Arnold Kling  

Comparative Health Care

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The Left's story of health international health care comparisons is the following:

1. The U.S. system is flawed.
2. Other countries' systems work much better.
3. The U.S. system relies on the free market.
4. There are two systems of health care in the developed world--ours, and the one every other country uses.

I believe (1). It seems as though a favorite debating tactic of people on the Left is to brand their opponents as defenders of the U.S. system. I do not defend it. I see health care policy and regulation as driven by the interests of providers. I think that Americans make extravagant use of medical procedures with high costs and low benefits.

I do not believe (2). (Please don't cite the "rankings" by the World Health Organization. In large part, they are rankings of how close a country comes to having a socialist system.) There is no health care system that works so well that I would like to see it adopted here. As far as I know, the systems for financing health care are unraveling everywhere.

I do not believe (3). Another favorite debating tactic of the the Left is to say that the flaws of the U.S. system prove that markets do not work in health care. But government pays for close to half of U.S. health care spending--more, if you count things like government employees and the tax subsidy for employer-provided health insurance. Government heavily regulates health insurance. The over-spending and inefficiency that plagues our health care system is quite evident in Medicare and Medicaid.

Government regulates licensing and practice of medicine in ways that promote rent-seeking and ensure inefficiency and fragmentation. Taking all these factors into account, conceivably one might find that ours is one of the *least* market-friendly health systems in the western world.

Which brings me to (4). Other countries have very different health care systems. The UK is centralized. Canada is government-run, but each province manages its own pool of doctors. France is not government run, merely government-paid. All of these countries have consumers paying for some of their health care privately. Thus, there is a lot of variation in other countries' use of markets in health care. Rather than describe our system as unique, it would be more accurate to describe each country's health care system as unique.


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COMMENTS (25 to date)
General Specific writes:

You say you don't believe #2 but provide absolutely no evidence, almost acting as if one can't compare.

Do you think we should and can learn from other countries?

Punditus Maximus writes:

I definitely believe that you don't believe (2), but given that (2) is, in fact, pretty much true, we're at an impasse, discussion-wise.

ed writes:

It would be more helpful if commenters would say *why* they think (2) is true. In particular, why/how do you disagree with Arnold's assertion that financing is "unraveling" everywhere?

Constant writes:

Guys, if you want arguments casting doubts on the arguments for (2), they're all over the place. Take for example this entry over at Marginal Revolution which casts doubt on the supposed superiority of the Canadian system over the American system. Kling already provided an argument casting doubt on the argument-from-WHO-rankings. And no, it is not at all fair to characterize Kling's specific criticism of the WHO rankings as a generalized "acting as if one can't compare". That's a total straw man. And MR has other entries pouring cold water on heads that need it, such as this one. Spare me the tedium of retrieving more by doing a bit of your own research.

Brandon Berg writes:

And then there's this: Apparently, when you control for the effects of accidents and homicide, Americans live longer than Canadians, the French, the Swedish, and even the Japanese.

Daublin writes:

It's fair to ask for links. I know Arnold has them, though, so take it easy, guys. It's a blog, and sometimes people will go ahead and post what they think instead of endlessly polishing the article.


The #2 argument in fact is one that drives me nuts talking to friends about health care. They say how great other country's systems are, without saying which one. So I talk about wait lines in Canada, and they switch over to saying how great it is in France. I point out that France hasn't balanced its health budget yet, and they hop over to UK. This switching of claims makes discussion unproductive, and so it's a good way to "win", but also suggests that the speaker is not being intellectually honest.

To add to the link fest, here is a post by Greg Mankiw that updates life expectancy numbers in the way Brandon describes. If you do so, the US comes out having the best medical care in the world.

dearieme writes:

Hang on. When commenters on many blogs were discussing life expectancies a while ago, they many of them agreed that life expectancy was a very poor guide to quality of medical care. Now that someone has discovered a way of manipulating the numbers so that the USA comes top, you're not all going to argue that life expectancy is an excellent guide to quality of medical care, are you?

Tom writes:

"you're not all going to argue that life expectancy is an excellent guide to quality of medical care, are you?"


No, but it is a good rebuttal for those who do.

Constant writes:

you're not all going to argue that life expectancy is an excellent guide to quality of medical care, are you?

No, it's like Tom said.

Now that someone has discovered a way of manipulating the numbers so that the USA comes top

A way of manipulating? You make it sound fishy. But it's not fishy.

Constant writes:

Let me amend that last answer. Mankiw's numbers aren't there yet, but if you control for enough other stuff, then yes, the life expectancy numbers could indicate the quality of medical care. The reason people have been saying that they aren't an excellent guide to the quality of medical care is precisely that the raw numbers don't control for non-health-care variables. Once you start controlling for those variables, then that issue is addressed and the numbers potentially become a good guide to the quality.

Mankiw's numbers aren't there yet because only one thing was controlled.

