International Health-Care Comparisons: How About Them Apples
As long as we’re talking about health-care, a few thoughts about international comparisons.
The biggest knock against the United States’ health-care system isn’t that we spend so much, but that we appear to get so little value for money: based on aggregate numbers, Americans are less-healthy than many other major industrialized countries, in spite of spending lots more on health care.
Some of that is surely the combination of waste and free riding. America’s system provides fewer incentives to use the lowest-cost treatment than most other national health-care systems. That provides a greater incentive for pharmaceutical and device-makers to come up with new and expensive health-care products for the American market. Some of these products will be genuinely useful innovations and some will be copy-cat drugs and the like designed to extract IP-related rents without delivering much in the way of value. Other countries can then get the benefit of the useful innovations at much lower cost than Americans do, and avoid the wasteful copycat innovations.
A great deal of it is due to the fact that America’s health-care providers earn a lot more on average than those of other countries. But the big driver of this disparity is that America has vastly more specialists. And the big driver of that disparity is that everybody would like to see specialists more easily, and you can only do that if you have more specialists. And since America has fewer incentives for cost-containment, Americans get what they want (and pay for it), and people in other countries do more queuing. (And they do the most queuing in systems that employ health-care providers directly, which is exactly what you’d expect – when prices are driven down artificially by a monopsony buyer, supply dries up.) Measuring the value of being able to see a specialist more easily in America in terms of actual health-care outcomes isn’t going to capture everything that matters to the consumer. There’s some value, after all, to having the opportunity – and the coverage – to do everything you can to beat that cancer, even if the odds are, objectively, lousy. But it costs something – across a society, it costs a lot. This is exactly the kind of preference question that a diversity of insurance options – at different price points – should be able to resolve. Not necessarily at the lowest-cost point on the curve, mind you, but at a point that represents the aggregate preferences of consumers – provided those consumers are making decisions based on real prices, which would be the case in a functioning individual insurance market and is much less so today.
But some of it probably amounts to apples-to-oranges comparisons. It would be useful to look not merely at aggregate statistics but to break the statistics down demographically by race and by income. The United States has a much larger non-white population than the European countries to which we are usually compared; we also have a much higher percentage of the population living in poverty. I would expect that, if you compared poor Americans to poor French or German citizens, America’s health statistics would look pretty bad. I’m less sure how the comparison would look if you compared, say, the second income quintile of each country.
And then there are lifestyle questions. Obesity is rising across the globe, but it is a much bigger problem in the United States than it is in other industrialized countries. And obesity is a driver of a host of negative health outcomes that cannot really be ameliorated by the health-care system. Indeed, you would expect an epidemic of obesity simultaneously to be a drag on GDP (more people unable to work due to obesity-related health problems), a booster of health-care expenditures, and a driver of lousy aggregate health statistics such as low life expectancy. But is America’s obesity problem really caused by our health-care system? Not really, no – and our health-care system can’t really solve it either.
My strong suspicion is that demographic differences are a significant driver of the ways in which American health outcomes are inferior. Tackling the consequences of higher rates of poverty may require modifications to the structure of our health-care system – for example, it may well make sense for the government to provide directly on a “cheaper than free” basis certain basic services with large public health benefits, rather than merely providing subsidized or public insurance – but that’s not the same thing as blaming that overall structure for the disparities that exist. By contrast, I suspect that much of the higher cost of American healthcare reflects genuine consumer preferences; the question, though, is the degree to which those preferences are based on real prices. To the extent that they are not (and I think that’s to a very great extent), one solution would be to move in the direction of limiting the scope for consumer preferences – say, by eliminating private insurance. The other direction to go would be to move in the direction of making health-care consumers more aware of the prices they are paying when they buy insurance. That, to my mind, is the real center-left versus center-right divide on where to take the American healthcare system.
This reminds me of the scene in “Network” when Howard Beale talks about how we are all becoming humanoid instead of humans. Not just in America, but in the whole world – we’re just more advanced so we’re getting there faster.
The obesity epidemic is caused by the nutrition advice that we have been faithfully adopting over the past 30-50 years – cut fat, increase carbohyrates. We are consuming more sugar and refined carbohydrates than any population has in human history, and less of the traditional foods like pastured meat, dairy and butter, as well as fermented dairy and grains.
The healthcare system is better equipped than ever before in human history to treat trauma and acute disease. If people go back to eating the way that they should then we can reduce the Diseases of Civilization (heart disease, diabetes, cancer) and prosper indefinitely.
If anyone is interested in more information, try reading Food and Western Disease by Staffan Lindeberg or the works of Weston A. Price, available for free at this Project Gutenberg Link
— Lisa L · Jun 7, 07:17 PM · #
Lisa: that’s a big part of it. We’re also consuming more calories total. And we’re also more sedentary for a greater proportion of our day/week/year. But my point was just that you can perhaps blame ADM or the cable companies for our high carb couch potato lifestyle, it’s hard to blame our healthcare system as such. And yet when you ask “why aren’t Americans getting more for our healthcare dollar” that’s what’s being implied. We may be getting a huge amount for our healthcare dollar – we’re just also making ourselves really unhealthy.
