Am I A Socialist?

Am I a socialist? I don’t think so, but I did inch in that direction during the four days I spent in northern Norway last week, visiting the local hospital in Bodø and speaking to about 20 of the nation’s hospital CEOs. Here’s what I learned.

First, a word on visiting northern Norway – above the Arctic Circle – in summertime.

I’d rank experiencing the midnight sun (your wristwatch says midnight, but the sky looks more like late afternoon) as among the most awe-inspiring things I’ve seen in my travels, up there with Xian’s terra cotta warriors, Scotland’s Isle of Skye, Masada at sunrise, and the 8th hole at Pebble Beach. And the people are a delight – unpretentious, outdoorsy types who were far less reserved than I’d been led to expect. It is well worth a visit.

But the medical piece was what fascinated me – particularly as it reflected the country’s broader societal values. Norway is a wealthy country, owing both to the miracle of oil reserves and to an industrious and well-educated population. Belying the notion that capitalism is the only way to achieve prosperity, the country is unabashedly socialist. Although the tax rate is high (about 50 percent for top earners), this level of taxation is an accepted part of life, the subject of absolutely no political debate. When the economy dipped a couple of years ago – a mere blip by world standards – it was a given that the government would pump in money to rebuild roads and improve the infrastructure.

The Norwegian healthcare system is organized into five regional trusts, whose underlying philosophy is similarly communal. Each runs on tax revenues, which are allocated to the hospitals based on the size of their catchment area, with adjustments based on the population’s age and socioeconomics. Hospitals that are able to manage their affairs on less than their budget are able to invest the surplus in research or new programs. But the CEOs I spoke to were all about population health: how to use their resources to promote the best health for their communities. Nobody seemed concerned about profits, bonuses, or the other accoutrements of market-driven healthcare. They see their mission as providing a social good.

Norway’s healthcare system is known as one of Europe’s most centralized, and the government’s touch is not light. Just recently, for example, the health ministry adopted new standards to ensure that patients newly diagnosed with cancer begin receiving therapy within about two weeks. I mentioned to my hosts that many U.S. healthcare organizations (hospitals, health plans) have internal standards that address such things (waiting time to get a clinic appointment, for example), but that – aside from the acute care measures like door-to-balloon time – there were no comparable national standards guiding patient flow. The CEOs were surprised.

The Norwegian government’s engagement and reach are such that I doubt it wouldn’t think twice before launching a secret shopper program to assess waiting times for primary care. In contrast, when The New York Times revealed Medicare’s plans to do just that last week, one day later the Obama Administration found itself mimickingSaturday Night Live’s Emily Litella (“Never mind”).

Egalitarianism governs many of Norway’s decisions, and this is as true in healthcare as the rest of the economy. “We want every hospital to be equally good,” one of the CEOs told me. I got the sense that there would be real discomfort with a hospital, university, or any other public institution, that appeared to be head and shoulders above its peers. While Americans accept such things as a natural outgrowth of competition, the Norwegians, it seemed to me, might well see this as a threat to the common good, and take steps – overt or subtle – to elevate the laggards and maybe even to add a little lead to the snowshoes of the lead dog.

I heard many examples of this egalitarianism, but the starkest was in Norway’s approach to residency admissions. After completing medical school (at no cost to the student, by the way), all Norwegian students enter a lottery. The person who draws number 1 can choose among any training position in the country, while the one who draws the last number (475 this past year) has to take any open position remaining. When I heard about this, my jaw dropped. I asked one of my hosts how both hospitals and trainees felt about this lottery system. She repeated the shared desire for all hospitals to be equally good, adding,  “It would seem unfair for all the best students to go to only a few places.”

Can you imagine someone proposing such a thing in the States? The top grad at Harvard Med School draws a number to determine where she will train? Will it be Mississippi? Iowa? UCSF and Hopkins fill their residencies with a random assortment of lucky medical students? Just when I am convinced that the world is indeed flat, tales like this convince me that some pretty lumpy contours remain.

The lottery system will soon become a thing of the past, but not because of any internal backlash from Norwegian training programs or students. Rather, it is yet another victim of the semi-permeable borders created by the European Union. While Norway did not enter the EU (a decision they’re feeling pretty good about these days, as the number of Euros required for the Greek bailout takes on additional commas), it did agree to abide by most of the EU’s border-related guidelines. This has meant that young doctors from other EU countries who can pass a Norwegian language test (not a small feat) can enter the lottery on an equal footing with Norwegian med students and, after completing training, be guaranteed a physician job in Norway. According to a recent article in the BMJ, there was a 50 percent annual growth in non-Norwegian applicants to Norwegian residencies between 2006 and 2009, and such applicants now make up more than half of all trainees entering the lottery. The displacement of Norwegian students from the country’s residencies is what is finally pushing the health ministry to abandon the lottery system for a less egalitarian system of formal applications. Absent this external pressure, I’m confident that the lottery system would have remained in place, relatively unquestioned.

