A short history of two extremes – Or, How the US and The Netherlands start to resemble one another24 Sep, 2013
Essay by Albert Jan Kruiter
A few years ago, I was standing on a football pitch. A few wildly enthusiastic guys in their thirties – who forgot that their untrained bodies were not consonant with their passion for the game – imagined themselves to be sixteen again. It went wrong within five minutes. Two of them were lying on the ground, moaning. One of the few observers brought them to the emergency department of the nearest hospital. Just to have a check. Because you never know. It did not occur to anyone to wait until the next morning and go to their own respective family doctors. In the hospital they were confronted with a waiting room filled to the brim. These were all people waiting for first-rate academic healthcare. Much more expensive than the usual route via the family doctor and a possible referral. Nobody seemed to know, or to bother. We are insured for this, aren’t we? So, what’s the problem!
A month later I visited a colleague who worked for an American University. The Olympic Games had started and this gave us the idea of letting the ‘Netherlands’ play against ‘Team America’ on the small volleyball field, situated on the adorning green surrounding the campus. Of course, you’re a ‘patriot’, or you’re not. Stiff scientists imagined themselves to be Olympic players. And it went wrong within five minutes. One of the Americans had his ankle give way, and was lying there moaning. He couldn’t walk anymore. Immediately, we Dutch offered to take him to the hospital. But that was not necessary. Not at all. Taken aback, he sat on a bench and stopped playing. Afterwards he told us, a bit ashamed, that he had no ‘health insurance’. His colleagues did not know. And he wanted to keep it like that. His ankle would heal ‘on its own’.
For us, in the Netherlands, it is obvious that healthcare is insured. It’s a ‘commodity’; available to everyone. In America that used to be different, you might be insured, and you might not. Often depending on whether you would be able to afford it. In both countries, the way in which healthcare is financed and organized is liable to change. This poses new questions. Questions we did not ask ourselves for quite some time. These questions can be posed even sharper, when using a mental experiment.
Try to imagine that we do not have a healthcare insurance. That you have to pay your entire healthcare costs yourself. That, after visiting your family doctor, you have to pay his secretary for it, using your switch card. In case of major operations, the setting of a fracture, or an open heart surgery, you would of course have to prove that you have enough means to pay for it, by producing a bank statement. Some hospitals would ask you to pay in advance. You would also have to bear the costs of child welfare, mental care and social care. A visit to the family doctor might still be possible, but a lot of people would not be able to raise the money to bear the costs of a major operation. With all its consequences. Inequality (people who have money will receive care) and in the end a less healthy population. Since the people who could not afford it, would not have any healthcare.
In that case, there’s a fair chance that you would start a collective insurance together with your friends and relatives. Everyone puts some money into the fund every month, and the healthcare costs for participants who become ill, will be paid from the fund. Try to imagine that you are present at such a founding meeting. How would it proceed? What questions would be asked? Who is allowed to join in and who isn’t? What sort of conditions would you set towards each other? And should people who lead less healthy lives pay more? Or, quite the contrary, pay less, as they will die sooner and therefore will benefit from the insurance for a shorter period of time? And do you want to know these people who insure you and who you insure, personally? Or quite the contrary. After all, it will be difficult to prevent the situation where you will be informed about each other’s illnesses immediately. Since you pay for it together. Then would you like the idea that precisely those people are your friends? Or would you prefer to set up an insurance with people you do not know?
And how would you set the amount of the costs? What sort of care will be insured and what sort of care will you leave uninsured? The dentist? The beautician? The physiotherapist? You happen to have perfect teeth, and have never had any cavities, but your father, who wants to join in too, will probably need a set of dentures before very long. You hate to think what that must cost. Moreover, you know that some of the people who have joined in are rather hypochondriac, to put it mildly. They run to their doctor with the least complaint. Or sometimes, when they are in a hurry, straight to the emergency ward of the hospital. Of course, that would cost loads of money. In that case, would it actually be justifiable to let them pay more? Or at least to introduce a deductible? Whereas on the other hand, illness is both merciless and arbitrary. People, who have lived healthily all their life and hardly know what the inside of a hospital is like, can also contract fatal diseases. They would in turn become the victims of a too high deductible.
Moreover: wouldn’t it be fair to let people pay less who earn less? Of course, healthcare costs are the same for everyone, in principle. But when you contrast them to people’s earnings, they differ enormously. As the percentage of someone’s income, a course of chemotherapy is much cheaper for someone who earns a hundred thousand a year, than for a welfare mother. Even worse, for someone earning a minimum wage a visit to the family doctor could be more expensive than a kidney transplantation would be for a millionaire.
