By MARY SCOTT NABERS
The United States ranks number one in the world for health care spending as a percentage of GDP. That sounds great… but, for instance, Texas ranks only 11th worldwide when it comes to performance. That’s because of access to care.
The country’s health care rankings are likely to get worse as 673 rural hospitals in the U.S. are at risk of closing. Here’s what has happened: the need for care greatly outpaces available funding, especially for public hospitals. Something must be done.
If public funding is no longer available, alternative funding can be secured in numerous ways. The simplest way to access alternative funding is through a public-private partnership (P3) engagement. However, alternative funding for public hospitals, health care clinics and university medical centers can be found from other sources as well. Finding funding is not a problem when private-sector investors, large equity funds, pension programs, asset recycling and EB5 programs all stand ready to invest in public-sector projects.
Moving to a P3 health care model would allow hospitals to secure immediate funding and utilize private-sector expertise and best practices while transferring all risks. The launch of health care P3s would also ensure new construction, new jobs and hundreds of additional health care options for people.
Massachusetts has a long track record of making headlines in the area of health care reform, whether or not Mitt Romney likes to talk about it.
In 2008, Massachusetts released results of its initiative requiring virtually all of its citizens to acquire health insurance. In short order, nearly three-quarters of Massachusetts’ 600,000 formerly uninsured acquired health insurance, most of them private insurance that did not run up the tab for taxpayers. The use of hospitals and emergency rooms for primary care fell dramatically, translating into an annual savings of nearly $70 million.
But that’s pocket change in the scheme of things, so the other shoe had to drop — and now it has. Massachusetts made news recently, this time for passing legislation that aims to impose a cap on overall health care spending. That ambition implies, even if it doesn’t quite manage to say, a very provocative word: rationing.
Health care rationing is something everyone loves to hate. Images of sweet, little old ladies being shoved out the doors of ERs that have met some quota readily populate our macabre fantasies.
But laying aside such melodrama, here is the stark reality: Health care is, always was, and always will be rationed. However much people hate the idea, it’s a fact, not a choice. The only choice we have is to ration it rationally, or irrationally. At present, we ration it — and everything it affects — irrationally.
The conventional wisdom in health policy is that the United States spends far more than any other country and enjoys mediocre health outcomes. This judgment is repeated so often and so forcefully that you will almost never see it questioned. And yet it may not be true.
Indeed, the reverse may be true. We may be spending less and getting more.
The case for the critics was bolstered last week by a new OECD report that concluded:
The United States spends two-and-a-half times more than the OECD average health expenditure per person … It even spends twice as much as France, for example, a country which is generally accepted as having very good health services. At 17.4% of GDP in 2009, U.S. health spending is half as much again as any other country, and nearly twice the average.
Similar claims were made recently in The New York Times by former White House health advisor, Zeke Emanuel, who added that we are not getting better health care as a result. The same charge was aired at the Health Affairs blog the other day by Obama Social Security Advisory Board appointee Henry Aaron and health economist Paul Ginsburg. It is standard fare at Ezra Klein’s blog, at The Incidental Economist and at the Commonwealth Fund. It is also unquestioned dogma for New York Times columnist, Paul Krugman.
What are all these people missing? On the spending side, they are overlooking one of the most basic concepts in all of economics.