid Services (CMS). CMS directly manages Medicare and oversees Medicaid.
The states manage their individual Medicaid programs for their citizens.
The case for universal healthcare in the USA
The idea of universal healthcare - a system that delivers good-quality medical care to all citizens and residents, regardless of their ability to pay- dates back to 1912.
Theodor Roosevelt, who has served nearly eight years as a Republican president - decided to run again on a progressive ticket. He promoted a platform that called for the creation of a centralized national health service. He ultimately lost the 1912 elections.
But the program planted a seed.
Accessible and affordable medical care might one day be seen as a right, more than a privilege.
Harry Truman proposed a national healthcare system twice: in 1945 and 1949- with no results.
Lyndon Johnson's Great Society campaign included the idea of helping those populations the market economy had left behind (instead of a radical change and challenging head-on private insurance).
Medicaid and Medicare were initiated in 1965.
This blended system functioned well enough in the '70s and '80s, covering 80% of Americans through their jobs or one of these two programs, according to the New Yorker (Nov.2, 2020).
Needless to say that nearly a fifth of the population lived just one illness or accident away from personal bankruptcy.
In 2010, more than 48 million Americans were uninsured (source CDC reports), and millions more were underinsured (an estimated 16 million adults in 2003).
To top it off, premiums for family coverage had increased by 97% from 2000 to 2009.
The American Medical Student Association (AMSA), in a 2015 study, pointed out that, contrary to prevailing stereotypes, 80% of the uninsured are hardworking Americans. But they can't obtain insurance through their work for three main reasons:
- Their employer does not offer it,
- The employer's premium share is too high,
- They are not eligible for health insurance (newly employed or part-time).
The 1993 Clinton Health Care Plan included universal coverage and a basic benefits package, but the bill was never enacted into law.
The 2006 Massachusetts Health Care Reform, also known as the « RomneyCare » because Mitt Romney was the Governor, inspired the 2010 Patient Protection and Affordable Care Act (ACA), also called «ObamaCare.»
At the time, the "RomneyCare" reform had been a real success, driving the uninsured rate down to 4%. As of 2019, the rate is even lower at 2.9%.
According to Gallup, the ACA increased the number of insured citizens and residents but did not achieve universal health coverage.
The ACA originally mandated that all residents buy a health insurance policy or face a fine or penalty. Trump's Tax Cuts and Jobs Act (TCJA) repealed the penalty.
The percentage of uninsured US adults reached 10.6 in Q3 2016 and started to rise again in 2017 and over 2018 to 13.7 by Q4 2018. It rose again in 2019 to an estimated 14,5%.
The ACA still earns a split decision from Americans in 2019, according to the American analytics and advisory company, Gallup.
However, the ACA proved resilient over time.
Now, Democrats have a chance to amplify Obamacare provisions, and even with a narrow majority, they are well-positioned to get a few projects rolling.
In June 2021, VOA (Voice of America) reported that more than 31 million Americans have health coverage through the ACA, a record.
#5 European mixed-model plans
Mixed-model plans aimed at ensuring healthcare for all.
The Bismarck and Beveridge models have had a lasting influence on most European countries.
So what has been done?
During the second half of the 20th century, all European countries progressively extended universal health care to cover nearly all citizens.
Since the implementation of the CMU (universal health care coverage), the French system, for example, has ensured that everyone has access to healthcare. Employment no longer determines access to healthcare, as is theoretically the case.
But funding methods have not been called into question.
In all countries influenced by the English model, funding mainly comes from taxes.
In countries influenced by the Bismarck model, such as France or the Netherlands, social protection is funded through contributions.
These differences in funding are linked to how the system is organized: in general,
- financing through taxes corresponds to a state-run organization,
- in contrast, funding through social contributions usually means that trade unions and employers' organizations are involved.
So, how is healthcare funded in Europe?
Each country has its system.
It is an example of the principle of subsidiarity, and therefore under the jurisdiction of national governments.
Europe-wide cooperation exists on the matter, particularly concerning patients' cross-border mobility (with measures such as the EHIC, the European Health Insurance Card.
It gives the holder the right to access healthcare during a temporary stay in another EU country, the UK, Norway, Iceland, Liechtenstein, or Switzerland.).
In other words:
Healthcare is a national topic only.
Cooperation also facilitates the exchange of knowledge and best practices.
More than €1,500 billion is spent in the European Union (including the UK) on healthcare.
Faced with the sharp rise in healthcare costs, all European countries have tried to rein in spending while improving universal healthcare systems' efficiency.
Note that the United States spending per capita is twice as much as Germany or France. The situation was unchanged in 2019. US health care spending was reaching 18% of GDP in 2020.
Pros and Cons of Universal Healthcare
Life expectancy covers many aspects (from genetics to hygiene, lifestyle, and crime rate) but can be correlated with health and easy access to health care.
Overall, universal coverage seems to create a healthier population and workforce (in comparable countries.)
That's what we see here.
