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INTERNATIONAL: Health care costs, and not just here!

I spent rather more than I’d like of my Thursday night writing a piece I promised ABCNews for their week-long series on the health care system that starts Sunday. As I was finishing up I saw this. It’s not exactly what I was writing about, but it’s not far away—Medical costs push 78 million Asians into poverty

International health experts have estimated that 78 million more Asians than previously thought are living in poverty because of healthcare costs. Many people in Asian countries do not have health insurance and pay for doctor bills and medical treatments. But the out-of-pocket health expenses they incur are not included in conventional estimates of poverty.When researchers deducted the medical costs from total household resources in 11 Asian countries, millions more people fell below the internationally accepted poverty threshold of $1 per head per day. "If you allow for direct out-of-pocket healthcare payments, there are another 78 million counted as poor," said Dr Eddy van Doorslaer, a health economist at Erasmus University in the Netherlands who headed the research team."We calculated that an additional 2.7 percent of the population under study ended up with less than $1 a per day after they had paid for healthcare." The figures, which are reported in the Lancet medical journal on Friday, are based on information from national expenditure surveys of what people spend on medical care in the various countries. The researchers extrapolated the national, representative samples to cover the entire population. Overall the study showed the prevalence of poverty was 14 percent higher than other estimates that did not include out-of-pocket healthcare costs.

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  1. I have learned to trust the government players more than the corporate CEOs that would run the system you envision, Barry. The CEO has but one goal: to maximize profits and his own personal wealth. The government can screw up and send us screaming to the politicians, but they won’t kiss you off like private industry will. I’ve been very happy with my social security and Medicare; even more so than the companies I’ve investments in. I simply don’t understand the concerns expressed over a Medicare-for-all system.

  2. “(and no, John, I am not going to search for the source, but if you read http://www.pnhp.org I suspect you’ll find it.)”

    Oh, yeah . . . PNHP.

    Well, THAT certainly explains Jack’s views.

  3. “John. Jeez I thought you read my blog. Go read this and weep about the fact that on the crossborder issue at least Jack is completely right.”
    Matt, thanks for the info (I had not started reading your blog in 2003, if that matters). Learning never makes me “weep”.
    BTW, the information you post does note the presence of a net in-migration of Canadian physicians to the US, marginally larger than an out-migration of US physicians to Canada. Overall, the net is negligible. That is important information, and alters the point of view I had taken from widespread media reports of the late 1990’s.

  4. I have learned to trust the government players more than the corporate CEOs that would run the system you envision, Barry. The CEO has but one goal: to maximize profits and his own personal wealth. The government can screw up and send us screaming to the politicians, but they won’t kiss you off like private industry will. I’ve been very happy with my social security and Medicare; even more so than the companies I’ve investments in. I simply don’t understand the concerns expressed over a Medicare-for-all system.
    But all of this discussion is for naught. We are headed for an HMO-for-all system because the corporations have the gold. Perhaps then the free-market types will start hollering for a government based system. And I don’t know what kind of concensus you need, but a majority of patients, small business leaders and physicians support a single-payer system.

  5. Jack — The issue of covering the uninsured is one of how to achieve universal healthcare. Some (including you) want a single payer system while others favor building on the current system.
    The issue I raised is an analytical one that purports to measure and compare quality across countries using metrics like life expectancy and infant mortality. I am suggesting that there are many factors that impact on these metrics that have nothing to do with the quality of the healthcare system.
    As for the uninsured, figures I’ve seen suggest that about one-third are eligible for Medicaid but have not signed up. If they wind up in the hospital, people called eligibility vendors get them signed up and are allowed to backdate the effective date of the application by up to three months. They are paid a percentage of what the hospital collects from Medicaid. Another one-third make over $50K per year and have consciously decided to forego health insurance even though their employer offers it. They are generally young and healthy and would prefer to spend their money on other things. They should probably be required to buy at least high deductible catastrophic coverage (with help from their employers). The final one-third work for low pay in low wage industries like retail, restaurants and hotels. Subsidies are probably required to help this group buy insurance.
    Single payer may be the obvious way to go in your opinion, but there is no consensus for it. Why? Not just because of our money driven politics, but because lots of people would probably pay more for less coverage including many public sector employees who currently have gold plated coverage (teachers, police, etc.) as would many people who work for large companies that have long provided very comprehensive coverage at low (visible) cost to employees. There are also millions of people, including myself, who just don’t trust the government to do anything efficiently and cost-effectively. If a presidential candidate in 2008 advocates a single payer system and wins, he or she will have earned the political capital to push it through, but not until then.