— Noah Millman · Jun 7, 07:51 PM · #
My contention is that the health-care system does cause obesity in that the entire system, from doctors to WIC, pushes a system that is flat out wrong. The entire health care system has told us that grains are good for you, fat is bad, and sugar is okay in moderation. When people try to follow their doctors’ recommendations for preventative medicine, or to treat their diabetes and heart disease through diet they are making themselves more unhealthy and setting themselves up for failure.
I know I sound like a crackpot on the internet (maybe I am) but if you have an interest in health care issues, maybe you would be interested in taking a look at what can be the root causes? So much of the debate around health seems to center on blaming lazy people for being unhealthy, but what if following their doctor’s orders is making them that way? “Good Calories, Bad Calories,” while having a stupid sounding name, goes into great depth about how bad science leveraged political clout to get us into the current health environment that we have.
I don’t really have an opinion on whether or not we are “getting more for our health-care dollar” – I would rather work towards a future where we don’t need to worry about such efficiency because most Americans are healthy.
— Lisa L · Jun 7, 08:14 PM · #
Lisa:
I don’t know where you’ve been for the last 10 of those 50 years you’re referring to, but no one is pushing carbs anymore (except maybe for runners loading up before a race). It’s all about the glycemic index now: Nutri-System and the South Beach Diet are huge.
— jd · Jun 7, 09:02 PM · #
jd –
That is certainly not true with regards to standard medical dogma. Take a look at the new Food Plate / Pyramid and you’ll see that over half the plate is high carb – grains and fruit. If you read the fine print, everywhere the government admonishes us to make low fat choices and avoid meat wherever possible.
I would say that the rise of low carb dieting in popular culture is that… it works? People get results? Medical “experts” are certainly not pushing it, if you take a look at the most recent U.S. News and World Report Diet Survey here the diets that the health media are pushing are still low fat, high carb.
Furthermore, low/high carb is not the entire issue. There are traditional societies, such as the Kitavans, that survive quite well with almost no cancer, diabetes or heart disease, on a diet that is very high in starch from tubers. The difference is that in their traditional diets they did not consume grains or fructose in any quantity. When native peoples in Africa, on islands or what have you, eating traditional diets move to diets containing grains or fructose they immediately start to develop tooth decay, obesity, diabetes, heart disease and cancer – the so called “Diseases of Civilization.” Grains and fructose have a much greater effect on the body than anyone talks about. Most people who are not celiac nonetheless have gluten sensitivity. If you eliminate wheat and gluten containing products from your diet and then reintroduce them, most people will notice a difference.
— Lisa L · Jun 7, 09:59 PM · #
so Lisa, what should we be eating?
— jd · Jun 7, 10:07 PM · #
Do you have any evidence that the U.S. has substantially better access to specialist care than other countries or that this contributes substantially to the difference in overall health care costs?
It seems like a reasonable speculation, but I haven’t seen any information that leads me to believe it’s true, and my own anecdotal experiences with the U.S., British, and Dutch health care systems makes me suspect it is in fact false.
Also, I don’t agree with your binary judgment on whether the health care system can solve the obesity crisis. On its own it surely cannot, but it can be an important contributor to solving the problem, much moreso than it is now. Transitioning from pure fee-for-service and into more of a fee-for-outcome model as envisioned by the PPACA is a potentially very positive step in this direction.
Lisa, your theory is contradicted by the rather obvious fact that most Americans don’t, in fact, follow the diet recommendations from either the USDA or their doctors. There are multiple causes of obesity in the U.S., and blaming it all on the food pyramid is just silly.
— DarrenG · Jun 8, 12:22 AM · #
No, I think Lisa’s very much on to something; if you look at a graph of incidence of obesity in America, there’s a really obvious elbow right at the year when the uniform dietary consensus was to replace as much of your calories from fat with calories from carbohydrates as possible.
That’s not a basis on which I would conclude that this advice is literally responsible for obesity, but the fact remains that the rise in American obesity rates began almost exactly at the time that dietitians decided there was a problem with it. It’s the greatest single failure of public health education since doctors were telling gonorrhea victims to cure it by sleeping with virgins.
— Ch3t · Jun 8, 12:35 AM · #
Do you have any evidence that the U.S. has substantially better access to specialist care than…
Bleagh. Why use language like “access to specialist care”? Noah, to his great credit, didn’t use that abominable phrase.
— The Reticulator · Jun 8, 01:26 AM · #
The healthcare in America is expensive because healthcare in America is a business. As long as the US has a for-profit system, it will continue to be the most expensive in the world.
