Friday, April 15, 2005

The best medicine? Not so much. . Kevin Drum says Brad Plumer and Matt Yglesias have a little list. First Brad asks Why Does The Media Hate Single-Payer? The bullet points: 1. Reporters just don't know all that much. 2. Anecdotes count for more than statistics. 3. Health care professionals in single-payer systems have reasons for drumming up "crisis" rhetoric. These are fleshed out a bit in Brad's post, but Matt's bullet points in The Media on Health Care aren't as informative, so I'll have to give you more The England Problem. For linguistic and other reasons, the European country Americans are most cognizant of is the United Kingdom which happens to have a health care system (the NHS) which goes very far in the opposite direction from the U.S. system in terms of command-and-control health care and which, consequently, offers a very exaggerated version of the downsides of government-run health care. Another problem neither of them mention is actually highlighted by this paragraph - that Americans believe a lot of wrong things about British healthcare because people who oppose a universal system spread lies about it. We have pretty decent care here, sometimes better than you'll get in the US at any price. As I've said before, the furniture isn't always as nice, but the quality can be top-notch - and free at the point of delivery. (My room at Moorefield's didn't include a private bathroom, and it was smaller than any hospital room I remember seeing in the US, but it was certainly adequate, and I got my surgery in what may be the best eye hospital in the world. My outcome was at the top of the known range for the procedure.) Overall, as Kash shows here and here, and Angry Bear shows here, the UK still delivers a better healthcare outcome than the US despite the fact that they cheap out on it compared to the rest of Europe. The France Problem. What Matt says here basically amounts to, "It's France." That is, people are politically hostile to taking advice of any kind from France, and anyway they confuse the healthcare system with other things they don't like about France's labor rules, housing projects, approaches to diversity, etc. The Canada Problem. The US-Canada health care dynamic is asymmetrical, because wealthy Canadians can travel to the United States to take advantage of the aspects of our system that work better (for relatively prosperous people) than does their system, while working- and middle-class Americans can't go to Canada to take advantage of the aspects of their system that work better than ours. The result is that you have lots of anecdotal evidence of people fleeing Canadian waiting lists to get their hips fixed in the USA, but no anecdotal evidence of people taking their kids to Canada to get affordable, high-quality preventative care for their kids. In the limited domain of pharmaceuticals, this has changed and Americans now can (and do) go to Canada to get cheap drugs. Not coincidentally, I think, this is the area in which you have the most public support for left-wing solutions. Cost Underestimation. Apropos of the French-style taxes, it seems natural to assume that governments which provide health care for all their citizens are spending more than are government which provide health care to only some citizens. It's natural to assume, but it isn't true. Reporting on the actual composition of federal spending is always dismal, which leads people to grossly underestimate the extent to which your tax dollars are already going to pay for health care, since Medicare is a universal coverage program for the segment of the population that is by far the most expensive to treat. Matt understates the case, here. It's not just that we don't see the costs of what publicly-funded healthcare we do supply or the real costs of what our employers pay in and our insurance companies cover, it's also that we seem remarkably unaware of where it's all coming from in the first place. For example, Big Pharma claims they need to charge those high prices to cover the cost of their research, but in fact much of that research was performed at taxpayer-funded institutions. The same is true of the development of new treatments and machinery. All that wonderful stuff was developed in government-funded universities, at NIH - and in other countries. (Americans seem astonishingly unwilling to believe that any of these things were created elsewhere, but they're wrong.) Bipartisanship as Fairness. Perhaps the biggest problem is simply that since single-payer isn't the official view of the Democratic Party. One problem with "he said, she said" writing is that if he is lying, he gets to get away with it. Perhaps a bigger problem is that if he and she agree that we shouldn't do X, it winds up going without saying that X is, in fact, a terrible idea. If a major political official started insisting that France had a great health care system, you might be able to browbeat the press into acknowledging that he was right. But until someone does it, it will simply continue to be taken for granted that it must not be. This is a significant part of the complaint liberals have with the Democratic Party generally - if they don't stand up for the liberal position, no one is doing it, and the discourse ends up skewing to the right. Rich Journalists. That doesn't need much explanation, but again, Matt is wrong to assume that if you're rich you necessarily get the best care in the world in the