Walter Bradley is the Chairman of the Department of Neurology at the school of Medicine at the University of Miami. He has written a long piece (available here) on how he thinks we should solve the uninsurance problem. Here’s the short version:
Introduction
We all know that the United States health care system is in trouble. The US spends over $2 trillion a year on health care, almost 17% of the GDP. By comparison, Switzerland, Germany and Canada spend about 10% of their GDP on health care, while United Kingdom spends less than 8%. Despite this, the 2005 Commonwealth Fund International Health Policy Survey of sicker adults from six countries, Australia, Canada, Germany, New Zealand, the United Kingdom and the US reported that "(t)he United States often stands out with high medical errors and inefficient care and has the worst performance for access/cost barriers and financial burdens." Moreover, the US lags well behind many other countries in indices of quality of care. In 2005 the US ranked 42nd among the world’s nations in infant mortality, with 6.50 infant deaths per 1,000 live births, behind such nations as Singapore (2.29), Sweden (2.77), France (4.26), Canada (4.75) and United Kingdom (5.16), and was 29th among developed countries in maternal mortality. In 2004, 46 million people (15.7% of the US population, about one-fifth of them children) were without any form of health insurance. Many of these have been without health care for years, though others are between jobs that provide health care coverage. In addition another 50 million people in the US have inadequate health care coverage and would be bankrupted by a serious illness.
Most people without health insurance do not have primary health care and only obtain medical care when they suffer an illness that is sufficiently severe as to take them to the Emergency Department of a public hospital. The stroke or heart attack costs the public hospital and the local taxpayers much more than would the control of blood pressure by a primary care doctor.
Health insurance premiums are skyrocketing. In 2004 the annual premium of an employment-based group plan for a family of four averaged $9,950 and workers are contributing an ever-increasing amount to these premiums. The percentage of people with employment-based health insurance in 2004 was 61 percent and is likely to fall further in the coming years as employers strive to reduce health insurance overheads.
The current system of health care for the medically indigent is fragmented, expensive and inefficient. The exact cost of health care for the uninsured in the US is difficult to assess because it is fragmented between Medicaid, the public hospitals, physicians and the insured public. In fact, the US may well be spending more per capita on health care for those without health insurance through these various sources than it does for those with insurance.
I propose a comprehensive cost-effective system of medical care for those without health insurance, the National Health Service for the Uninsured (NHSU). The creation of the NHSU would not immediately address all the ills of the US health care system, but it would provide health care for those without medical insurance, improve the overall health of US citizens, and introduce cost-saving systems that might eventually help the overall US health care system.
An integrated system of health care for the medically indigent in the United States, the National Health Service for the Uninsured.
This proposal for the provision of improved health care to those without medical insurance envisions no change in the current system of fee-for-service medical care, which would continue to provide for the 80% of the population with private health insurance or Medicare. As now, these patients would continue seeing their own doctors and the health insurance programs would reimburse the doctors, hospitals, laboratories, etc. for the medical services they provide.
The National Health Service for the Uninsured (NHSU) would replace the current fragmented "non-system" for the 16% of the US population that is currently without health insurance. The NHSU would be a comprehensive, cost-effective federal program. It would be an integrated health care system for the uninsured based on a new primary care physician network, and the staff and facilities of public hospitals that contracted to join the program. The NHSU would provide medical services from the family practitioner to the specialist, from ambulatory care and home health services to the hospital and nursing home services. It would provide laboratory services, medications and durable medical equipment, and the services of allied health professionals for all covered patients. When fully operational, the NHSU might approach revenue-neutrality for the US as a whole if it were funded centrally by redirection of monies currently going to provide inefficient and costly indigent care through federal, state and local funding. It has been suggested that the incremental annual cost to the federal government of providing health care for the medically uninsured to the level of that provided by insurance-based and government-based coverage would be $34-69 billion annually. However, the cost to Society of shorter lives and poorer productivity of 50 million people without health insurance has been estimated to be $65-130 billion per annum.
The NHSU would not provide the level of consumer flexibility and
over-utilization that characterizes the US health care system at
present. It would be more like an expanded VA system, providing all the
services needed for comprehensive care of those enrolled in the
program, including primary care. However, it would do so in a
cost-contained format. Increased efficiency and cost-containment
programs would be likely to reduce the per capita costs of the NHSU
well below that of insurance- and Medicare- based health care. When
fully operational the NHSU would likely reduce rather than increase the
total cost of US health care.
Financing the NHSU could either be via the creation of a new federal
fund or alternatively it could be based on an expansion of the current
federal Medicaid fund. The monies currently going to provide health
care for the medically uninsured from federal, state and local programs
and from hidden cost-shifting to health insurance companies could be
centralized through a system of tithes on current providers.
Alternatively a new federal tax could be instituted to support the
NHSU, with consequent savings to those health care entities and
providers currently funding indigent care. Viewed from the perspective
of the US health economy as a whole the changes would probably be
budget- neutral.
Efficiency and cost-containment in the NHSU
Physicians would have
to play a large role in the administration of the NHSU. However, these
physicians would be salaried and not be placed in the currently
ethically challenging position of being paid more for providing more
services. The NHSU would not involve fee-for-service reimbursement. In
this regard, the NHSU would be like the British National Health
Service, where physicians are salaried, and where
physician-administrators are involved at all levels, based on the
concept that physicians are best able to make priority judgments about
allocation of scarce resources.
