When you and I buy something, the cost to us is the price we pay for it. But that is not necessarily true for society as a whole. The social cost of something may be a whole lot more or a whole lot less than what people actually spend on it; and that is especially true in health care.

In the United States and throughout the developed world, the market for medical care has been so systematically suppressed that no one ever sees a real price for anything. …

[O]ther countries are more aggressive than we are at shifting costs and hiding costs. They use their buying power to suppress the incomes of doctors, nurses and other medical personnel much more than the United States does …

[T]here is another way to assess the cost of health care. We can count up the real resources being used. Other things equal, a country that has more doctors per capita, more hospital beds, etc., is devoting more of its real income to health care than one that uses fewer resources — regardless of its reported spending. On this score, the United States looks really good.

Read the whole post: Do We Really Spend More and Get Less? | John Goodman’s Health Policy Blog | NCPA.org.

See also:
Health Care Reform: Do Other Countries Have the Answers?
Myth Two of The Top Ten Myths of American Health Care

It’s one of the most oft-repeated justifications for socialized medicine: Americans spend more money than other developed countries on health care, but don’t live as long. If we would just hop on the European health-care bandwagon, we’d live longer and healthier lives. The only problem is it’s not true. …

If you really want to measure health outcomes, the best way to do it is at the point of medical intervention. If you have a heart attack, how long do you live in the U.S. vs. another country? If you’re diagnosed with breast cancer? … I compiled … data for the U.S., Canada, Australia, Japan, and western Europe. Guess who came out number one? …

A few years back, Robert Ohsfeldt of Texas A&M and John Schneider of the University of Iowa asked the obvious question: what happens if you remove deaths from fatal injuries from the life expectancy tables? Among the 29 members of the OECD, the U.S. vaults from 19th place to…you guessed it…first.

Read more: The Myth of Americans’ Poor Life Expectancy – Forbes.

(via FIRM)

Had Jobs been under the care of the British National Health Service (NHS) or the Canadian Medicare system, he almost certainly would have died two years earlier. That would have been a major loss for the world, by anyone’s reckoning.

Here’s the back story. In 2004 Steve Jobs was diagnosed with pancreatic cancer. He reportedly underwent successful surgery. Then, in 2009 he received a liver transplant. …

[N]owhere else in the world would a pancreatic cancer survivor be considered an appropriate candidate for a liver transplant. In Jobs’ case, the transplant apparently bought him only about two more years of life. In no other developed country would a patient get a liver transplant in order to live two more years.

In Britain, the National Institute for Health and Clinical Excellence (NICE) is charged with deciding which treatments the British NHS will pay for and which it will not. NICE considers a treatment cost-effective only if the cost per quality adjusted life year (QALY) is £20,000 or less (about $31,000). Since the cost of a liver transplant plus two years of follow-up care are greater than that number, in Britain Jobs would not have made the cut.

Overall, the British Medical Journal estimates that 25,000 British cancer patients die prematurely every year because they do not get access to life-extending drugs readily available on the European continent and in this country. The British government reasons that the extra months of life the drugs will allow is not worth their cost.

Plus, Jobs’ end-of-life care enabled him to keep pushing the envelope. Because of his never-ending devotion to innovation, we got the iPhone after he was diagnosed with pancreatic cancer and the iPad after his liver transplant.

Goodman also points out that making it legal “compensate people for donating their organs in the case of an unforeseen death” [or before their death with kidneys] would decrease the “average of 20 people die each day waiting for transplants that can’t take place because of the shortage of donated organs. ”

Read the while post: Thank U.S. Health Care for the Life of Steve Jobs.

Here is the conventional wisdom in health policy:

• In the United States, we ration health care by price, whereas other developed countries rely on waiting and other non-price rationing mechanisms.
• The U.S. method is especially unfair to low-income families, who lack the ability to pay for the care they need.
• Because of this unfairness, there is vast inequality of access to care in the U.S.
• ObamaCare will be a boon to low-income families — especially the uninsured — because it will lower price barriers to care.

As it turns out, the conventional wisdom is completely wrong. Here is the alternative vision, loyal readers have consistently found at this blog:

• The major barrier to care for low-income families is the same in the U.S. as it is throughout the developed world: the time price of care and other non-price rationing mechanisms are far more important than the money price of care.
• The U.S. system is actually more egalitarian than the systems of many other developed countries, with the uninsured in the U.S., for example, getting more preventive care than the insured in Canada.
• The burdens of non-price rationing rise as income falls, with the lowest-income families facing the longest waiting times and the largest bureaucratic obstacles to care.
• ObamaCare, by lowering the money price of care for almost everybody while doing nothing to change supply, will intensify non-price rationing and may actually make access to care more difficult for those with the least financial resources.