After hearing about all of these manifestations of boundless egalitarianism, I was asked what I thought about them. Such questions are loaded, obviously – we are our upbringing, and who among us can jettison the worldview that we have inherited?

That said, I came away from my time in Bodø convinced that Norway’s system of delivering health care is better than ours in many respects. The system enjoys widespread public support, life expectancy exceeds ours by two full years, and theirhealthcare expenditures are 9.6 percent of GDP, compared with 17 percent for the U.S.

Of course, all choices have consequences, including Norway’s. Queues for elective surgery are common. (The well-off can go to private hospitals for things like plastic surgery, but even the wealthy wait their turn – several months – for their total hips. When a region’s queues grow too long, that region can purchase services from other regions, or even from other EU countries. But the queues are a fact of life.) Patients must see GPs for their initial contacts, who act as gatekeepers for specialty and hospital access. Such gatekeeping systems invariably produce tradeoffs, and some dissatisfaction. And, from what I witnessed, the U.S. is about 5 years ahead of Norway in approaching patient safety and quality in a systematic way.

But the bottom line is that every Norwegian citizen receives high-quality care in very good hospitals and clinics, staffed by very good doctors and nurses, all at an affordable cost. And the average Norwegian hospital is able to focus on providing care to its community – the hospital CEOs told me that they have no billing departments to speak of.

I guess I’m violating that old maxim that people get more conservative as they age. When it comes to the organization of medical care, I’ve moved leftward. (After seeing Don Berwick get pilloried for once professing his love for the UK’s National Health Service, God help me if I ever have to survive a Congressional hearing.) Medical careis a social good, and it should be allocated as equally as possible – at least with respect to the provision of a basic set of health care services. Sure, let the wealthy have plasma screens in their hospital rooms and concierge-type access by spending their own non-tax deductable dollars. But a basic package of preventive, chronic and acute care services should be standardized, robust, and guaranteed. Geez, you’d think we could do that for 17 percent of GDP.

Such sentiments notwithstanding, Norway’s residency lottery system demonstrates that even a good thing can be taken too far. Forcing the most gifted student to attend a mediocre training program nearly guarantees that he won’t reach his full potential. And, as I am privileged to experience at UCSF every day, allowing very accomplished, smart people to co-mingle tends to foment ideas and projects that would not have emerged if such folks were spread thinly, like margarine, throughout the system.

The worst of America – healthcare or otherwise – is awfully bad. On the other hand, I’m typing this blog on my Macintosh computer, checking my email on my iPhone, and searching the web on Google – all from a terrace outside my adopted flat in London (I’m on sabbatical here through December). This reminds me that Silicon Valley could never have happened if Stanford was prevented from accumulating a disproportionate share of really smart, ambitious geeks. Meritocracies have their value, even when the cost is a hierarchy and a little elitism.

Robert Wachter, MD, is widely regarded as a leading figure in the modern patient safety movement. Together with Dr. Lee Goldman, he coined the term “hospitalist” in an influential 1996 essay in The New England Journal of Medicine. His posts appear semi-regularly on THCB and on his own blog, Wachter’s World.

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25 replies »

  1. There are European models that use a mix of private and public health services. Private insurers are constrained in premium pricing by Government policy, yet are in competition with each other and with the Government for clientele. These systems also provide better health services than the U.S. at less cost. A Medicare for All model would be great in the U.S. and Medicare already has private insurer competition.

  2. As Bob Mecher, filmmaker Micheal Moore also spent some time in Norway. In creating the controvercial movie “Sicko” he did however leave out most of the material from this “crazy” country. Here is a some extra footage from the DVD;
    Moore is well known to put his twist and focus on the story, and the 10 min video gives his impression of some aspects of Norway.
    The mindset of a good public safety net and free/resonable basic services such as healthcare and education may sound socialist/communist to an American, but the social-democratic models of the Scandinavian countries seem to give pretty liveable and supporting societies for the population as a whole. (An yes, we have private companies, a stock exchange and many political parties. One large party admires Reagan, Bush and Thatcher, so we have diversity….)

  3. I don’t think Dr. Wachter mentioned seeing starving doctors in the streets, nor seeing them unable to perform their duties because of personal poverty. There did not seem to be excellent candidates unwilling to enter the profession because of the pay. So why do you care? They probably get a paycheck that lets them live a good life, serving in their chosen profession.

  4. I agree with the assessment. However, it should be borne in mind that Norway’s population is small (about 5-6 million) and it is homogenous.Shared values are much easier in such a system. The system would not exist were it not for oil & gas revenues.