The current US health care system is characterized by layers of
bureaucracy that relate to the efforts of Medicare and insurance payers
to minimize costs and to the efforts of providers to maximize
reimbursements. Administration and bureaucracy absorbed over 30% of
total health care expenditure, over $300 million or more than $1,000
per capita in the United States, compared to about $300 per capita or
16% in Canada. The in-house cost of administration of the NHSU would be
of the order of 5%, which is comparable to that of Medicare and
Medicaid, much lower than the 12% of commercial insurance companies.
Greater participation of physicians in the administration of the
NHSU, removal of the profit motive and the necessity of working within
fixed annual budgets would allow medically appropriate decisions to
control utilization. It would stimulate the development of
cost-containment programs based on the use of medical guidelines and
practice parameters to reduce over-utilization, implemented by
physician education programs. Physicians and public hospitals providing
services for the federal NHSU program could be granted sovereign
immunity. The introduction of compulsory arbitration programs and a
national insurance scheme for patients suffering medical injury,
similar to the Neurological Injury Compensation Act of the State of
Florida, the United States National Vaccine Injury Compensation
Program, and the New Zealand no-fault compensation program for medical
injury could dramatically reduce the costs of malpractice insurance and
defensive medicine. Bulk purchases of medications, goods and services
by the single- payer NHSU could result in a savings in excess of 20% on
those items.
The primary care physician (PCP) base of the NHSU.
At present, those who have no health insurance in the US receive no
primary care services and hence the NHSU would need a large number of
PCPs. The US currently has about 400 PCPs/million population, compared
to the United Kingdom with about 700 and Canada about 1,000
PCPs/million. Based on these figures, the NHSU would need at least 500
PCPs/ million of enrolled individuals, or about 25,000 new PCPs. This
number is daunting, since it is 1.6 times the total number of medical
students graduating each year from US medical schools, of whom only
one-third enter the primary care disciplines of family practice,
general internal medicine and general pediatrics.
There are several ways in which this need for additional PCPs could
be met. The number of medical students graduating each year from US
medical schools has remained static for a decade or more and many
health care professionals, including the American Association of
Medical Colleges have been calling for an expansion of medical school
places. A higher proportion of graduating medical students could be
attracted to become PCPs by the opening of a well-paid and salaried
primary care track in the NHSU. Newly graduated doctors could be
further attracted by a program to forgive student loans in return for
two or three years of primary care service in the NHSU, similar to that
currently offered through the National Health Service Corps. Finally,
the new primary care network of the NHSU would attract well-qualified
foreign medical graduates. The specialist physician base of the NHSU.
The specialists of the NHSU would predominantly come from the current
staff of the public hospitals already providing care to the medically
indigent population. Many of these are the clinical faculty of US
medical schools. These physicians, whether attached to a public
hospital or a medical school, could be either full-time salaried
employees of the NHSU, or alternatively they could have part-time
appointments split between fee-for-service practice and the NHSU in the
same way as academic physicians can
The hospital base of the NHSU.
Currently in the US, hospital services for uninsured patients are
provided by public hospitals, many of which are affiliated with medical
schools. Hospitals would contact with the NHSU to provide services for
patients that would not be based on fee-for-service reimbursement. The
NHSU would be based on a network of community based primary care
centers evenly distributed throughout the country on a per capita
basis, linked to small regional hospitals and geographically
distributed large specialty tertiary care hospitals. This would be
similar to the Veterans Health Administration system where regional VA
Medical Centers provide hospital services for patients whose ambulatory
care is provided by decentralized VA primary care sites.
The hospitals contracting with the NHSU would be funded to provide
care for the NHSU patients based on a capitation fee related to the
total number of subjects enrolled in the NHSU in a given drainage area.
The "threat" of migration of beneficiaries from employment-based
health insurance to the National Health Service for the Uninsured.
The NHSU would be available to every US citizen who lacks health
care coverage through Medicare and employment-based commercial
insurance. Ultimately, it is likely that Medicaid would also be merged
into the NHSU.
An argument that has been raised against the NHSU is that employers
would stop providing health insurance for their employees, thereby
forcing them to join the NHSU program. This argument fails to recognize
that the NHSU would be a very different system from the current US
fee-for-service system, even with all the restrictions imposed by
Medicare and the health maintenance organizations. NHSU patients would
not have open access to specialist physicians, other than through their
PCP. Prescription medications would be provided on the basis of
cost-effectiveness using generics wherever possible, and an information
base similar to Consumer Reports Best Buy Drugs program.
Investigations, like MRI scans and expensive laboratory tests would not
be freely available and their use would be based on practice parameters
and evidence-based medicine. The NHSU would have more in common with
the US Veterans Health Administration system or the provincial health
care systems in Canada34-36 than with the current US fee-for-service
system. The NHSU would provide cost-effective medical care for all who
need it and a safety net for the 50 million citizens who otherwise have
no health care. However, it would be less attractive for employees than
insurance-based health care. Unions and prospective employees would
still seek to have health insurance provided by employers as a fringe
benefit. Medicare recipients and lobbying groups like AARP would fight
hard to keep the fee-for-service or HMO models of health care rather
than that provided by the NHSU.
