Arnold Kling  

International Health Care Comparisons

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Behaviorism in Economics: A Fu... Just Resting...

In my latest essay, I write,


One way to sort this out would be to conduct a statistically valid comparison of fetal survival rates across countries. In each country to be studied, take a random sample of pregnancies that are normal as of three months. Try to control for age of the mother and other risk factors. Then measure the proportion of babies that live to age one.

A statistical study of this sort would not be affected by some of the measurement differences that I suspect are in the aggregate infant mortality data. I am not saying that such a study would prove that the cabal is wrong. However, it would provide what for me would be more persuasive evidence, regardless of whether the results imply that that U.S. health care is better, worse, or the same as that of other countries.


Paul Krugman and others are jumping to the conclusion that the U.S. has an inefficient health care system, based on data that were never intended to be used to make international comparisons. The purpose of the essay is to suggest that the issue should be studied first and decided later, rather than the other way around.

UPDATE: For a contrary point of view, see Paul Krugman's latest or Angry Bear's latest.

For Discussion. Are you aware of any studies that have been done or which are underway along the lines suggested in the essay (there are other suggestions beyond what was quoted in the excerpt above)?


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COMMENTS (16 to date)
Jim Erlandson writes:

You may find this a useful resource -- Population Index on the Web.

The sections titled Prenatal and Perinatal Mortality

Perinatal mortality is defined as mortality occurring between the twenty-eighth week of gestation and the seventh day of life.
and Infant and Childhood Mortality

Studies of infant mortality under one year of age, including neonatal mortality occurring after the seventh day of life, and childhood mortality after one year of age. The subject of infanticide, deliberate or implied, is also classified under this heading.
point to some interesting studies. Within the section on Fertility, is a heading: Induced Abortion


I also found this -- Lifestyle-Specific Outcome Measures -- which suggests that our longevity problems come not from inadequate health care but too much good livin'.

The leading causes of death in the industrialized countries are significantly influenced by lifestyle factors. In the US, the infectious diseases which accounted for the majority of deaths in the early 1900s have been replaced by: cardiovascular disease, cancers, unintentional injury, pulmonary disease, suicide, homicide, and diabetes.

... smoking cessation, physical exercise, nutrition and weight control, stress management, and the appropriate use of alcohol and other drugs ... [are] the priority areas for health promotion and disease prevention activities. While acknowledging the tremendous advances in medicine and public health, which have resulted in reduced infant mortality and increased longevity, the [1979 US Surgeon General's] Report emphasized the need for individual responsibility in making lifestyle changes associated with reduced risk of premature morbidity.

The most interesting thing in your essay is:

In the United States, per capita spending in the 19-44 age group is about $2500, compared with about $5000 in the 55-64 group and about $8000 in the 65-74 group. In France, per capita spending is about 1200 euros in the younger age group, rising to 2500 euros and 3500 euros in the older age groups, respectively. Thus, the pattern of relative spending is very similar in the two countries.

This is potentially interesting because we know that where the U.S. differs most from other countries in the structure of our health care finance system is below age 65. Over age 65, we are like other countries, in that government pays for the bulk of health care spending. Thus, if the reason that the U.S. spends so much on health care is that we do not have government health insurance, you would expect the U.S. to spend close to the same amount per capita on the elderly as other countries do. The big difference should be in spending on those under 65. However, that is not the pattern that we observe.

bill shoe writes:

The study approach (end of first trimester until one year after birth, controlling for as much as possible) makes sense to me. Also, induced early birth may be done to protect the mother's health. Studying the mother's mortality or health a year after birth could give useful information for international comparison.

John Thacker writes:

As I noted on another blog, the US is a rare industrialized country in the that the number of stillbirths per 1000 births (4) is equal to the number of early neonatal deaths per 1000 live births (4). In most advanced countries there are more stillbirths. For example, in the UK 5 and 3, and France 5 and 2. Since infant mortality doesn't count stillbirths (or miscarriages), it's a problem if the health systems treat things differently.

Particularly unusual, by WHO's data, is the case of Cuba. Their infant mortality is down at the 3-4 per 1000 live birth range with all the developed countries, but their stillbirths are a relatively high 11 per 1000.

Jon writes:

A few additions perhaps, to an excellent essay.