— Shaz · Jun 8, 01:45 AM · #
1) Specialists drive up costs, but it is important to remember how they do it. Doc salaries account for 6%-7% of health care spending. It is the spending that physicians control that really drives costs.
2) Every other OECD country with quality health care has all of their patients in the same system. When costs go up, it affects everyone and at the same time. We in the US would care more about costs if every time insurance premiums increased it affected all of us.
Steve
— steve · Jun 8, 01:54 AM · #
Sure,
because the obesity epidemic is being caused by Americans reading up on the food pyramid, seeing that they should eat more grains, and then interpreting that to mean soda and corn chips.
The fact is, cabs/fat…we all needs those. The issue is the availability of cheap, processed snack foods and fast foods. Eating pasta with tomato is not the issue. It is the bag of Nacho Cheese Doritos and a large Thirst Buster coke.
— Brad · Jun 8, 01:55 AM · #
As long as the US has a for-profit system
Even North Korea’s health care system is a for-profit system. But it’s interesting how the U.S. system ceased to be affordable for ordinary people shortly after it became much less of a market system.
— The Reticulator · Jun 8, 01:56 AM · #
What sort of data do you have that says the U.S. has more specialists than other countries? I ask because I’ve looked into this – and while it gets repeated over and over again, I can’t find much primary source evidence to support this.
In fact, the OECD data from 2007 (which I believe is the most recent stat available) shows a much different picture. Here’s a link to the page: http://www.oecd.org/document/54/0,3343,en_2649_201185_43220022_1_1_1_1,00.html
If you click on graphs, #7 shows the U.S. with similar, if not lower percentages of specialists than many other countries.
The “myth” of medical specialties usually gets reported by groups such as the American Academy of Family Physicians or Primary Care physicians, who obviously have a vested interest in lobbying for increased pay for their members (and possibly rightly, depending on your views.)
Finally, American doctors are paid more because just about everyone in America makes more than their counterparts overseas. From nurses and techs, to the architects and construction workers who build the hospitals; not to mention the drug reps, health care corporate executives, and other affiliated industry personnel. But then again, lawyers here make more, businessmen here make more, police and firefighters make more than their overseas counterparts. America is an expensive place to live, and our health care reflects that.
— GtheK · Jun 8, 02:07 AM · #
Your ideas are interesting, but wrong on at least a couple of accounts.
1. “A great deal of it is due to the fact that America’s health-care providers earn a lot more on average than those of other countries.”
I am an ICU nurse. I work 13-14 hour days for critically ill patient’s on ventilators, administering titrated cardiac medicines, and helping doctors focus on the most important issues the patient is presenting. Not to mention the physical care—without the help of CNA’s—ICU nurses provide. For this I make 27 dollars an hour—about $60k per year. I pay $750 a month in student loans because in my town, there are few non-profit or public organizations to work for that could help me repay my loans. I literally have made life saving calls on patients who later recovered to live out the remainder of their lives. Given that I, too, must buy health insurance, save for my retirement and am currently putting my children through college, how do you argue that I am “overpaid”?
2. It is becoming a proven fact that “specialists” when consulted actually SAVE money. Again, as a nurse, I can give you hundreds of situations where Primary Care Physicians missed serious illness that would have been spotted immediately by a specialist, costing not only the patient but the health care system in general tons of money. And guess what—-once again, these specialists only cost more because they must borrow for their own advanced educations, pay the overhead of running their own “capitalistic” businesses and purchase protective insurance policies out of their own incomes. In other countries, these guys would have been chosen out of merit, had their training paid for and be covered under national laws protecting them from frivolous lawsuits. Not here.
The truth is, if we REALLY want to save money on health care in this country, we need to move towards a nationalized, publicly run health care system. Health care simply does not work as a free market commodity.
— ella · Jun 8, 02:55 AM · #
_“A great deal of it is due to the fact that America’s health-care providers earn a lot more on average than those of other countries.”
…how do you argue that I am “overpaid”?”
I’ve never before thought of ICU nurses as unintelligent, and maybe the one who claims to have written this is really just masquerading as one in order to make them look bad, but Noah didn’t argue that they are overpaid.
Maybe somebody is feeling defensive for some reason? Does anybody have Sigmund Freud’s e-mail address?
The truth is, if we REALLY want to save money on health care in this country, we need to move towards a nationalized, publicly run health care system. Health care simply does not work as a free market commodity.
Interestingly, the more we’ve moved towards that kind of system and the more we’ve moved away from a free market system, the less affordable health care has become. There are some legitimate reasons for govt involvement in providing health care for some people, but saving money is not one of them.
— The Reticulator · Jun 8, 03:49 AM · #
Noah,
What data exists to justify your claims?