Conclusions.
This proposal for a National Health Service for the Uninsured would
not interfere with the health care of the majority of the US public.
Limited to the 15% of the population without health coverage, the NHSU
should be politically acceptable to most of the US voting public, who
currently have government- or employment-based health insurance. The
NHSU would provide a comprehensive integrated national health care
system for the medically indigent that extends from a new primary care
service to a system of tertiary referral hospitals and specialists. The
US public could feel proud of the NHSU, rather than embarrassed at
having nearly 50 million Americans without basic health care. The NHSU
would probably result in a net savings to the US when compared to the
current costly fragmented "non-system" of emergency medical services
for the medically indigent and the cost to Society of ill health and
shortened lives. The NHSU would aid in the development of a primary
care infrastructure that the US has long needed. The NHSU might
ultimately be instrumental in bringing under control the double-digit
rate of inflation of medical expenditure in the US by providing
templates for cost-containment for the insurance- and Medicare-based
health care system. The NHSU would raise the overall standard of
medical care in the US and hence improve the international standing of
the US in measures of health care quality and outcomes.
Categories: Uncategorized
This is exactly why, this plant is still wallowing around in the dark ages,I’m not doing enough,I should be supporting this fight more.I should have supported this meeting.If most foreign-born physicians returned to their homelands after completion of graduate training here,the United States would make an enormous contribution to these countries rather than drain them of some of their most talented young people.
Influence can be defined as the power exerted over the minds and behavior of others. A power that can affect, persuade and cause changes to someone or something. In order to influence people, you first need to discover what is already influencing them. What makes them tick? What do they care about? We need some leverage to work with when we’re trying to change how people think and behave.
http://www.onlineuniversalwork.com
There already is a National Health Service codified in the US Code….it’s called the US Public Health Service and they’re busy providing care to Indian tribes throughout the country. Ask anyone who’s in the USPHS, they’d LOVE IT to move out of the role they are presently cast in….
With respect to current trends in medical policymaking and given the inherent logic latent within the ‘Lucas Critique’ regarding macroeconomic policymaking in general – would it be naive to consider microeconomical predictions for future medical policymaking strategies?
I agree with Mr. Bradley about the health care crsis.
As a patient and a former employee (I used to work at a famous hospital on
Long Island) of the health care system – I have first-hand knowledge on how
the care system works in America.
Close to 100,000 people die each year in hospitals due to medical errors.
The hospital I worked at had too much administrative waste. There was
endless paperwork in processing patient information.
Many of the positions, especially in the non-medical areas, were filled
through nepotism. Many of the supervisors and mid-level managers at this
hospital were concerned about how they looked to top administrators, rather
then perform thier jobs effectively. (CYA was the major activity).
A question I would like to ask the general public, particularly doctors –
How come doctors never challenge other doctors?
Right after I graduated college I was “confused,” doing drugs, and getting into trouble; so my parents sent me to psychiatrist. The psychiatrist said was I “mentally ill” and he sent me to neurologist for my tests. (Our family doctor stated at first I did not need any tests, and then he changed his mind.) The neurologist examined my brain and said I was fine. I just needed to “grow up.”
Dear Collegues can any body tell me how MBA in Health care mangent help a physician in his practice not as an administrater.On the other hand what is the purpose of doing MBA in HCM.
I really appreciate your advice.
Thanks
Ven
I think that a better solution is to require those who don’t qualify for medicare or medicaid to purchase health insurance so that they can be responsible of their own health and not rely on the state to bail them out.
http://www.simplehealthquote.com
As I see it, national vs. privatized healthcare isn’t really the issue. Out-of-the-box thinking is what is needed. An analogy would be automobiles. What’s better, gas, hydrogen or electric cars? Here, the debate centers on what substance should fuel the car, rather than on creating alternative modes of transport. Same goes for healthcare. The debate centers on who should fuel the system, rather than on creating alternative modes of delivering and pricing healthcare. Today’s hospitals are, as far as I’ve experienced, are dinosaurs. Many of its services could be provided much more efficiently and cheaply in one’s own home. Gas, electric, linen, meals, janitorial services, etc. are all added to one’s bill in the hospital. Recently thought about the fact that a pulse oximeter reading at the hospital costs $350 a pop, plus doc’s fees, etc. Went online and found the same pulse oximeter machine the hospital uses for $250!!! Found 8 people in my vicinity who get tested regularly using the same machine. We all share it. That’s one tiny example of ways to save. Sure there are thousands of others. Freedom breeds innovation. Let’s innovate!
Using the per capita OECD spending data and calculating percent increases year over year we see that the UK is outpacing the USA in spending growth. Averaging the year over year percent spending increases from 2000 to 2004 the UK has averaged 8% per year and the USA has averaged 7% per year. Not a huge difference but still present, even in the face of the rationing within the UK government controlled single payer system. (2000 UK $1858 (8.6%) USA $4588 (5.8%); 2001 UK $2029 (9.2%) USA $4933 (7.5%); 2002 UK $2228 (9.8%) USA $5324 (7.9%); 2003 UK $2317 (4.0%) USA $5711 (7.3%); 2004 UK $2508 (8.2%) USA $6102 (6.8%)).
