Map of life expectancy at birth from Global Education Project.

Sunday, August 14, 2005

They just keep repeating themselves . . .

The new Health Affairs (abstract only available to non-subscribers) has an analysis by Gerald Anderson, Peter Hussey, Blanca Frogner and Hugh Waters regarding the relative levels of spending on health care in the developed countries. These pieces appear annually (see Reinhardt, Hussey and Anderson from last year), and they always come to the same conclusions. Yet it is necessary to do the analysis, come to the conclusions, and repeat them, over and over, because we do not have reality based politics and we continue to have the same feckless debates between truth and falsehood.

The United States spends, currently, 53% more per person on health care than the number two country, which is Switzerland. Canada by the way -- whose publicly funded system was recently described by a commenter here as inefficient compared to the U.S. -- spends 56% as much as the U.S. This basic disparity, with health care spending being far higher in the U.S., has existed since the Organization for Economic Cooperation and Development, OECD, began collecting this information more than a quarter century ago. (These comparisons, by the way, are made in what is called "purchasing power parity dollars," based on what currencies actually buy in the home country rather than international exchange rates.)

No-one can deny these disparities, but defenders of the U.S. system claim that we have much higher quality than the other countries; that people in other countries have long waits for diagnostic and elective procedures; or that the whole problem is litigiousness and high malpractice insurance costs (the Bush administration's explanation).

Every year, Health Affairs considers these explanations anew, and debunks them. Specifically, this year:

  1. "Surprisingly, American have access to fewer health care resources than people in most other OECD countries, measured in . . .hospital beds per capita, physicians and nurses per capita, and . . . MRI and . . . CT scanners per capita."
  2. Although some OECD countries do tend to have longer wait times for elective procedures than are typical in the U.S., others do not. But there is little difference in spending per capita between those that do and those that don't, and it's no surprise -- the procedures for which waitig lists exist in some countries account for less than 3% of U.S. health care spending.
  3. The U.S. does have more malpractice claims filed per capita than the UK, Australia and Canada. Two-third of these are dropped, dismissed, or unsuccesful; in 1/3, plaintiffs receive compensation, but the average payment in the U.S. is less than in the UK or Canada. The net result is that total malpractice payouts per capita in 2001 were $16 in the U.S., $12 in the UK, $10 in Australia, and $4 in Canada (where few claims are filed in the first place). Adding the cost of defending malpractice suits and insurance underwriting expenses, malpractice payments are less than 5% of health care spending in the U.S.

Let us never forget that those other countries provide coverage to everyone, while here in the U.S. there are about 45 million citizens and legal residents who have no health insurance coverage whatever. This contributes to huge disparities in access to care, which in turn contributes to disparities in health status and longevity among various parts of the population.

It also follows that the greater proclivity of Americans to sue for malpractice may not represent a defect in our national character, but rather the unfortunate reality that people injured by medical intervention or negligence have no other way of having their need for further care met. In the other OECD countries, a child disabled at birth or someone who suffers neurological damage from surgery will be cared for like everyone else. Here, you have to sue -- and even if your need is genuine, you won't get any money if the doctors weren't negligent.

And the bottom line hasn't changed either: Americans are healthier than people in the poor countries, but not as healthy as people in the other wealthy countries, including a lot of countries that aren't nearly as wealthy as we are.

The reasons we pay so much more, and get less, haven't changed:

  1. Salaries are higher here, especially for physicians. That's probably appropriate up to a point, this is a rich country. (We can dispute specifics, particularly the relative compensation for various specialties.) However, even after adjusting for the higher per capita income and cost of living in the U.S., health care spending here is still more than $2,000 higher than would be predicted if everything else were equal.
  2. Those other countries have centralized purchasing power, so they drive a bargain with drug and device manufacturers, and get much better prices.
  3. We squander something like 25% of our hard earned dollars on administrative expenses, billing multiple payers, keeping track of multiple formularies and benefits structures, billing for copays, and probably most important, figuring out ways to deny care to people.

I'm feeling a bit redundant and repetitive here. So are all my friends. How many times do we need to say that the earth is round before the politicians and the corporate media get it?

We need universal, comprehensive, single payer national health care. Like other civilized people.

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