Population in 2020 (in millions)
Life expectancy in 2020 (years)
Gap with US (years)
Life expectancy (males)
Gap with US
Note that western European and Canadian males' lifespan is longer by 3 to 5 years than their US counterparts. This difference is very significant.
In these countries, access to care and high-quality healthcare services are offered to all.
We must give a word of warning here: we all know correlation is not causation.
More on this topic: Why is life expectancy shorter in the US?
#2. Lower health care costs for all
US healthcare spending does not compare well with other developed countries.
As we said, it represents 18% of GDP for 2020 compared to less than 10% in the UK, Norway, Sweden, and Denmark, and in the range of 11% in Italy, France, or Germany, and 11,5% for Canada.
Lower costs of health care and prescription drugs are obtained through negotiation and regulation, fewer administrative costs, and a simplified and unified system.
For example, in the US, administrative costs account for 8% of total national health expenditures. The other countries range from 1 to 3% (CNBC - why health care costs so much in the US.)
It appears that in a private health care system, costs are substantially amplified.
- More Californians are skipping medical care because of cost and are sicker for it (24 February 2021- San Francisco Chronicle.)
- Why are insulin prices in the US 6 times higher than those in Canada and 9 times higher than those in the UK? ( 6 October 2020 - RAND corporation.)
#3. Enhance pricing transparency
With universal healthcare systems, pricing is much more transparent and subject to rules. Medical acts are coded and have the same price tag all across the country. Patients can also anticipate their bills.
We see much more opacity in the United States.
In its article dated 18 December 2018, Vox is illustrating with many examples how medical billing across the US can be costly, opaque, and unpredictable.
According to Vox searches, patients pay extravagant prices for all kinds of care, which are also hard to prevent.
As Vox puts it, "Even with a Ph.D. in surprise billing," you can’t avoid steep medical bills.
In the US, injuries or serious diseases can quickly generate hundreds of thousands of dollars in bills, dry out your savings and retirement account, or even cost you your home.
That’s pretty hard to grasp when you live in Canada, UK, Italy, or Germany.
#4. Improve health care equality
In countries where socialized medicine is implemented, health and health care are less related to social or financial status or education.
In the US, health care inequality is patent and is very much correlated with income inequality, as reported by The Balance in its article dated 02 November 2020.
The socialized healthcare systems are built on the principle of solidarity. No one is left behind. Everyone can access medical services and has health insurance.
And obviously, but it's worth mentioning, no one goes bankrupt from medical charges.
Read more: COVID-19, health equity and the battle of pre-existing conditions (24 February 2021)
#1. Require healthy people to pay for those in need
The rich pay for the poor.
Healthier people pay for those in need of health care and treatments.
It's certainly a question of governance.
- In which society do we want to live?
- What are a Welfare State and its limits?
Social protection laws or the absence of these (health and health insurance) mainly define people's healthcare coverage rights.
#2. Need careful public management
This can be caused by long-term trends like an aging population, unemployment, a steady increase in chronic diseases, or unexpected events like a pandemic.
For example, in France, COVID-19 tests and injections are free of charge for all insured and beneficiaries.
COVID-19 treatments at the hospital are free as well.
#3. Make medical careers less rewarding
Medicine can become a less financially attractive career to embrace.
It's all the more sensitive in the US, where studies are very costly. Medical doctors often have to pay their student loans many years after they've left university.
This is no the case in Europe, however, where studying at the university is almost free.
The fact is that general physicians in the US made an average of $218K in 2016 (Harvard report). That's twice as much as the average of generalists in comparable countries, where pay ranged from $86K in Sweden to $154K in Germany.
The same study notes that the US's quality of care isn’t significantly different from other countries and excels in many areas.
#4. Make access to medical resources more difficult
In France and the UK in particular, getting an appointment with a dentist can take weeks. It can take months with an ophthalmologist or a dermatologist.
As a consequence, emergency rooms are often used for the wrong purpose and overcrowded.
More reading about the topic: The Best Health Care System in the World: Which One Would You Pick?
The healthcare system management and challenges
Let's see the three significant challenges when considering healthcare system management.
1. Providing long-term healthcare
The first challenge is maintaining or improving citizens' health by providing healthcare that meets the general public's legitimate expectations (medical or otherwise). Issues surrounding the funding of the system, continuity, and proper management are, of course, fundamental.
There are several priorities to manage the resources available, such as:
- optimizing the system by rendering procedures paperless,
- freeing patients up from the many administrative processes linked to healthcare management.
Take, for example, the unintentional effects or complications resulting from medical errors (treatment or advice), known as iatrogenesis.
This is an issue of some magnitude.
In the United States, the total number of deaths due to iatrogenesis in 2001 reached 738,936.
The number of deaths caused by cardiac disease was 699,697, and 553,251 deaths were caused by cancer (American Iatrogenic Association 2002).
In France, in 2004, the number of deaths resulting from iatrogenesis was higher than 10,000, and 3.19% of hospital stays were due to medical errors and medication errors.