  6. But Barry, all of your arguments are just “excuses” for not fixing our current system. Matthew and others are 100% correct that practice variations can cause rather than correct medical problems. But rather than eliminating the health care system because of it, which we have essentially done to 45 million Americans, we must fix that system with a national IT solution (God forbid we allow Medicare or the VA do it, no matter that they are the best equipped to do so. Let’s outsource it to Halliburton or Boeing.)
    You and I agree that a national database will solve many of our problems. Just two days ago I took my mother-in-law to the emergency room for chest pains. Because they did not have access to her records because they were at the clinic two blocks away, and it was 9pm, they reran all of the tests she’d already had. But they had nothing to compare with. That’s incompetence on the part of our planners.
    >>> “Finally, on rationing, let’s be careful of semantics here. If longer wait times for elective surgery result from the government artificially restricting the number of hospital beds by requiring a certificate of need or limiting the number of MRI machines, it’s rationing.”

    I disagree. It is cost containment. Done so to prevent hospitals from leap-frogging each other with equipment and bed expansions, thus driving the cost of medicine out of sight. They usually have an MRI machine, but turn them over at 2 or 3 year intervals to keep ahead of the hospital down the street.
    The CON has never restricted beds that were not needed, but in our city two 500 bed hospitals were closed by the private investors because they were located in the poor areas of town and did not attract the rich folks that had private insurance. Yet now they are building a new 85 bed hospital virtually next door to a modern 435 bed hospital that is only 65% utilized. Why? Because the local clinic was bought up by a competing hospital and wants their own place of business. Who is going to pay? All of us.

    >>> “The bottom line is that this is a complicated issue and these widely quoted metrics that claim to show that the U.S. healthcare system is inferior are overly simplistic and highly misleading.”

    They are simplistic and misleading, Barry, unless you are one of the 45 million who is uninsured, one of the 50 million that is underinsured, or not rich enough to buy whatever you want.

  7. Jack — In debating how to potentially restructure 16% of our economy, it is extremely important to insure that the analysis is complete and not overly simplistic. Take, for example, the issue of life expectancy, which only varies by a couple of years among most of the major industrialized countries.
    You said (correctly) that Japanese people have higher life expectancy even though more of them smoke. It could be due to a healthier diet and/or genetic factors. It would be incorrect and inappropriate to attribute it completely to better healthcare.
    People from lower socio-economic groups tend to die sooner than others even if they have decent health insurance, in part, because their lives are just plain harder in a whole host of ways. So, poverty rates should be factored into the analysis as well.
    Occupational issues also play a role. The steel and coal mining industries have, for decades, provided gold plated comprehensive health insurance to their unionized work force. Yet, these workers have shorter life expectancies because many of the jobs are physically demanding and are performed under hot and often dangerous conditions even though workplace safety has greatly improved over the years.
    The U.S. is a very large country in land area. With more driving required and mass transit not a viable option in many locations, more people (relative to population size) may be killed or badly hurt in traffic accidents. This also has nothing to do with the quality of the healthcare system.
    Regarding your comment about more frequent visits to the doctor increasing the chance that disease will be discovered, Matthew and others have pointed out that variations in practice patterns in the U.S. suggest that more care and treatment often results in worse health outcomes.
    Finally, on rationing, let’s be careful of semantics here. If longer wait times for elective surgery result from the government artificially restricting the number of hospital beds by requiring a certificate of need or limiting the number of MRI machines, it’s rationing. It may not be as explicit as World War II era food and gasoline ration stamps, but it’s rationing nonetheless.
    The bottom line is that this is a complicated issue and these widely quoted metrics that claim to show that the U.S. healthcare system is inferior are overly simplistic and highly misleading.

  8. Barry, since Matthew hasn’t responded yet I’ll throw my two cents in, but overall I just think you are grabbing at straws to save a doomed system.
    >>> “1. Infant mortality statistics.”

    It doesn’t really matter that we are larger or more diverse, these are per-capita numbers. Canadian teenagers are typically poorer than those in the US but are not deterred from prenatal care. That is a positive.

    >>> “2. Life expectancy.”

