Reader comment on health care

on Aug 19 in health care tagged by Trevor Hicks

A highly valued contributor says

According to this site: http://www.photius.com/rankings/healthranks.html , the US is No. 2 in total health expenditures as % of GDP, we spend the most per capita on health care, and for that money we only have the 37th best performing health care system in the world, based on WHO data. I haven’t looked closely enough to see what their methodology is, but it looks like there must be huge inefficiencies built into our current system to cause such a discrepancy between what we pay and what we get.

The bill that so many people are up in arms about isn’t for a single-payer system. It’s just for a public option so that people who earn too much to qualify for Medicare but can’t afford private health insurance can buy health insurance from the government. People who can afford private insurance or who have employer provided insurance would keep what they have.

Well put Josh.  To address the first issue regarding the efficiency of US health care I have two categories of responses.

1) So what? We have one of the highest per capita expenditures on our automobiles and yet we spend more time sitting in traffic than most countries.  Is the fact that many people spend more than they need to on cars a problem for government to solve? So if Americans, for a variety of reasons, in aggregate like to spend lots of money on useless medical procedures then I don’t see why that should be an issue. Well, I do see it’s because the government shells out about half of every health care dollar spent in this country so our prfoligate spending on health care affects the government’s fiscal situation. I see this as more of a problem with socialized medicine. We shouldn’t create another government program to solve a problem and reduce the costs created by another government program.

2) Let me concede that our system is expensive and has problems in both distribution and efficiency, we do pay more than we really need to in aggregate for health care. As I mentioned, I believe the chief culprit is our propensity to over-diagnose and over-treat. For instance, Americans regularly give another round of chemotherapy to a hopelessly terminal cancer patient because nobody is willing to admit that there is a time to give up. However I disagree with the implication that our current system delivers low or mediocre quality care.

Regarding the WHO report, note that the US is 37th, but out of 191 total countries which is still in the upper quartile. There are some serious problems with the WHO methodology, notably that three of the five metrics accounting for 62.5% of the final weighting are about the ‘fairness’ of the distribution of healthcare. So the WHO rankings say much more about how socialized the healthcare system is than about how good it is at delivering quality care. And of the two rankings that actually cover the quality of care, the 25% weighted metric is life expectancy which is a terrible proxy for the quality of health care in a country. Factor out deaths from accident and homicide and then the US actually compares much more favorably to most countries. The last ranking, weighted at 12.5% is responsiveness which deals with issues such as dignity, autonomy, confidentiality, choice of provider and prompt attention. The US is #1 in the world on that one. So our system is certainly expensive, but it is not necessarily hopelessly inefficient as a cursory look at the WHO rankings might indicate.

On the topic of the quality of US care, it should be pointed out that the US leads Europe in cancer survival rates as noted by Preston & Ho at the University of Pennsylvania (apologies for the lack of table formatting):

Table 1. Five-Year Relative Survival Rates for Cancer of Different Sites, US and European

Cancer Registries*

5-year survival rate (%)

Site United States Europe

Prostate 99.3 77.5

Skin melanoma 92.3 86.1

Breast 90.1 79.0

Corpus uteri 82.3 78.0

Colorectum 65.5 56.2

Non-Hodgkin lymphoma 62.0 54.6

Stomach 25.0 24.9

Lung 15.7 10.9

All malignancies (men) 66.3 47.3

All malignancies (women) 62.9 55.8

If you need an organ transplant, the US is definitely the place to be.

One last point I want to make is that the US is also suffering from a massive free rider problem. Pharmaceuticals are a great example, because we do, in fact, pay much higher prices for the same drugs in the US compared to other countries. We are financing the R&D for the entire world. But would we really be better off imposing price controls and choking off new research?

So I agree that our health care system is expensive, but I would also argue that we do get more for that money. Certainly we could argue whether the marginal benefit of our excess spending is worth the excess cost, but I think the argument that our excess cost has no or negative benefit is false. The real problem underlying this issue is, to return to my car analogy, that the US gives you a choice of buying a Mercedes, a BMW or a Cadillac. This is really a problem since many people who cannot afford those more expensive choices and would prefer a Toyota to nothing, but that choice isn’t really available. I think the main source of this situation is excessive and not insufficient government intervention in health care.

As for what is in front of Congress today, I admit that I, like the 535 members of Congress, have not read the bill. I see a system that is world class in many respects but which also has some deep flaws.  AndI don’t trust Obama, and certainly not Pelosi & Reid, to not screw up the great parts as they work to address the flaws. Obama squandered my trust when he perpetuated so many awful Bush policies regarding the banking and automotive bailouts and economic stimulus. He certainly didn’t show any ability to reign in the worst impulses of Congress to load up the bills with billions in handouts and protections for their corporate and union cronies. And he hasn’t shown any willingness to scuttle the climate change bill which is worse than useless with its massive giveaway of cap and trade permits instead of the 100% auction he promised.

So I’m definitely one of Obama’s cynics who has lost faith in the political process. Thanks in no small part to Obama himself. As I’ve said earlier, the best way to increase fairness in American health care is to cut government intervention, not make a new and expensive program that will only worsen our government’s already poor fiscal balance.