And how long will you actually be committed? To this collective insurance? Are you allowed to step out when you are sick and tired of the other participants? Or if you find another group, for which the monthly fee is much lower? Or are you committed for ever? In the case of the first possibility, the chances are that people will step out when one of the members needs an expensive operation, as you have to pay for this together. In the second possibility, you seriously limit each other’s freedom. Of whom would you actually prefer to be financially dependant? People whom you like and trust? Or, quite the contrary, people you have never seen before?
And how many people do you need? How large can the group be? Of course, you need enough people to be able to pay for expensive healthcare, but it certainly has to remain controllable! Before you know it, you will start creating formats and protocols, and policy conditions, as it has become impossible to know all your group members. You can still keep track of a group of 50, but 500?
And what if people cannot work anymore, due to their illness? Will you provide them with an income, together? Isn’t that also a humane thing to do? Or will people be more likely to abuse this privilege? How can you check up on each other? Do you accept someone’s word for it? Or should an independent doctor determine whether you are too ill to work? Questions, questions, questions.
Questions that are closely connected to the question: how willing are we to show solidarity towards each other? And in particular: how do we organize solidarity? The term solidarity stems from the Latin word solidus. From which the term solid is also obviously derived. As a consequence, this would mean that solidarity leads to a solid, stable society. But that still does not tell us anything about the particular form of solidarity we choose for. In general, we make a distinction between direct and indirect solidarity. Direct solidarity means that people arrange solidarity amongst themselves, like in the above-mentioned mental experiment. But donating to good causes, giving money to the homeless, and voluntarily taking care of a sick neighbor are also examples of this direct solidarity. People decide for themselves with whom they are willing to show solidarity, and when and how they will implement this. By contrast, indirect solidarity is organized by the government. In that case, the government obliges the people to show solidarity towards each other. For instance, by paying taxes. Subsequently, the government uses these taxes to buy healthcare or social security, and then offers these to the people. The advantage of direct solidarity is that people have more freedom to choose when and towards whom they are willing to show solidarity. The advantage of indirect solidarity is that the government can reach many more people, and treats people equally. The advantage of direct solidarity is that the donor feels good, and the recipient feels grateful. A humane relationship is created. The disadvantage of indirect solidarity, organized by the government, is that it remains anonymous and rather technocratic. Moreover, at a certain point people will consider solidarity as a ‘right’. There will no longer be any gratitude, and furthermore a total lack of human relationship. Bureaucracy and protocols will replace the individual relationship between donor and recipient. The advantage of indirect solidarity is that it relieves people in a certain sense. By paying taxes, people transfer their ‘duty to show solidarity’ to the government. In fact, we, the citizens, outsource our duties. In turn, we can completely focus on ourselves. Without the need to care about those who are ill and in need. For that’s obviously the task of the government. Or, as the professor in philanthropy Lucas Meijs has phrased it: “The most efficient way to organize solidarity, still is to levy taxes”. That is again only one side of the picture, as the indirect solidarity is at the expense of social involvement. However, indirect solidarity does provide entitlements and rights; whereas you could never enforce your neighbour to take care of you. So both direct solidarity and indirect solidarity have their own advantages and disadvantages.
Figure 1: advantages and disadvantages of direct and indirect solidarity
Direct solidarity (society)
Indirect solidarity (government)
|Involvement (social capital)||Sense of duty (sometimes missing)||Provides rights||Bureaucratic|
|Giving meaning||Time-consuming||Efficient||Little involvement|
|Individualism (development, voluntary)||Individualism (focused on oneself)||Collectivism(paying together for each other)||Collectivism (compulsion, obligation)|
Liberty, equality and fraternity
The way in which a country organizes solidarity, strongly depends on the country’s culture. Does the population think that equality is important? Or, quite the contrary, freedom? Do they attach value to the development of the individual or, the opposite, the collective? Do they trust the government or not at all? And does the government trust the civilians, or not at all? The Netherlands and The United States of America are two totally different countries where the organization of healthcare is concerned. Or maybe more trenchant: in the way government and civilians are related to each other. As early as 1831, the French thinker Alexis de Tocqueville (1805) came to a few remarkable conclusions concerning the differences between America and the West-European countries. To understand his way of thinking it is important to make a distinction between a democratic society and a democratic government. Which is what he did. A democratic government he understood to be the formal, governmental side of democracy. Rights and laws, checks and balances, the parliament, the government, civil servants, et cetera. A democratic society he understood to be the informal, cultural side of democracy. Do people actually behave democratically? How do they treat each other? Do people show citizenship? And what about social capital? Are people willing to set aside their own interests in favor of the public interest?