    As an aside, Sweden and Norway have groups of physicians for hire as consultants and as “impaired risk” underwriters…particularly in cardiology

  5. I think we need a little more data here. What are the measurements of variation in access, outcomes, etc., in Norway? Despite its being an ethnically homogeneous country with a small population I’d bet there’s large-area variation between urban and rural. Plus, if we sent the Dartmouth Health Atlas team to Norway I’d bet they’d find plenty of small-area variation, too.

  6. Most “nonproducing voters” do not vote at all (elderly don’t count because the are ex-producers).

    Corporations are enjoying benefits payed for by individual tax payers, therefore they should also pay taxes.

  7. Of course. My remark was rhetorical satire. However it is true that the nonproducing voters will always vote themselves a benefit they canot afford themselves. They will always vote for raising taxes on the “wealthy” because it does not affect them.

    While corporations do not and should not vote, neither should they pay taxes, except on property. Only individuals should pay income taxes, it we have an income tax.

  8. Norway is not actually socialist, though. In socialist countries, the government owns all the businesses. Like Cuba, Belarus and North Korea. Norway has lower corporate taxes than the USA, and a ferociously competitive economy, even without the oil. Oil wealth which is not spent, but has been saved up in a sovereign wealth fund for decades. And that efficient capitalist wealth-creation engine drives the social programs you saw a bit of.

    For an interesting look at the economic engine that drives the social benefits; http://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html

    Norway has universal health care, free university education, 5 weeks vacation, a year of maternity/paternity leave and a host of other social benefits. From the US point of view, this is pretty socialist.

    It seems to be a uniquely American error to believe social benefits equals socialism. From the American viewpoint, social policies and capitalism become points on the same line, and more of one must necessarily mean less of the other.

    To other countries, social benefits are political settings, socialism and capitalism are economic systems. You can in fact have the dials of both capitalism and social policies turned up high.

  9. I must disagree with you on this issue, my esteemed colleague. This is government and not business. We are all equal under the law, regardless of wealth, status of birth, or other circumstance. One (wo)man, one vote. And no votes for corporations, nor bribery (campaign contributions), either.

  10. Each tax dollar paid should be one share of stock which equals one vote

  11. Very insightful and balanced article. America is desperate for such honest, non-cynical yet direct discourse. Please keep it coming.

  12. Re. the obesity issue: there is a culture of acceptable obesity that has grown in the US. There is come research suggesting that obese people in the family and social background increase the likelihood of yourself becoming obese, even if you control for other factors. Moreover, the US (unfortunately, I have to say) had the land and the cheap oil to build enormous car centered suburban developments – when I started residency in Germany, I took my bike to work as many other people did(and even if you take the bus, at least you walk a little bit). But obesity is growing in Europe too, although rates are small in comparison to the US.

  13. I would add that the upper class in this country pays way, way under their fair share.

  14. Peter –

    When I was in Switzerland last summer, I didn’t see any fat people either. I think people in Scandinavia and Switzerland tend to pursue more outdoor activities than Americans do on average but I don’t have any data on that. I also think there are fewer places to buy fast food in these other countries than in the U.S. and fewer poor people as well.

    Regarding the restaurants, I note that Starbuck’s employees in the U.S. get health insurance if they work at least 20 hours per week yet same drink at a U.S. Starbuck’s costs less than half what it did in Switzerland.

    Most of these European countries have a more extensive safety net than the U.S. does. The tradeoff, however, is that even the middle class pays around half of its income in taxes of one sort or another including the VAT and very high gasoline taxes along with income taxes and they live in modest houses and drive very small cars. Most of them are perfectly fine with it.

    We could have a more extensive safety net too if our middle class were willing to pay 50% of it’s income in combined federal, state and local taxes instead of the 30% or a bit more that most pay now and if they were willing to live in smaller houses and drive tiny cars or mopeds. Most aren’t willing to make that tradeoff. As for raising taxes on the rich, we could do that but it wouldn’t come close to raising enough money to pay the bill even if we weren’t facing a huge debt and deficit at the federal level already.

  15. “When you visit as a tourist, prices are so high, even for a meal in an ordinary restaurant or café; it makes NYC look like a bargain by comparison.”

    Barry I just returned from a trip to the Baltic and Oslo was one of our stops. Yes prices are expensive by American standards (meals about double), but moderate tipping in restaurants is only done as an occasional courtesy, not as a requirement as here. Restaurant employees also get healthcare and benefits. There were good crowds at the restaurants so price for Norwegians can’t be that bad. Oslo had extensive public transportation at reasonable prices and I didn’t see one fat person. Norway is trying to work through immigration issues due to a large influx of poorly educated, low skilled migrates looking for better opportunity and social services. Until I saw Stockholm, Oslo was my city of choice.