Additionally, just released data out of Washington stated, “data show that in 2005, spending on healthcare grew 6.9%. That was the smallest rate of increase since 1999, and marked the third straight year in which the pace had moderated.”
They point out that there are ways to reduce spending other than forcing the entire country into a government mandated single payer healthcare system. Some of the things that appear to be working are a greater reliance on generic medications, better cost containment of Medicaid expenses, and better management of chronic disease reducing the needs for costly hospitalizations.
“But in 2003, the share of spending on these very ill patients dipped to 49%, suggesting that doctors are reducing costly hospitalizations through better management of chronic diseases such as diabetes.”… “Analysts credited a continuing shift to generic medications, as well as aggressive cost-control efforts by state Medicaid programs.”
http://www.latimes.com/features/health/medicine/la-na-health9jan09,1,3515088.story?coll=la-health-medicine
“You think that we don’t spend too much on health care. I think we do”.
Matt, yer making it up. (That is, to use your words, your statement is “pure BS”.) I’ve said many times that we need to learn from other countries how they provide health care roughly equivalent in quality to the U.S. at roughly half the cost.
You don’t seem to want to answer the actual question I asked. That’s OK, it’s your blog and all. Anyway, here is the question again:
“After having implemented such a system in the U.S., it appears reasonable to worry that we will have bought time, but not a solution. In other words, if our per capita expenditures continue to rise at historical rates (or higher, as suggested by OECD experience) how long until the per capita costs are back where they are now? What then?”
You see Matt, I’m assuming that when we change to a universal system, our per capita health care expenditures will indeed drop. I’m further assuming that, afterward, the per capita costs will continue to rise. I think that’s a reasonable general inference from the OECD data, because it is the actual experience over a few decades now, in 30 OECD countries.
Thoughts?
I also maintain there is a difference between government spending and health care costs, even in a universal system. If the costs of health care were not rising, the expenditures would not be rising. But if instead you regard government spending as synonymous with health care costs, then that would indeed be a severe disagreement between us.
“Of course all this spending will increase at the rate it’s politically allowed to.”
Politicians can control government spending, but can they control health care costs? Do they only make political decisions to fund, or underfund, such costs? I think these questions are important. I also think the experience of countries that already have a universal system in place can help answer these questions, and therefore it’s important not to be hasty about brushing aside the experience of the OECD countries.
“. . . that sector of the economy has to compete with others (education, defense, etc) in a rational allocation. . . .”
The political classes will only do what they are forced to do, and when they are forced to do it. So IMO at any point in time there are likely to be big differences between the actual resource allocation and some “rational allocation” – – to say nothing about ongoing disputes between reasonable people about what constitutes a “rational allocation” in the first place.
I might be a little more optimistic were the American public reasonably well-versed on health care issues. But most people just want their expenses paid, no questions asked. They don’t want to hear complexity, or coverage limits, or restrictions, or health care theory or cost-sharing, or anything much, except “your balance due is zero”. Will Americans’ attitude change when a universal program is in place here? IMO, no. I think one of the important lessons of Canada and Japan – and France, and U.K, and etc, etc is this: those countries’ governments increased health care funding when public outrage arose over inadequate health care services – and not an hour before. Polite suggestions about securing “rational allocations” to fund adequate health care services fall on deaf ears. That is not exactly a management model that inspires optimism.
I might also be a little more optimistic if there were some guarantee that providers who are told by their government what they may earn, will not e.g., cut their office hours or their weekly schedules. Or if there were some guarantee that under a system of government procurement rules, technology research and development will thrive and we can look forward to continued medical advances in fields such as neurology or cancer treatment. Or if a sufficient supply of highly-talented young people were guaranteed to pursue the profession of medicine in the future – even as physicians’ incomes decline. Or if there were any reasonable assurance that the government will not deliberately underfund medical costs to balance its budget or that access to care will not be affected by such government budgetary decisions.
John
“My question focuses on OUR costs, I’m not comparing our costs to anyone else’s. And I would NOT want the answer to be that the government will use the mechanism of the universal system to deliberately reduce health care spending.”
Well that is a severe disagreement between us. You think that we don’t spend too much on health care. I think we do. I want to reduce health care spending, either by means of rational market forces (which we don’t have but might under an Enthoven-type model) or by government control. And i accept that many providers will get leess. My hope is that school teachers, social workers, (insert your favorite underpaid profession here), etc, will get more.
“But anyway, of course decisions about governmental expenditures are political choices – rational or otherwise. But will those decisions affect the continuing growth to the underlying cost of the health care? The OECD experience suggests the answer may be No.”
Pure BS. Of course all this spending will increase at the rate it’s politically allowed to. The difference is that in other countries–as it would in this country if we had one organization in charge of all spending–that sector of the economy has to compete with others (education, defense, etc) in a rational allocation. And when it got out of line (defense in the US in the early 1990s, HC in Japan/Canada in the mid 90s) it can be reduced in a political process. That’s what can’t happen here as the providers own the public and private payers.
I would agree with you that most Americans and few politicians care about the experience of foreigners. They’re only good to play TV villains or comedians, or to drop bombs on after all….
“In Japan and Canada in the mid-1990s health care spending as a share of GDP was deliberately reduced because they wanted to reduce government spending overall.”
That’s a good half-point. The other half is to connect reducing government expenditures to reducing health care costs. How will that happen exactly?