A financial assessment of this issue is tough to carry out.
No realistic study relating to the amounts involved was to be found. But the causes of the phenomenon are known.
Iatrogenesis can be linked to many factors such as:
- doctors lacking information or training,
- patients requiring information or education,
- prescription errors (inappropriate medication: dose, protocol, treatment),
- over-prescription or incomplete prescription,
- a lack of data on the patient (allergies, symptoms not all taken into account, multiple pathologies),
- an under-estimation of drug interactions,
- and self-medication.
Between 30% and 50%+ of iatrogenesis could be avoided (French Ministry of Health, July 2010).
Better information systems could play a part in cutting this figure. This reduction is one of the goals of the Personal Medical File.
Health care fraud is also a significant challenge.
Just think about it.
- In the United States, between $75 billion and $250 billion, according to the FBI, are lost to fraud. In 2019, $3.8 trillion was dedicated to health care spending.
- On average, around 6% to 10% of spending in the healthcare sector is lost to fraud, according to the European Healthcare Fraud and Corruption Network (EHFCN). Europe spent €1.5 trillion on healthcare in 2019. Over €150 billion were lost in that year alone.
2. Focusing the work of Healthcare professionals on patient health
Most programs in this area aim at :
facilitating information exchanges, helping healthcare professionals to concentrate on care and treatment rather than management.
This attempt to reorganize the relationships between patients, healthcare professionals, and administration is much helped by introducing new digital technology for exchanges between healthcare or insurance organizations and creating health cards. These factors can often lead to drastic improvements.
In France, with the universal health care SESAM Vitale program, for example:
- Patients are now reimbursed after five days rather than after 2-3 weeks (due to paperwork).
- 1.207 billion electronic claim forms were used in 2020; 93% of all claim forms with administrative productivity and treatment costs were divided by 6 for the claims in question.
- 12% of the French population has a Shared Electronic Medical Record ( smart EMR) in January 2020.
"Carte Vitale" is a card with an embedded microcontroller that certifies entitlement to health insurance.
The introduction of electronic claim forms and the cut in the number of statement sheets means that 3,6 billion A4 sheets of paper are saved per year. They are no longer produced, printed, distributed, stored, or destroyed.
3. Coordinating, optimizing information-sharing
Ambition: optimize the use of medical data.
A patient's Electronic Medical Record (smart EMR) ensures that all their medical information can be accessed by healthcare professionals, whenever and wherever.
This record, therefore, cuts errors and hesitancy in emergencies and improves the quality of services provided. It also enhances cooperation between all healthcare workers, pooling all available information on patients into a centralized file.
Electronic Medical Records streamline healthcare systems.
Smart EMRs limit the number of medical interventions and ensure that the care provided for patients is consistent. There are also advantages to government health policy: a well-treated patient does not have to keep coming back.
Telemedicine also presents fantastic opportunities. The term refers to any situation where information is passed between healthcare professionals electronically (general practitioners or specialists, care workers, pharmacists, etc.). This information could be messages, letters, signals, results, images, administrative data, complete files, etc., for diagnosis, therapy, or monitoring.
Benefits of smart mart cards in healthcare
Using smart cards speeds up the transition to paperless electronic procedures and data exchanges, three formidable catalysts for the modernization of systems.
In terms of administration, the results obtained are impressive.
Yet this technology is often under-used at present, in areas where it will produce excellent results.
- Strong identification and authentication (ID verification) for patients and healthcare professionals are key features of computerized cards and should be implemented in the healthcare sector. Yet this is not the case in many countries.
- Implementing health care cards with an identification number and PIN or biometric authentication would enable the creation of personalized, online services, a quintessentially «patient-centric» approach. Yet, these initiatives are still in the development stages.
- The ability to verify benefits, expiration dates, repeated, and multiple uses are, on the whole, underused.
- Thus far, the benefits of paperless, electronic medical data exchanges have not been fully tapped. Yet cards have a crucial role in creating consistent databases, automatic reading of data, and temporary or permanent confidential local storage of additional data such as blood groups, allergies, chronic diseases, and associated treatments.
Electronic services that have already been implemented in European countries for universal health care schemes and in the rest of the world—with identification systems, electronic signatures, and electronic authentication - clearly show:
The best part?
This robust technology can strike at the heart of fraud mechanisms, often with minimal investment in infrastructures and without significant changes for patients and healthcare professionals.
Smart card technology is an invaluable asset to combat healthcare fraud and errors in the interest of all.
Thales – a significant health care systems provider
Thales provided technical services and products during the implementation of 11 national electronic health care systems, including the German Gesundheitskarte (picture above) or Chifa card, an eHealthcare solution in Algeria.
Our contribution to these electronic health care projects provides us with an excellent overview of the technology involved, its applications, and the quality of information systems, as well as the social context of its use.
Furthermore, our experts have supported national debates on improving systems, mainly to fight fraud and cut the number of errors.
Finally, Thales is an active collaborator in European and global standardization organizations.