US. In some things perhaps that is true, but there's a downside to the expensive care you get in the US. Leaving aside the fact that it's doubtful you could get better in America than I got at Moorefield's, there are other problems we don't pay much attention to, like the fact that the over-abundance of cardiac facilities at US hospitals often means that your cardiac team will be one that is underemployed, while my cardiac team will be one that is sufficiently busy all year long that they're constantly being educated and staying in practice. To me, though, the priceless fact of UK healthcare is this: I pay for it when I can pay, and I get it when I need it. What that means is that, yes, when I'm getting a paycheck, money comes out whether I'm sick or not, but when I'm ill, I get healthcare whether I have money to fork-over or not. I don't feel that money coming out of my paycheck, but believe me, as someone who grew up in the US, I am acutely aware of the fact that when I'm thinking about seeking medical care or advice, I know with a certainty that the price is not an issue. When I was getting ready for my eye surgery, I didn't forget that even some people I know who have health insurance in the US would have had to write-off their eye if they'd been in my situation because the cost of surgery, two nights in the hospital, and after-care might not all be covered and what they still would have had to produce out-of-pocket would have broken them. Someone with no insurance wouldn't even have been able to consider it. (And that's leaving aside the four weeks I spent house-bound while I kept my head in the necessary position to make sure the procedure works. Would your employer give that to you?) I get the care I need when I need it, and so far it's been good care. I never have to think about whether I can afford it. Like I say, priceless. So congratulations on having the best healthcare in the world. [The Sideshow] 7:16:02 AM     Disgusting subjects . Dahlia Lithwick discusses the question of whether pharmacists should be able to deny women birth control in Martyrs and Pestles, and Meat-eating Leftist (via The Daou Report) links to this story saying that the governor of Arizona, Janet Napolitano, has vetoed the bill to allow pharmacists to refuse to dispense medicine based on their religious prejudices. Bill supporters expressed disappointment with the veto of what three Catholic bishops called civil rights legislation for health care professionals and institutions. Civil rights, right. Here is what an evangelical pill-sorter's rights are: He has the right to sort pills and give them to customers. If he has a problem with that, he has the civil right to get out of the profession and become a priest or a talk-show host or whatever the hell he wants! As my friend JBC once told me, a pill-sorter refusing to give you medication is like a checkout girl at the supermarket refusing to sell you meat because she is a vegan. Same stupidity. And coming from people who have no problem with the death penalty, which not only kills people but in many cases tortures them to death, as Steve Bates of The Yellow Doggerel Democrat reminds us, citing The Houston Chronicle: As many as four of every 10 prisoners put to death in the United States might receive inadequate anesthesia, causing them to remain conscious and experience blistering pain during a lethal injection. The idea of lethal injections was supposed to salve our conscience by providing a death that was less painful than the electric chair, firing squad, or hanging. Personally, even with the illusion that it's painless, I've always found it even more sickening, but perhaps that's just me. But I also know that the way the drugs are administered only hides the fact that the subject could be in agony - and I have no reason to believe that's not the case. And finally, the great Tom DeLay quote, in case you missed it: The reason the judiciary has been able to impose a separation of church and state that's nowhere in the Constitution is that Congress didn't stop them. The reason we had judicial review is because Congress didn't stop them. The reason we had a right to privacy is because Congress didn't stop them. Holidays 2004 observes that with the Republican leadership expressing views like this and getting away with it, "There are no moderate Republicans left who have influence over the party. Why would anyone vote for a Republican given the way the party is and has been behaving? Republicans support Big Brother government. Republicans support theocratic government. If you love freedom, democracy, and the rule of law-and if you enjoy religious freedom: stand up and oppose these wackos." [The Sideshow] 7:14:29 AM     Over and Dun. Dear United States Congress; It has come to our attention that you have not made any payments on your debt in five years. Please make arrangements for payment or further action will be taken. Failure to pay may also... [Fanatical Apathy] 7:10:18 AM     Friday Bird Blogging. (...) [South Knox Bubba] 7:04:05 AM     Health Care in The U.S. And The World, Part II: What do we spend the money on? In Part I of this series, I showed that the US spends a lot more money on health care – now over 50% more as a percent of GDP than France and the other industrialized nations. Additionally, the U.S. is the only country in my data for which less than half of health care spending is publicly financed, with the balance coming primarily from employers