    Japanese are heavier smokers but live two years longer than us, probably having more to do with diet than anything else.

    >>> “3. Canadians have more doctor visits per capita. Why is this indicative of better healthcare? Maybe it just means more frivolous visits because it’s “free” and nobody gets a bill.”

    Of course! Could it also be one of the reasons their care is better and has a higher patient-satisfaction rate? Could it mean that greater access offers greater opportunity to discover disease? The facts are what the facts are! Greater access generally means better care.

    >>> “4. Canadians have longer hospital stays on average than we do. Couldn’t this mean that Canada’s system takes longer before you are ready to be discharged? Or maybe their hospitals are paid on a per diem basis which gives them an incentive to keep patients longer.

    Yeah, I guess you could say that it takes them longer to do the job right, rather than blame the US hospitals that kick the patients out sooner than they should. But their hospitals are paid a fixed yearly budget thus the incentive would be to move them out faster. They just don’t do it. They keep them a more appropriate amount of time.

    >>> “There is plenty of room for debate on how …. we should ration care by restricting supply of hospital beds, MRI machines and the like.

    Canada has longer wait times for elective surgeries, but they do not ration care.

  9. In the course of my work I’ve had occasion to familiarize myself with a number of health systems around the world on a superficial basis. Based on this work experience I think it’s fair to say:
    1)most countries are grappling with health care costs rising well above the rate of inflation, wealthy nations more so.
    2)There is no “free system,” nor is there an “Asian” system. There is rather a lot of variety though most countries attempt to offer universal health care. The Netherlands for one has an interesting blend of private and public provisions.
    3) The Canadian system is a fine health care system but has it flaws, most notably prohibiting private health insurance. The UK does the same thing. The concern is equity of access, but the systems are unable to avail of beneficial market forces as a result.
    4) The World Health Organization and the Organization for Economic Cooperation and Development both have good data on many aspects of health care in various countries. In the U.S., the Kaiser Family Foundation, the Centers for Medicare and Medicaid, and the Bureau of Labor Statistics all have good data on health spending, provision, etc., and would help provide groundwork for discussion.
    5) The flow of medical professionals and patients is a worldwide phenomenon. The most prominent issues are the loss of talent (particularly in the third world), the increased draw of patients to cheaper locations, and patients seeking higher levels of care. In the first two cases, what we’re really talking about it arbitrage (taking advantage of price differentials). I’m not surprised it occurs, but I don’t see it as an endorsement of one system over another.
    In sum, I would say our system is falling apart by many measures, but excels at top flight care and developing new treatments and drugs. The biggest problem is that most consumers have little understanding of own system, and less or none at all of foreign systems.

  10. Matthew,
    Since you are a healthcare expert, could you please speak to the relevance and validity of some of the following metrics the purport to show that U.S. healthcare is lower in quality than numerous other countries despite higher costs:
    1. Infant mortality statistics. The U.S. is a much larger and more diverse country than others. Such issues as poor teenagers who become pregnant may not get adequate care because they don’t go for checkups consistently even though they are usually covered by Medicaid or have access to clinics. In some of our rural areas, there may an inadequate supply of doctors even though people who live there have insurance, at least on paper.
    2. Life expectancy. The New York Times had a recent article that showed that life expectancy varied hugely within the U.S. from 91 years for Asian women in Bergen County, NJ to 58 for Native Americans in South Dakota. In the UK, the percentage of people who smoke increases as you move from south to north, and life expectancy also varies depending on socioeconomic status even though everyone has insurance.
    3. Canadians have more doctor visits per capita. Why is this indicative of better healthcare? Maybe it just means more frivilous visits because it’s “free” and nobody gets a bill.
    4. Canadians have longer hospital stays on average than we do. Couldn’t this mean that Canada’s system takes longer before you are ready to be discharged? Or maybe their hospitals are paid on a per diem basis which gives them an incentive to keep patients longer.
    5. Lifestyle choices like diet and exercise could be important factors in health outcomes whether or not one has insurance.
    There is plenty of room for debate on how to get the uninsured covered, how we should handle care at the end of life, whether we should reform our malpractice system, whether we should just say no to expensive treatments that are probably not worth their cost, and whether we should ration care by restricting supply of hospital beds, MRI machines and the like.
    Any general thoughts you may have on this subject would be helpful.

