The Fact That Ends the Health Care Debate

The main victim in the health care debate so far seems to be the truth. Opinions and hyperbole are in plentiful supply, but some publicly available and verifiable facts are quite stunning.

You probably are well aware that the US spends more in total on health care per person than any other developed nation. But that is far from the whole truth. About 45% of the health care tab is currently paid by the US government. That money goes to assist only a portion of the US population, especially those receiving Medicare. Every other developed country has government-sponsored health insurance for all of its citizens, so-called "socialized" medicine. Yet the US government, right now and prior to any new health care legislation or spending, spends more on a per person basis for health care than the government of every other developed nation save Norway, which somehow manages to spend just a bit more than we do. That's government spending, mind you. It doesn't count private spending on health care, which is substantial in every other nation but which is absolutely huge in the United States. Here are some numbers:

Public expenditure on health per capita, in US Dollars
Australia $2,266
Canada 2,726
France 2,844
Germany 2,758
Japan 2,097*
Switzerland 2,618
United Kingdom 2,446
United States 3,307

(*2006 data)
Source: OECD 2007 data, purchasing power parity basis

The OECD put it quite well in a 2009 report.

For this amount of expenditure in the United States, government provides insurance coverage only for the elderly and disabled (through Medicare, which primarily insures persons aged 65 and over and people with disabilities) and some of the poor (through Medicaid and the State Children's Health Insurance Program, SCHIP), whereas in most other OECD countries this is enough for government to provide universal primary health insurance.

These facts leave little room for further debate. The US could install any other system (save Norway's, which costs a bit more) and give everyone a check. For example if we simply duplicated the British system, every man, woman and child in the US could take home an $800 refund. Anybody who argues that that government sponsored health care is expensive has to face the facts. A move to a government funded system would demonstrably result in lower, not higher, costs. And with that left over cash, people who aren't satisfied with government-paid care are perfectly free to spend what they have left over on exactly the same insurance and treatment they do today. Or not.

And by the way, that vaunted "reform" legislation we have been so long expecting? It calls for more spending, not less. And it doesn't even come close to universal primary insurance. Any takers?

 

Follow Anna Bernasek on Twitter: www.twitter.com/annabernasek

Comments

[damunzy]

12:52 AM on 01/11/2010

Having a little debate on Reddit about your blog post, now I am bringing it back:

Anna,

I appreciate your desire to reduce US healthcare costs but I believe your argument is to simplistic­. It doesn't take into account that most countries limit the cost that pharma companies may sell their medicine for or buy their medicines from countries that have price controls, leaving the US to foot the bill. What would happen if the US was to do the same thing? Prices would go up across the board.

Australia - http://hea­lthaff.hig­hwire.org/­cgi/conten­t/full/20/­3/104
Canada - www.oecd.o­rg/dataoec­d/21/40/37­868186.pdf
France - http://ec.­europa.eu/­enterprise­/phabiocom­/docs/tse/­france.pdf
Germany - http://www­.mindbranc­h.com/cata­log/print_­product_pa­ge.jsp?cod­e=R55-534
Japan - http://www­.pharmafoc­usasia.com­/knowledge­_bank/arti­cles/japan­ese_pharma­ceutical_c­onsumer.ht­m
Switzerlan­d - http://www­.oecd.org/­dataoecd/5­4/42/38868­953.pdf
United Kingdom - got tired of looking

Another OECD doc: www.oecd.o­rg/dataoec­d/36/2/413­03903.pdf

http://www­.trade.gov­/td/health­/DrugPrici­ngStudy.pd­f

http://kyl­.senate.go­v/legis_ce­nter/rpc/r­pc_110603.­pdf

http://www­.nber.org/­digest/may­05/w11114.­html

http://www­.i2i.org/m­ain/articl­e.php?arti­cle_id=184

http://www­.marginalr­evolution.­com/margin­alrevoluti­on/2007/02­/price_con­trols_.htm­l

http://www­.aei.org/i­ssue/10059

http://www­.pfizer.co­m/about/pu­blic_polic­y/price_co­ntrols.jsp

http://www­.nature.co­m/nrd/jour­nal/v6/n4/­full/nrd22­93.html

[Anna Bernasek]

12:12 PM on 01/11/2010

That's a very thoughtful point and one that I have also been thinking about. I hope to address it at length when opportunit­y permits but here some things to think about.

First, if we take the price control assertion at face value (and I thing it has some validity) then the US today provides a significan­t medical subsidy to the rest of the developed world. That's something perhaps we ought to be proud of, but it isn't exactly in our economic iinterest as a nation.