and out-of-pocket. But what do we spend the extra 5% of GDP? It’s apparently not doctors. While the number of doctors in the US has increased steadily, we still rank low in terms of doctors per capita: France has the most doctors per capita, while the US edges out Canada, the UK, and Japan. It’s often alleged that the US has more specialists and less general practitioners than other countries, which might explain why we spend more money yet have fewer doctors to care for us, per capita – we’re buying high priced specialists (I haven’t found data on international comparisons of the specialist:generalist ratio.) If it’s not doctors then it must be hospital care, right? Again, no. While all nations have shed hospital beds, France still has substantially more beds than the US. The U.S. does have more hospital beds than Spain, Sweden, and Finland: Perhaps our doctors are simply more efficient, able to care for more patients with fewer beds? As it turns out, France and Finland have increased their efficiency (i.e., using fewer beds to produce more discharges) over the last 15 years or so. In the U.S., however, changes in hospital discharges have basically tracked the changes in hospital beds. A quick side note: the funny business you see with the UK lines in the last two graphs is most likely the result deregulation that took place in England in the 1990s (see, e.g., Propper et al., 2004). Back to the subject at hand, while we spend a lot more on health care, we don’t have more doctors or more hospital beds, rendering rather dubious the claim that other nations are able to spend so much less on health care because they have shortages and long waiting lines (see yesterday’s post by Kash for more on this point.) If our extra spending is not buying us more doctors, nor more hospitals, then perhaps it’s going to drugs. While it’s true that spending on pharmaceutical products increased from 8% to 13% of health care spending, that change occurred as total spending on health increased from 10% of GDP to 15%. Putting those numbers together, pharmaceutical spending increased from a bit under 1% of GDP to a bit under 2% of GDP. That 1% of GDP is a lot of money, but it accounts for at most a fifth of the increase in health care costs in the US over the last decade. Also note that other nations, such as France, Canada, and Finland had similar increases in their pharmaceutical spending ratios, yet have not had nearly as dramatic increases in total health care spending. Based on the data I’ve been able to find so far, there’s simply no readily apparent sense in which consuming more inputs (doctors, hospital beds, drugs) accounts for a large portion of the additional health spending in the U.S. Since spending equals price times quantity, this leads to the conclusion that the prices of health inputs are higher here than in other industrialized nations. Still, that might be money well spent if our inputs are of higher quality, able to produce more or better health output. I’ll take a look at this issue in Part III. AB - Angry Bear [Angry Bear] 6:44:44 AM     Health Care in The U.S. And The World, Part I: How much do we spend? POST-AUTHORING NOTE: I see that while I was drafting this Kash wrote a great follow-up post with substantively similar content to this one. But perhaps my take on the issue or, failing that, my graphs, will still be interesting. ************** Given that about one in seven dollars in the U.S. are spent on healthcare (and the popularity of Kash’s recent 100 comment post on the topic ), I decided to take a closer look at how the U.S. compares to other nations. Most of the data underlying the following charts are taken from the OECD ( www.oecd.org/health/healthdata and, in particular, the tables at OECD Health Data 2004 – Frequently Requested Data .) There are several ways to look at the problem of health care spending in the U.S. The most obvious is how much we spend. Clearly, we all know by now that we spend a lot more on healthcare than other nations, about 50% more than any other industrialized nation, as the following set of graphs demonstrate. Given the interest in comparing France and the U.S. ( CalPundit , Yglesias , Plumer ), I’ve emphasized the series for these two countries. The U.S. is in red and France is black with red diamonds. As is plainly evident, during the 1960s and even the 1970s we were still spending more on health, but at 7-9% of GDP we were in the same neighborhood as the rest of the industrialized world. Beginning around 1980, the rate of health care spending in the US accelerated, both in absolute terms and relative to other nations. The subsequent flattening out of healthcare spending in the US that started around 1990 is mostly attributable to the growth of managed care. If you look closely, you can also see the effect of the balanced budget act of 1997, which lowered Medicare reimbursement rates. What accounts for the dramatic upsurge that started in 2001? That, of course, is rapidly becoming the two trillion dollar question. But first, a bit more on the components of healthcare spending. The gap between the U.S. and other industrialized nations in this figure is most likely due to two factors: (1) about 60% of Americans have health insurance through their employer, and (2) the 40 million uninsured in the U.S. who presumably go without some services that in other countries would be paid for by the government. Of course, if our government spends less, yet overall