General Specific writes:

I looked at the link over at Marginal Revolution. Here are a few statements made:

"1. American health care outcomes look much better once we adjust for race and other demographic factors, including violence and car crashes. Some groups -- such as Asian-American women -- have remarkably good health care outcomes."

That's it? A statement? No references? Is this true, what he says? Has he mined the data to find a group that seems to be doing well?

"3. American's high expenditures, however wasteful they may be, nonetheless drive much of the world's medical innovation. Medical innovation is also a public good to some extent and no the pharmaceutical companies are not simply parasites on the NIH and universities."

Again, no analysis, just a statement. What's the real truth?

I agree with the comment that this is just a blog. One cannot reference everything. But that's why I disagree with Kling's comments that blogs will somehow supersede or augment real research or analysis. They won't, because they are running open loop. Too many unsubstantiated statements running around. Linking to one another.

Blogs are a lot more like cocktail parties, with opinions floating about. That's a good thing, because one can learn from the exposure. But I'd like to see more convergence towards something that might be called truth.

Zagreus Ammon writes:

Anything that educated well-considered people come up with is a left-leaning conspiracy?

I would suggest this post is merely reflective of the current crop of right-wing crack-pots who couch lies in the form of pseudoscientific ramblings, gaining credibility far beyond what the evidence would support.

I would like permission to reference my statement with the entire climate debate.

Brandon Berg writes:

General Specific:
The point is not that these statements prove that the US has better health care than the rest of the world. The point is that any analysis that assumes that raw numbers on things like life expectancy and infant mortality are adequate measures of "health outocmes" is not to be taken seriously.

Koen writes:
It seems as though a favorite debating tactic of people on the Left is to brand their opponents as defenders of the U.S. system.


Funny - Here in Europe, that's the strategy of leftists as well, and not only in healthcare matters.

While using the 'regressus ad americanam'-argument, the Left is not burdened by knowledge of facts. I guess that even a proposal to deregulate our education system would be countered with some form of anti-American sentiment, though the American public school system is more statist than the average European education system. (Well, more statist than Belgium's, anyway).

Dan Weber writes:

Didn't Kling link to this article earlier this year? It's gone now. Anyone have a cache of it?

http://www.theamericanscene.com/2007/7/8/notes

One of the points was that the French system works for France. But

1) huge cost increases are imminent, even though they are currently under-spending us for what I would call (subjectively, but probably accurately) better care, and

2) we probably couldn't adopt their system without fixing some the major problems with our system first -- at which point we might not want to switch over to their system.

Brandon Berg writes:

Following up on my earlier comment, here's an analogy: Saying that the US must have worse health care than most European countries because we have shorter life expectancy makes about as much sense as saying that carbon dioxide doesn't contribute to global warming because there have been years when carbon dioxide went up and average global temperatures went down.

spencer writes:

I really question your point two. The left analysis I see really comes down to generally the point that the US and other advance industrial countries systems deliver roughly the same results. Sure you can find specific examples where the US may be better or some other country gets better results.
But on balance I think the left and right both generally agree that we spend much more to get about the same results. The differences in life expectancy and live births that so many quote are not a big deal.

Where are your specific examples of other countries where the financial system behind health-care is unraveling? Germany? France? Japan? Sweden? Their systems all seems to be in much better shape than that statement implies.

3. What system is completely a government controlled system or which is a pure free market system? They all seem to be some mixture of both -- even in England.

You are a smart analyst, and even when I fight or disagree with you I pay attention to what you say.

But, boy sometimes you get off on the most illogical tangents that it is hard to believe that the same individuals write all your post.

You sure that Don Boudreaux doesn't "ghost" your post sometimes?

General Specific writes:

My anecdotal experience: I've worked with and discussed health care with nationals from China, Canada, France, and Sweden.

In general, the comment I get is that the US health care system stinks. They prefer their healthcare because they don't have the fears that exist here.

Now, please consider: these people were all well educated top notch (high IQ???) technical and business professionals working for a company that provided the BEST health care available--second to none. And they understand that their current health care is great.

But they are still of the opinion that, for the average bloke, health care in the US stinks.

The Canadians do not like their lines. The French don't like their high taxes nor, more generally, the lack of competition or innovation that exists in their society. Same holds for the Swedish. They like and respect American competition. They aren't socialists. But they still think something is broken in American health care.

In that sense, Kling is on the same page. But not everyone who doesn't agree with his opinions are leftist (the only party I ever belonged to, years ago, was the GOP).

Kling is arguing against--not necessarily a strawman--but against, say, Mother Jones, or The Nation. WSJ Opinion page versus Mother Jones is just pure noise.

Let's increase the signal. Let's look at expenditures. Let's look at some socialist systems. Let's regulate where appropriate. But let's not just say "free markets solve all problems" or that "government can fix the problem." Both are nonsense. Free markets sometimes provide solutions that are ugly or immoral. And governments can create more externalities or problems than were solved in the first place.

