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Universal health care – The Danish Approach

Universal health care – The Danish Approach Speech by the Minister for Trade and Investment, Pia Olsen Dyhr Mailman School of Public Health - Columbia University, New York Date: February 4th, 2013

Dear guests, faculty members, students,

First of all, let me thank Columbia University for the invitation to speak here today. It is a privilege to be invited to one of the world’s most distinguished universities. 

And I look forward to talk to you about a fundamental and very pertinent issue for Americans and Danes alike.
By the way, I should start out by mentioning that I had the pleasure of serving as Minister for Health for a three month period last year while my good colleague was on maternity leave. All that for saying that today’s topic is not completely new to me.

As a keen observer of your debate on Medicare for the past couple of years, I am aware of the sensitivity of this issue here in the US. I know that Medicare and free universal health coverage remains hotly-debated.
I also know that you won’t be surprised when I say that I have complete sympathy with the position taken by President Obama.

Where I come from, it would be hard to find someone who does not sympathize with President Obama’s position. Actually, in many ways I guess the Danish health care system is the nightmare of any anti-government free market believer: a tax-funded state-run universal health care system.
The Government-sponsored health care system with universal coverage is an en-grained part of Scandinavian welfare societies. Very few people in my country would question the desirability of such a system. 
Before I explain the reasoning behind this, I would like to provide you with a few basic facts about Denmark. Firstly, as some of you may know, Denmark has the highest level of taxation anywhere in the world with 48.1 percent of GDP .
For many Americans this might sound quite extreme. Denmark might seem like a horrible place to make a living, but most Danes don’t see it that way.  A large majority of them recognize that they get essential services in return for the high taxes that they pay. This is confirmed by successive opinion polls year after year.

Of course Denmark's universal health care means a higher overall tax bill and that healthy people are paying for the treatment of sick people through their taxes. But because the system is simpler and less profit-oriented, it ends up being cheaper for everybody.
When asked if they prefer a health care system based more on private insurance schemes or differentiated health coverage depending on what the individual citizen can pay, a large majority of Danes say no thanks.
They want the state to ensure universal health coverage for all Danes regardless of the size of their wallets and they accept to pay the taxes, which go along with having such a system.   
In Denmark, hospitals are generally owned and run by the government and regional authorities. Medical care right from family doctors to hospitalization is free.

Danes are free to pick their own family doctors, as long as they choose one within their own geographical area, and they have a choice of hospitals and in certain cases can opt for treatment abroad.
The government covers around 85 percent of the total medical costs and during a single year, 9 out of 10 Danes are in contact one way or the other with the health care system.

As you probably are well aware of, the Danish health service is facing the same challenges as health services are facing in many other western countries:
The population is ageing and the number of patients suffering from chronic diseases is rising. Also, we have an increasing challenge with health inequalities. Together, this put pressure on the resources that we allocate to health care.
During the past ten years, the healthcare sector – in both Europe and US – has grown significantly. So have the costs. In a time of growing economic and demographic pressure we need to address this challenge in order to maintain sustainable health systems and high quality care for patients.

Unfortunately, this trend entails that the ratio between the number of elderly people receiving state subsidies and the number of people who are active on the labour market is changing in a costly way.
It impacts public finances in a negative way, when you have many more elderly people needing health care services not to talk about state pensions, while at the same time having to pay for that through a shrinking tax base. That is a difficult mix, indeed. 

In 2010, Denmark spent 11.1 percent of its GDP on health care. It is a bit more than most European countries, but significantly less than the US.
In comparison, the US currently spend 17.6 percent of its GDP on health care. In other terms, Denmark spends about 4.465 dollars yearly per citizen on health care – in the US it is around 8.233 dollars.
So to sum up, we are in the same boat and have the same task ahead of us: We must supply health services in a smarter way in order to meet the challenges of the future.
We will have to improve our health care system within existing or even with less economic means, while at the same time meeting growing demands and expectations.

This is not simple, and we are still on the look-out for the silver bullet – if you have the solution here today - please let me know. Meanwhile let’s look at some of the steps we have already made in order to meet the future challenges.
For my government, it is obvious that the continuing ability of the Danish state to offer universal health care to all its citizens requires that the system is run efficiently and that medical costs are fairly passable. What we aim for is to provide improved health care at a lower cost.