we’re spending more, then someone has to be paying. Guess who that is. (Hint: grab a mirror): Of course, there’s nothing wrong in principle with spending a lot on healthcare, if we’re getting more for our money. For example, perhaps we have more doctors and hospital beds per capita, supporting the commonly held view that waiting times are quite long in other countries. Or perhaps we have better health than Europeans. Ok, Kash showed the other day that the U.S. doesn’t fare all that well on two metrics, life expectancy at birth and the infant morality rate. But perhaps after adjusting for factors such as obesity, smoking rates, and differences in age distributions we’ll find that the U.S. does better. Stay tuned. Coming soon: Health Care in the U.S. and The World, Part II: What do we spend it on? Health Care in the U.S. and The World, Part III: What do we get for our money? AB - Angry Bear [Angry Bear] 6:44:26 AM     Waiting for Health Care Okay, so much for the bad side of US health care: high costs and mediocre-to-poor average results . But what about the benefits that the "market-driven" US system provides? Sure, the argument goes, the US health care system has some shortcomings - but at least it doesn't involve long waiting lists for elective procedures, as is the case with countries that have primarily government-run health care. It turns out that this is largely a myth. Let me leave aside the point that waiting lists exist in abundance in the US for elective procedures - it's just that when people are waiting in the US, they are waiting for a miraculous windfall of money to be able to afford the procedure, rather than waiting a few months until their number is called. No, right now I want to focus on the myth that government-financed health care necessarily entails waiting lists for elective procedures. The data shows that many countries with "nationalized" health care systems have little or no waits for elective medical procedures. A 2003 OECD working paper entitled " Explaining Waiting Times Variations for Elective Surgery across OECD Countries " by Luigi Siciliani and Jeremy Hurst provides some survey evidence of actual waiting times in various OECD countries. The results of that survey are presented below. Note: figures for Canada and U.K. reflect median waiting times. In all of the countries surveyed above (except the US), the government is responsible for the vast majority of health care spending. (See AB's post from yesterday for specific data on that.) Yet many of them have no waits for common elective procedures. Clearly government financing of health care does not, in and of itself, cause waiting lists for medical procedures. If a country has waiting lists for elective health care, that is due to some specific design flaws in its health care system, not because it is financed by the government. The rest of the paper mentioned above goes on to take a look at the factors that lead to waiting lists. The authors run some econometric tests that conclude that long waits for elective surgeries tend to happen when 1) countries don't have enough acute care hospital beds (France and Germany have plenty, the UK doesn't); 2) countries have older populations (older populations create more demand for elective procedures); and 3) countries pay specialists a salary rather than according to a fee-for-service formula. One last point of interest: what do consumers in other countries have to go through in order to receive these elective procedures? The following table shows out-of-pocket costs for elective procedures, and who makes the decision about whether an individual should receive the service. In countries with government-financed health care, the decisions are made by doctors - often by the specialists themselves - and out-of-pocket expenses to individuals are negligible. Compare this to the case of the US, which is somewhat different in both dimensions. What would an American expect to pay out-of-pocket for elective hip replacement, and how many hoops would they expect to have to jump through to get approval from their HMO? So the next time you hear that the US health care system is better than those of other countries because Americans don't have to wait for their health care, recognize this argument for the myth that it is. Kash - Kash [Angry Bear] 6:43:57 AM     In Summer Wind. In summer wind by the brook, a willow tree drinks deeply, though not of the cool water that flows but of the air itself - the air that animates her limbs and tossles her hair upon the breeze. [BOPnews] 6:36:59 AM     Eating Your Seed Corn. The Christian Science Monitor reports what scientists have been grimly foreseeing for some time: the decline and failure of American scientific, engineering, and technological preminence. This is somewhat short sighted since the only way to buy time for the US to smoothly transition to a new economic is to hope for just one more single last technological leap forward. In more dire considerations, the US has pissed off a lot of people during the years and it is almost inconceivable that the military model of technological superiority will be successful then Europe and Asia are inventing all the best new gadgets. [BOPnews] 6:35:28 AM     Today's Economic News. DIA –1.52%, SPY –1.20%, QQQQ –1.41% 10-Year Treasury, +11/32 to yield 4.34% The market had a triple digit drop for the second day in a row. [BOPnews] 6:35:02 AM

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