The core truth about our health care system

Summary:  Health care reform tests the ability of America to reform.  We cannot afford our current system, one factor causing deficits for both State and Federal governments — and dragging down the competitiveness of major companies.  Yet it delivers results no better than our peers get at less cost from their long-tested systems.  Worst of all, aging boomers will boost its costs.   This is the simplest of our problems; as we need only learn from the experiences of our peers abroad.  Our difficulty doing so bodes ill for our future.

Obscured by the torrents of propaganda, the basic fact remains:  we spend far more on health care than our peers (1/5 – 2x more), yet get little or nothing more for the extra money.  To distract the American public from this, conservatives fired off the most intense barrage of propaganda this nation has seen in decades (perhaps generations).  Lies about massive government take-overs, death panels, and endless anecdotes about errors made by the UK and Canadian systems (of course, such stories can be found in the US or any nation).

Since opponents of the heath care bill have focused on Canada, let’s compare the costs and results of their system with ours.  Here is the best known study (links to others appear below):  “Health Status, Health Care and Inequality: Canada vs. the U.S.“,  June E. O’Neill and Dave M. O’Neill, National Bureau of Economic Research, September 2007 — For purchase only.

Abstract:

Does Canada’s publicly funded, single payer health care system deliver better health outcomes and distribute health resources more equitably than the multi-payer heavily private U.S. system? We show that the efficacy of health care systems cannot be usefully evaluated by comparisons of infant mortality and life expectancy. We analyze several alternative measures of health status using JCUSH (The Joint Canada/U.S. Survey of Health) and other surveys.

We find a somewhat higher incidence of chronic health conditions in the U.S. than in Canada but somewhat greater U.S. access to treatment for these conditions. Moreover, a significantly higher percentage of U.S. women and men are screened for major forms of cancer. Although health status, measured in various ways is similar in both countries, mortality/incidence ratios for various cancers tend to be higher in Canada. The need to ration resources in Canada, where care is delivered “free”, ultimately leads to long waits. In the U.S., costs are more often a source of unmet needs. We also find that Canada has no more abolished the tendency for health status to improve with income than have other countries. Indeed, the health-income gradient is slightly steeper in Canada than it is in the U.S.

Conclusion (red emphasis added):

It is commonly supposed that a publicly funded single payer health care system will deliver better health outcomes, and distribute health resources more fairly than a multi-payer system with a large private component. Based on our analysis of health care measures in Canada and the U.S. we find a somewhat greater incidence of chronic health conditions in the U.S. combined with evidence of greater access to health treatments for these conditions. Health status is similar in both countries. But Canada has no more abolished the tendency for health status to improve with income than have other countries. Indeed, the health-income gradient is more prominent in Canada than it is in the U.S. The need to ration when care is delivered “free” ultimately leads to long waits or unavailable services and to unmet needs. In the U.S. costs are more often a source of unmet needs. But costs may be more easily overcome than the absence of services. When asked about satisfaction with health services and the ranking of the quality of services recently received, more U.S. residents than Canadians respond that they are fully satisfied and rank quality of care as excellent.

One important issue that we do not address concerns the large differential in per capita health care expenditures which are about twice as large in the U.S. Is the U.S. getting sufficient additional benefits to justify these greater expenditures and where should we cut back if cutbacks must be made? Alternatively, what would Canada have to spend to increase their technical capital and specialized medical personnel to match American levels or to eliminate the longer waiting times? And would it be worthwhile to them to do so?

For more excerpts see this article at Healthcare Economist, 2 October 2007.

For more information about our health care system

Studies of the costs and benefits of health care systems:

1. “Health systems: improving performance“, Worth Health Organization Report 2000 — “This report examines and compares aspects of health systems around the world. It provides conceptual insights into the complex factors that explain how health systems perform, and offers practical advice on how to assess performance and achieve improvements with available resources.”
2. “Private Health Insurance in OECD Countries“, OECD, September 2004
3. “OECD Health Data 2006 – How Does the United States Compare“, OECD, 26 June 2006
4. “Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care“, Commonwealth Fund, 15 May 2007
5. Very good:  “Is American Health Care Uniquely Inefficient?“, Alan M. Garber and Jonathan Skinner, Journal of Economic Perspectives, Fall 2008 — The answer is “yes.”
6. “Economic Survey of the United States 2008: Health Care Reform“, OECD, 9 December 2008
7. “OECD Health Data 2009 – How Does the United States Compare“, OECD, 1 July 2009
8. “Low Life Expectancy in the United States: Is the Health Care System at Fault?“, Samuel H. Preston and Jessica Y. Ho, National Bureau of Economic Research August 2009

Articles about health care:

1. From the OECD’s stats:  “How American awfulness stacks up“, Left Business Observer, July 2009 — Ugly, but the numbers are what they are.
2. Vital info about the problem:  “Overconsuming health“, Left Business Observer, August 2009 — In “1978, consumption was 61.5% of GDP; in the second quarter of 2008, it had risen to 70.3% (+8.8 points). Well over half that increase, 5 points, came from spending on medical care. The share of GDP devoted to spending on goods actually fell by 4.7 points over that 30-year period.”
3. Best graphic for the day, with a brief powerful explanation:  “The Cost of Care“, National Geographic, 15 December 2009 — International comparison of heath care expenditures nad life expectancy.
4. Ugly numbers about US health care spending:  “‘Big Government’ Health Care“, David Leonhardt, blog of the NY Times, 12 January 2010
5. One reason US health care is so expensive:  “Rise of the Machines“, Merrill Goozner, The Fiscal Times, 11 February 2010 — “The overuse of pricey technologies in preventive medicine is driving up health care costs unnecessarily.”
6. Best collection of commentary on the Health Care bill:  “Passage of Moderate RomneyCare Drives Republicans Insane“, Brad Delong, 21 March 2010
7. “Ten immediate benefits of HCR“, karoli, Crooks and Liars, 21 March 2010

Information on the FM website:

1. The American public is organizing and getting involved! Are we happy now?, 12 August 2009
2. Beginning of the end of the Republic’s solvency. Soon come the first steps to a reformed regime – or a new regime., 14 August 2009
3. Hidden truths about American health care, 19 January 2010
4. A note about practical propaganda, 22 March 2010
5. About the political significance of the conservatives’ health care propaganda, 23 March 2010