On infant mortality - beyond differing ways of classifying "live births", we also have to normalize for age of mother - the US has a very high age of maternity relative to other countries - how would this factor also come into play wrt IM?

In general - are we "purchasing" the same basket of goods and services as other countries? Are the GDP numbers measuring the same things? One reason our GDP number may be relatively high, is that we spend on a broader basket of health care service than other countries do/can. For example, how is medical technology figured into this relative to R & D costs? Are the other countries enjoying the benefits of our spending while spending little in this area themselves? What exactly are the constituents of the GDP figures?

Also, taking off from this idea - what factor of our HC $ goes to "voluntary" procedures like Botox and Lasik and liposuction? How does this compare internationally? What about "extreme" care - the multimillion dollar extreme care situations that exist here and are often chairty cases - does these exist elsewhere and how does this figure into the overall spending picture? Perhaps other countries would spend more if they could....

Lastly - the diversity of our population seems as if it ought to play some sort of factor relative to smaller and more homogeous populations. This, in addition, to simpler factors such as diet, etc.

I too am quite skeptical of the arguments advanced by Krugman, et al - but would certainly give them much more weight were the measures used consistent.

Matthew Peppe writes:

I don't see the point Patrick excerpted from your essay as being very persuasive. Prices are set at the level of the health market as a whole, are they not? Also, you also cite data that "Americans over age 60 are in poorer health than the elderly of other countries." This could lead to higher medical spending for this age group, compensating for any price-reducing effect of government regulation.

But I agree with your overall point.

I don't see the point Patrick excerpted from your essay as being very persuasive. Prices are set at the level of the health market as a whole, are they not?

The point is that IF, the higher spending is going to pay for the higher administrative costs of the (private) U.S. system, then it shouldn't show up in health care paid for through Medicare and Medicaid. If the source of efficiency is government provision in the rest of the world, why not in America's government part?


One thing that the rest of the world is not burdened with is our tort system which has driven up medical malpractice insurance rates. Which in turn incentivizes physicians to conduct more and more tests before making diagnoses.

Mcwop writes:

My wife is a nurse - she spends more time on medicare paperwork than she does on non-medicare paperwork for the same procedure.

Although the comparison stats used by Krugman and others have flaws, it seems tough to argue that universal access systems have numbers that are horribly worse than the U.S. system. In other words, people are not dropping dead prematurely because of universal access in developed countries. This does not mean the care is necessarily better, but probably not significantly worse.

I did the currency conversion for this excerpt from your essay:

That same OECD briefing offers a sliver of data pertaining to what could be a very persuasive indicator about the differences between the U.S. and other countries. It looks at spending by age bracket in two countries -- France and the United States. In the United States, per capita spending in the 19-44 age group is about $2500, compared with about $5000 in the 55-64 group and about $8000 in the 65-74 group. In France, per capita spending is about $1550 in the younger age group, rising to $3230 and $4520 in the older age groups, respectively. Thus, the pattern of relative spending is very similar in the two countries.

This link may lead to some more age based data:
LINK

Deb McAdams writes:

Of course, there has never been a perfect study.

To say that until the results of a study you've designed but are not able to carry out, and that you don't know ever will be carried out, are known it is improper to make international comparisons is to make a very weak argument.

If life expectancy is the best proxy for quality of medical care that we have, then life expectency is what we have to deal with.

Pharmaceutical and health care companies have _plenty_ of money with with to conduct studies that would help them politically. The fact that you do not know of any results is a statement in itself.

Jim Erlandson writes:

I continue to be amazed at the information that is available ON LINE if you dig a little. I am further amazed that folks like Paul Krugman don't bother to dig. Even a little.

The National Healthcare Quality Report is full of interesting and useful information, not all of it flattering.

The National Healthcare Quality Report, developed by the Agency for Healthcare Research and Quality (AHRQ) is the first national comprehensive effort to measure the quality of health care in America. The report includes a broad set of perfomance measures that can serve as baseline views of the quality of health care. The report presents data on the quality of services for seven clinical conditions, including cancer, diabetes, end-stage renal disease, heart disease, HIV and AIDS, mental health, and respiratory disease. It also includes data on maternal and child health, nursing home and home health care, and patient safety.

Longevity is not a performance measure of Healthcare Quality. Longevity, however is a number that is easy to find and easy to write about.