Read the whole post: How We Ration Care | John Goodman’s Health Policy Blog | NCPA.org.

Your column and blog contain a ludicrous and incorrect depiction of health care needs in America, painting a picture where visits with a medical professional are always preceded by a call to 911 and a trip on a blaring ambulance – which is the experience for approximately zero Americans, anywhere. I would be eager to learn of any of your research showing otherwise.

A simple glance at a cost breakdown of the American health care system eradicates your fanciful depiction. According to the U.S. Department of Health and Human Services and the Agency for Healthcare Research and Quality, as much as 75 percent of health care costs in the United States are due to chronic conditions. …

Your incorrect view of the nation’s health care reality is, in fact, one of the chief reasons for problems with the current system, which was originally designed in the 1930s to cover catastrophic events, not chronic conditions, predictable treatments, and long-term care. …

There is some irony in your mistake and in his, in that the government-managed coverage systems you favor are perhaps at their worst in providing responses to the life-threatening illnesses you apparently think all of us are faced with on a daily basis. …

via Consumer Power Report #269: A Letter to Paul Krugman – by Benjamin Domenech – Consumer Power Report.

See also this breakdown of medical spending on different types of treatment.

Are patients consumers?  In 2006, CBS News reported:

Like millions of Americans, Gary Garcia is shopping online, CBS News correspondent Wyatt Andrews reports. But he’s not on eBay or Amazon.com. Garcia needs a new heart valve, and he’s shopping for surgery.

Using a Web site called Health Grades.com, Garcia learns which nearby hospital is the best at heart surgery — and then, to his amazement, he gets an estimated breakdown of the costs. He gets the list price for his operation, the discounted price his insurance will pay and his estimated co-payment.

Check out the video, too.  Vimo.com provides similar information.  There’s also MediBid.com. Its site says:

Patients can find a doctor, family physician, chiropractor, dermatologist, surgeon, dentist, or any other medical specialist on MediBid.  The process is simple; patients register as “Seekers” and post a secure, private request for medical care for anything from acupuncture to total knee replacement surgery or stem cell therapy for cancer. … More than a medical directory, MediBid is a resource where medical consumers can find a doctor, then actively seek bids for the care they need. It gives physicians a direct connection to their patients.

And don’t forget about medical tourism, and North American Surgery, Inc., which offers US-only medical tourism. Is Krugman aware of this?

Krugman claims that “‘Consumer-based’ medicine has been a bust everywhere it has been tried,” but provides no evidence for this.  Has he looked at the successes of employers such as Land O’Lakes, Wendy’s, and Manitowoc County, Wisconsin?  Or how about the results of a study by the The American Academy of Actuaries: Emerging Data on Consumer-Driven Health Plans, which includes cost savings, containment, proper & preventive care, and evidence-based care.

Krugman also wrotes:

Medicare Advantage was supposed to save money; it ended up costing substantially more than traditional Medicare.

Not so fast.  A Pacific Research Institute study states:

“In a very narrow sense, Medicare Advantage plans cost more per beneficiary than traditional Medicare,” said [study author John R.] Graham. Medicare Advantage increases the total costs of Medicare by about $12 billion a year, or about 2 percent. However, because traditional Medicare (a government monopoly) does not pay providers enough to cover their costs, they shift costs to the privately insured. This imposes a “hidden tax” on privately insured Americans that accounts for $49 billion a year: four times greater than the narrowly defined extra costs of Medicare Advantage.

Krugman states: “America has the most “consumer-driven” health care system in the advanced world.”   Really?  One might measure this by how much patients spend on medical care “out of pocket,” that is paying directly with their own money rather than with cash.  At the Health Affairs blog, Thomas Miller and Rohit Parulkar write:

U.S. OOP share of health spending, as of the last comparative figures available from the OECD in 2008 (12.1 percent), was below that of Germany, Canada, and the weighted average of all reporting members, respectively.

Krugman also states: “It also has by far the highest costs yet provides a quality of care no better than far cheaper systems in other countries.”  Krugman provides no citations for evidence to this claim.  For a well-references discussion of the data, see:

1. Health Care Reform: Do Other Countries Have the Answers?, by by John C. Goodman, Linda Gorman, Devon Herrick, and Robert M. Sade.
2. Myth Two in “The Top Ten Myths of American Health Care: A Citizen’s Guide”, by Sally Pipes (purchase, or view PDF for free)

Stepping back from these details, ask yourself: So what if Americans spend too much on medical care?  Do you care if Americans spend too much on car repair?  No, because they are spending their own money, or, having paid car insurance premiums with their own money & made a claim, they are spending money from an insurance company. It’s a private matter, & no one else’s business.  Health care should be the same.  “Spending too much” is only an issue because of government policies that force us to pay for other people’s medical care.  (I think I’m paraphrasing Arnold Kling, here.)

