The Best Healthcare System in the World
Discussions of the American healthcare system should all include the following six points to prevent distortion and misunderstanding. First, these discussions should consider socialized systems (i.e., everywhere but the U.S. and the third world) not as they are, but as they would be if they spent per capita what the U.S. spends. So, what would healthcare in Canada or France be like if they spent twice as much per capita? Or if Britain spent two-and-a-half times as much? Or if Cuba—that poor, depressed dictatorship—spent 21 times as much?
Even without this adjustment, though, the supposed advantages of our system don’t actually exist. As Paul Krugman reports in yesterday’s Times (based on a new study from the Commonwealth Fund), Americans are actually much less able than people in other countries to receive prompt medical care or to receive it after hours. And, where America performs well—as in waiting times for elective surgery (like hip replacements)—the cause is often the fact that Medicare (America’s own foray into socialized medicine) does a better job than other socialized systems. So we’re left with lots of disadvantages and no advantages.
Second, they should proffer a textbook-economics description of how markets for health insurance work differently than those for, say, shaving cream. Insurance works by pooling risk; put simply, those who don’t collect (me) subsidize those who do (someone with diabetes, or me if I get unlucky). Markets thus incentivize insurance companies to offer me insurance (but not the person with diabetes) and then to deny any claims I should have (say, if I got diabetes tomorrow). All those “medical losses” really hurt the bottom line. This structure only increases costs because insurance companies, medical practices, and hospitals are all paying people to try to avoid paying the bill. But the bill (i.e., the cost of medical care) doesn’t go away. Free markets, while great for offering variety in automobile colors, disposable razors, and aluminum siding, do not work for health insurance.
Mayor Giuliani’s recent comments—both that our system is “the best in the world” and that being “market-based” and “profit-driven” makes it this way—are thus preposterously ignorant. If looking around the world (and at Medicare!!) doesn’t convince him, textbook economics should. In other words, this is not a “liberal” issue but an empirical question of economics (along the lines of 2 + 2 = 4). (Everyone should read Paul Krugman’s March 2006 essay in the New York Review of Books for an excellent primer in health economics and a nice review of competing proposals.)
Free-marketeers seem to think that only slovenly free-loaders require expensive medical care. In his speech last week, for example, the President roused his audience to be, as John Edwards would put it, patriotic about something besides war: “There’s a certain responsibility we have as citizens,” he said, “to take care of ourselves, and a health savings account actually provides a financial incentive for you to do that.” So, according to the President (and Mayor Giuliani, who supports HSAs), the solution lies in creating an incentive structure so that people don’t develop cancer and diabetes. (Everyone should also read Malcolm Gladwell’s 2005 piece in the New Yorker that describes the ideological underpinnings and exposes the empirical failings of the HSA movement.)
Third, they should note that moving to a socialized system would be, at worst, cost-neutral overall. (Every socialized system in the world pays a fraction what we do per capita and gets superior care). The fact that taxes will be higher is technically true but misleading. If the U.S. moved to a socialized system, medical care would be paid through taxes, not premiums and co-payments. So, to compare fairly, we should compare taxes plus medical expenses now with taxes under a socialized system. Some people will pay more, but more people will pay less. In fact, people will experience the two similarly, since premiums are often withheld from paychecks now.
Fourth, they should note that employer-based health insurance is bad for business. Industries and municipalities are going bankrupt because of their healthcare obligations. In effect, the U.S. healthcare system taxes employers to the tune of $8500 per year. This tax makes America less competitive and encourages outsourcing. The business community should thus be the loudest advocates for a socialized system. For a cynic, it’s like the scene in The Distinguished Gentleman when Eddie Murphy’s character, a freshman Congressman, asks a senior member of Congress where he should be on particular issues. To paraphrase the response: “It makes to difference to me. If you’re for socialized medicine, I’ve got money for you from the manufacturers and retailers. If you’re for a private system, I’ve got money for you from the insurance lobby.”
