Thursday, October 23, 2008

WHY BOTH CANDIDATES ARE WRONG ABOUT HEALTHCARE

Marcia Angell, Harvard Medical School - In 1972 the Yukon Territory became the last jurisdiction in Canada to adopt the Medical Care Act, which set up a system to provide hospital and physician care to all Canadians. Before then, the Canadian and US health care systems were similar. Both were partly public, partly private, partly for profit and partly nonprofit. Both also left a great many citizens uninsured. The costs were also about the same - a little over $300 per person in 1970 - as were outcomes. At that time, life expectancy was about a year longer in the United States.

But with the implementation of Canadian medicare, the two systems rapidly began to diverge in all respects. The US system became more and more costly, leaving increasing numbers of Americans - now about 46 million people - uninsured. In 2005, expenditures were twice as high in the US as in Canada - US $6697 per person v. US $3326 in Canada. And although Canada insures all its population for necessary doctor and hospital care, the US leaves 15% without any insurance whatsoever. Those who are insured often need to pay a substantial fraction of the bill out-of-pocket, and some necessary services may not be covered. In a recent survey, 37% of Americans reported that they went without needed care because of cost, compared with 12% of Canadians.

Instead of living a year longer, the life expectancy of Americans is now 2.5 years shorter than that of Canadians. Infant mortality rates are higher in the US, as is preventable mortality (death before the age of 75 years from diseases that are amenable to treatment). Furthermore, contrary to popular belief, people in the US do not receive more health care services. They visit their doctors much less often and spend less time in hospital than Canadians do. Per population, there are also fewer nurses and hospital beds in the US, although there are slightly more doctors and many more magnetic resonance imaging (MRI) units.

The only plausible explanation for the US paradox of spending more and getting less is that the US health care system is enormously inefficient compared with the Canadian system. The inefficiency stems from the fact that the US, alone among industrialized countries, relies primarily on private, largely investor-owned corporations to provide health care. It is the only industrialized country that treats health care like a market commodity instead of a social service. Thus, health care is distributed not according to medical need but, rather, according to the ability to pay. . .

The most popular part of the US health care system is the government-administered system for Americans over the age of 65 - Medicare. This is a single-payer program embedded within the private, market-based system. It is by far the most efficient part of the US system, with overhead costs to government of about 2%. It covers virtually everyone over the age of 65, not just some of them. It also covers everyone for the full package of benefits, so it cannot be tailored to avoid high-risk or chronically ill patients. But US Medicare is not perfect, and it has been weakened by the Bush administration. Out-of-pocket costs for Medicare beneficiaries are substantial and growing. Moreover, because Medicare pays for care in a market-based private system, it experiences many of the same inflationary forces that affect the private insurance system, including profit-maximizing hospitals and physicians' groups. In addition, doctors' fees are skewed to reward highly paid specialists for doing as many expensive procedures as possible. As a result, inflation in the Medicare system is almost as high as inflation in the private sector and is similarly unsustainable.

Attempts to reform the US health care system incrementally have run into the following dilemma. If coverage is expanded, costs rise. If costs are controlled, coverage shrinks. This problem faces the US presidential candidates as they attempt to respond to the increasing calls for reform, and they have embraced opposite horns of the dilemma. Senator John McCain has opted for holding down costs by passing more of the burden to individuals, even though it means reducing coverage. Senator Barack Obama has opted for increasing coverage, even though it means adding to the staggering costs. Neither is a long-term solution. The only way to increase coverage and reduce costs is to change the system entirely.

Polls have shown that about two-thirds of Americans would prefer a Canadian-style system, as would three-fifths of doctors. However, many businesses that profit from the current system, mainly the private insurance industry and for-profit health care facilities, resist any fundamental change. They in turn have inordinate influence over law-makers and many economists and health policy experts, who propagate the myth that a Canadian-style health care system is "unrealistic." In addition, many procedure-oriented specialists are quite happy with the current system. They are generally paid much more than they are in Canada, and that predisposes them to exaggerate the failings of the Canadian system and minimize those of the American system.

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