  11. John,
    If the best you can do is send someone running to document their sources for a simple remark, believe what you will. If you are denying that “big bucks” would attract physicians to the US, so be it. That ANY physicians are leaving the US for Canada should be enough to concern you. That you would totally ignore the preceding comparison for such a mundane post tells me you simply want to believe what you want to believe. So do it.

  12. John. Jeez I thought you read my blog. Go read this and weep about the fact that on the crossborder issue at least Jack is completely right.

  13. Jack, please share your sources.
    You agree that Canadian physicians once moved south. You say that these physicians “came south originally because that’s where the big bucks were”. And you say that more physicians are moving north than south now.
    Do you have more information? Minimally, what documentation do you have about the movement of physicians between Canada and US? It would also be interesting to know what accounts for the “reversal” if there is one. Are the big bucks now in Canada? If not, why would more physicians now be moving north? Are the same physicians going north that originally came south? Also, bourne’s comment didn’t say anything about the relative size of the migrations. Are any physicians and nurses still going south? If so what are the reasons for movement either way?
    I’ve seen media and professional journal reports within the past 3-4 years that documented a net inflow of health care professionals to the US but have not seen reports – except for your post above – that more professionals are going north than are coming south. Please share your sources, including the survey of big border hospitals that you refer to.
    Thanks.

  14. That’s not correct today. Though once true, there are now more Canadian physicians heading north than south, and they came south originally because that’s where the big bucks were. They cannot achieve million-dollar salaries under their system, which caps physicians at $400K per year.
    As well, in a survey of big border hospitals, the biggest US hospital treated all of 60 Canadian patients per year. So the spin by the for-profit lobbyists is just that: spin.

  15. What’s not to like about a system that covers 100% of its patients at a cost 50% lower and care equal or better?
    Good question.
    There’s a steady flow of Canadian doctors & nurses who move to the US, and of Canadians patients who seek health care in the US. If there is something not to like, perhaps these folks know what it is.

  16. Healthcare will never be free, pgbMD, but as Peter points out, it can be less costly were we to adopt systems from other countries. It costs us 15% of gross domestic product in the US compared to 10% in Canada, and it’s even less in every other industrialize country in the world. Though our costs are 50% higher than Canada’s, that country still has far healthier people. Look at these differences:
    * Canadians have a life expectancy two years longer than Americans (79.3 years compared to our 77 years). They are 5th in the world in longevity compared to America at 26th.
    * Canada’s infant mortality rate is 35% lower than ours, because mothers are not priced out of (i.e., denied) prenatal care
    * We spend $5,267 per-capita on health care compared to Canada’s $2,931, because Canada’s administration costs are 8% compared to our 30%.
    * We spend more dollars on health care than any other country, yet our system of care is ranked by the World Health Organization at 37th in the world (France is first, Canada is 5th).
    * On a per-capita basis the U.S. has twice as many MRI scanners as does Canada. (Japan has the most, and they still beat the US in all categories)
    * On a per-capita basis we have fewer hospital days per visit as do the Canadians. Their hospitals have 75% less bureaucracy.
    * On a per-capita basis we have fewer doctor visits as do the Canadians.
    * Canada has independent physicians and hospitals, with free choice of doctor and hospital.
    * The Canadian system covers 100% of its population compared to 85% in the US.
    And yes, they have longer wait times for elective surgeries than we do because they squeeze their system more that we do. But a 10% increase in their spending (to 11% of GDP) would even eliminate that negative. But also understand that their wait times for urgent care are the same as ours: zero.
    What’s not to like about a system that covers 100% of its patients at a cost 50% lower and care equal or better?

  17. Barry and pgbMD,
    It looks like the single pay government run systems, while certainly not free, do achieve lower costs, better overall access while reducing overuse (a complaint here by Eric Novack), and with as good or better outcomes. But if you guys can find another world healthcare system that is based on the everyone-out-for-themselves free market principle that works better than the U.S. system, then I’d be willing to look at it.

  18. “Let’s just make healthcare free!”
    As P. J. O’Rourke famously said: If you think healthcare is expensive now, wait until it’s free!

  19. I guess we now have an example of what a true competitive free market, user pay system will look like here in the U.S. I wonder if the Asian system has, “Qualy/Metrics and transparency? Wait until baby boomers find that 50% or more of their pensions will need to go to healthcare. That’s if their private pension is still around.

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