Krugman concludes: “The idea that all this can be reduced to money — that doctors are just “providers” selling services to health care “consumers” — is, well, sickening.”  Krugman has also spoken well of “Medicare for all” and single-payer health care. But wait, back in 1999 the BBC reported that under England’s National Health System,

Up to 500 heart patients die each year while they wait for potentially life-saving surgery. … NHS patients are often put on a waiting list because of other pressures to health service resources. Only an “enormous injection” of cash could change the situation.

In 2008 a Daily Telegraph headline read: Patients ‘should not expect NHS to save their life if it costs too much’.

Shocking – under a single-payer system, people’s lives are just reduced to money!

See also “Diagnosing Krugman,” by Will Wilkinson. He writes:

[L]let’s examine Mr Krugman’s implicit premises. … whatever is [supposedly] crass and profane about patients exchanging money directly for doctors’ services is avoided if the patient-doctor relationship is brought within the matrix of politics. This seems odd to me …

… Even in matters of life and death, too many people accept words instead of thinking, leaving themselves wide open to people who are clever at spinning words. The whole controversy about “health care reform” is a classic example.

“Health care” and medical care are not the same thing. The confusion between the two spreads more confusion, when advocates of government-run medical care point to longer life expectancies in some other countries where government runs the medical system.

Health care affects longevity, but health care includes far more than medical care. Health care includes such things as diet, exercise and avoiding things that can shorten your life, such as drug addiction, reckless driving and homicide.

If you stop and think– which catchwords can deflect us from doing– it is clear that homicide and car crashes are not things that doctors can prevent. Moreover, if you compare longevity among countries, leaving out homicide and car crashes, Americans have the longest lifespan in the western world.

Why then are people talking about gross statistics on longevity, as a reason to change our medical care system? Since this is a life and death issue, we need to think about the realities of the world, not the clever words of spinmeisters trying to justify a government takeover of medical care.

American medical care leads the world in things like cancer survival rates, which medical care affects far more than it affects people’s behavior that leads to obesity and narcotics addiction, as well as such other things as homicide and reckless driving.

Read the whole article:  The Money of Fools: Part II.

Sowell has a good point. But maybe a more benign explanation is that “health” has one syllable while “medical” has three, so it’s close enough to refer to “health care” instead of “medical care.”

For details on life expectancy and medical care, see Accidents, Murders, Preemies, Fat, and U.S. Life Expectancy, by Ronald Bailey and Reason.

We listened to federal and state officials, doctors, hospital executives, members of the Bundestag (German parliament, a health journalist and German policy experts. They told us that the German system is the fourth most expensive system in the world. Their costs are rising rapidly and are unsustainable. …

Solidarity is the mantra and the cornerstone, and was explained to mean the entire population participated in and was in agreement that everyone should have the same health care.

Yet, many people wait for treatment:

At each meeting it was reiterated that 90 percent of Germans have compulsory statutory social health insurance through one of 170 plans. Under most plans, there are waiting times for office visits, delays for elective hospital care and postponed care if quarterly medical budgets are exceeded. Choice of physicians/surgeons is limited and private hospital rooms are not available.

But not everyone has to wait:

Ten percent of Germans, generally wealthier, are covered by 50 private insurance plans. … These individuals get to the front of the line for appointments, have access to private hospital rooms and use of “master” surgeons and leading specialists.

At one meeting it was mentioned that private coverage was “complimentary to special systems of civil servants, judges and soldiers.” Civil servants are defined as federal government employees, state employees, professors and others. By some estimates, civil servants make up about 14 percent of the German workforce. When pressed for an estimate of civil servants in the private insurance option, the German experts stated that 80 percent of those in the private health option are civil servants, with most of their premiums paid by their government employers.

Which raises two questions: If 80 percent of the private plan participants are government employees getting better access to better care with the best providers, how is that solidarity?

There’s also rationing through global budgets:

It seems that even primary care physicians operate with more than 100 separate quarterly budgets covering office visits, exams, laboratory tests, prescriptions, referrals, admissions and more. When the budget runs out, services can be performed but the physicians will not get reimbursed. Many patients must wait until a new quarterly budget is established for the service. Patients are never told they may be waiting because of a “maxed out” budget. Apparently, near the end of each quarter many primary care physicians close their offices after meeting their key budget limits.