In Tocqueville’s analysis, democratic culture – the democratic society – is the most important. Without democratic culture, democratic institutions (formal democracy) would be rather pointless. According to Tocqueville, America was first of all a democratic society. When the Pilgrim Fathers first came to America, there was not yet a state, a government, or a code of law. They had to manage it by themselves. Gradually, this developed into a democratic government. In France (and other West-European countries) things developed differently. States, governments, laws and rules already existed. When these states became more or less democratic because kings and monarchs were dethroned, they subsequently tried to develop a democratic society. By offering education, and healthcare. By organizing social security and improving working conditions.
Therefore, according to Tocqueville, Americans in need will first turn to neighbors, or friends, or to a community, district or council association, before they turn to a government institution. For the Europeans this is quite the opposite. When something happens to them, they expect the government to solve their problem. Very quickly, a personal problem becomes a public problem. We Europeans for instance think that healthcare is a basic need, to which we are all entitled. In America, by no means all people agree with that: if you want an insurance, make sure you arrange that yourself. There are plenty of companies offering healthcare insurance. You’re free to choose if you can afford it.
Tocqueville did have some trouble deciding which form of democracy (American or European) he would prefer. His assessments resemble the advantages and disadvantages of solidarity as I mentioned above. When government organizes solidarity, this is in general the better system in terms of social justice, since the government treats everyone equally. At least for someone who considers equality as an important asset of democracy. On the other hand, when government organizes solidarity, people tend to forget how to take care of each other and to solve common problems together. They become dependent on government institutions. And that would in turn be at the expense of people’s freedom to develop solidarity themselves and others. It would be at the expense of the democratic culture, of democracy as a society, you could say. On the other hand, when a democratic society organizes solidarity that materializes in Healthcare for instance, there are very few guarantees. People are allowed to help each other, and will very often do so, but there are no rights, nor entitlements. There is a chance that people who need a lot of care, or who don’t know a lot of people, will not be helped. Tocqueville warned against the creation of ‘micro societies’ within which people who know and like each other, help each other. Automatically, this means that people who do not meet these criteria will be excluded. The surpassing public interest will then disappear. However, people are free to help each other, and to choose who they want to help. And they are less dependent on the government. They can make their own choices. You could say that, in a cultural sense, freedom surpasses equality.
Those two values, freedom and equality, precisely define the way in which the third value of the French Revolution, ‘fraternity’, has been implemented by America and the Netherlands respectively. In the Netherlands, the government obliges people to take part in healthcare that is in principle equally available for everyone. In America, people in principle are free to organize their own healthcare. Employers may do that for their employees. Employees may organize their own healthcare together. And people can organize their healthcare with an insurer.
Obamacare and WMO
Of course, Tocqueville’s comparison was formulated a long time ago. And it is quite black-and-white. But the major lines and patterns are still recognizable. Compared to America, in Europe, and in particular in the Netherlands, people rely heavily on the government. Recently it was made known that 90 % of the Dutch people receive some sort of income support from the government. Varying from mortgage interest relief to child allowance. From rent rebate to student grants, from care rebate to living on welfare. And compared to the Netherlands, the Americans rely much more on themselves and each other.
But even more important: what we have observed in recent years is that both the Dutch system of a comfortable welfare state and the caring American democratic society have reached their limits. In the Netherlands, the costs of healthcare controlled by the government have soared sky-high. The costs seem uncontrollable, in the most literally sense of the word. If the government does not take action, Dutch people will spend more than 20 % of their gross income on healthcare in 2020 and up to 40% of the Gross Domestic Product in 2040. On top of the taxes they will have to pay. Moreover, to fulfill the healthcare demand by that time, the Netherlands will need more nurses and other medically skilled staff than the country will be able to train. In other words, the healthcare system will not be sustainable in the future, both practically and financially. Collectively, the Dutch ask for more care than they can and are willing to pay for individually. They seem to transfer the negative consequences of their own actions to other people.
And that’s precisely what the Americans fear. Will the costs of healthcare rise when the government starts organizing care? And why should the government be able to organize this any better that the Americans themselves? The great irony is that healthcare is cheaper in the Netherlands than it is in America. As the Dutch government regulates the price and because it is possible to purchase collectively, the government can make good (and cheap) deals with the providers and suppliers. However, the Dutch do use a lot of healthcare. Psychological care for youngsters, for instance, increased by 40 % in recent years. By decentralizing healthcare to the municipalities, the central government hopes to make healthcare cheaper. This so-called decentralization goes hand in hand with efficiency cuts (the municipalities receive less money than the state had to spend) and certain rights and entitlements will be cancelled. At the same time, the municipality will be obliged by central government to provide healthcare to their inhabitants, but how ‘hard’ this obligation could be when the municipalities have no more money left, remains to be seen.
