Posted by
philosophocon on Thursday, May 29, 2008 11:51:34 AM
Health care
is a perennial campaign issue in the U.S., and one in which Republicans
consistently take it in the shorts according to opinion polls. It’s basically a major issue that the
Democrats can take for granted and the Republicans have conceded, ideologically
at least.
Being an
analyst by trade and nature, I thought I’d examine the facts concerning this
issue a bit to see where things stand.
The numbers I found were quite surprising. Shocking, actually, as far as I’m concerned. The results raise a number of questions, and I’d
appreciate your contributions on the subject. I’ll try to provide some answers in a
follow-up post.
We all know
that total healthcare expenses are greatest in the U.S. than in other countries,
which is not shocking given its wealth and the ability of its citizens to
purchase health care with said wealth.
But did you know that per capita public spending on health care
is higher and has been growing at a faster rate in the U.S. than in 8 in 9
other OECD countries? And these are
figures that predate Bush’s drug plan!
Comparing
Real Levels and Real Growth Rates of Per Capita Government Healthcare Expenditures
|
|
1970
Per Capita
Expenditure
|
2002
Per Capita
Expenditure
|
Annualized
Growth
Rate
|
|
Australia
|
$362
|
$1,323
|
4.13%
|
|
Austria
|
$393
|
$1,375
|
3.99%
|
|
Canada
|
$589
|
$1,552
|
3.08%
|
|
Germany
|
$663
|
$2,066
|
3.62%
|
|
Japan
|
$457
|
$2,082
|
4.85%
|
|
Norway
|
$645
|
$3,366
|
5.30%
|
|
Spain
|
$175
|
$855
|
5.08%
|
|
Sweden
|
$940
|
$2,128
|
2.59%
|
|
UK
|
$528
|
$1,694
|
3.71%
|
|
US
|
$481
|
$2,364
|
5.10%
|
|
Average
|
$523
|
$1,880
|
4.14%
|
Who
is going Broke, August 29, 2006.pdf (application/pdf Object)
In addition, virtually all of
these other countries offer some sort of universal coverage whereas the vast
majority of public healthcare spending in the U.S. is on two programs, Medicare
and Medicaid. I’m not endorsing
universal coverage here, but these numbers beggar the following questions:
How is it that these countries
can provide universal coverage at a cost that is less than the amount the U.S.
spends to provide service to essentially the poor and the elderly?
Or do Medicare and Medicaid
provide a much higher quality of service than I thought?
How vast would the sums have to
be in order to provide universal health care, given the large number of
additional people that would have to be covered by government provided health
care?
And given the very little bang
for the buck that Medicare and Medicaid appear to provide, why in the world
throw so much more good money after bad?
Furthermore,
if the government spends so much in the U.S., why is it that Americans have to
spend so much more on private health care?
In 2003 per
capita health care in the U.S. was 55.6% ($ 3,133) private and 44.4% ($ 2,502)
public. Compare this to Canada, at 29.8%
($ 895) private and 70.2% ($ 2,108) public. (http://www.cga.ct.gov/2006/rpt/2006-R-0289.htm)
And yet, despite all of this spending, the
United States had shorter-than-average life expectancy and higher-than-average
mortality rates among OECD countries in 2004.
The report I read cites lifestyles as a major culprit here, with the
U.S. having both the highest obesity and HIV infection rates of the countries
in question, for example. And I would
add that these two facts would also indicate why there is a greater need for
healthcare spending in the U.S. (http://assets.opencrs.com/rpts/RL34175_20070917.pdf)
The final figures I’m going to look
at were the ones I found most startling, and go to the heart of the traditional
conservative argument that the market is the best and most efficient means of
delivering healthcare:
- "U.S. administrative costs totalled at
least $294.3 billion in 1999, $1,059 per capita, versus $9.4 billion, $307 per
capita, in Canada; these costs accounted for 31 percent of health care spending
in the U.S. versus 16.7 percent in Canada."
- Canada's national health insurance program
had overhead of 1.3 percent. Canada's private insurers had higher overhead
(13.2 percent) than U.S. insurers (11.7 percent) did. Overhead of U.S. insurers
was higher than that of Medicare (3.6 percent) and Medicaid (6.8 percent).
Overall, public (Medicare and Medicaid) and private insurance overhead in the
United States totalled $72 billion, 5.9 percent of total U.S. health spending,
$259 per capita. Insurance overhead in Canada was 1.9 percent of health
spending, $47 per capita.
http://www.rwjf.org/reports/grr/036617.htm#FINDINGS
Now I’d like to see the details as to
where these numbers came from and how they were calculated, as they seem
counter-intuitive. Although given the
number of commercials I see on TV for insurance, if these figures include sales
and promotion expenses for private insurers, I might be tempted to believe
them. Assuming that they are relatively
accurate, it then becomes rather difficult to argue against public health care
on grounds of efficiency.