I ask because I am currently in Tokyo long term on business, and there seems to be at least an equal number of specialists here if not more then in the states (admittedly I now live in a much larger city), more importantly I have far greater access to specialists at far far cheaper prices then I ever had in the states.
For example, there are probably at least half a dozen ENT clinics within 1km or so of my apartment, and I can go into any of them without waiting and without needing to pass through a general practitioner acting as a gatekeeper and my average co-pay for a visit (which is set at 1/3rd the total cost) is generally less than 3 dollars, and that includes time on the nebulizer.
I’m not trying to angelize the system here like its perfect, (Lord knows its not), just point out that my anecdotal evidence seems to contradict yours.
— James · Jun 8, 03:51 AM · #
The issue is the availability of cheap, processed snack foods and fast foods
I think it’s more the consumption of those foods than the availability. They are available in a lot of places. And the fact that they are available doesn’t make Arnold Schwarzenegger fat.
— The Reticulator · Jun 8, 04:04 AM · #
Interesting article. Noah, you say:
Some of that is surely the combination of waste and free riding. America’s system provides fewer incentives to use the lowest-cost treatment than most other national health-care systems.
Can you give examples of this?
— David · Jun 8, 06:11 AM · #
Interestingly, the more we’ve moved towards that kind of system and the more we’ve moved away from a free market system, the less affordable health care has become. — The Reticulator
You have your correlation and causation backwards. Medicare/Medicaid were introduced in 1965. You can’t seriously maintain that it would be possible to return to the level of medical spending that existed before routine pacemaker implantation, if only we end government-provided health insurance.
The causality here is that as a democratic country begins to obtain modern medical capabilities, the fact that they are affordable only for the rich becomes morally and hence politically unacceptable. This is why Thailand, which developed a world-class medical infrastructure in the 1990s and also became a democracy, created a national government-provided basic health insurance system in the early 2000s.
— Matt Steinglass · Jun 8, 09:09 AM · #
No, I didn’t say spending would go back to 1965 levels if we had no Medicare. New health care technologies make the situation different now. But health care would be a lot more affordable than it is now if we did that. Some people would also be left out in the cold, too, which wouldn’t be wonderful, either, but probably not as many as are left out in the cold now thanks to the price distortions caused by government intervention. I do favor social welfare programs to help those who are left out, but I favor a balance, which the left does not. The reason we have government-provided health care is not because it’s an act of morality. That kind of talk is just false advertising, to be believed no more than anything the used car salesman in a checked coat and striped tie will tell you. We have government-health care because it’s a mechanism of controlling the population, and of controlling every aspect of people’s lives if necessary — and the oppressors want more so it can be controlled better. It’s the most natural thing in the world for the oppressor class to want to do that, as you can learn from most any history book. The oppressor class just hates, HATES to see people make consequential decisions on their own. This makes the oppressors feel unneeded and worthless, which they are.
— The Reticulator · Jun 8, 12:13 PM · #
Ella wrote:
“Again, as a nurse, I can give you hundreds of situations where Primary Care Physicians missed serious illness that would have been spotted immediately by a specialist,”
That’s called referral bias. As an ICU nurse you are not likely to see the diagnosis’s that the PCP didn’t “miss” but instead “found” and treated without a bad outcome.
— Chris · Jun 9, 04:22 AM · #
“The biggest knock against the United States’ health-care system isn’t that we spend so much, but that we appear to get so little value for money: based on aggregate numbers, Americans are less-healthy than many other major industrialized countries, in spite of spending lots more on health care.”
Generally I liked the piece but I’d disagree with your opening statement. Our outcomes aren’t really that far off from other Western industrialized nations. Its just that we spend 50 to 100% more per person FOR THE SAME OUTCOMES
— Chris · Jun 9, 04:25 AM · #
Noah,
Apples and oranges indeed:
http://www.pacificresearch.org/doclib/20081020_Top_Ten_Myths.pdf
(go to pages 130-137 in particular for some excellent stats)
There are many other studies out there showing the same thing — once you control for our crime, or traffic accidents or even neo-natal care; our life expectancy figures are comparable or better than the rest of the industrial world. And when you compare the outcomes of discrete treatments in the U.S. against other industrialized countries we do better, not the same.
— Fake Herzog · Jun 9, 04:27 PM · #
This was an amazing read… and the detail and research! Very impressive. Thank-you for posting!
— Elizabeth · Jun 9, 07:19 PM · #
If anyone has a study that actually controls for the actual factors that go into the differences between American health care outcomes and those in other countries, please post them. The study from the Pacific Research organization posted above has many anecdotes, but few actual references to statistical procedures that control for numbers. For example, Ms. Pipes refers to homicide and traffic accidents as skewing American mortality rates, but her piece does not say exactly how these factors affect the calculations, and the references she supplies do not appear to provide this calculation.
— John Spragge · Jun 14, 04:22 AM · #