Fifth, they should remember that universal is not the same as comprehensive. Proposals to get everyone covered, which would improve the situation, would not guarantee that we escape the morass that currently afflicts the insured in America. Indeed, Sicko is about the insured, not the uninsured.
Sixth, they should discuss the socialized medicine that already exists in the U.S., namely, Medicare, which is immensely popular and out-performs private insurance on any measure. (President Bush was careful in Cleveland this week to note that he supports Medicare). In 1992, then-President George H.W. Bush exhorted voters, “If you think socialized medicine is a good idea, ask a Canadian.” (Michael Moore plays this clip in Sicko.) Candidates today should tell voters, “If you think socialized medicine is a bad idea, ask your grandmother.” The big fear—propagated everywhere from the “Harry and Louise” ads to liberal punditry—is that government will ration care. But if rationing hasn’t been a problem in Medicare—which exclusively serves the oldest population—why would it be a problem when Medicare covers the young and healthy as well?
Two temptations threaten to distract us from addressing the fundamental question. Now that Michael Moore has a film out (which I highly recommend), it’s easy ask the question “What did Michael Moore get right/wrong in his film?” instead of “Should we have a socialized system?” The second temptation is to think only in terms of what we convince ourselves is “politically possible.” We have started accepting the fact that Americans would never go for socialized medicine (or, more aptly, that the insurance and pharmaceutical lobbyists would never let American Congressmen and Senators go for it). Thinking this way can become very self-fulfilling very quickly. Americans love Medicare, and corporate-types would love a hand-out from Uncle Sam (so long as no one calls it “welfare”). Wal-mart loves Medicaid, housing vouchers, and the Earned Income Tax Credit precisely because these programs allow them to keep their “overhead” down. Once we convince ourselves that we can’t have a universal, comprehensive, no-exceptions healthcare system; it will be that much easier for politicians to tell us that we won’t.
Comments (21)
Just out reading the news this morning, and I find....
From UnitedHealth website:
By alerting public attention to the nearly 50 million Americans without insurance, and millions more who are underinsured because they can't afford sufficient health coverage, Michael Moore's "Sicko" will hopefully invite politicians, healthcare professionals, and every one of us renew our attention to the long-standing debate on how to provide affordable health coverage. The solution to the spectacular costs and inefficiencies of medical care in the United States will involve equal cooperation between the insurance industry, healthcare practitioners, and government-sponsored Medicaid programs to ensure that no one will be left without essential care when they have a health emergency. But until a long-term solution can be found, having an affordable insurance plan that will cover both preventative and urgent care is essential.
From Marketwatch:
UnitedHealth profit rises stronger-than-forecast 22% By Steve Goldstein Last Update: 6:09 AM ET Jul 19, 2007 LONDON (MarketWatch) -- Health insurer UnitedHealth Group said its second-quarter net income rose 22% to $1.2 billion, or 87 cents a share, while revenue rose 7% to $19.05 billion. The company said its medical care ratio, a measure of claims and expenses to premiums, fell 1.1 percentage points to 80.5%. Analysts polled by Thomson Financial expected earnings of 81 cents a share. Annual adjusted earnings are seen between $3.43 and $3.48 a share, which at the top end is an increase of 2 cents a share.
From my view, UnitedHealth is doing well in the denial of claims business.
July 19, 2007 8:24 AM | Reply | Permalink
What if Britain spent two and a half times as much on health care, as you suggested? Surely it's a good feature that they do not!
Consider that now in the UK they work 4 or 5 weeks a year to pay for health care. We work 8 or 9 weeks. Hence they have 4 extra weeks to devote to other uses: adventure, good food, gardening, community service, learning, combinations of the above, whatever.
Also consider that their diabetes rate is 4%. Their "prediabetes" rate [prediabetes is associated with heart disease, stroke etc] is perhaps 3%. Our rates? More like 8% and 6%. Now perhaps the exercise involved in longer British vacations is not the only reason for better health in this highly significant respect, but I believe that it is an important reason.