Doctors at one meeting said a single quarterly co-payment of 10 euros ensures unlimited access to primary care physicians. Germans say they need thousands of new primary care physicians. The average number of visits to primary care providers in Germany is about 18 per year, compared with the U.S. average of about three. …

I asked, “Do consumers know if the delay of a cancer test is because of a budget limit? Can they find information to go to another physician who has not hit his budget limit for that test?” The answers were “No” and “No.” Citizens are not told the reason for any delays, have no access to information on physicians’ budgets and, of course, most have no idea budget limits exist.

Hospital officials talked about the high quality of surgeries and specialist care. The data showed few complications, low infection rates and high survival rates. I asked, “Do patients have access to the quality information to compare hospitals and physicians?” The response was, “It is available to data experts but could never be understood by the average German.”

Bachman concludes:

At the end of the day, German consumers seem to be pawns in a great game of controlling costs through budgets, restrictive choices and limited access to care….

Consumer interests in social health systems seem to fall behind government employees, unionized physicians, bureaucratic budgeting, Big Pharma and political interests.

Soon we’ll find this in the United States, unless citizens vote for politicians who support a free-market in health care and insurance.  Read the whole article: A Case Study in How Consumerism Loses in European-Style Health Care.

(via StateHouseCall)

]]> http://www.patientpowernow.org/2010/06/health-care-germany-rationing-inquality/feed/ 0 http://www.patientpowernow.org/2009/08/united-states-europe-health-car/ http://www.patientpowernow.org/2009/08/united-states-europe-health-car/#comments Mon, 10 Aug 2009 07:30:19 +0000 Brian Schwartz http://www.patientpowernow.org/?p=1189 Continue reading →]]> Shikha Dalmia of the Reason Foundation has written about this in a recent Forbes column, The Myth Of Free Market Health Care In America.  Some excerpts:

But apart from England, most European countries have a public-private blend, not unlike what we have in the U.S.

The major difference between America and Europe of course is that America does not guarantee universal health insurance whereas Europe does. But this is not as big a deal as it might seem. Uncle Sam, along with state governments, still picks up nearly half of the country’s $2.5 trillion annual health care tab.

More importantly, contrary to popular mythology, America does offer public care of sorts. It directly covers about a third of all Americans through Medicare (the public program for the elderly) and Medicaid (the public program for the poor). But it also indirectly covers the uninsured by—at least in part—paying for their emergency care. In effect, anyone in America who does not have private insurance is on the government dole in one way or another. …

The most striking similarity between America, France and Germany, however, is the model of “insurance” upon which their health care systems are based. In other insurance markets, the more coverage you want, the more you have to pay for it. Consider auto insurance, for instance. If you want everything—from oil changes to collision protection—you’d have to pay more than someone who wants just basic collision protection. That’s not how it works in health care.

For the same flat fee—regardless of whether it is paid for primarily through taxes as in France and Germany or through lost wages as in America—patients in all three countries effectively get an ATM card on which they can expense everything (barring co-pays) regardless of what the final tab adds up to. (Catastrophic coverage plans are available in America, but the market is extremely limited for a number of reasons, including the fact that most states have issued Patients Bill of Rights mandating all kinds of fancy benefits even in basic plans.)

Thus, in neither country do patients have much incentive to restrain consumption or shop for cheaper providers. In America and Germany, patients don’t even know how much most medical services cost. In France, patients know the prices because they have to pay up front and get reimbursed by their insurer later—a lame attempt to ensure some price consciousness. But since there is no cap on the reimbursed amount, the French sometimes shop for doctors based on such things as office decor rather than prices, according to a study by David Green and Benedict Irvine, researchers at Civitas, a London-based think tank.

Read the whole article, The Myth Of Free Market Health Care In America.

(via Ari Armstrong)

But if you think other countries have it better, check out this well-researched article by Dr. Scott Atlas in the Washington Times.

In related news, CNN reports that

More than eight in 10 Americans questioned in a CNN/Opinion Research Corp. survey released Thursday said they’re satisfied with the quality of health care they receive.

And nearly three out of four said they’re happy with their overall health care coverage.

But satisfaction drops to 52 percent when it comes to the amount people pay for their health care, and more than three out of four are dissatisfied with the total cost of health care in the United States.

(via FIRM)

Cancer survival varies widely across the developed world and within the United States. However, in almost every category Americans survive cancer at higher rates than patients in other developed countries.  American cancer patients have a higher survival rate for every major form of cancer than patients in Canada and Britain-two English-speaking countries with which the U.S. is often compared.

The Telegraph.uk reported similar findings last year.