Tuesday, May 1, 2012

Health Care Wasn't Broken

Have the Politicians been fed a bucketful of false beliefs and half truths about the American health system? Are statistics from foreign countries relevant and can they be compared to U.S. statistics.  Mr. Conover posits these comparisons.


Christopher J. Conover is a Research Scholar in the Center for Health Policy & Inequalities Research at Duke University, an adjunct scholar at AEI, and a Mercatus-affiliated senior scholar. He has taught in the Terry Sanford Institute of Public Policy, the Duke School of Medicine and the Fuqua School of Business at Duke. His research interests are in the area of health regulation and state health policy, with a focus on issues related to health care for the medically indigent (including the uninsured), and estimating the magnitude of the social burden of illness.

Indeed, the fierce battle over reform was based on the perception that Americans did not get good value for their money. Many of the global comparisons that informed this view, however, were flawed, incomplete or misleading. It's time to set the record straight.

The U.S. spends too much compared to other countries.

This is a pervasive misconception encouraged by reformers who sought to argue that other countries, especially those with single-payer systems such as Canada or Britain, outperform the United States. Thus it was feasible to imagine that the U.S. could dramatically expand access to care without spending more money.

But throughout the world, as income rises, so does willingness to pay for healthcare. In fact, differences in income per capita explain about 85% of the variation in health expenditures per capita across industrialized countries.

Conventional models purportedly show that the U.S. spends 60% more on healthcare than it should given its level of per capita income. These models treat all nations the same so that the United States and its 300 million people is compared with very small countries such as Iceland, population 500,000. But a more precise model that compares apples to apples shows that the U.S. spends only 1.5% more than it should. By contrast, France spends about one-fifth too much, while Canada and Britain spend about one-fifth too little.

What really matters is how much the average person has to spend on everything else once healthcare has been purchased. And on this score, Americans have a huge advantage. In real dollar terms, the U.S. margin of advantage in nonhealth spending increased between 1960 and 2007 compared with every country in the then-G7 except Japan. The U.S. spends more on healthcare in large part because it can afford to do so.

The U.S. has abysmal infant mortality rates.

This is a half-truth. The U.S. ranks 43rd internationally in infant mortality, according to United Nations figures for the years 2005 to 2010. Unfortunately, there is no consistent standard for reporting infant deaths across countries. The U.S. scores lower because doctors here count as failures extreme cases in which the odds of survival were so low that foreign doctors don't count them at all.

Specifically, many nations also do not report any live births at less than 23 weeks, even when vital signs are present, according to a study published in 2000 in the American Journal of Public Health. That same study found that when all deaths to infants delivered in Philadelphia at 22 weeks' gestation were excluded, the city's measured infant mortality rate declined by 40%.

So it will take a little longer to decide how to fix a ‘non-broken system’

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