July 19, 2007 5:46 PM | Reply | Permalink
Does Mr. Tedesco have any contacts in these "socialized medicine" countries? His claim that Americans wait just as long to see a doctor is totally bogus. All my acquantances in these countries have their own private insurance policies -- which means they can go to a private on-demand clinic when they need to rather than wait for the NHS or the Irish national system to see them. One of my Irish friends just gave birth, and the hospital didn't even have her name on their official list, when she tried to check in -- which meant hours of delay.
There is no perfect system out there, and an NHS-style sytem is not politically realistic. Mr. Tedesco needs to do his homework here. This blog reads more like propaganda.
July 23, 2007 6:32 PM | Reply | Permalink
Unbelievable that a comment like Brook's can get blog space. We're not talking perfection here, Brook. We're talking 45 million with no access and we're spending more than anyone else in the world!
Anytime someone issues a call for drastic healthcare reform in the US you can count on the Brooks of this world to trot out an anecdote. "Didn't have her name on the list"? No way! Wow! That's totally unacceptable.
People who have insurance wait to see doctors here, and more often than we realize they are denied coverage. I can trot out my own personal anecdotes that happened in the last 2 weeks to myself and my grandson, but what's the point? The Brooks of this world are in the business of picking flyspecks out of honey. Weighted down with a healthcare system that is dysfunctional to the point of a third world country, Brook takes comfort that his Irish friend's wife's name wasn't on the list. Look no further guys, perfection isn't out there! Really? We had no clue.
July 24, 2007 10:48 AM | Reply | Permalink
Re: We're talking 45 million with no access
Um, they do have some access. It's not like a doctor won't see you without insurance. You just have to pay him out of pocket. For a simple OV that's not particularly unaffordable for most of us ($60-- most of us spend more than that on gasoline, cell phones, cable internet etc. a month). Also, some few (and I do emphasize SOME FEW) Rx are $10 or less, and many doctors will hand out free samples of more expensive medicines to patients without insurance.
The problem arises when expensive tests, specialists or in-patient procedures are required. Other than a few very wealthy people no one can pay that stuff out of pocket.
Re: People who have insurance wait to see doctors here, and more often than we realize they are denied coverage.
Office visits are almost never denied (permanently) unless there is some basic dispute as to whether the patient is covered or the physician is "participating"* (as in an HMO). OVs are "chump change" to insurers. Where they make their money is nickle-and-diming the more complicated stuff, things you can't just consult the back of your insurance card and point out "See, it's covered with an $X.xx copay!" Check out an EOB for an inpatient hospital stay if you someday have the chance. It's quite astonishing to see how far down the insurer whittles the charges on the original bill. Probably the hospital deliberately overinflates the bill because they know they will be lucky to get a quarter of it, but this is still a very damaging practice for the unisured who can't whittle down the charges.
* That said, I had an OV initially denied because the bill referenced the clinic name not the physician's name. The clinic was not participating with the PPO, but the physician was (I know, "Huh"?). Of course the claim was paid after this stupid little snafu was straightened out.
July 24, 2007 6:53 PM | Reply | Permalink
we're discussing solutions here, Brit, not problems. Tedesco's post painted a far too rosy picture of other countries as does Michael Moore's film. If 45 million people are uninsured what is the solution? I'm saying the government-funded universal model is not the solution that would work here -- and it doesn't always work that well in other places either. It's time to get brutally honest about what is feasible -- not a utopian fantasy.
July 25, 2007 7:24 AM | Reply | Permalink
Re: I'm saying the government-funded universal model is not the solution that would work here
Maybe You could tell us why not? Or how about instead a hybrid model (and this is actually being proposed) whereby people that do not have other health insurance would be able to sign up for a government program instead. That would preserve the "free market" and "choice" while creating universal coverage. What's not to like?
