Lies, Damned Lies, and Healthcare Policy

[Heart_of_Dorkness]

I saw an interesting article in the Post this weekend, by T.R. Reid, author of a new book: The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care.

The goal of the article was to dispel five myths about about how healthcare actually works, in both the U.S. and other countries; namely:

1. It’s all socialized medicine out there.
2. Overseas, care is rationed through limited choices or long lines.
3. Foreign health-care systems are inefficient, bloated bureaucracies.
4. Cost controls stifle innovation.
5. Health insurance has to be cruel. (That is, insurance companies have to do things like exclude preexisting conditions in order to survive as a business.)

I think he made a good case, although I would have liked some cites (guess I’ll have to read the book). I’ve heard all of these ideas expressed here and elsewhere, by people on both (all?) sides of the healthcare debate, either as decisive reasons against reform, or as inconvenient truths that must be addressed in policymaking. So I’m curious to know what others think of the article. Did you think any of these things were true before reading it? If so, do you still afterward? Do any specific points persuade you, or strike you as moot, or misleading - and why?

[Long_Time_First_Time]

I already knew all that stuff, but then I am interested in medical policy.

The thing that isn’t talked about much is the fact that we spend so much more on health care than anyone else in the Western world.

[Heart_of_Dorkness]

That was one point that surprised me a bit - not only that we spend more per person overall (and sometimes for less actual care), but also that the percentage spent on administration is also higher than everywhere else:

U.S. health insurance companies have the highest administrative costs in the world; they spend roughly 20 cents of every dollar for nonmedical costs, such as paperwork, reviewing claims and marketing. France’s health insurance industry, in contrast, covers everybody and spends about 4 percent on administration. Canada’s universal insurance system, run by government bureaucrats, spends 6 percent on administration. In Taiwan, a leaner version of the Canadian model has administrative costs of 1.5 percent; one year, this figure ballooned to 2 percent, and the opposition parties savaged the government for wasting money.

The world champion at controlling medical costs is Japan, even though its aging population is a profligate consumer of medical care. On average, the Japanese go to the doctor 15 times a year, three times the U.S. rate. They have twice as many MRI scans and X-rays. Quality is high; life expectancy and recovery rates for major diseases are better than in the United States. And yet Japan spends about $3,400 per person annually on health care; the United States spends more than $7,000.

[Hari_Seldon]

1. It’s all socialized medicine out there.

I am not sure what that means. In Canada we have single-payer gov’t insurance. Although there are, in Quebec at least, gov’t operated clinics, I have a family physician that I chose and have been using for nearly 30 years. He gets paid by the number of patients he sees.

2. Overseas, care is rationed through limited choices or long lines.

It depends. Certainly things like hip and knee replacement can involve waits. But when I was diagnosed to need a pacemaker, it was in in ten days. When my GP wanted a routine colonoscopy, it took four months. Had private there been symptoms requiring it, I assume it would have taken only a week or so. I could have gone to a
private clinic and my former employer’s complementary insurance would have paid 80%, but I chose not to.

3. Foreign health-care systems are inefficient, bloated bureaucracies.

I have seen no evidence of that and they lack a small army of salesmen and a large army devoted to denying coverage. My daughter-in-law is a family physician in NYC and spends an inordinate amount of time fighting with insurance companies and filling their forms, all different. I am afraid the bloat is all in the US.

4. Cost controls stifle innovation.

That might be. My uncle taught in a US medical school (he was a biochemist) and when he described to one of his medical colleagues a cardian “incident” (not a heart attack but increasing angina), the colleague said that there they would have done a bypass. Well, 35 years later (and having two friends who never quite recovered mentally from bypasses) I am very happy the Canadians are more conservative. It is hard to imagine heart transplants having been pioneered here, although way back, Banting and Best discovered insulin at U of Toronto. But none of this is the result of cost control. What cost control mainly does is restrict routine treatment to proven therapy. But I don’t think they restrict medical experimentation.

5. Health insurance has to be cruel. (That is, insurance companies have to do things like exclude preexisting conditions in order to survive as a business.)

I will leave a question like that to an economist. What I do know is that if the US had Canadian style medical care, I would be moving to NY now that I am retired and two of my children live there.

