Trump May Get a Health-Care Lesson From the Danish Prime Minister

  • Nordic health care delivers better results at fraction of cost
  • U.S. president hosts Rasmussen at White House on Thursday

When Donald Trump hosts Denmark’s prime minister at the White House on Thursday, his guest may want to steer the conversation toward health care. Because in his corner of northern Europe it’s not just much better, it’s much cheaper.

Initial attempts by Trump’s administration to fix one of the most inefficient medical systems in the world have failed, with U.S. lawmakers now hinting that the battle against Barack Obama’s Affordable Care Act won’t resume until 2019. That should give the U.S. president enough time to ponder how it’s done elsewhere.

Read more: House GOP is said to mull trying again on health vote

For a QuickTake on the future of Obamacare, click here.

Scandinavians have had access to universal health care for as long as they can remember. They rarely have to think about the costs, and the quality is generally regarded as excellent.

The Organisation for Economic Cooperation and Development describes Norway’s health service as "impressive" and Finland and Denmark’s as "high performing." Swedes have access to free condoms, while the state will reimburse all costs should they have to travel for a hip replacement in case their local hospital can’t act within the maximum waiting time of 90 days. If you break your leg while hiking up a remote volcano in Iceland, the state pays for a helicopter to take you to a city hospital.

Health Rights

"We view health care as a common good, almost a human right" that society must take care of, said NTNU university professor Jon Magnussen, Norway’s leading health economist. "It’s a completely different way of thinking."

Assessing the effectiveness of a nation’s health care is a complex affair, as Trump himself has noted, but some broad-brush indicators can help paint the picture. Life expectancy in the United States is 77 years for men and 82 for women, according to 2015 data from the World Health Organization. In Sweden and Iceland, men generally reach 81 and women make it to 84. Figures in Norway, Finland and Denmark are slightly lower, but still above longevity rates in the U.S. At between 2 to 3 per thousand, Scandinavian infant mortality rates are roughly a third of those in the U.S., according to the World Bank.

Another gauge captures the number of doctors available per citizen. WHO data plotted in the chart below shows northern Europe’s supremacy (Cuba and Greece, notwithstanding) over some of the world’s major economies.

While the quality of Nordic health care is well known, less obvious is how cost-effective it is. Unlike the American insurance scheme, coverage is comprehensive and automatic, for rich and poor, from the cradle to the grave. It is generally administered by local authorities via the central government and funded by taxes. That makes it simpler and more efficient.

Bargain Care

According to Magnussen, lower administrative and marketing costs help European health systems provide "better quality for less."

The numbers support that theory. The U.S. in 2014 spent 2 1/2 half times as much per citizen as was spent in Finland, yet ranked 26 places behind the Nordic country in Bloomberg’s latest health care efficiency table. The proportion of gross domestic product spent on health that year was 17.1 percent in the U.S., compared with Denmark’s 10.8 percent and Norway’s 9.7 percent.

Another reason why the Nordic model is so cost-effective is its focus on prevention. Because consulting a general practitioner is either free or extremely cheap, patients won’t hesitate to turn to an expert when symptoms first emerge. Gunnar Alexander Olafsson, an Icelandic health economist and former Welfare Ministry adviser, also notes that the Nordics have a long history of educating the public.

Public health campaigns "are so ingrained in the mind of the Icelandic public that we no longer require ‘no-smoking’ signs close to a primary school," Olafsson said. "It’s considered common knowledge."

Having relatively homogeneous societies and citizens who display a high level of trust in their governments also helps bring down the costs.

Financial Pressures

That’s not to say the Nordic health service doesn’t have its problems. Aging populations and growing demands for treatment mean costs are rising.

In Finland, where the problem is particularly acute due to depleted state coffers, the government is opening up the country’s 8 billion euro ($8.7 billion) health-care market to the private sector. Sweden implemented a patient-choice reform in primary care back in 2010.

For all its merits, there’s one aspect of the Nordic health system that Danish Prime Minister Lars Lokke Rasmussen may find difficult to broach during his talks with Trump: Funding a Nordic-style universal free health care system requires quite a lot of income tax. That’s something which Nordic voters continue to be more willing to accept than their U.S. counterparts.

— With assistance by Sveinung Sleire, and Omar Valdimarsson

    Before it's here, it's on the Bloomberg Terminal.