The United States is often compared, unfavorably, to health care systems of other countries.
But it’s refreshing to read that, yes, there are indeed countries that are worse off than we are. (via Ezra Klein)
Like Russia, which allocates significantly less than the World Health Orgnaization’s recommendation of 5 percent of government spending to health care. It’s a hybrid public-private system gone wrong:
Ninety percent of Russians are technically covered. But, doctors and hospitals extract “donations” for free care. Anyone who can afford it pays out-of-pocket for private hospitals and doctors. In theory, consumers can pick their own insurance plan. In reality, their employers generally do it for them, bought-off by the insurers.
And if you think the fee for service system is bad here, consider China, where health spending is actually growing faster than its booming economy:
Most hospitals are government-owned, and the doctors who work there are on salary—and paid very poorly. Today, a junior doctor can make less than $120 a month. A doctor’s biggest payday comes with his yearly bonus, which is tied to the revenue he brings in for his hospital or facility. Thus not only do hospitals have an incentive to have a lot of beds, but doctors also have an incentive to fill them—all to turn a profit.
And, of course, you can’t forget Turkmenistan. Their idea for reform was to close all rural hospitals, forcing people to travel to the capitol city, banning the reporting of certain diseases, along with replacing doctors with military conscripts. As a result, an epidemic of bubonic plague reportedly broke out.
So, when you read in the media about how bad the United States health care system is, don’t panic. It could be worse.
Related posts:
- A doctor in Cuba becomes a nurse in the United States
- Is it fair to compare American health care with systems in Europe or Canada?
- Saving what’s good about the United States’ health care system
- Citizens, not lobbyists, must reform health care in the United States
- Is rationing health care impossible in the United States?
- "Primary-care practices in the United States now depend on luring physicians away from other countries"
- A major obstacle impeding universal coverage in the United States
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That there are health care systems worse than in the US is hardly news.
I still have to be sold on the idea that there is a better health care system than in the United States. I don’t like using WHO statistics, as they seem very unreliable. Does anyone really believe that Cuban neonatal care is better than in the US? Hardly. I’ve heard that in Cuba, if a child dies within a few hours of childbirth, its not even recorded as a live birth! I’m sure there is much such poor reporting in many countries.
Also, average life expectancy is used to evaluate health care systems. This is foolish and fraught with statistical no nos. Genetics, lifestyle, obesity, and exercise are all confounding variables with such an analysis, rendering it useless. If you examine cancer detection and survival, the US beats Europe, Canada, and Britain.
The US system is the best, or one of the best, in the world – despite all of its flaws. Let’s get rid of the flaws, including government intervention into medicine, not scrap an excellent system.
What do you consider to be a flaw, and what do you propose to fix it?
Do you consider the high costs, limited choices (for those with employer provided plans), inability for many people to buy any medical insurance on the individual market, and insurance companies commonly denying what should be covered claims to be problems? If so, what do you propose to fix these problems?
Dr. Pho, I think your post is well written and I agree that it is important to keep perspective. While change within the system is certainly needed, if we the changes are enacted hurriedly, we may find ourselves in a bigger mess before the problem is fixed. That said, isn’t it a little disheartening that we had to look to Russia and China (not to mention, uh, Turkmenistan) to find examples of systems with more problems than ours?
And to previous poster David, your thoughts regarding the U.S. healthcare system seem to fail to recognize the amount of money we spend to achieve our outcomes-specifically, a higher percentage of our GDP than other first world countries. Thus, it is imperative to change our costs, because the current system is not sustainable.
Anonymous,
High costs are certainly a problem. We don’t really know what the costs of health care would be in a truly unfettered system. We do know, though, that US spending as a percentage of GDP rose dramatically in the 1960’s, just after the introduction of ‘free’ health care programs known as Medicare and Medicaid. Medicare is a great driving force of costs in the system – it is the government dumping a huge load of money (purchasing power) into the laps of patients. This has surely raised the cost of medical care.