[Balthisar]

@Hari_Seldon

What I do know is that if the US had Canadian style medical care, I would be moving to NY now that I am retired and two of my children live there.

Of if you had paid into social security long enough, you’d be eligible for our already-existing government, single-payer health care system and move to New York.

My Ontario colleagues tell me about a very inexpensive, self-paid policy that allows them to take their provincial coverage with them out of the country (into Michigan, in this case). Tourist Canadians (unknown provinces) sometimes tell me the same. I don’t know any details… is that a possibility for you?

[Fotheringay-Phipps]

Sneaky & devious article.

The main problem is that it lumps the entire world into one category of “around the world”. This allows the author to falsely make positive comparisons of “around the world” to the US system, by focusing on the particular countries & systems that have an advantage WRT each specific issue.

The real truth is that every system has advantaqes and disadvantages, and since there’s a broad range of foreign systems that are different from each other you will frequently find some system that is better WRT any one specific aspect.

If you want to legtimately compare and contrast you have to compare one system to one system, not one system to some vague “around the world” category.

[BTW, I don’t believe the claim that US insurers spend “roughly 20 cents of every dollar for nonmedical costs”, or think it’s misleading at least. The number is a lot lower for people who are not on Medicare. It’s a lot higher for people who are on Medicare. This is because the cost of administering a private plan is roughly the same (or higher) for these people, but most of the actual health care costs are paid by Medicare. It’s also a lot higher for individual coverage than it is for group coverage]

[Heart_of_Dorkness]

@Fotheringay-Phipps

The main problem is that it lumps the entire world into one category of “around the world”. This allows the author to falsely make positive comparisons of “around the world” to the US system, by focusing on the particular countries & systems that have an advantage WRT each specific issue.

Well, yes - it would be an issue if he were suggesting that the US system sucks compared to The World’s healthcare system, because there’s no such thing. But he’s not. He doesn’t say that every - or any - other system is perfect; he even points out some of their flaws. But he is saying that we shouldn’t dismiss any and all possible alternatives to our current system as being socialist, bureaucratic, restrictive, and so on, because they’re not, or at least, not more so than ours. He’s basically disputing the idea that we should just stick with what we’ve got, because, like democracy, the US healthcare system is the worst out there, except for all the others.

I would certainly be more suspcious if he addressed a different group of countries in each point, which would lead me to believe that he was cherry-picking only the positives, as you say. If he said, for example, that Japan isn’t socialized, but failed to mention it again, then I might wonder whether he was hiding the fact that it had long lines and higher costs. But he mentions Japan repeatedly, saying that it isn’t socialized, has freedom of choice of practicioner, doesn’t have long waits for care, spends less per capita, and produces medical innovations despite cost controls. He also mentions Canada, Germany, and Britain in some detail.

@Fotheringay-Phipps

[BTW, I don’t believe the claim that US insurers spend “roughly 20 cents of every dollar for nonmedical costs”, or think it’s misleading at least. The number is a lot lower for people who are not on Medicare. It’s a lot higher for people who are on Medicare. This is because the cost of administering a private plan is roughly the same (or higher) for these people, but most of the actual health care costs are paid by Medicare. It’s also a lot higher for individual coverage than it is for group coverage]

If he included Medicare’s administration costs and not its medical costs, then I would agree that the figure would be misleading. However, I believe Medicare is administered not by private insurers, but by the government, specifically, the Centers for Medicare & Medicaid Services. And if you’re talking about Medicare Advantage (Part C), where people recieve Medicare services via an HMO or other private insurer, then it seems the health care costs aren’t paid by Medicare, as such:

Private insurance plans are generally paid a fixed rate per beneficiary by Medicare, regardless of how many or how few services the beneficiary actually requires. [From Center for Medicare Advocacy]

In other words, the insurance plans are paying the medical expenses, if any, and are being reimbursed by Medicare.

[Fotheringay-Phipps]

@Heart_of_Dorkness

But he is saying that we shouldn’t dismiss any and all possible alternatives to our current system as being socialist, bureaucratic, restrictive, and so on, because they’re not, or at least, not more so than ours.

I don’t think so. If that were so he would be disputing something that no one is actually saying. I’ve never heard anyone suggest that we should “dismiss” anything.

