2008/01/02

Hard numbers on healthcare

The completely unacceptable performance of the American healthcare system has been widely recognized for at least 30 years. So it's baffling that politicians and the media have almost completely ignored the experience of a dozen other industrialized countries whose approach to healthcare has produced far better results.

Baffling, that is, until we recognize what following the lead of the other rich countries would entail - the almost complete elimination of private insurance providers and perhaps private pharmaceutical companies as well. The health industry is one of the richest in the nation, with plenty of money to corrupt politicians and threaten them with massive hostile propaganda campaigns if the lure of campaign contributions is inadequate. Since the media are too timid to venture beyond the incredibly narrow mainstream political debate, there has been almost no attention to the experience of other countries that spend significantly less per person on healthcare yet manage to insure everyone.

Winning a single-payer health insurance system, which in practice would mean extending Medicare to everyone in the country, is one of the most urgent political issues we face. So it's extremely important to counter the widespread ignorance and misconceptions among Americans about government-provided healthcare in the other rich countries. Here are some hard numbers that demolish the idea that private insurance is superior to single-payer in any way.

A survey of Australia, Canada, Germany, Netherlands, New Zealand, Britain, and the US found that the US spends twice as much per capita ($6697) as even the second-highest spending country (Canada, $3326). The other countries spend even less - New Zealand spends only one-third as much as the US. This disparity is even more shocking in light of the fact that even with our astronomical healthcare expenses we leave 16 percent of the population without coverage, while the other countries cover everyone.

What about the results of the health system? I looked at the WHO's health statistics for Australia, Canada, France, Germany, Japan, South Korea, Britain, and the United States - all have universal, government-provided healthcare except the US. The US is last in life expectancy - as many as 6 years behind the leaders. The US had the highest infant mortality rate (7 per 1000 live births) - South Korea was 6 deaths per 1000 live births and the other countries were between 3 and 5 deaths per 1000 live births. Per capita number of doctors varied - France and Germany had the highest, Australia, Canada, Britain, and the US were in the middle, and Japan and Korea had the lowest.

A survey of Australia, Canada, France, Germany, Netherlands, Japan, Britain, and the United States gives some more information. The US had the highest number of years lost to diabetes and circulatory and respiratory diseases, as well as the largest number of deaths due to surgical or medical mishaps.

In terms of overall opinions on healthcare, Americans are less satisfied than those with universal healthcare (see the first study). 16 percent of Americans said there were only minor problems in the health system, while 34 percent said the health system should be completely rebuilt. In the other countries, around 25 percent believed their health system had only minor problems (42 percent in Netherlands), while only 15 percent or so called for fundamental changes.

Confidence in the likelihood of receiving good-quality care was about the same in countries with universal healthcare as it is in the US (it was slightly lower in Canada, Germany, New Zealand, and Britain, about the same in Australia, and much higher in Netherlands). Wait times for surgery in the US were shorter than other countries (except Germany, which was significantly shorter than the US), but the differences were not overwhelming. Even Canada and Britain, the worst performers, held 85 percent of surgeries in under 6 months - and this relatively poor performance might be because of recent conservative attempts in both countries to reduce medical spending.

Another study assigned rankings to the health systems of Australia, Canada, Germany, New Zealand, Britain, and the United States. Rating the countries on "right" (effective) care, safe care, coordinated care, patient-centered care, access, efficiency, equity, and capacity to promote healthy lives, the US scored last or second-last in all categories except right care (the US's strong performance in preventive medicine was responsible for this single bright spot).

In 2000 the WHO ranked all the health systems in the world. Here are some of the rankings: France (1), Italy (2), Japan (10), Britain (18), Germany (25), Canada (30), Australia (32), US (37). Costa Rica was 36, Slovenia was 38. Cuba was 39.

(Also check out this Paul Krugman column, which tears apart the standard arguments in favor of private insurance.)

The conclusions are inescapable: the US spends by far the most money per capita on health care in the world - 2 to 3 times more than other rich countries. Yet the US leaves 1/6 of the population uninsured while the other rich countries cover everyone; the US's health indicators are no better and often worse than those countries with universal coverage; and Americans are less satisfied with their health system than are people with government-run systems. What makes our healthcare system operate so poorly?

The main reason is that private health insurance is a remarkably inefficient way to deliver health insurance. Dr. Stephanie Woolhandler, an associate professor of medicine at Harvard, notes that we spend "almost a third of every health care dollar on administration and paperwork generated by the private health insurance industry" while "[c]ountries like Canada spend about half that much on the billing and paperwork side of medicine". An even more relevant comparison is Medicare - America's own government-run insurance program for the elderly, which would be extended to everyone under single-payer insurance. Compared with the 30 percent administrative costs of private insurers, Medicare's administrative costs are significantly lower - between 2 and 5 percent depending on how they're figured.

Why is Medicare so much more efficient than private insurers? One reason is that Medicare doesn't spend millions of dollars on advertising and the ridiculous pay packages of HMO corporate executives. At least as important, Medicare benefits from economies of scale. The US has hundreds of private healthcare bureaucracies duplicating each other's work and paying thousands of employees to figure out how to deny care to sick people. Other countries do the paperwork through a single comparatively efficient government agency, with no profit incentive to deny care.

By Woolhandler's calculations, Medicare for everyone would save so much money that we could extend coverage to the 47 million uninsured and still have enough money left over to improve the coverage of those currently underinsured. So single-payer should be a no-brainer - it should look good to those who want to help their fellow Americans struck down by horrible illnesses, but it should equally appeal to those who simply want to stop spending so much on healthcare. The only reason we're denied this obvious solution is the tremendous power of the private healthcare lobby. It's up to us to organize and apply as much pressure as needed to convince our representatives to implement the only efficient and ethical answer to the healthcare crisis.

2 comments:

Patrick said...

I think you're missing the problem with communistic socialized healthcare. The issue isn't whether it's more or less efficient, but rather that it's being done by the guvmint.

Good write-up, tho. ;)

Jake said...

i'm glad you brought that up, because for the same reason we should oppose socialized medicine, we should also oppose socialized education (public schools), socialized pensions (social security), socialized fire departments, socialized transportation (public transit and govt-built roads and highways), and socialized books (public libraries). and just look at how well privatizing military contracting has worked in iraq! everything capitalists do is so efficient.