July 25, 2007 9:22 AM | Reply | Permalink
Universal care is a non-starter politically. It's like tampering with Social Security. All the opposition has to do is ramp up the scare tactics (as they did with Hillary Care) and it's over. This may not be right, but it's just the way it is.
A hybrid plan would have to be carefully presented. The middle-class that has good insurance through work are not going to go for any plan that is going to raise their taxes to pay for someone else's insurance, while they continue to see increases in their premiums at work.
I favor a plan that would make the government a re-insurance partner with existing private companies. In other words -- when your medical bills get to a certain level annually (say $ 35,000) the governemnt re-insurance company shares the costs. This has a lot of win-win aspects for the consumers, the government, and private insurance companies.
The bottom line is any plan is going to have to be sold to the people from the bottom up not top down. I'd rather see a candidate with a plan I like -- then my vote for that candidate is a mandate for that plan. So far, Edwards is the only candidate to offer specific details. His plan is horrible, but at least he's putting it out there.
July 25, 2007 10:18 AM | Reply | Permalink
Universal care is a non-starter politically.
Why? Because you said so? Because lobbyists killed the Clinton effort? How many years ago was that? Costs have more than tripled since then, and there are even more uninsured people. In other words, things have only gotten worse since the insurance lobby killed the last major effort.
The middle-class that has good insurance through work are not going to go for any plan that is going to raise their taxes You're dead wrong. They sure will go for a plan that raises their taxes, but does away with insurance premiums, co-pays and outrageous medication prices. We're paying far more for healthcare than any other country and getting far less for it. Those are the facts no matter how you spin them. Americans need educating about that, and if you inform insured middle America "we'll give you 100% access to healthcare, and you'll end up paying less than you do today, even with an increase in taxes" - they'll go for it. As long as you, and folks like you, misinterpret, obfuscate, and spin the facts - basically scare the brown out of them, nothing's going to change.
July 25, 2007 11:14 AM | Reply | Permalink
Obama has said this many times -- health care is a major political war that will be tough to win. Maybe you'll believe him. Anybody who doesn't think so doesn't understand how Washington works.
I'll remind you that Medicare will be out of money in 20 years, and you're talking about adding another huge entitlement to the mix. We're already facing a tax increase to fund Medicare. Another one on top of that will take a President with a Bush-like apathy for public opinion.
July 25, 2007 11:29 AM | Reply | Permalink
they do have some access. It's not like a doctor won't see you without insurance. You just have to pay him out of pocket.
I don't know where to start with this. If you don't have money you don't have money. How simple is that? If you're out of work and have no insurance you're out of luck.
Office visits are almost never denied (permanently) unless there is some basic dispute as to whether the patient is covered or the physician is "participating"* (as in an HMO).
I'm not talking about office visits I'm talking about people with insurance who reach their caps and are denied further coverage.
July 25, 2007 11:48 AM | Reply | Permalink
I don't deny that it will be hard, but is it too much to expect main stream media not to collaborate with the rotten healthcare industry?
The public should know that other countries pay far, far less for healthcare. I don't hear that much on tv. Telling the truth is too much to hope for? There is so much spinning and obfuscation it's no surprise most Americans still believe they have the greatest healthcare in the world.
Healthcare reform - instituting a single payer system - would fix Medicare funding problems.
July 25, 2007 11:59 AM | Reply | Permalink
This woman's testimony before Congress this week pretty much says it all: http://judiciary.house.gov/OversightTestimony.aspx?ID=1046
Read it if you want to know how our healthcare system abandons even the insured.
July 25, 2007 12:52 PM | Reply | Permalink
According to Krugman,
"the U.S. health care system does worse, not better, than other advanced countries—even Britain, which spends only about 40 percent as much per person as we do."
So universal care will cost LESS, not more than the present system, if done properly.