  16. AFAIK, few if any Americans are true socialists. Government ownership of all land and all means of production? Please. We’re all a bunch of capitalists. Those of us who argue for a larger social safety net and more basic public services are branded as “socialists” by the holy roller corporatist crowd. They just try to shut down the debate b/c they don’t want to have the debate.

    Socialist. “You keep using that word. I do not think it means what you think it means.” To paraphrase…

  17. “Would you agree that a flat tax is the fairest tax?”

    Dr. Mike –

    Actually, no I wouldn’t even though, historically, my family would have benefited from it. The purest form of the flat tax proposed at the federal level is the FAIR tax which would impose a 23% sales tax on virtually everything we buy. Even if it replaced all other federal taxes currently on the books, it would effectively shift even more of the tax burden from the wealthy to the middle class because the FAIR tax only taxes consumption and the wealthy save and invest most of their income.

    That said, too many people who say the rich don’t pay their “fair share” in taxes at both the federal and the state level think a fair share is always more than whatever they’re paying now no matter how much that is. Personally, I favor a broad tax base and a comparatively low top rate like we had after the 1986 reforms when the top rate on all income, including capital gains and dividends, was 28%. The concept of a fair share should also relate to the total tax burden – federal, state and local, not the top marginal rate. Personally, I think a fair share defined that way is 33%-35% of which roundly 25% should be federal and about 8% state and local at the high income end. Most middle class people pay considerably less than that now, including the payroll tax, to the federal government and more to state and local government, mainly in the form of property taxes.

    As for loopholes, the two largest, the tax preference for employer provided health insurance and the mortgage interest deduction, benefit the broad middle class as well as the wealthy. The wealthy benefit from a 15% top rate on capital gains and dividends which I think is too low. If it were up to me and I couldn’t broaden the base and lower the top ordinary rate, I would like to see an Alternative Maximum Tax that would limit federal income tax liability to 25% of gross income with no deductions or exemptions for anything and health insurance included as ordinary income. Alternatively, there could be a 30% maximum federal tax burden including FICA taxes with the employer share of FICA taxes counting as both income to the employee and taxes paid.

  18. Would you agree that a flat tax is the fairest tax? If not, what or who designates what an “honest share of taxes” is? Is it about how much they have left, or how much they paid? It seems to me that most discussions of “fairness” are really sour grapes about how much they have left.
    That having been said, I do believe that the reason why there are so many loop holes for the wealthy is because the number of people left actually paying taxes is too small of a number to hold the politicians accountable for the laws that provided the loop holes.

  19. Unlike Norway, America is not about having good “average” things. It is about excellence, which by definition implies inequity. However, America is (or used to be) also about “fair play”.
    The way the goodies are split now in this country is not fair any more. All those wonderful Silicon Valley inventions are indeed due to this system of encouraging excellence and discouraging average. It stops being fair when we accept that those that amassed billions in our system, don’t even have the decency to pay their honest share of taxes, while large portions of the very people, who make this great system possible, are told that the system has no money to ensure that they can see a doctor.
    It’s not about socialism, or homogeneous populations or malpractice (?), or free markets. It’s about fairness, or systemic lack thereof.

  20. When we hear someone speak of adopting a more “socialist” approach to health care in this country, we almost never hear about anything resembling what you describe in Norway. What we hear is “Medicare for all” or something similar, and that is an entirely different animal. I can’t see a “Medicare for all” type program ever becoming satisfying to Americans nor affordable because it adopts the same third party payer model that currently thwarts free-market forces. We either need to move in a truly capitalistic direction, or to acceptance of a two tier system which acknowledges that cutting out the middle man (third party) is the most efficeient way to provide health care to those who cannot otherwise afford it (i.e. government owned hospitals and clinics and government employed physicians). Prove that the goverment can own health care for the poor, and you might find more Americans willing to pay the government to do it for them too, as long as you allow the freedom to purchase what the government can’t provide.

  21. Norway is a homogenous society of all of 4 million people and, because of a happy accident of geography, it has significant oil wealth. The other Scandinavian countries are also quite homogenous and all four of them combined have only 23 million people or thereabouts. They believe in high taxes and an extensive social safety net. When you visit as a tourist, prices are so high, even for a meal in an ordinary restaurant or café; it makes NYC look like a bargain by comparison. We have a different culture, a vastly larger population and a far more ethnically and culturally diverse society.

    I wonder what the medical malpractice environment is like in Norway. Do they see much need for defensive medicine? How do they deal with end of life care? How much are doctors paid? How many people are poor? I don’t think there is a lot we could copy even if we wanted to.