Denmark: A Socialist Welfare Monarchy

A lot has been said about how socialist some European countries are. Look at Denmark and you would know why.

The Welfare State

Her Majesty Margrethe II’s Denmark has 5.5 million people, with GDP per capita of $37,000, PPPed. GDP has been growing at around 3% in real term in recent years, and unemployment has been trending down to under 4%.

Besides the wind turbines all over the country supplying 18% of energy use (above map), what sets the economy apart – as well as most other western European countries – is the heavy tax rate.

The government collects and spends almost half of the GDP. The average personal income tax rate is 40%, with the top bracket being 65% (which is facing pressure recently).

BTW, there’s also a slightly less than 1% church tax for Folkekirken members.

Free Healthcare, Free Education, and Income Equality

If that doesn’t scare you away, I should tell you where the tax hike goes.

Healthcare is free

The government foots 81% of total healthcare expenditure. You can go see a doctor for free only with your health insurance card. The healthcare expenditure per capita is PPP int’l $3349 (9.5% GDP), half of the U.S.’s $6714 (15.3% GDP), while all health indicators – health life expectancy, child health, service coverage, etc. - are equivalent to that of the U.S.

According to the Ministry of the Interior and Health, 79% of the population, more aged and of a higher rate of use of alcohol and tobacco than that of the U.S., rated the nation’s healthcare service as “very good” or “good.”

Hospitals are run by the local authorities, and drug prices are reigned in by the government’s negotiation with drug companies and encouraging competition from other EU countries. From 1988-2000, the annual increase of total health expenditure was a mere 1.6%.

Education is also free

Free schooling starts from preschool. The State Education Grant and Loan Scheme grants 18+ student DKK 4400 (above $800) per month for student living away from parents.

The Tertiary-type A (i.e., high school) graduation rates are among the highest of the developed.

More Equal Income

The Danish Gini is the lowest in all OECD countries. In comparison, China is of the Mexican level.

Is It Socialism?

It depends on your definition of socialism.

If it means high-tax-rated, state-welfare type to you, you should add $10,000 family healthcare insurance, another $5,000 education expense per child, pension, unemployment insurance, and whatnot to your tax returns, and recalculate your tax rate.

Then we can talk, unless if you are now priced out from having a healthcare plan and can’t afford sending your kids to school.

http://icecurtain.blogspot.com/

Almost Universal Healthcare: Can We Afford it?

This post in a response to China’s new Healthcare Reform Plan.

I don’t have to repeat the importance of healthcare. Now, finally we take the courage to work towards one. Hoorah!

Key Features of the Healthcare Reform

The health reform plan spans into 2011, budgeting an additional RMB 850 billion or 1% GDP annually, with a bit over 1/3 from the federal government.

It aims to cover 90% with healthcare insurance – a comprehensive landscape change from the mere 15% coverage as of today.

It establishes a nationwide procurement and distribution system on a list of basic drugs. The government would reign in drug prices, and public healthcare providers would retail drugs at purchase cost.

It would separate drug prescription and purchase – a break from the current hospital-also-sell-drugs system, presumably to avoid conflict of interest.

It will build a lot of new hospitals, with the goal to cover each and every village in the country.

It would provide training to 2 million healthcare personnel.

..and many, many other good stuff.

Overall, it is a tremendously exciting one and a courageous move of the government. Send in your thank-you note.

China Health, an International Comparison

If you have time, read WHO’s ultimate death book for a global health overview. Here’s a screenshot.

 

China, still a poor developing country, lags behind the developed in many aspects on healthcare.

The life expectancy is on average 7-8 years shorter in China than G7 countries. Want to live longer? Move to a developed country.

The infant mortality rate is much higher.

Infectious and parasitic diseases, perinatal conditions, and injuries caused much more death per person.

China’s Premature Healthcare Infrastructure

Healthcare service coverage is primary compared to G7.

And environmental infrastructure lacks.

The Disparity of Healthcare Expenditure

Even on PPP-based, China spends per capita 7.5% of the average of G7’s. Not 75%, but 7.5% - No kidding. Did somebody call China a threatening super-power?

GDP-wise, China spends 4.5%, while G7 countries spends about 8-10%. The exception is the U.S., who expends a 15% from an already forerunning GDP, without seeing obviously better health conditions other than occasional personal bankruptcy of the 16% uncovered (hearsay: most other developed countries have universal healthcare). Mystery.

China doesn’t have an established health insurance system, with over half health expenditures paid out of pocket. It is almost eye-popping that there would be a 90% coverage.

A Concern on Cost

It is a common knowledge that national healthcare cost usually overshoots, and sometimes explodes. So we have to worry about it, though it may not be a good time.

There are several “detonators.” One is aging.

The Chinese population is relatively young, but it is turning old.

Age drives up healthcare expenditure exponentially.

Another factor worth attention is healthcare price inflation. For example:

The situation of China doesn’t look good at all. Despite that unit cost increase may not be the only factor, the per capita inpatient and outpatient expenditure per treatment paced up much quicker than consumer price index.

Can We Afford it?

With many fickle economic, social and natural variables, it is near impossible to predict the future cost of a national healthcare system. I hate to be a fortune teller here.

The key question is: do you see healthcare a cost or a contribution to the economy?

http://icecurtain.blogspot.com/