Monday, May 27, 2013

New Zealand's Health Care System

Eric Crampton, at Offsetting Behavior, likes New Zealand's health care system:
Things I have never ever here had to do: 
  • Worry about whether our preferred GP, obstetrician, or specialist takes the insurance that we have;
  • Have to take the insurance recommended by our employers;
  • Have insurance tied to employment;
  • Save receipts for reimbursement later on [we just mailed the bills to the insurer];
  • Add up total health expenditures for a tax form to get a deduction;
  • Wait in really long queues (Canada);
  • Pay tons for private health insurance.
I really enjoyed this analysis and these all sound like significant improvements over the U.S. health care system.  Of particular appeal are the separation of insurance from employment and the prominence of high deductible plans in New Zealand.  And I believe that the U.S. system would function significantly better if we could accomplish these two objectives.

All that being said, a couple of potential flaws do jump out of this description.  I know nothing about New Zealand's health care system beyond what is presented here, but it seems significant and problematic that only 30% of the country subscribes to private insurance.  It's not clear to me what is covered by the public insurance system, but there seem to be some large gaps in the public insurance if a gallstone removal is not covered under public insurance.  Knowing only that gallstone removal must be paid for through private insurance (or out-of-pocket) and that 70% of the population does not have private insurance, I see the potential for some significant problems.  None of this is to argue that the U.S. health care system is "better"; just attempting to analyze some of the potential problems of New Zealand's system (of which, again, I am ignorant beyond Crampton's blog post).

Also, this is a bit of a semantic criticism, but I'm not sure it's fully accurate to say that "America has decided to make it difficult to get inexpensive high-deductible insurance coverage."  Under the ACA, the maximum limit for deductibles in 2014 will be over $6,000, triple the deductible paid by Crampton in New Zealand.

Addendum: See Eric Crampton's comment below for correction of my error in this post.


  1. Hi Max,

    The public health system is comprehensive. If the gall bladder issue were acute, it would have been handled quickly; otherwise, it's a couple months' wait for treatment. We were borderline acute; running it through insurance was simpler and quicker than making the case that it was really acute.