A good starting place for researching healthcare quality is The Agency for Healthcare Research and Quality,

... the lead Federal agency on quality of care research, with new responsibility to coordinate all Federal quality improvement efforts and health services research. The Agency has been fulfilling this function since 1998 ...

Volumes of information, reports and online databases. From the 2003 report:

Quality of care has markedly improved—for measures that have trend data, 20 of 57 areas have improved over time.
Thirty-seven of 57 areas with trend data presented in the report have either shown no improvement or have deteriorated.

Isn't this kind of information more useful than Krugman's
Most Americans probably don't know that we have substantially lower life-expectancy and higher infant-mortality figures than other advanced countries.

If life expectancy is the best proxy for quality of medical care that we have

The point is that life expectancy probably isn't even a good proxy.

spencer writes:

I personally doubt there is much difference in the overall level of healthcare among the advanced countries -- with maybe the UK being the exception. Rather, the question is why do we spend so much more to get roughly the same results. Erlandson -- the study you refer to of the US sounds interesting, but where will I find comparable data on other countries. It shows that US healthcare has improved, but I doubt that anyone questions that.

While just a start one good study by the New England Journal of Medicine found that in the US administrative costs accounted for about 31% of healthcare costs in the US versus 14% in Canada.

When I look at our healthcare system it looks to me much like what you would get from a Pentagon cost plus contract. After WW II it essentially evolve as a costs plus system and now we have found we do not really want to spend that much.
Much of the problem is that the system creates too many of the wrong incentives for all the individual members to try to shift the costs to others. That is why it is to the individual providers benefit to spend so much to try to shift costs.

Jim Erlandson writes:

Spencer:

Erlandson -- the study you refer to of the US sounds interesting, but where will I find comparable data on other countries.

You're on your own on that one -- I can't do it all. But if you'd like to fund a year abroad, I'd be happy to start working on it. Stockholm, Paris, Rome, Tokyo ...

It shows that US healthcare has improved, but I doubt that anyone questions that.

I think they were a little optimistic. While 20 were up, 37 were unchanged or down. The point remains that progress on something as complex as healthcare cannot be measured using a single indicator.

Brian Ferguson writes:

Take a look at (e.g.) Canadian and American infant mortality rates by birthweight - not just the overall average, and more finely defined than the usual "very low" and "low". You'll find that, while Canadian infant mortality rates are slightly better at normal birthweights, as you go down into lower and lower birthweights (where medical care can be expected to be particularly important), American infant mortality rates are lower than Canadian.

aaron writes:

I think that instead of asking whether socialized medicine is better than private, we should be asking WHICH medicine is better socialized or private.

Victor writes:

Two questions and then comments.

1) Our cost data likely comes from the NHE. Where do the data from other countries come from? Is there is a good way to ascertain whether they are indeed comparable?

2) What is the impact of the PPP adjustment on these numbers?

Comments:

I agree that Medicare is more expensive than elderly care in other countries, suggesting that our "problem" (to the extent there is one) is with more than reimbursement schema. In other OECD studies, you will find that one of the distinguishing features of our system is that we pay doctors for "on demand" services, and tend to intensely utilize hospital bed space (and presumably a whole host of inputs).

Further, one distinguishing characteristic of France's system is the willingness of doctors to work for relatively low pay (it would seem; I would like a PPP-adjusted figure for doctor salaries). In other words, there is a possible supply issue in this country.

Also, notice the striking US utilization of CABG operations and other similar surgeries and procedures. To the extent that these procedures are not fully justified in otherwise healthy populations, we may be throwing an awful lot of money down holes that other countries -- because they restrict choices -- are not.

Should our answer be to restrict choice? Why is the American consumer so susceptible to doctor suggestion? Notice here that out-of-pocket expenditures are not a sufficient answer, since most OECD countries do not significant out of pocket expenditures (at least after the privately insured component).

I suspect that our higher utilization of health care services has a strong cultural component making these inter-country comparisons difficult, at best.

Lastly, notice that the real issue with efficiency of health care is with respect to France and Germany. It is relatively easy to look at most of the other major systems and point out ways in which we are superior. Further, our accounting is not geared for self-justification, whereas these comparison countries' accounts might be. That's why one of my primary questions relates to what is in the data. If that is garbage, one shouldn't bother to explain the result.

More questions than answers, I know. But maybe some future posting ideas.

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