So far we have managed to achieve meaningful progress and tangible results in the last couple of years. For example, we have increased the productivity at the Danish hospitals. From 2010 to 2011 the productivity has gone up by 5.3 percent and costs have been reduced by 1.7 percent.
The productivity increase is closely related to several positive measures. Last year 29 percent of all surgery was performed ambulatory without hospitalization.
In 2008, it was 25 percent. And the people who do get hospitalized, stay for a shorter time period. In fact, we have gone from 4.5 days in 2008 to 3.8 days in 2011. 

Speaking of numbers and statistics, we mustn’t forget that we are dealing with real people. Sending home patient earlier and being more productive is not just about saving money.
It is indeed also about increasing life quality of the patients. Life quality is spending time with your loved ones and living your life close to normal - perform everyday tasks - instead of lying in the hospital.
But as in the US, the Danish health care system is struggling with readmissions. In 2011, the readmission rate was 9.4 percent. That is down from 10.6 percent in 2008, but still too high. Again, a bit of progress has been accomplished, but more definitely needs to be done here. 
Thankfully, however, life is not all about economics and health care is not all about costs. Another key challenge for us is what we call equality in health care.  

Even though we have universal health care system free of charge, we have not attained equality in health care. The problem is that our system to some extent is set up around the idea of the ideal patient.
                                                   
A patient, who knows his rights and how to enforce them. A patient, who has a basic understanding of symptoms and a solid grasp of how our health care system works and how to get access to the system.
We take it for granted that as long as health care is freely available to everyone, everybody will make use of it and by logical necessity, the system will cover the needs of each and every individual. This is not what actually happens in real life.

Unfortunately, equal access is not a given thing. More visits to emergency departments, more hospitalization, bigger risks of readmissions and lower participation in cancer screenings is the reality for many Danish citizens with limited social and economic resources. Danes with better education and more resources live up to 10 years longer than their less fortunate fellow citizens.

This is an essential challenge to address for the Danish Government. How can we help or equip these people in order for them to become capable of navigating the health care system successfully?
I am talking about people with little or no formal education. People with precious little feel for how the health system works, for the way doctors and nurses operate and what medical expressions mean. People who often lack a network to support them or guide them through to the right entry point in the system.
As you will agree, good medical treatment depends on a decent cooperation between the health providers, for example the medical staff and the patient.

In Denmark, we have to ask ourselves, if our health system is able to acknowledge when a patient does not possess the strength or the mental resources to participate in such a cooperation.
Some need extra help to make sure that they are treated in time, and not just when their condition is very serious. We need to identify the cracks in our system, which these people too often fall through.

The cracks might exist between general practitioners and the medical specialists, between the specialists and the hospitals or between the hospitals and other institutions outside the health system. We are exploring, where and how these cracks emerge, and I am confident that we will find at least some of the answers in the near future.  
Another major initiative is our process of redesigning the hospital system. Actually, we are in the midst of a complete overhaul of Danish hospitals. In the next 15 years, Denmark will invest 7 billion US Dollars in 16 new main hospitals, going from more than 40 hospitals scattered around the country.

This is the largest capital investment in Denmark – since church construction in medieval times.
By centralizing departments, we obtain more synergy, more quality and more scale. In addition, we will be able to optimize our resources not just in relation to medical care, but also with regard to administration and logistics.
This provides several benefits to the patients. By concentrating our efforts, we increase specialization to provide the best possible service from the most skilled medical staff.

This will allow us to reduce waiting times for high demand surgeries and treatments. In certain geographical areas in Denmark, we know that the time to treatment can mean the difference between life and death.
We will also minimize the need for transferring patients between different hospitals, making the process through the health system smoother and more coherent. Furthermore, the new and larger hospitals will utilize the latest advances in technology and care.

New buildings will be designed according to strict environmental and sustainability standards. The new buildings will also be designed to facilitate the newest approaches in relation to management of patient-flows.
Another recent initiative that has already shown positive results is the newly established so called “diagnostic centers”. Present at the center are various specialists to carry out the medical checks of patients with symptoms of serious illness.


This ensures a faster diagnosis and comfort during the process, and leads to better and faster treatment. The government has set a clear goal that patients with symptoms of serious illness are diagnosed within 30 days. I think that the collection of diagnostic skills can help us reach the goal.
While the patient is our main focal point here, I would also like to highlight the health care industry in Denmark and Danish companies within the health care industry. They offer solutions to many of our most challenging health problems.
In fact, I see it as a win-win situation for all, and the Danish Government is deter-mined to promote a business-friendly environment for this industry in the years to come.