As you note, health care costs are steadily increasing even in Japan and Canada. Any political decision to reduce government spending must reduce the incomes of physicians or other providers, or reduce the public’s access to services, and probably both. Is that how it’s envisioned that health care costs will be reduced? If so, such political decisions appear threatening, rather than advantageous. I’ve never tried to argue that there are no benefits in a universal, politically-controlled system. At the same time it seems really clear that some problems we have now will be greater in a universal system and there are likely other problems that the public is not even aware of. I don’t see much even-handed sharing of cross-nation experience and that’s a shame because it’s so relevant to the public debate that this country is trying to have.
“The US government is unable to make that decision.”
Really? Medicare and Medicaid for decades have spent less than physicians believe is necessary; this was done to serve the political need to hold down budget expense and thus taxes. In so doing, the government has shifted costs to private payers – a hidden tax. Has that been an advantage or a problem? If an advantage, to whom, exactly? I don’t see how transferring health care spending decisions fully into the political arena will mean that decisions will become easier in the future, quite the reverse. Besides, a universal politically-controlled system may not produce the decisions that will give the public what it seems to expect. For example, I doubt the average person’s main expectation is that universal health care will allow the government to better control its budget, potentially at the expense of their own reduced access to care.
“the major difference between the US and France is that the French pay their providers less”
Are you suggesting that reduced physician incomes are necessary to the success of a universal system in the U.S?
“And for John’s second question…if we had such a system, the level of per capita costs is more likely to be a rational political choice over the whole economy, rather than the outcome of the political captures of the process by the current provider/supplier system–as we have here now.”
I don’t see how that relates to my second question. Here’s the question again:
“After having implemented such a system in the U.S., it appears reasonable to worry that we will have bought time, but not a solution. In other words, if our per capita expenditures continue to rise at historical rates (or higher, as suggested by OECD experience) how long until the per capita costs are back where they are now? What then?”
My question focuses on OUR costs, I’m not comparing our costs to anyone else’s. And I would NOT want the answer to be that the government will use the mechanism of the universal system to deliberately reduce health care spending.
But anyway, of course decisions about governmental expenditures are political choices – rational or otherwise. But will those decisions affect the continuing growth to the underlying cost of the health care? The OECD experience suggests the answer may be No. I think everyone needs to know much more about this and therefore it’s important not to be hasty about brushing aside the experience of the OECD countries.
pgb–Sorry but the data doesn’t really say what you think it says
Published today
http://content.healthaffairs.org/cgi/content/abstract/26/1/154
“This paper compares the long-term (1970–2002) rates of real growth in health spending per capita in the United States and a group of high-income countries in the Organization for Economic Cooperation and Development (OECD). Real health spending growth is decomposed into population aging, overall economic growth, and excess growth. Although rates of aging and overall economic growth were similar, annual excess growth was much higher in the United States (2.0 percent) versus the OECD countries studied (1.1 percent). That difference, which is of an economically important magnitude, suggests that country-specific institutional factors might contribute to long-term health spending trends.”
Plus, the 2006 number is closer to 16% here and our costs have been going up more.
But the wider point is that you think that public and private spending are somehow different. They both use actual money. So if a society is spending 16% of its GDP on health care, and another is spending 10% or 11%, somehow in your theory the one that’s spending more is actually spending less–because it’s not all public money.
Let us talk only about the facts and leave the rounding of numbers to the readers. I will have to admit that the OECD database is packed full of goodies and the numbers don’t lie!
The average annual percent increase in total per capita expenditure on health over 6 and 12 years was 4.6% in the USA versus 5.4% in the UK and 3.5% in the USA versus 4.1% in the UK, respectively. Percent change in total expenditure on health per capita from 1994 to 2004 was 47% in the UK and 40% in the USA. This again tells me that even in the face of severe healthcare rationing the 100% government controlled healthcare system in the UK cannot contain costs.
You may have more recent OECD data but I could only find 2004 data for total expenditure on health as a % of GDP. In the USA it was 15.3% versus 8.1% in the UK (11.6% in Switzerland, 10.6% in Germany, 10.5% in France). Close to twice that of the UK but not so for France and Germany.
Not sure what to make of this, but the number of practicing physicians per 1000 population from 1996 to 2006 rose only 8% (2.2 to 2.4 physicians per 1000 population) in the USA versus 22% (1.8 to 2.3) in the UK. This may be just the result of indentured servitude.
I think this whole discussion comes down to what percent of earned income do we need to be taxing in order to fund the “Great Society” social welfare programs. If we follow Europe’s example it is over 50%!!! In 2005 the central and sub-central government income tax rates plus social security for a married couple with one income (making the average wage/salary) and 2 children were 25% in the UK, 22% in France and Germany, 19% in Canada, and only 5% in the USA (prior to Bush tax cuts 9.3%). Total income tax plus social security for those making 167% of the average wage/salary was 54% in Germany, 53% in France, 37% in the UK, 34% in the USA, and 33% in Canada (the winner Belgium at a whopping 61%). Contrary to what our media claims, looking at these numbers, it appears the USA has the most progressive income tax system with the average wage earners paying a very small share of the total tax burden. The Europeans really fleece those in the lower earning brackets.