Choices can indeed be limited for those who get health insurance through their employers. Why do you think this might be? Because tax laws strongly favor this circumstance. Employers are allowed to pay for health insurance using untaxed dollars (which is a significant benefit). It is therefore cheaper for employers to offer this, and so they do so as a benefit. This is a problem, though, since it ties people to their jobs for health benefits and eliminates the portability of health insurance. The tax laws should be changed (allowing individuals the same benefits). Health Savings Accounts are one attempted remedy.
You also point out that many people cannot afford any health insurance. While this is less true than is commonly thought (there certainly are not 45 million people in this situation) it is a problem. Part of the reason, though, has to do with control of markets. States, for the most part, tightly control insurance companies. They are told what benefits they must offer and even what prices they can charge. Hardly a model of capitalism! Insurance is, in part, expensive because it is forced to be by the ‘do gooders’ in state governments. They mandate mental health coverage, prescription coverage, mamograms, etc, etc. Want to buy cheap insurance that will handle true catastrophes but leave you paying out of pocket for most things – such insurance is often outlawed!
These are some examples of ways you could improve the best system in the world. It helps to ask why the problem exists in the first place, I think. Only the proper diagnosis will lead to a cure. Unfortunately, we have many people today who admit that they don’t understand why there are problems in the system and throw up their hands and invite the government to ‘take over and fix’ everything. A little more analysis leads to the conclusion that the government itself is behind most of the systemic problems.
We have certainly come a long way since WWII. Before the 40’s there was very little involvement by the Federal government in health care. As you may recall, employer paid health care plans came about during WWII as price controls eliminated other avenues of employers rewarding their employees. Now, we seem to think that each individual has a right to health care; many believe that the benefits should be limitless, it seems. We are now at a nexus where we continue with a health care system that is crippling the economy and employers or make some changes are fiscally responsible while the majority of Americans receive decent care. Of course, we need to insure that the primary care physicians receive the income they deserve and the honor they have earned. I do not even know if this is at all possible; it will certainly take some wizardry. Going back to the system before WWII or letting things remain as they are certainly does not seem like an option to me.
That’s not what I said. Many people cannot buy individual medical insurance at any price, due to pre-existing conditions that are rejected under medical underwriting. Of course, that is the insurance companies’ defense against adverse selection. But the combination of adverse selection and insurance company reaction (rejecting those with pre-existing conditions, and dropping insured people who develop a condition that will cost a lot of money in the future) destroys the individual market for medical insurance, forcing the market to be group based. Even if the tax benefits to employers for buying insurance for employees were removed to equalize that with individual-bought insurance, most insurance would likely remain group-based due to the large number of people who would be rejected for individual policies.
Note that this has an economic inefficiency side effect in that some people stay with large companies to be under group insurance plans, because they cannot go into self-employment or join small companies due to being unable to get individual or small group medical insurance.
Since you appear to want a primarily private market based system, how would you handle the adverse selection problem, which you do not address in your post above?
The list is hilarious, It brings to mind the just as improbable list of nations that made up the “coalition of the willing” of the Iraq war and which Michael Moore mocked. Turkumenistan. Well at least we are better than them.
This kind of comparison isn’t all that helpful. What would make for a better comparison is between us and say, Germany. Tell me what the average German citizen pays for coverage and what he gets in that coverage. Are my chances of getting timely, state-of-the-art cancer treatment as good in Germany as they are in the USA? Are they better there than here? Will German insurance cover things I cannot have covered here? Can anyone buy insurance? Are there laws prohibiting rejecting a person because of prior medical history?
(Don’t give me country-to-country comparisons of infant mortality. Those are notoriously used to disparage the USA but those using that statistic are dishonest in failing to recognize that there are differences in how those rates are calculated, country to country, and what kind of perinatal demise is counted and what is not. What is more, we are supposed to believe that infant mortality is supposed to be a direct indicator of the quality of a healthcare system, without convincing proof, just as we are to believe the same of average lifespan, another statistic that no one ever seems to be able to prove how it is a reliable indicator of the quality of healthcare, we are just supposed to accept that it is.)
Matt said “Thus, it is imperative to change our costs, because the current system is not sustainable.” On this point I can agree. I suggest a slow phase out of Medicare and Medicaid as our most fruitful step. The age of eligibility for Medicare can be slowly increased, say 6 months later for every year that passes. This would allow the slow build in of private health insurance to fill the gap.