Also, as the world ages, don't we expect to spend more on our elders? Isn't that expected? If world population is going to stabilize, which libertarians like to point to as a great thing about economic development, that implies more older people, and more non productive expensives caring for them.

I think that's a fact.

Brandon Berg writes:

GS:
And they understand that their current health care is great. But they are still of the opinion that, for the average bloke, health care in the US stinks.

In other words, they're talking about a topic on which they have little to no direct experience or specialized knowledge. So why bring this up at all?

Dan Weber writes:

It depends what we mean by "average bloke."

Most people in the US are satisfied with the quality of their care. But they are 1) worried about its current costs, 2) worried about the costs rising significantly, which might be the same as 3) worried about losing their health care in the future.

And this still leaves 4) a significant number of people who aren't covered.

Paul Zrimsek writes:

Why should I accept an American's anecdote about what Canadians believe about the average American's health care, when with a little research I can maybe turn up a different American's anecdote about what a Dutchman overheard a German claiming to have heard from a Frenchman about a Chinese guy's report of a rumor circulating among the Japanese about what Canadians believe about the average American's health care, and gain the combined wisdom of all those different nationalities?

General Specific writes:

Why listen to them? Simple: these people have friends in this country who have significant trouble getting medical coverage, and friends in their homelands who don't have that fear.

I look at statistics. But I also talk to people. It's helped me in my career and helped me to understand the world.

I know many people, my wife included (breast cancer many years ago) who live with a constant concern about their ability to get health care coverage. These are people who have participated in a health care plans their entire lives but as soon as the company finds an excuse--poof--you're kicked off and then denied coverage elsewhere.

I think the opinions of my foreign acquaintances are warranted. You tell me that you don't like my anecdotal data, because it can be countered with statistics, yet you provide none. If I've read surveys correctly, most people in Canada, the UK, France, and Sweden, given the choice, would choose their health care system. It's certainly true amongst the people I've talked to.

Where am I wrong? What statistics or research disproves my observations.

General Specific writes:

One other point that I forgot about: Libertarians like Caplan and Kling are proponents of free trade and immigration. So am I.

So why do libertarians want to erect barriers against health care ideas that may have proven themselves elsewhere? Shouldn't we at least consider them?

Maybe we can learn something about governance and society by importing a few ideas. I understand that libertarians won't like that because it does imply a level of government complicity or participation--but libertarians need to get over the fact that government isn't going away. They'd best get on board to help build effective government instead of always railing against government.

So I say let's import health care ideas if they might make our system a little more efficient. And the fact is, Kling's proposals are all about--rationing. He calls it choice, but it's rationing. Price rationing.

Am I wrong?

8 writes:

I'm not at all certain that free market healthcare wouldn't increase costs, because because people will receive better, more personalized care. Just like I believe privatizing education would increase education spending, potentially leading to higher taxes if the system was funded with vouchers, because I think we might very well see a correlation between higher spending and results which does not exist today.

People advocating government control say government can lower costs. The only method to do this is rationing. It is illogical to believe that bureaucrats could lower costs in any industry, let alone healthcare which is more highly specialized than most (especially because our current problems were created by bureaucrats). That's all the nationalized systems are anyway: fancy ways of rationing care. Maybe Americans are like foreigners and love their government so much that they won't throw fits when national health says, "People over 60 will not receive dialysis", but somehow I doubt it.

mt57 writes:

There is probably a better metaphor for the healthcare debate than the Tower of Babel but I can't think of one right now.
When people speak of "the flaws in the healthcare system" we don't even know what they plan to speak about - health? quality of healthcare? access to healthcare? the cost of healthcare? the financing of that cost? There is no common understanding of what the subject is, or in what order those issues should be addressed. Some won't even agree they are all issues that need to be confronted or benefit from being confronted. Then, even if some people agree on what issue they are going to talk about, there is no agreement on the cause of that particular problem or how one should evaluate solutions. Some people emphasize anecdotes, others statistics, others moral principles. But anecdotes tell us little in a country of 300 million, the statistics are incomplete and disputed and moral principles tell us nothing about what is possible. can work in the real world or what the consequences of a particular choice will be. There is no baseline model of how the healthcare system works so that people can do scenario analysis for different ideas and see if they work and what the unintended consequences of each might be. People can't agree on the validity of cross-country comparisons such that we could use other countries' systems as substitutes for that scenario analysis. For some, healthcare debate appears to be in large measure a debate over wealth disparity, which in itself has become a moralized issue. Many people's positions are driven entirely by their own personal circumstances of sickness/health and financial status and what kind of employment and benefits they already have. Gender, race and age all play a role in shaping one's position too. The one overriding trend I see is that people get locked into a position not by any policy analysis of any merit but by personal circumstances and other philosophical or political agendas, and then devote their efforts to blocking out any part of the debate that would threaten that stance or require sacrificing another part of their agenda. Sadly, such an incoherent debate is unlikely to lead to sound overall decisions.

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