On the other side of the spectrum, the Americans demonstrate the bankruptcy of their system. They may be free to arrange their healthcare themselves, but since a lot of people cannot afford it, they remain uncovered by insurance. In areas such as Skid Row, people gather who have been excluded from the social services that they could not afford and from the social networks that did not accept them. The story sounds all too familiar. Not enough money for an operation you really need. Extortionate insurance premiums. Having to take a second job to be able to pay your healthcare costs. This system seems equally bankrupt. Obamacare should give solace to this problem. A compulsory insurance for everyone. So that everyone can receive the necessary healthcare. And an underwriting obligation for the insurers. In a country where it used to be possible for insurers to refuse people who had preconditions (diseases they had already contracted). Just like the underwriting obligation in the Netherlands. Although Obamacare does not insure everything, and the insured have a deductible, it does appear that a democratic government is replacing the democratic society.
So what we are actually observing is a movement of the Netherlands and America towards each other. In the Netherlands, the welfare state is withdrawing, and the government increasingly emphasizes the ‘self sustainabillity’ of citizens, who have to take care of each other midst ‘joint-supportiveness’. On the other hand, we can observe that the American government is trying to compensate the poorly developped ‘self sustainability” and ‘joint-supportiveness’ of the American people by introducing Obamacare. Or, in other words, the Dutch government tries to compensate the adverse and negative consequences of the enforced indirect solidarity with voluntary, social, direct solidarity. And the American government tries to offset the adverse consequences of social, direct solidarity with indirect, forced solidarity. In the Netherlands, expensive illnesses will be excluded from the insurance package, whereas America will start to insure all Americans. Obamacare wants to offer equal care to everyone, whereas the Netherlands are increasing the deductible, due to which people become jointly responsible for their healthcare costs. And whereas America has discovered that direct solidarity leads to exclusion, the Dutch government seems to have confidence in self sustainability of the citizens. Whereas the Dutch government is canceling rights, the American government is offering guarantees.
An interesting question is where these two former extremes will meet each other. Of course, America can certainly use a bit more government regulation. If only to reduce the purchase price of healthcare and reduce healthcare costs. And of course, Dutch citizens are spoiled. How can you expect a society to take care of your parents, if you are no longer willing to do that yourself? Both countries seem to be searching for a new balance. Between citizens and government, between indirect solidarity and direct solidarity. That’s exactly why the debates about these new developments are so vehement. Sarah Palin, for instance, suggested that Obama would set up ‘Death Penals’ to determine whether or not people were too old to receive healthcare. Or even worse: that the government should decide when your life was over. But in the Netherlands the discussion was also unprecedentedly fierce, when the Rutte II government proposed making the health insurance premium income-related. According to the public opinion, whole families would go bankrupt.
This fierceness is caused by the fact that we are no longer used to talk about solidarity. The debate has become completely politicized and there are only supporters and opponents. Appeased by decades of status quo, we are now shaken up by the crisis. We have to reconsider with whom we are willing to show solidarity. And under what conditions, and how we are going to organize it. The systems that we have become accustomed to in the Netherlands and America during the second half of the twentieth century, are ready for renewal. However, the debate is especially so fierce, because it’s all about freedom and equality, as Tocqueville has taught us. And in particular where healthcare is concerned, freedom and equality are necessary values and conditions fraternity. It is good that we have this debate at both sides of the atlantic. In the past, freedom and equality became solidified in a thick layer of conventions, rules, protocols, taboos, flows of funds, laws and objections. It is important that we can again see them as fundamental values and discuss them. For this is exactly what we have forgotten how to do.
Healthcare is an outstanding domain to start with that. As healthcare might very well be the noblest item ever produced by society and government. That’s why we should discuss the fundamental values that constitute healthcare. This will be complicated and will have its ups and downs. But we have to get used to it. Both in the domain of healthcare itself, and in the areas of science, journalism and art. Without debate, change will never come And change is precisely what healthcare needs, both in the Netherlands and America.
Albert Jan Kruiter is the co-founder of the Instituut voor Publieke Waarden and the Sociaal Hospitaal (Institute for Public Values and the Social Hospital). He obtained his doctorate with a thesis on Alexis de Tocqueville’s work in 2010. He used Tocqueville’s works as the basis for investigating the Dutch healthcare system. He has had extensive discussions with Wunderbaum about the problems, solutions and questions that will determine the healthcare of the future. This essay forms a reflection of those discussions.
Photo Albert Jan Kruiter: http://www.groene.nl/