U.S. Healthcare--Everything Is "Compared to What?"

On Monday, President Obama declared that healthcare cost increases were "unsustainable" and "we're getting less for our money [and] millions of Americans don't have the affordable, quality care they deserve." Of course, Obama also repeated his claim that "half of all personal bankruptcies stem from medical expenses," which is pure nonsense. What about the President's other assumptions?

I disputed several similar premises when presenting a trans-national healthcare metric. Better still is John Goodman, president and CEO of the National Center for Policy Analysis, detailing the comparative failure of socialized healthcare in the May 25th National Review:

Does the U.S. Spend More on Health Care?

Taken at face value, international statistics show that the United States spends more than twice as much per person on health care as the average developed country. But these statistics are misleading. Other countries are far more aggressive than we are at disguising and shifting costs -- for example, by using the power of government purchase to artificially suppress the incomes of doctors, nurses, and hospital personnel. This makes their aggregate outlays look smaller when all that has really happened is that part of the cost has been shifted from one group (patients and taxpayers) to another (health-care providers). This is equivalent to taxing doctors, nurses, or some other group so that others may pay less for their care.

Normal market forces have been so suppressed throughout the developed world that the prices paid for medical services rarely reflect the services’ actual cost. As a result, adding all these prices together produces aggregate numbers in which one can have little confidence. One gets a better measure of how much countries spend by looking at the real resources used; and by that measure, the U.S. system is pretty good. For example, we use fewer doctors than the average developed country to produce the same or better outcomes. We also use fewer nurses and fewer hospital beds, make fewer physician visits, and spend fewer days in the hospital. About the only thing we use more of is technology. (See below.)

Spending totals aside, the U.S. has been neither worse nor better than the rest of the developed world at controlling spending growth. The average annual rate of growth of real per capita U.S. health-care spending is slightly below the OECD average over the past four decades (4.4 percent versus 4.5 percent). It appears that other developed countries are traveling down the same spending path we are.


Are U.S. Health Outcomes Worse?

Critics point to the fact that U.S. life expectancy is in the middle of the pack among developed countries, and that our infant-mortality rate is among the highest. But are these the right measures? Within the U.S., life expectancy at birth varies greatly between racial and ethnic groups, from state to state, and across counties. These differences are thought to reflect such lifestyle choices as diet, exercise, and smoking. Infant mortality varies by a factor of two or three across racial and ethnic lines, and from city to city and state to state, for reasons apparently having little to do with health care.

All too often, the heterogeneous population of the United States is compared with the homogeneous populations of European countries. A state such as Utah compares favorably with almost any developed country. Texas, with its high minority population, tends to compare unfavorably. But these outcomes have almost nothing to do with the doctors and hospitals in the two states.

It makes far more sense to look at the diseases and conditions to which we know medical science can make a real difference -- cancer, diabetes, and hypertension, for example. The largest international study to date found that the five-year survival rate for all types of cancer among both men and women was higher in the U.S. than in Europe. There is a steeper increase in blood pressure with advancing age in Europe, and a 60 percent higher prevalence of hypertension. The aggressive treatment offered to U.S. cardiac patients apparently improves survival and functioning relative to that of Canadian patients. Fewer health- and disability-related problems occur among U.S. spinal-cord-injury patients than among Canadian and British patients.


Do Patients in Other Countries Have Better Access to Care?

Britain has only one-fourth as many CT scanners per capita as the U.S., and one-third as many MRI scanners. The rate at which the British provide coronary-bypass surgery or angioplasty to heart patients is only one-fourth the U.S. rate, and hip replacements are only two-thirds the U.S. rate. The rate for treating kidney failure (dialysis or transplant) is five times higher in the U.S. for patients between the ages of 45 and 84, and nine times higher for patients 85 years or older.

Overall, nearly 1.8 million Britons are waiting for hospital or outpatient treatments at any given time. In 2002-2004, dialysis patients waited an average of 16 days for permanent blood-vessel access in the U.S., 20 days in Europe, and 62 days in Canada. In 2000, Norwegian patients waited an average of 133 days for hip replacement, 63 days for cataract surgery, 160 days for a knee replacement, and 46 days for bypass surgery after being approved for treatment. Short waits for cataract surgery produce better outcomes, prompt coronary-artery bypass reduces mortality, and rapid hip replacement reduces disability and death. Studies show that only 5 percent of Americans wait more than four months for surgery, compared with 23 percent of Australians, 26 percent of New Zealanders, 27 percent of Canadians, and 36 percent of Britons.

In sum, Obama's right to stress cost control, especially for Medicare and Medicaid. But don't be fooled when the President falsely presumes U.S. healthcare is a failure. Especially compared with Canada. Or Scotland.

See also the Wall Street Journal.