It does not stop with the income tax in these countries. These exorbitant tax rates in Europe and Canada don’t even include the ridiculous VAT taxes they impose on the middle class when they go to buy a TV and the insane petrol taxes they levy on everyone trying to fill up their tanks to get to work. I am still looking for per gallon tax rate broken down by OECD country. The federally mandated general sales tax or VAT (value added tax) is 18% in the UK, 7% in Canada, 20% in France, 16% in Germany, and 0.0% in the USA. Of course many states do have a sales tax, but not nearly on the level of the European VAT.
In summary, there are many reasons to keep healthcare out of the clutches of a 100% government controlled system…
pgb & John — You don’t really want to start into the mire of HC transnational comparisons with me, as I actually cut my academic teeth in that and can bore us all to death on the issue! Especially as the US’ number is now over 16% of GDP not 14%, which is well on the way to “twice as much as any other nation” (1.6 being close to two in my math, and I don’t count Luxembourg as being a real country!) and even more so when you consider per capita spending PPP.
But let me point out two very important things. In single & multi-payer systems the government can make a political decision to change the amount spent on health care. In Japan and Canada in the mid-1990s health care spending as a share of GDP was deliberately reduced because they wanted to reduce government spending overall. In the UK in the late 1990s it was deliberately raised because the government decided that it was spending too little on health care. These were political decisions. The US government is unable to make that decision.
Second, even if everyone has the “problem” of health care cost increases, and we have the same problem starting from a much higher base–so our percentage increase will need to be much slower than everyone else’s for them to catch up. And it’s not!
As for John’s questions….the major difference between the US and France is that the French pay their providers less (see Anderson and Reinhardt, “It’s the Prices, Stupid”) and in France being poor doesn’t mean that you lack access to health care, or that you can’t afford your medical bills. If we are prepared to make those changes, we can have French health care here. (We can all probably agree to skip the way they routinely take temperatures, though!)
And for John’s second question…if we had such a system, the level of per capita costs is more likely to be a rational political choice over the whole economy, rather than the outcome of the political captures of the process by the current provider/supplier system–as we have here now.
“even in the environment of a 100% government controlled healthcare system, the rate of increase in healthcare spending in the UK is twice (4.5%) that of the USA (2.3%). (OECD Health Data 2004”
pgbMD, I’ve also looked at the OECD data, and they are striking. According to the October 2006 update of OECD data thru 2004, the compounded growth in total per-capita health expenditures for the TEN YEAR period 1995-2004 was 43.4% for the U.S.
Canada’s corresponding growth was 31.6%; Japan 31.3%; France 37.0%; Germany 23.3%; Netherlands 38.0%. On the other hand, for the same period, the corresponding growth for Belgium was 62.9%; Norway 56.9%; Australia 53.8%; Austria 51.3%; U.K 49.2%; New Zealand 45.0%; Sweden 44.8%. Some countries experienced growth even higher than Belgium’s (Ireland, Korea, Luxembourg for example – Luxembourg’s compounded growth for the period was 109.5% i.e. per capita cost more than doubled).
These data identify about a dozen OECD nations that experienced higher rates of increase to their per capita health spending than did the U.S. – not just for one year, but over the most recent ten-year period for which data are available.
It is hard for me to understand how these data reflect universal financing and delivery systems that have definitively solved the problem of increasing per capita costs.
Questions that these data can’t answer:
1. If the U.S. changes to a universal system in which our per-capita costs could be reduced to roughly the level of say, France, what are the explicit gains and tradeoffs that the public will experience – other than reduction in cost?
2. After having implemented such a system in the U.S., it appears reasonable to worry that we will have bought time, but not a solution. In other words, if our per capita expenditures continue to rise at historical rates (or higher, as suggested by OECD experience) how long until the per capita costs are back where they are now? What then?
“The question therefore is, why would any rational person support a health care system that costs on the way to twice as much as that of any other country, doesn’t produce any demonstrably superior results for that money, and ensures that significant shares of lower income American citizens are forced to endure financial cataclysm because of their need to access medical care?”
Actually as a percent of GDP the USA is not twice as much as that of any country except the UK (USA 14.7%, Germany 10.9%, France 9.7%, Canada 9.6%, UK 7.7%). Unfortunately, what is not mentioned much is that even in the environment of a 100% government controlled healthcare system, the rate of increase in healthcare spending in the UK is twice (4.5%) that of the USA (2.3%). (OECD Health Data 2004) This rapid rise in the rate of healthcare spending in the UK is putting the system into a deep crisis. Unless significant further rationing takes place, the UK healthcare system in 20 years will near the spending in the USA but still have even longer lines for MRIs and hip replacements. Apparently the NHS is not quite the bargain or panacea we have been sold.
Interestingly, the Commonwealth Fund does shine a glowing light occasionally on the US healthcare system- “Compared with the other five countries, U.S. patients fared particularly well on receipt of preventive care and care for the chronically ill, …Across the indicators of effectiveness, the U.S. ranked first and New Zealand ranked last.” (Commonwealth Fund 2006)
I have looked into the clinical data on just one benchmark operation to compare results between the UK and the USA for CABG outcomes and could not come up with any prospective studies. There are many retrospective studies without good controls so further research needs to be done comparing prospectively the clinical outcomes between the single payer and hybrid payer healthcare systems.