One way of doing this is through Public-Private Partnership, and hereby inviting private actors to contribute to innovations in the public sector. This approach is one of the reasons that Denmark has already come a long way in empowering patients through self-monitoring and self-treatment by the use of telemedicine and other technologies. The potential is enormous.
For this reason – in august last year – the Danish Government, municipalities and regions published a national action plan dissemination of telemedicine. 
One of my favourite example of a Public-Private Partnership is between a small private company Medisat and a larger university hospital.

Together they developed the so called “COLD-Suitcase” [COLD: chronic obstructive lung disease] – a suitcase with tele-medical equipment - video, sound and measuring device - connecting a patient at home with doctors at the hospital.
The COLD-Suitcase is installed at the patient home no more than a day after hospital discharge. Patient and doctor see each other and talk to each other in real time through display and built-in microphone.
Study shows that the new treatment concept is at least as good and much cheaper. There is a significant lower readmission rate. Normally 20-25 percent of the patients readmitted within four weeks after discharge.

Among patients who received a cold-suitcase at home it was less than 10 percent. The number of readmission days was reduced by more than two-thirds (66 percent). And the patient satisfaction among participants is more than 90 percent.
The ambition of the Danish government is also to strengthen the Danish life science cluster. Therefore, we have formed a special “growth team” consisting of our most prominent experts within this area to come-up with recommendations and policy options on what the Danish Government can do to enhance the economic growth potential of the Danish health industry. I am very optimistic that we can move forward quickly here. 

One of the core competences of the Danish Life Science cluster is optimization and efficiency. Whether we look at the pharmaceutical industry – for example Novo Nordisk or Lundbeck - the medical equipment and technology industry comprising companies such as Coloplast and Radiometer or companies focusing on health-IT, the main driver for them is to improve their products without incurring huge costs.
Many recent innovations by Danish companies have been fostered by this ambition to deliver higher quality at a lower cost. This approach is also one of the reasons for the success of Danish life science companies on the American market today. The cooperation taking place across the Atlantic between our two countries represents a fantastic opportunity for Danish companies as they seek the new input and inspiration. Like their competitors, they want to be on the cutting-edge technologically and research-wise.

For its part, Denmark provides opportunities for those foreign companies, research institutions and investors, who would like to try their hand on the Danish market.
What we offer is one of the largest bio-pharma clusters in Europe, including state of the art facilities, and access to a highly skilled workforce.  Denmark has the third largest pipeline of drugs in development in Europe in absolute numbers.  
Big US pharma companies such as Eli Lilly, Merck, Pfizer and Abbott use Denmark for clinical research because they recognize the benefits to be gained there.

Last year, we launched the Danish National Biobank, which provides access to more than 15 million biological samples, and the biobank links all these samples in a huge cradle-to-grave register.

Nevertheless, despite these innovative measures and our on-going reforms of the Danish health care system and private companies need to come up with more solutions on how to give better and more effective care.
An important part of this is to make sure that the strongest expertise and competencies in Danish corporations and research institutions reach international markets, including of course the biggest of them all - the American market. 
I began my speech today with a few words on the relationship between a free universal health care system and high-levels of taxation. I said that a large majority of Danes according to the opinion polls accept high taxes in return for free health care and free education.

The fact that high taxes and state-sponsored health care do not equal unhappy citizens was just recently confirmed by the British magazine The Economist.
Two months ago, The Economist published a survey called the “Where to be born” index. It ranked 80 countries around the world according to number of key economic, social and political parameters.
The Economist had conducted the same survey in 1988, when Denmark placed 24th. In 2012, we came in fifth behind Switzerland, Australia, Norway and Sweden.

I mention this not as a vindication of state-sponsored universal health care free of charge, but as a way of telling you that a tax-rebellion because of free health care is not on the cards in Denmark. 
I hope my speech has provided a few insights into the Danish approach in dealing with health challenges. I have tried to give a snap shot of where we are and where we would like to be.

It is my belief that through increased international cooperation and by making use of the vast knowledge and experience of private companies, we will be able to confront the health challenges ahead.
The hilarious American comedian Groucho Marx once said that politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.
As a politician and as a government minister, I acknowledge that Marx has a point sometimes, but for me the issue of health is too important for politicians to get wrong. We must get it right!

In Denmark as in the United States and elsewhere, politicians dealing with health care must deliberate carefully, consult with experts and act to the benefit of the largest number of people. To accomplish this, an informative debate is needed.
I would be intrigued to hear how you think the US and Denmark can work together in providing better health care for an ever wider circle of people at a lower cost. I look forward to your questions and comments.
Thank you.