Health Care Outcomes: Is Our System All that Bad?

An article in the Washington Post: “U.S. Losing Ground on Preventable Deaths: Despite High Medical Spending, Results Trail Other Wealthy Countries”, (Ceci Connolly, Tuesday, Oct 6, 2009). Quoting a study by Common Wealth Fund the writer states:
“Although the Unites States now spends $2.4 trillion a year on medical care—vastly more per capita than comparable countries—the nation ranks near the bottom on premature deaths caused by illness such as diabetes, epilepsy, stroke, influenza, ulcers and pneumonia”. Comparing costs and outcomes may not be all that relevant unless everything else is held constant.
The U.S. health care system has always been costlier than other systems in the developed world. Ever since OECD (Organization for Economic Development and Cooperation) has been compiling data on comparative health care, we have been put on notice that as percent of per capita GDP, the U.S. spends more and consumers of health care do not fare better, perhaps worse. This means one of two things, maybe both: The American population are either sicker than the “comparative” population hence the low return of investment on their medical care or that health care providers in the U.S. are “greedier”, “less efficient” in the delivery of health care than providers in other countries.
Let us, for a moment, accept the proposition that our providers are less efficient. The question that arises is why are they? Given the innovation that emanates from the U.S. not only on the diagnostic front but also in the drug therapy, it is worth a moment of reflection to contemplate the failure of the system to meet the efficiency standards of other European health care systems. Such reflection invariably leads us to an assessment of the disease-specific cost of intervention and there lies an ocean of difference between the U.S. system and European Systems.
Economists, rightly or wrongly, when discerning the effect of an increase in the price of good X on the demand for good X, will always tell you, “everything else remains constant”. That may sound foolish since nothing ever remains constant, or at least not for long, when good X’s price rises. We do that to ascertain the direction of effect and not necessarily the exact change in the demand. The same logic should apply to the demand for health services and hence the cost. Comparing the “comparative” cost per service delivered in one country viz a viz another in relation to the corresponding outcomes make good statistics but unfortunately masks a great deal of differences between systems. I tried to emphasize, “everything else remains constant”. That translates into comparing “like” with “like”. How can one judge life/death outcome of a diabetic patient in the U.S. compared to a diabetic patient say in France? The statistics says, a “premature death” for the U.S. patient compared to the one in France. But is this information really telling? To compare outcomes, given cost one first of all need to keep constant the profile of the patient, the environment of the patient, and a host of other issues that frame the comparison. Or take the cost comparison: It may be true that our providers are “greedy” , it may also be true that pharmaceutical pay providers to over prescribe or prescribe expensive drugs, but it is also true that the patient in the U.S. expects and demands to receive the best available medical care.
The U.S. system promotes patient’s right to choose the medical care he/she is to receive. To so many in the U.S. this right is worth the cost society has to bear. To make the cost comparison worth while patients here and there have to hold similar expectations. To make health outcome comparisons, one needs to compare like with like. Neither of these two elements hold in the U.S., European comparison.
Having said that, one should not shrug aside the three critical issues that impact costs and outcome the Post article alluded to. These are:
· The “efficiency” of the delivery of medical services;
· Access to health services , and
· Patients’ expectations
I shall address these issues in conjunction with some of the Senate bill provisions for Health Care reform 2009. Once the bills gets out of the Senate Finance Committee as the bill provisions touches on the issues raised in the Post article.