As for the uninsured, I have a plan to ensure that the lower income and even middle income Americans are not forced into “financial cataclysm”. That is low cost barebones mandatory HDHPs possibly like what may occur in MA and MD if the lobbyists don’t get their way. We need to first scrap Medicaid since it is fraught with abuse and fraud. With those billions of dollars pay for HDHPs and use a sliding scale voucher system for those that are 300% above the poverty line. For those that want more comprehensive indemnity coverage, they can pay more, but at least we can have everyone insured in the event of a medical disaster and not force the entire nation into a single payer nightmare.
I let you keep your website though…
Barry
I love your optimism – better information = better legislative product. I hope you aren’t confusing life with logic. By implciation, you seem to suggest better information about the differnces in such things as admin cost, charges and interventions might lead us to some solutions to our problems (reforms.) In this case, I doubt the light shed on the situation by “better” information moves us forward. While the debate on this site over the past few days suggest cost and care information matters, its not so clear to me that better information does anything to generate agreement about approaches to solving problems. There is a deep ideological divide here that will never be resolved. I may choke on these words but fortunately this is a political problem – the facts don’t count!!
Don’t forget, Mr.Gingrich in the early 90’s vowed never to let the Democrats own the solution for fear of a decades long politcal victory on the order of the New Deal. Given the problems – cost, quality and access – whichever solution prevails (and there will be a “winner” some day)the solution will inevitably be quite imperfect. The saddest part of this for me is observing so many bright people wasting their time and energy raging on about their more pefect problem defintion and more perfect solution. If ever there was a case of perfection being the enemy of the cure, this is it. Good luck to us all.
Dr. Bradley,
I appreciate your detailed responses to the comments posted by me and others.
If we eventually move toward significant reform of our healthcare system, especially with respect to financing, I think it is critical that we have the best possible understanding as to why our costs are so much higher than elsewhere.
To that end, I think it would be instructive if we could break our system down into two populations as follows:
Age 65 and older (Medicare eligible) – Since Medicare covers all of these people, administrative costs are not a significant factor in the analysis, even though millions of seniors have supplemental insurance policies to cover what Medicare doesn’t. If it turns out that our higher costs are driven by higher like for like charges for services and more interventions reflecting a different attitude toward end of life care, neither factor would be impacted by changing the way we finance health insurance for the rest of the population. Extensive data already exists documenting significant differences among the 50 states with respect to number of days in the hospital, number of physicians treating the patient, and dollars spent during the last six months of life with little or no difference in outcomes or quality for patients in the high spending states.
Under 65 population – Here, it might be useful to compare differences between the U.S. and elsewhere in potential years of life lost for those who die before age 75 (but after age 1). While vehicular and workplace accidents play a role in this metric, as do lifestyle choices like smoking, poor diet and lack of exercise, it could be at least somewhat instructive regarding the value of preventive care. Comparing age and race adjusted death rates per 100,000 population from cancer and cardiovascular disease (heart attacks and strokes combined) might also be useful. The U.S. numbers for 2006 were 201.8 and 326.0, respectively. Both metrics, along with infant mortality, vary considerably from state to state, and I could not see much correlation between death rates and the percentage of population that lacked health insurance or between infant mortality rates and the percentage that received prenatal care. It appears that the factor most correlated to adverse outcomes is poverty.
As for costs in the U.S. vs elsewhere, administrative costs are most likely a factor here, but so are like for like differences in charges for services, drugs, devices, etc. Differences in utilization would be helpful to understand, including to what extent, if any, higher utilization here (if it exists) might be related to defensive medicine.
I am all for finding ways to cover the uninsured and get more value from our healthcare spending. As a taxpayer, I am certainly open to paying more if it will result in a sounder, more sustainable system that covers everyone at a price we can afford. At the very least, however, I expect policymakers to have the best information possible regarding costs and quality as well as strategies that could reduce the former and improve the latter. The better information they have, the better any ultimate legislative product is likely to be.
HW – make that “thoughtful readers”.
“You’re going to have to do better than that if you really wish to discredit me in the eyes of your readers.”
Not really, Mr. Browning. You’re doing a fine job of that yourself.
Personally, I come here to read the diverse viewpoints of intelligent, informed individuals on how to fix the American healthcare system. Posts like yours just clutter up the place. I appreciate that Matt gives a voice to all sides of the debate, and not just to people with whom he agrees. My only exposure to you has been on this blog, but you seem entirely incapable of engaging in a respectful exchange of ideas. I would surmise that is why no one really wants to bother with you.
Mr. Holt – You’ve made the charge of racism before and it just doesn’t wash.
White americans have life expectancies roughly the same as white europeans. You have not disputed this by introducing a study focused on disparities of “healthiness”. You’re merely comparing apples and oranges.
I find it challenging to debate a person who performs this type of intellectual sleight of hand mixed with ad hominem attacks. You’re going to have to do better than that if you really wish to discredit me in the eyes of your readers.
Walter, you write that physicians in this system would not be paid much more than public hospital physicians today – yet the study states that you expect to attract 25,000 new physicians into the program!
the opening of a well-paid salaried primary care career track in the NHSU would undoubtedly attract
a higher proportion of medical school graduates to go into primary care disciplines
Frankly, I don’t see how this can be done at all. Paying higher salaries would go some way towards making it work, I suspect.