July 25, 2007 2:47 PM | Reply | Permalink
the question is do we need to reform the current system and fix some of these obvious problems or do we do a surgical transplant for a whole new Medicare-like system for the entire country? While the majority agree something should be done, they are deeply divided on what that solution should look like.
July 25, 2007 3:39 PM | Reply | Permalink
Re: If you don't have money you don't have money.
This area of TPMcafe is about the middle class, not the poor. Being middle class implies one has some small amount of discretionary income (or savings) which can be tapped in a pinch. I agree that poor people would be hard pressed to come up with even a small amount like $60, but anyone making close to the median income should have no trouble there. To give you a real world example, I make slightly above median income (or slightly below actually, for my age). One of my cats ran up $100 at the vet in May. I was able to accommodate this unexpected expense by postponing buying some new clothes (instead I got out needle and thread and mended the old clothes), put off buying a hard-cover book, and stayed home one weekend instead of going out on the town. Easy $100 bucks saved right there. I suspect most MIDDLE CLASS people could do the same.
So going to a doctor is not going to be a problem for most of us (but yes, for the poor, I agree totally). Where the problem begins is when a simple office visit with some cheap (or free sample) Rx isn't enough, when expensive tests or procedures are called for. That's where we all get into trouble, even insured people sometimes.
July 25, 2007 4:19 PM | Reply | Permalink
Re: Universal care is a non-starter politically. It's like tampering with Social Security.
Universal healthcare usually polls in the 70s. I doubt social security privatization ever got out of the 20s. Two very different situations. (I think you are confusing universal healthcare with single payor, which I agree probably is politically impossible.)
Re: I'll remind you that Medicare will be out of money in 20 years
Only if we don't reform its funding, and given its popularity and indeed its necessity I predict we will do exactly that.
Re: The bottom line is any plan is going to have to be sold to the people from the bottom up not top down.
Which is why something like the Edwards plan is great: it gives people a choice between their private coverage and a public plan. If people want to stick with Aetna, Blue Cross etc. they can. But if public coverage turns out to be better they will, gradually perhaps, migrate to it.
July 25, 2007 4:22 PM | Reply | Permalink
edwards plan -- not great. He's got these regional health plans you can sign up for, which would be good if you have no coverage, but you can also sign up if that plan is better than your plan at work. Who is going to sort through all the applications and decide who is going to be covered? It's overly complicated and will require billions to administer.
The re-insurance idea works better, because you simply require existing insurance companies to offer guaranteed issue (non-underwritten) insurance plans. That way you can get your coverage from Blue Cross regardless of your health, and they will cover you (just like Medicare). The admin on these plans would be minimal since there are no health questions to consider. Premiums won't be any more than a group plan, because the Feds help minimize Blue Cross risk exposure.
July 25, 2007 6:45 PM | Reply | Permalink
If you are not outraged about corporate maximization at the
expense of Humans and the Health Profit System’s part in this,
YOU ARE COMPLICIT!
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Today, are we searching for I deals or Ideals?
-Thinking
July 25, 2007 8:30 PM | Reply | Permalink
Re: He's got these regional health plans you can sign up for, which would be good if you have no coverage, but you can also sign up if that plan is better than your plan at work.
So choice is a BAD thing? People are just too dumb to figure out what they might prefer?
Re: Who is going to sort through all the applications and decide who is going to be covered?
How hard is it to process applications? Much of that can be done by software these days. Medicare and Medicaid manage tyo priocess their memebrship with undue expense. So does every private healthplan in the country. Why would this be any different?
July 26, 2007 9:47 AM | Reply | Permalink
What, pray tell, is happening to the middle-class that the Warren Reports was created to report on? Is it their decimation into the POOR class or their uplift into the ELITE class? FM.
BTW, our local town of about 2200 people has a clinic that is now part of the Mayo Clinic cartel and our office visits start at $90. If it wasn't for Medicare they wouldn't be getting much business given the elderly demographic of our population.
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July 27, 2007 5:57 PM | Reply | Permalink