Anonymous,
I think there are an infinite variety of health conditions (each person’s health is different and potentially more or less potentially costly to an insurance company). Insurance companies don’t know what will happen to you in the future any more than you do. That is why they have actuarial tables and statisticians trying to calculate these things. You have to really change your perspective and realize that insurance companies are actually providing a valuable service that both you and I would like to take advantage of.
Now, logically, if I am free to set my price to any amount, then, logically, there is NOTHING that would prevent me from offering insurance to a particular person. in addition, if I can limit that insurance to certain types of outcomes (to be defined in the contract that is signed) then I can also limit my exposure. Under the current system, neither of these conditions is true. Health insurance companies are highly regulated, mostly by states. This results in them not being free to sell insurance at any price and not being free to offer any product (in this case, a limited one). The end result is that certain people are simply not offered insurance. This is simply another example of price controls leading to shortages, as they do in other markets.
Now could I imagine a person who current does NOT have insurance and who has a horrible disease, and for whom the cost of insurance will probably be too high? Of course. You can always imagine a horrible scenerio that may, in a few cases, actually come true. Such people will have to depend on the good will of family, friends, hospitals, and charity organizations.
Actually, medical costs are very predictable in many cases, since they are not like many other perils that happen at unpredictable times and finish occurring within a day (car crashes, house burning down, theft, etc.).
If a doctor tells you that you have non-skin cancer, recommending various treatments that should be scheduled in the near future, both you and any insurance company seeing your medical records will know your near future medical bills without having to look up any actuarial tables. It is not like a car crash, where your doctor tells you that you have non-skin cancer and does all of the treatment in the same day. In this case, the insurance company has an incentive to drop the customer as soon as it can after finding out the diagnosis, in order to avoid paying for any of the scheduled treatment.
The way to make a market-based system work is to create a mechanism where you can buy insurance to insure your insurability for medical insurance. As it would be in an unfettered market, medical insurance would just be prepaid medical care, with costs approximating actual medical costs to an individual due to the predictability of actual individual medical costs, rather than a risk-sharing mechanism that insurance is meant to be. Insurance policies to insure insurability would put the risk-sharing mechanism back in.
But that idea does not seem to be mentioned by anyone.
Anonymous,
I think you may overestimate the predictability of medical care costs. Once a diagnosis of cancer is made, there are a huge number of potential complications that may occur. Blood clots to the lungs, strokes, heart arrhythmias, spinal cord involvement of metastases, etc.. In any case, this isn’t your main point so why quibble.
Your second point is simply lost on me. Insurance can work in many ways – and it wouldn’t necessarily revert to some equivalent of paying to the insurance company what they are paying out for your medical care. I think we would have to actually speak with some insurance executives about this and see where they stand on the feasability of various structures.
Another point, though, is that insurance is so expensive, in part, because it has grown to envelop routine care. Visits to your doctor, routine prescription drugs, etc. are all now handled by insurance. This has divorced the patient from direct costs and leads to a continual demand for more from the insurance company. I’m not sure, really, why this has happened. Did Medicare begin this trend and others found it necessary to follow suit? Did Blue Cross and Blue Shield (who apparently, early on, got significant tax breaks) encourage this idea – and other insurers had to compete with them? Anyone who knows the answer please chime in.
That was already answered in a hearing in Congress, where insurance company executives basically described some rather customer-unfriendly business practices like looking for excuses to rescind policies as soon as the policyholder got an expensive medical problem.
While in theory, insurance is most efficient when it covers only catastrophic losses, medical care is a situation where it is often “pay a little now or pay a lot later” for the same problem, but most people balk at paying a little now (remember the story of the kid who died because his mother did not want to get his cavity filled, which later led to a fatal infection?). So insurance schemes offered by employers often include checkups and routine care because it is cheaper to catch problems when they are cheap than to deal with them later when they are more expensive.
Note also that many people choose lower deductibles on the car and homeowner / renter insurance than are probably optimal for their situation. Moving over to medical insurance, high deductible plans are not popular at all, either in the marketplace (for either individual or employer group plans) or in political discussions happening these days.