I would certainly be more suspcious if he addressed a different group of countries in each point, which would lead me to believe that he was cherry-picking only the positives, as you say. If he said, for example, that Japan isn’t socialized, but failed to mention it again, then I might wonder whether he was hiding the fact that it had long lines and higher costs. But he mentions Japan repeatedly, saying that it isn’t socialized, has freedom of choice of practicioner, doesn’t have long waits for care, spends less per capita, and produces medical innovations despite cost controls. He also mentions Canada, Germany, and Britain in some detail.

Well maybe Japan has a good system. In that case let’s focus on Japan (I refer to his article, not to us here). FWIW, it looks like Japan may have some issues as well (see: Health care system in Japan - Wikipedia). And you would also have to consider other aspects, e.g. demographics and lifestyle.

But that’s not the point. This guy did not focus on Japan. He mentioned Japan when it made his point and other countries when it made other points. He acknowledges long lines and rationing in Canada, but that didn’t stop him from using Canada to prove other great things about healthcare “around the world”.

His point was to debunk the idea that you might end up with any of the listed problems if you copied healthcare “around the world”, but he proved that you don’t have Problem #1 from Countries A & B and that you don’t have Problem #2 from Countries B & C, and so on.

If he included Medicare’s administration costs and not its medical costs, then I would agree that the figure would be misleading. However, I believe Medicare is administered not by private insurers, but by the government, specifically, the Centers for Medicare & Medicaid Services. And if you’re talking about Medicare Advantage (Part C), where people recieve Medicare services via an HMO or other private insurer, then it seems the health care costs aren’t paid by Medicare, as such:

In other words, the insurance plans are paying the medical expenses, if any, and are being reimbursed by Medicare.

Read up on Medicare.

Most private plans ingtegrate with Medicare, i.e. the plan pays some percentage of what Medicare doesn’t pay. (There are various methods of integration, which are beyond the scope of this discussion.)

[Markxxx]

HMOs ration healthcare now. You don’t need to Google hard to find many cases where an HMO denied a procedure and the person suffered. Dental Insurance is like that now too. Dental only pays for the cheapest procedure, regardless that a more expensive procedure now would save in the future.

As for spending per person, don’t forget those are not REAL costs, those are charged costs.

If a hospital charges $3.00 for an aspirin, that is what goes into those figures. Obviously an aspirin isn’t $3.00. So those cost/person are not comparable, 'cause you don’t know what other countries charge or how they are computing their costs.

Cost controls stifle innovation, -> I would rephrase this and say, if there is no profit or less profit to be made, it does harm the innovation. Look at HIV. Worldwide about 10 drugs used to treat HIV have been made and paid for by governments worldwide. All the rest of the anti-retrovirals were developed by private companies seeking to make $$$$.

I know many people that bemoan the cost of HIV drugs and they are outrageous but with no profit motive the Big Phrama wouldn’t have bothered to develop them. They’d have moved on to “where the money is.” Most companies are like that.

Will it create inefficencies. I say yes. Have you ever dealt with a government office that is efficent and does a good job. I can say in 45 years on Earth, outside of the CTA (Chicago Transit Authority) in Chicago, I’ve never have excellent service from a government agency. Oh some have been OK, I’m not saying everyone is bad, but I never have experienced one good customer service event.

(The good service on the CTA comes from happy bus-drivers. Some of them are nice, very nice. Not all of them but some of them)

[ZipperJJ]

For those of us who aren’t smrt enough to follow an article, here is the case for UH in cartoon form

[Cheesesteak]

@Markxxx

Will it create inefficencies. I say yes. Have you ever dealt with a government office that is efficent and does a good job.

That’s the trick, you don’t go to a government office, you go to your doctor’s office, the government just pays. My recent experiences with healthcare have to do with my son’s pediatrician and wife’s OB during pregnancy. My wife’s doc is a 1 man operation, and he’s got 2 people just to handle forms and scheduling. My son’s doc is part of a 3 doctor group, and they’ve got something like 4 people doing the office work.

Why? Because they need to put a lot of effort into getting paid. Different insurers, different plans, different coverages, nobody knows up front who is paying for what, unless you throw a few administrative assistants at the job. Add in the fact that insurers frequently try to not pay for stuff, and the office has to go after the patient for the non-covered services. It’s expensive and pulls resources away from doctoring and into billing.