International best practices can fix America’s broken health care system

Health Care is an excellent example of how dysfunctional our current political climate is. One side of the debate claims the other side’s health care solutions are on the slippery slope to socialism. The other side claims their opponents only cater to the pharmaceutical and insurance industries.

Meanwhile health care’s large financial interests publish misinformation about the state of U.S. health care and the problems in other countries. Those who wish to inform themselves of the facts will find it hard to separate fact from fiction.

Much in the media is distorted rehashing of misinformation. Most of what is said about England and Canada is only partially true. Even Michael Moore’s “Sicko” had some distortions, even though it had fewer misrepresentations than the editorials I read criticizing the film.

The purpose of this piece is to present comparison data and comparison strategies used elsewhere in the world. The piece will not advocate for any particular solution. If I were to advocate, it would be for a system along the lines of the French, considered No. 1 one by World Health Organization statistics. The French system uses a combination of single payer and consumer driven mechanisms.

However, neither American political party is advocating anything like the French system.

There are a lot of good ideas out there in what other countries do. Most developed countries’ health care solutions perform better than ours. However, the strategies used in other countries go largely unnoticed or are distorted by our politicians. Both parties’ proposals seem to be more concerned with protecting various economic interests than with saving people’s lives.

Cold, hard data

The data in this piece comes from the World Health Organization (WHO) and the Organization for Economic Cooperation and Development (OECD). What this data will show is that we have the world’s most expensive health care system and yet we are a system plagued by some of the poorest outcomes of any of the developed countries.

The data in this chart doesn’t show it, but even some third world and ex-communist countries beat us in some statistical categories.

Refer to the chart “Health Care System Comparisons.” There are listed some key health care statistics of 10 countries that are ranked higher than we are. In the bottom row there is either a comment about the rest of the developed countries in the world or an explanation of the data in the column to the left.

The second column after the country names gives the WHO rank based on a number of criteria. Notice the United States ends up 37th, even though most agree that we rank first in technology and physician training in the world. Our high infant mortality, low healthy life expectancy and high medical error rates are just a few of the measurements that lead to our low ranking.

The third column shows how you would classify the particular health care systems. Single payer means there is a single entity, usually the government, of health care reimbursement to a private system of providers. Government run means the government controls the providers, employing the doctors and owning the hospitals. Most systems of the world are hybrids using a combination of single payer and consumer driven solutions that may even include highly regulated private insurance companies.

The United States is classified as private insurance because even though we have a large government sector providing Medicare and Medicaid, we have the largest for-profit, comparatively unregulated, private insurance sector of any country in the world.

The next column shows the percentage of the population covered by public insurance, the 45 percent number for the U.S. is Medicare and Medicaid only. The goal of most countries is 100-percent coverage. It is considered important both as providing healthy outcomes as well as keeping costs down (that seems counter intuitive but all the developed countries of the world have recognized this.) Together private and public sector coverage in the United States is over 80 percent, but that still leaves a gap of 47 million uninsured, and that number is growing.

The next column shows the administrative costs of health care. Costs that do not go directly to providing care but includes things like paperwork land in this category. The 7.6 percent in the United States is the highest in the world but even that number does not tell the whole story. If you just look at the private insurance industries administrative costs and throw in the overhead and profit margins of insurance companies, the non-care related costs in our private insurance industry take anywhere from 25 to 35 percent of the health care dollars in that sector.

This is much higher than the costs related to malpractice insurance, which some put at 2 percent of our health care dollar. So, the constant harping on trial lawyers by some politicians seems to me to be a smoke screen.

The cost per capita of health care is shown in the next column. Not only is the United States the most expensive but also it is more than twice as expensive as many of the systems it is often compared with. This and the next column that shows how health care is paid for tells a story of the problem with U.S. competitiveness in the global marketplace.

Competitive disadvantage

Most countries pay for at least a percentage of their health care with VAT or value added taxes. These are taxes that are not charged until a good or service is sold to the consumer. So most European countries’ products are unburdened by health care costs when exported, whereas most U.S. products are burdened by a health care cost that is as high as 15 to 20 percent of payroll.

In the public sector, our high-priced health care system is driving state and municipal governments to cut services and increase taxes. Our current dysfunctional health care system is a festering wound that not only sucks financial resources from American industry but also is killing government services while delivering only mediocre care to the vast majority of Americans.

The second-from-the-last is the column of data I find most disturbing. We have one of the highest death rates from medical error of any country in the world. We have about 100,000 deaths per year from errors made in hospitals and about 100,000 deaths per year from errors with prescription drugs. Japan has less than one fourth the rate that we do. That means that if we just copied the Japanese in the way they regulate hospitals and physicians, we could possibly save more than 150,000 lives from drug errors and hospital mistakes.

Who needs a war on terror? 

Best practices

How does the rest of the developed world deliver better outcomes at lower cost per person? Most of them do it with a combination of government and consumer-driven strategies. All of them tightly regulate insurance companies and mandate administrative cost limits and profit margins. All of them impose quality standards and use reimbursement strategies that promote quality outcomes. All of them focus on prevention rather than the aftermath of the onset of serious illness.

So if someone asks, “Do you want the government between you and your doctor,” I usually say that it is better than an insurance company with a vested interest in limiting care.

It is interesting that a country that is so fearful of government involvement provides government run health care for the president and vice president. The rest of us struggle for survival in the current system.

Our country used to be in the forefront of solving complex problems, and now we seem to be only an also-ran competitor, well back in the field. This comes from not recognizing where free market forces can operate to solve problems and where government needs to take a role.

It comes from protecting the interests of large powerful industries in a form of corporate socialism at the expense of the public at large. It comes from politicians courting where the money will come from for their reelection campaign than the public.

The problem with the health care game is that we are letting more people by far die every year than die from any terrorist threat.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display