Basic HTML Version
Healthcare Journal of New Orleans
I
NOV / DEC 2013
55
David W. Hood is Former
Secretary (1998-2004)
Louisiana Department
of Health and Hospitals
each criterionand the scoreswereweightedand
summed to obtain their efficiency scores. Rela-
tive cost is healthcost per capitaas apercentage
of GDP per capita. Absolute cost is total health
expenditure, whichcoverspreventiveandcurative
healthservices, familyplanning, nutritionactivi-
ties and emergency aid. Includedwere countries
withpopulations of at least fivemillion, GDPper
capita of at least $5,000 and life expectancy of
at least 70 years.
The U.S. ranking of 46
th
would not be so
hard to take were it not for the fact that higher
grades were earned by the likes of Ecuador
(20), Cuba (28), Peru (35), Turkey (44), and Iran
(45). How did the U.S., the epitome of market-
driven economics, rank so low in efficiency?
Perhaps a better question would be “how
did the top 10 nations manage to be so effi-
cient?”All of them are prosperous democra-
cies withmarket economies and they operate
health systems that are modern, high quality,
and well regarded. Operation of their health-
care systems is as diverse as their societies,
but they all have one thing in common: the
government plays a major role in regulation
of the system, including pricing of services,
safety, quality, and coverage. In some nations,
but not all, the government owns and operates
hospitals and other services.
Hong Kong (1) and Singapore (2) prac-
tice capitalist theory to the max, but spend
much less than the U.S. (Hong Kong spends
only $1,409 per capita on healthcare, which is
merely 16% of U.S. spending.)
Here in the U.S. we often hear that a “free-
market” healthcare system without govern-
ment intervention would reduce costs, im-
prove quality, and assure access to care. But
the most successful systems (low cost, high
quality, and universal coverage) tell us that
government has a role to play. For the last 30
years, healthcare costs have skyrocketedwhile
the ranks of the uninsured have increased. It’s
time to make a change for the better.
n
budgetingmechanisms, such as an insurance
premiumgrowth cap. Instead theACAretains
all the complexity of the current systemwith
few tools to rein in excessive spending.
Another voice that should be widely heard
on this subject is Paul Starr, professor of public
affairs at Princeton University. Arecent article
by Starr appeared in the
St. Louis University
Journal of Health Law and Policy
titled “Law
and the Fog of Healthcare: Complexity and
Uncertainty in the Struggle Over Health Pol-
icy” (February 2013).
In this article, Starr focuses on the problem
of healthcare overspending but directs atten-
tion to what he calls the “fog of healthcare,”
the element of complexity that can’t be mea-
sured as a cost but serves to conceal other
components of our very expensive system.
Non-transparent pricing of medical services
is an example. Here are some of his thoughts:
Compared to systems in the othermajor democ-
racies, theAmericanhealthcare systemstandsout
not only for its cost and inequities, but also for its
extraordinary complexity.That complexity—and
the fog of uncertainty it creates for everyone in-
volved in healthcare—is more than a nuisance;
it is a problemwithwide repercussions that de-
servemore analytical attention than it has thus
far received.
The United States worked its way into this fog
stepby step. Insteadof enactingacomprehensive
systemof healthcarefinance, asdid theother rich
democracies of the world, Congress created dif-
ferent programs for different groups—veterans, the
employed, the elderly, some of the poor. Each of
these programswas basedon its owndistinctive
principles, whichrun the gamut of thepublic-pri-
vate spectrum. For veterans, therewas a federally
ownedandoperatedhealthsystem; for seniors, a
federal insurance planwithprivate supplemen-
tal insurance; for the categorically eligible poor,
amixed federal-state program; for workerswith
employer-provided coverage, a tax subsidy for
private insurance.Ashealthcosts rose, employers
andprivate insurersadoptedamyriadof different
plans and rules ina largelyunsuccessful effort to
keep costs down. For similar reasons, programs
and rulesmultiplied in the public sector as well.
Many of the complexities in thoseprograms stem
fromlegislative compromises struck inCongress,
which were then overlaid with further compro-
mises in later additions and revisions. Private
markets, federalism, and legislative compromise
have their virtues, but transparent and stream-
lined arrangements are not necessarily among
them. Ironically, some of the most highly prized
features of America’s political economy have
produced one of the most reviled features of the
American healthcare economy—its bewildering
complexity.
Starr presents an accurate picture of U.S.
healthcare, a viewwhich—like the weather—is
familiar to all of us yet rarely questioned. We
accept complexity and all of the difficulties
(and dangers) it imposes on those who need
medical care, as well as those who provide it.
Those of us who support theAffordable Care
Act must realize that it is a complex solution
for complex problems. The result may not be
as trouble-free as we expected.
Bloomberg Surveys National
Healthcare Systems by
Efficiency – U.S. Ranks 46th
U.S. healthcare takes another hit with a
global comparison that evaluates nations in
terms of how efficiently they deliver a wide
range of services and at what cost.
Bloomberg, the company that owns
Busi-
nessWeek
magazine, has a data division that
churns out comparisons on numerous sub-
jects, including global health care. One that
caught my eye recently was “Countries With
Most Efficient Healthcare.” Bloomberg sur-
veyed 48 countries, not all as wealthy as the
U.S. and European countries, but selected ac-
cording to criteria as explained below:
Eachcountrywas rankedon three criteria: life
expectancy (weighted 60%), relative per capita
cost of healthcare (30%); andabsoluteper capita
cost of healthcare (10%). Countrieswere scoredon