Of course it is inefficient to run every small charge through insurance company bureaucracy (which also gives them a chance to mess up the claim payment or inappropriately deny what they say is a covered claim). Unfortunately, that seems to be what most people want, and what is needed to give most people an incentive to get routine care.
I just ran across this article that spells out a lot of the problems with our current health care system and also the problems with health insurance companies. Specific reference is made to state regulators and the fact that they shut out interstate competition:
http://www.afcm.org/fascisthealthcare.html
If you ask Daniel Hannan, EU Parliamentarian, he’ll tell you the US has a far superior healthcare system to the UK. However, the UK does have it all over the US in one area. According to Mr. Hannan, that’s the US’ litigation lotto.
Actually the United States has worst health care than Canada and Europe. Their statistics are far less for all diseases, and they have a longer life span than us. I’m proud to be an American, but I often see why people think so negatively of Canada and Europe. Just look how it’s portrayed to us. My European and Canadian friends are very happy with their health care. Also, the United States has the highest obesity rate, just look at all the hormones and cancerous products in the foods we eat.
It’s okay to dump people off in the middle of the road like *cough cough… skid row…cough cough*. It’s ironic how we say we all care about one another, but when it comes to actions we show very little. The only times we do is when it’s in times of despair. Like after 9/11, but those same people who are our hero’ s volunteer fire fighters, medics, were just thrown away. They suffer the damage, and have a hard time getting medical.
We say health care reform can wait, no we can’t!!! How long have we been talking about reforming health care?! It’s been quite a long long time.
I have lived mostly in Canada, but also have lived and worked for seven years in the United States. Being almost 60 years old and retired for almost four years, there is no doubt in my mind which system I prefer, having used both. The US medical system is very overrated and my experience is that I have received far better overall care in Canada than I did in the US.
Americans talk about wait times in Canada. My experience is that I have had procdures done here much faster than it used to take me to get insurance company approval, let alone procedures, in the US.
I have had two serious, but not particularly urgent surgeries.
I had a serious but not urgent kidney injury from playing football as a 20 year old. I was referred to a Urologist in the city (I lived in a small town then) and saw him on the third day, after seeing my GP on the same day as the injury. The Urologist put me in hospital that same day, did testing and X-rays the fourth day and surgery on the fifth day after seeing my GP. The testing had shown that the injury was localized in the upper pole of the left kidney, so he was able to only remove that affected half, all done in five days of the injury.
Two months ago I went to my GP with vocal hoarseness. He suggested I see an otolarygologist. I got that appointment in 7 days, and had surgery for a laryngeal lesion (later pathology showed it was benign) 2 days later which also included surgical vocal cord reconstruction all within 10 days.
My mother had bypass surgery at age 72 within 2 1/2 days, most of which was because the cardiac surgeon wanted her more stable to improve her chances of surviving the surgery.
She also had cataract surgery at age 77. Time from diagnosis to surgery, 14 days.
I have always had excellent, efficient, and very high quality care by both physicians and hospitals in Canada. My experience in the US was more about insurance company interference with care and denial of care than it was about health care. I wasn’t overly impressed with the quality of care I had in the US either, measuring it against what I had experienced here.
Universal and unlimited access to physicians, particularly primary physicians, enables problems to be dealt with when they are small and treated with far better outcomes and treated far more cheaply.
My opinion from my experience in the US is to take off the blinders and quit the hype about US superiority. In my opinion the US has a lot to learn about both access and quality from other countries.
It is amazing to me the numbers of respondents lately that feel health care is not a right. This is the MOST precious thing to any person, but the same people maintain their absolute right to keep all the money they make. This line of reasoning makes absolute sense, when you are well to do, and therefore demand the absolute right to keep all your income. Because you manage to make a good income, you then can afford any high priced healthcare, and you may effectively state I ( by right of my station in life ), am entitled to healthcare however you, due to your lower standing are rightly limited to your entitlement as to healthcare availability. These people now act like the KING our forebears left Europe to escape – how soon they forget.
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