Universal Health Scare

by Jonathan Cohn | April 16, 2007

This is the third part of a four-part debate. To read the previous installments, click on the links below.

Part 1, Monday: David Gratzer
Part 2, Tuesday: Jonathan Cohn

 

Wednesday, April 18

Dear Jonathan,

First, let me thank you for the kind words. I also respect your desire to better American health care. I recommend your book--it's not simply well written, it's an important addition to the debate.

In a nutshell, here's your argument:

How do you conclude that they outperform our system? You suggest infant mortality, life expectancy, and disability adjusted life expectancy (DALE) stats are all better across the Atlantic than here at home; and, with regard to France, you offer up some inviting facts. And so it is that you're both a fan of the Boston Red Sox and French health care.

I'm with you on points A and B. Obviously, there are problems in the United States; the universal coverage seen in other countries is admirable. But your argument for European superiority in general and French excellence in particular fails to persuade me--you don't have me whistling La Marseillaise.

Start with your use of health measures. As I pointed out in my first essay, crude health measures are just that: crude. Because stats on, say, life expectancy reflect a mosaic of factors (health care being just one), it's difficult to draw from it any sweeping conclusions about a nation's health care system.

How did you respond? You emphasize that you never really liked clunky old stats like life expectancy and instead prefer sophisticated measures like Disability Adjusted Life Expectancy (DALE). But, beneath the fancy paint job and nifty spoiler, I'm still seeing the same used car. DALE and such statistics are just variants on life expectancy, doing nothing to address intentional and unintentional injuries--exactly my criticism of life expectancy comparisons in the first place. Nor do such measures attempt to factor in how people get illnesses (diet, life choices, genetics) and how they fare once they're sick. So I'll come back to my point: It's impossible to look at these measures and draw larger conclusions. You cite Anderson's Health Affairs study again, but still don't quite get around to addressing his methodological problems. In judging health care, he considers suicide, smoking, immunization rates--in order words, he confuses health with health care.

It's also true that you like certain aspects of the French system: Women stay in hospital for five days post-childbirth, and the French are prescribed more drugs. But what does this say? Five-day post-birth stays? Find me a single study suggesting better outcomes with such lengthy hospitalizations. More drugs per capita? The French receive three times more antibiotics than Germans--are they any healthier for it, or just setting the conditions for the next super-bug?

We sparred over cancer figures and the like. You haven't liked my data, commenting: "You responded to all of this by, once again, talking about ...Great Britain and Canada." Good point in that I was overly selective about my lists. So, for the record, all cancer data I've cited in our debate (prostate, breast, colorectal), have shown better outcomes in the United States over Canada, Great Britain, and, yes, France and Germany.

You're right, though: U.S. health care doesn't reign supreme in every type of cancer, compared to every nation in the world. That said, international comparisons yield a fairly similar result: if you're diagnosed with cancer, your 5-year survival is better in the United States. And the overall picture here is remarkable. As I noted before, U.S. cancer deaths have, adjusting for age, fallen 1 percent per year since 1991--a record unmatched in the Western world. That's not exactly a surprise. The United States is the home of medical innovation. Consider that 18 of the last 25 Nobel prizes for medicine went to Americans or people who work here; in the last two decades, half of all the major new medicines were developed by U.S. companies; Americans played a key role in 80 percent of the most important medical advances of the last 30 years.

You're right to fret the problems of American health care. Your prescription, though, is the wrong one. As a good surgeon knows, it's not enough to remove the diseased tissue; you need to minimize damage to the healthy tissue. But my purpose isn't to defend this system without thought of an alternative. Let me take a brief tangent for a moment, and then come back to your arguments.

 

As I write in The Cure: How Capitalism Can Save American Health Care, American health care has been shaped by three days: February 12, 1941; October 26, 1943; and December 1, 1942.

February 12, 1941, is the day that medicine as we know it changed--it was the first clinical use of penicillin. Had nothing else been discovered in the twentieth century, this breakthrough would have still be enough for it to be considered the century of medicine. But, as you know, so many other amazing discoveries followed in quick order: steroids, antipsychotics, open-heart surgery, et cetera.

On October 26, 1943, the IRS ruled that employers could continue to pay health insurance premiums in pre-tax dollars. As a response to wage and price controls, employers had begun to offer health benefits to attract better employees. The IRS ruling legitimized and encouraged the practice, giving rise to the dominance of employer-sponsored health insurance.

On December 1, 1942, Lord William Beveridge issued his report on health care and pensions to the British Parliament, envisioning zero-dollar public health insurance. Lord Beveridge had enormous influence here, particularly among Democrats; his thinking (and persuasiveness) helped lay the intellectual foundation for Medicare and Medicaid.

Fast forward 60 years, and the end result is a world filled with medical miracles--a man like Dick Cheney can have 4 heart attacks and still hold office; three Republican candidates for President have survived cancer. But, if medicine has fundamentally changed over these 6 decades, how we pay for and regulate health care has not. Americans--whether privately insured or publicly covered--tend to be over-insured, and thus less sensitive to prices. A good example of this is the Dartmouth studies showing that health spending for a Florida Medicare recipient is double that of a Minnesota retiree but there is no difference in health outcomes.

How to deal with rising costs? To date, health reforms in the United States have largely followed along two lines: government expansion and managed care. The first has failed to reduce costs (witness Medicare spending); the second did, but it failed to develop any popular support.

Your essay emphasizes the former. You wonder if I apply my bias against Canada's system to other countries, such as Germany and France. (Though, for the record, you are so enamored with universal access that you're willing to see the Canadian system as being basically no better nor worse than the American one.)

But public systems are relatively similar--they simply attempt to ration health care in one way or another. In my travels and in my conversations with colleagues, I have yet to come across any particularly interesting approaches to health care management in the countries you list. It's not that governments have pioneered novel types of primary care or that they have rethought the institutional provision of services. These countries simply use wage and prices controls to temper demand. Sure, the Canadian and British approaches seem particularly problematic, but France has its share of dissatisfaction and problems.

 

What would I suggest? Rather than looking at the failed experiments in other countries (government meddling) or revising a dismissed idea (managed care), I champion a third way: In five-sixths of the economy, Americans value choice and competition. That's the key to reforming American health care.

In my book, I talk about ways to insure more uninsured, to increase quality and trim costs. A summary of my core ideas: Make health insurance more like other types of insurance, foster competition, reform Medicaid using welfare reform as a model, revisit Medicare, and address prescription drug costs by addressing the FDA's size and scope.

So, no, I don't look to France for inspiration; I look to the United States.

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