During a trip to Israel, Mitt Romney hailed the nation’s health care system for holding down costs and broadening coverage more effectively than the U.S.
The irony: Israel contains costs by adopting a very centralized, government-run health care system — anathema to Romney’s Republican Party.
“Do you realize what health care spending is as a percentage of the GDP in Israel? Eight percent. You spend eight percent of GDP on health care. You’re a pretty healthy nation,” he said Monday at a breakfast fundraiser, according to the New York Times. “We spend 18 percent of our GDP on health care, 10 percentage points more. That gap, that 10 percent cost, compare that with the size of our military — our military which is 4 percent, 4 percent. Our gap with Israel is 10 points of GDP. We have to find ways — not just to provide health care to more people, but to find ways to fund and manage our health care costs.”
Israel’s health care system is an instructive exercise in all that rankles American conservatives — replete with government mandates, price controls and centralized payments funded mostly by high taxes.
Reformed in 1995 on the basis of a European model, Israelis are forced to buy insurance from one of several competing not-for-profit plans, which are heavily regulated by the government, according to the journal Health Affairs. The state requires them to cover everyone regardless of health status, and establishes a broad benefits package insurance policies must provide, updated annually by a committee of appointed experts. The government pays the full cost of these policies, mostly through higher taxes. The state also caps the level of annual revenue hospitals can earn from an insurance plan. Care is largely delivered through government-owned facilities; there are private providers, but they tend to charge more.
So how’s the socialized approach working out?
Quite well. Israel covers all residents and spends 8 percent of its national product on health care; the U.S. has many uninsured and currently spends 17.5 percent. Nor are Israelis resigned to low quality care or long waits that some associate with government-run systems: according to the Jewish Daily Forward, “going by many indexes of health outcomes, the result in terms of quality of care [in Israel] is often better — and definitely cheaper than in the U.S.”
A 2010 study in Health Affairs describes “strong government influence” over its system as the catalyst for Israel’s low health spending growth since the 1995 reforms.
The Affordable Care Act moves the U.S. a bit closer to an Israel-type system with the use of regulations and mandates to extend coverage, but permits far less government power over health care delivery than Israel. Romney has vowed to repeal the law if elected president.
Sahil Kapur is a congressional reporter for TPM. He previously covered politics and public policy for numerous publications including The Guardian and The Huffington Post. He can be reached at sahil [at] talkingpointsmemo.com.