Eric–I’ve missed you. But the difference between you and Mr Browning (other than I like you) is that you believe that there are severe problems with the current US system and say so openly. I happen to think that other countries have solutions that work better for their populations than the US’s does for ours, and that your solutions wouldn’t help our system get any better–although I concede it would be hard to make it much worse! But at least we can and do have a rational debate. (Even if you know that I don’t actually call for many of the things you say I do in your earlier comment)
Mr Browning on the other hand spends all his time here and on his own blog cherry picking anecdotes and attacking anyone suggesting that alternative systems have any merit. He also talks alot of tosh about “individual liberty” suggesting earlier in this thread, for instance, that paying for an MRI directly is illegal anywhere else in the world.
This is palplaby false. Every country apart from Canada allows some form of “queue jumping” health insurance for those who can afford it, and as he’s pointed out many times, Canadians who want to can come to the US to buy an MRI (Basically none do, but that’s another story).
In fact in Japan there are twice as many MRIs per capita as in the US. Perhaps Mr Browning should move there. But he’d find that under their system poorer Japanese people have great access to those MRIs and yet the nation still spends less than half the level of its GDP on health care than we do. So perhaps he wouldn’t like it after all.
What Mr Browing appears to want is for society somehow to pay for unlimited flat of the curve medicine up to and beyond the limits that medical science can think up and providers can make a profit off.
There’s only one nation that allows that to happen, and all the evidence suggests both that it gives very poor value for the resources spent, and that its system’s organization necessitates that its high costs are basically borne on the backs of the poor. (to quote a compassionate conservative)
As far as I can tell Mr Browning has not ever written one word suggesting that there are any problems with the US system, and for reasons that I cannot fathom, spends all his energy attacking the health systems of other countries and anyone who suggests that on balance they are better deals for the population than the one here. He’s now extended that attack to a tenured professor who he thinks wants to become a civil servant, even though I’m sure that the average civil servant would tell him that being a tenured professor is a rather better paid and more secure job!
He also returns to his thinly veiled quasi-racist tactics of saying that all the problems with the US’ health statistics are because of certain minorities skewing the data. He presumably missed the recent RAND study which compared white Americans with white Britons and found that the Brits were much healthier. While any realistic assessment of the connection between a nation’s health and its health care system must acknowledge that the connection between them is complex and probably has dual causality, it’s clear where he and his ilk are going with this line of reasoning. And let me spell it out. The sub-text of the argument is that we rich, white Americans do better than anyone else in the world, and if the data makes us look bad (or the same) then it’s because of all those minorities dragging the numbers down. The RAND study disproves that logic, and frankly it deserves about the same amount of respect as do the the drunk frat boys in Borat–who basically said the same thing. Of course, it would though be unrealistic to suggest that in US politics, the use of this type of “logic” has not been politically effective (Willie Horton, David Duke, George Bush vs John McCain in S. Carolina…need I say more?).
That’s why he’s not a credible proponent of a “free-market” view and you are. And I’m done talking about him. I look forward to continuing discussions with you
What Mr. Browning ignores is the sheer awfulness of having to deal with the US “system” of health care. The hassles of dealing with private insurance, both for physicians and patients, are time-consuming and misery-inducing. Insurers seem to delight in denying payments just to harass patient and physician’s staff.
When someone like Eric Novack argues that Matt Holt wants more bureaucracy, I have to laugh. Every country with universal coverage has less bureaucracy, and far far less heartache associated with dealing with their systems than we do. Even a National Review contributor has noticed that those who are the sickest are least able to deal with these obstacles the insurers erect, yet they are forced to. “Another thing working in insurance companies’ favor is that cancer patients rarely have the energy to argue about such nickel-and-diming… To decide after a therapy has proved beneficial that it’s merely “investigational” and therefore should not be covered — that, actually, seems the definition of bad faith.” Battling cancer — and Blue Cross
But, no matter. We’re “free.” Sure.
Walter Bradley can’t seem to help himself. He defends his use of shoddy statistical propaganda with more shoddy statistical propaganda regarding infant mortality rates. I’ll guarantee you that my wife did NOT have twice the likelihood of dying while having our children here in the US – nor were my children much more likely to die at birth here in the US than in other OECD countries.
He implies that our infant mortality rates are higher than other nations because our government has not done its job of making sure every mother gets prenatal care. Even if you believe that this is a proper function of government in a free society (I do not), its just not true. Black women, who have a much higher propensity to have low-weight babies are also less likely to seek prenatal care than white women. However, Asian-American women are even LESS likely to seek prenatal care – and they experience lower infant mortality rates than white or black women! The ethnic makeup of a society plays a large role in determining broad statistical averages like life expectancy and infant mortality. They are not useful proxies for health care quality.
Bradley (a doctor who wishes to be civil servant) and his ilk know that they can fool a lot of people with this sort of disinformation. That is why we continue to hear this stuff from Krugman and the liars at PNHP.
Stuart Browning writes in comments about my proposal of a National Health Service for the Uninsured: “Notice that in his “indices of quality care” he omits the most important of all: how well a system treats you when you have a serious illness. Instead he quotes straight from the statist playbook using infant mortality rates as a proxy for quality even though they have little or