aTypical Joe: a gay New Yorker living in the rural South

Thursday, August 25, 2005

Why does America love its health care system?

Malcolm quantifies the mystery:

One of the great mysteries of political life in the United States is why Americans are so devoted to their health-care system. Six times in the past century - during the First World War, during the Depression, during the Truman and Johnson Administrations, in the Senate in the nineteen-seventies, and during the Clinton years - efforts have been made to introduce some kind of universal health insurance, and each time the efforts have been rejected. Instead, the United States has opted for a makeshift system of increasing complexity and dysfunction. Americans spend $5,267 per capita on health care every year, almost two and half times the industrialized world’s median of $2,193; the extra spending comes to hundreds of billions of dollars a year.

What does that extra spending buy us? Americans have fewer doctors per capita than most Western countries. We go to the doctor less than people in other Western countries. We get admitted to the hospital less frequently than people in other Western countries. We are less satisfied with our health care than our counterparts in other countries. American life expectancy is lower than the Western average. Childhood-immunization rates in the United States are lower than average. Infant-mortality rates are in the nineteenth percentile of industrialized nations. Doctors here perform more high-end medical procedures, such as coronary angioplasties, than in other countries, but most of the wealthier Western countries have more CT scanners than the United States does, and Switzerland, Japan, Austria, and Finland all have more MRI machines per capita.

Nor is our system more efficient. The United States spends more than a thousand dollars per capita per year - or close to four hundred billion dollars - on health-care-related paperwork and administration, whereas Canada, for example, spends only about three hundred dollars per capita. And, of course, every other country in the industrialized world insures all its citizens; despite those extra hundreds of billions of dollars we spend each year, we leave forty-five million people without any insurance.

He then suggests that policy makers have bought into the “Moral Hazard” argument, that universal insurance would act as an incentive to get unnecessary health care, leading to inefficient allocation and driving costs up.

Malcolm trashes that argument pretty effectively, as he does the President’s Heath Savings Account proposal, concluding:

Health Savings Accounts are not a variant of universal health care. In their governing assumptions, they are the antithesis of universal health care… In the rest of the industrialized world, it is assumed that the more equally and widely the burdens of illness are shared, the better off the population as a whole is likely to be. The reason the United States has forty-five million people without coverage is that its health-care policy is in the hands of people who disagree, and who regard health insurance not as the solution but as the problem.