The State of Health Care- The Basic Facts

What are the basic facts relating to our health care system? The facts listed come from a variety of respected and trusted sources (OECD, WHO, The Henry J Kaiser Foundation etc.) and readers are encouraged to read the sources for themselves. Nothing brings home the facts better and readers do not have to depend on intermediaries such as this blog or get their knowledge from second-hand comments posted in response to newspaper articles.

1) The US spent $2.1 trillion in 2006 and $2.2 trillion in 2007 on health care- overall. This expense is expected to continue its upward trend to $2.4 trillion in 2008 and $2.5 trillion in 2009. To get a sense of the rapid rate of increase in overall health care spend, we spent $28 billion in 1960, $714 billion in 1990 and $1.35 trillion in 2000.

2) In order to do a meaningful comparison of health care spend across countries, one can look at per capita spend on health care (expenditures per person) or the percentage of GDP spent on health care. As should be expected, based on the US being the richest country in the world (on a GDP basis) the US has the highest per capita spend on health care (2006- $6714) followed far behind by other developed countries. Health care spending is currently 15% of GDP and is expected to reach 19.7% of GDP by 2017 (Keehan et al, 2008.) Looking still further out in time, the Congressional Budget Office estimates that health care spend will reach 35% of GDP by 2035 and 41% of GDP by 2060. So, it is easy to understand the concern expressed by those willing to do so.

3) You would assume that because we spend the most on health care our health care outcomes should be much better than those of any other country's, right? The truth is that while on some measures the US outperforms the rest of the world, in other cases we lag the developed world. For example, new drugs and technologies are brought into the market place quicker in the US than elsewhere and the wait time for doctor's visits is only eclipsed by Germany (marginally). Outcomes for cancer are also better than almost any other country. In terms of overall measures of health and in relation to the amount of money spent on health care we lag on many countries in the developed world.

As an example, life expectancies have been increasing in all the countries in the developed world. In the US life expectancy at birth overall- as measured between 2003-05 had risen to 77.7 years from an average of 70.2 in 1960-62. Because the rate in the life expectancy of women did not rise as fast as it did for men, the US, which had a life expectancy above the OECD average, has fallen below the OECD average. Only Hungary, Slovakia, Poland and the Czech Republic do worse than us on this measure.

Similarly, when looking at life expectancy at age 65, the US falls below the OECD average for both men and women.

While, this is not an admirable ranking in itself, the result is more striking when looking at life expectancies between populations grouped according to race- white, african americans and others.

It may be argued that as the US has a higher rate of deaths caused by causes other than natural ones (accidents, homicides etc.), but even after factoring in those causes, the lower US average is not able to account for the higher health care spend.

The infant mortality rate in the US at 6.9 deaths per thousand live births is the worst after Slovakia (2004-06).

For historical, political and social reasons, the US does not provide universal health insurance to it's citizens. Of the OECD countries the other 2 are Turkey and Mexico.

4) In the US the consumers of health care fall into the following categories (Commonwealth fund):
a) Employer provided healthcare insurance for more than 160 million workers and family members
b) Medicare for 44 million old and disabled citizens (Henry J Kaiser Foundation, June 2007)
c) Medicaid serves nearly 59 million low income families and children
d) Privately purchased health insurance by about 12.8 million individuals
e) Nearly 47 million uninsured or underinsured.

In following blogs we will tackle the common myths associated with US healthcare. When I say common myths, I refer to the typical bugbears raised by those who feel that we have the best health care system in the world and any moves towards universal health care are a move towards "socialism".

Introduction

I started this blog out of a deep sense of disappointment at the quality of public discourse on the Health Care Reform debate currently taking place. Articles in newspapers have described the efforts being made by the White House to convince both the Congress and the citizens, of the need for reform of the health care system in the US. Other articles have focused on the contest between Democrats and Republicans. Whilst, more recently, much has been focused on the internecine battle in various committees between Blue Dog democrats and the rest of the party. Columns have been wasted on describing the political horseplay. TV of course has been a wasteland with some exceptions.

Equally depressing have been the discussions posted in response to online newspaper articles. The responses have tended, on the one extreme, to be from liberals who are desperate to believe that some change is possible and desirable- however meager it may turn out to be. At the other extreme have been the responses of the right-wing diehards, whose common tendency has been to raise the specter and threat of socialism.

What I have found missing has been a discussion where participants honestly state the problem to be solved, their positions and the manner in which the problem may be solved. Stock positions are taken based on ideological proclivities and neither party is the better for the discussion. The media have spectacularly failed to present information that educates their readers and helps them understand the reason for the positions being taken by the players (the President, the Democrats, the Blue Dog Democrats, the Republicans, the Insurance industry and the Medical Service providers.)

In the interest of full disclosure, let me be clear- I believe that the state of health care in our country should be a matter of national shame. We spend more than any other country on health care, yet upwards of 47 million citizens are without health care. A smaller fraction are under insured. It is true that in some cases those that choose not to get health care insurance, have the means and choose not to be insured. What is more problematic is the efficiency of the health care system. We pay more for health care than other countries- by far, and have less to show for it- in terms of generally accepted measures of health and well being.

In this blog I will attempt to provide non-partisan information that readers may use to inform themselves. I hope that readers will feel free to add links to information that will move the debate forward and add to the general body of knowledge.

For starters, I am providing links that I have found useful.
1) OECD Health Data 2009- "How Does the United States Compare"
Organization for Economic Cooperation and Development (OECD)
Description- A comparison of US healthcare against other developed countries.

2) Healthcare Reform in the United States- Economics Department Working Paper #665
Organization for Economic Cooperation and Development (OECD)
Description- A discussion of issues in the US Healthcare system along with suggestions for remedies.

3) Accounting for the cost of US health care: A new look at why Americans spend more.
McKinsey Global Institute, December 2008
Description- An excellent analysis of US Healthcare cost drivers
(You will need to register, for free, at the McKinsey site in order to read the paper).

4) The Henry J. Kaiser Family Foundation
Description- Excellent source of information for all things to do with the health care system.

5) "McAllen, Texas and the high cost of health care", Atul Gawande, The New Yorker, June 1 2009.
Description- Discusses the regional cost disparities on health care costs caused by the pay for service system.

I will add other links as I find them. This is a moderated blog and the purpose is to educate us all. I also acknowledge that there may be differences in opinion, however ideology is no excuse for ignorance. So, I will delete posts that are abusive.