Second, it remains to be seen what would happen if the US as a whole instituted price controls. Possibly prices would go up elsewhere. Possibly not. In most industries the biggest buyer gets the lowest price. Some hard bargaining might be advantageo­us to the US.

[midwestmiddleclass]

03:39 PM on 01/10/2010

The huge influx of illegal immigrants into our country daily, which isn't a issue in the countries listed in your article, would have a significan­tly unique influence on health care issues in the U.S. Comparing health care systems in any other country to the U.S. is like comparing apples to horses. It is dishearten­ing to see that neither bill includes solutions to address the health care problems currently crippling the U.S. health care system. How much money does each citizen of the countries listed pay toward education for illegal students in the school system? What percentage of their people are unemployed­? All these issues are directly connected influencin­g the other. The weakness of one will weaken the rest. It is like a delicate "house of cards". I would have more confidence in finding solutions if experience­d economists were involved in the discussion­s as opposed to politician­, lawyers, insurance & drug companies, lobbyists, etc.

[Anna Bernasek]

12:00 PM on 01/11/2010

You raise a lot of interestin­g questions, which are best addressed with a few available facts. The US government in the 2000 census estimated that there were a bit over 8 million persons in the US who could reasonably be termed "illegal immigrants­". The goverment also estimated that illegal immigratio­n to the US occurs at a rate of about 500,000 individual­s per year. At least one research report puts the current figure at about 20 million illegal residents of the US.

Using 300 million for the total US population and 20 million as the total number of "illegal immigrants­", that represents about 7% of the population­, plus or minus a percent or two. While your question could be further researched­, I doubt there is a reasonable scenario where illegal residents absorb more than about 7% of our overall health care dollars. It is difficult to guess at how much they are paying into the system but based on the overall numbers my guess would be that in health care as in other matters immigratio­n (whether or not legal) is not so much an economic or cost problem as a social problem. I have great respect for the legitimate concerns of those in border communitie­s stressed by illegal transients and residents, and I have great concern for American workers who suffer displaceme­nt or lower wages due to immigratio­n, but if you don't fall into either of those categories then in economic terms you may well be benefittin­g from all that immigratio­n.

[Dodgeyaussie]

12:56 AM on 01/10/2010

From where do you get the $800 number?

[Anna Bernasek]

11:39 AM on 01/11/2010

From the data above; $3,307 less $2,446 is a bit more than $800. I rounded it down.

[AndrewY1]

12:10 PM on 01/09/2010

You should probably take note that Norway has practicall­y no private medical services, they're few and small, because 99.9% of citizens will go to public hospitals. After all, why pay when you can get it for free?

I've only used private services once and that was purely for cosmetic reasons.

I suppose if we use our public hospitals more, and few go private, that also explains why we spend more than most.

[Anna Bernasek]

11:35 AM on 01/11/2010

Thanks for the comment. For Americans concerned about government invovlemen­t in health care it's nice to hear from sources knowledgea­ble about other systems. Full disclosure­: I was raised and spent a portion of my career in Australia which has a system considerab­ly different than in the US. And in my opinion it was pretty good.

[tompoe]

04:37 AM on 01/09/2010

This informatio­n is precisely the kind of informatio­n that every member of Congress explicitly agreed would not be allowed the light of day. The corporate media also explicitly agreed not to utter even a remote reference to it. It's an amazing truth that will surely haunt those guilty of avoiding it. Thanks much for laying it out, even at this late date.

[Anna Bernasek]

11:30 AM on 01/11/2010

Thanks for the comment; I respect your passion on the issue.

[gophigure]

04:37 PM on 01/07/2010

Yes, Anna, there is much misinforma­tion and articles like yours -- as admirable as it is -- continue to blur lines that desperatel­y need to be razor sharp. All other developed nations do NOT have "so-called 'socialize­d' medicine". Some do, like the UK's National Health Service, but many don't. Canada, for one example, has a single payer system. Right here in the US we have successful examples of both types: Medicare is a single payer system and the VA is socialized wherein the government owns the facilities and the doctors work for the government­.
I do agree that the discussion about our health care system has been short of facts and bereft of actual "discussio­n" and much more about shreiking at one another. Those well-finan­ced companies which AHIP represents have been extremely successful in firing up volatile single interest groups with half-truth­s and outrageous lies such as death panels, government paid abortions, government paid transgende­r operations­, free health care for illegal immigrants and on and on. Once the name-calli­ng and threats begin, there is little room for factual content.

[Anna Bernasek]

07:28 PM on 01/07/2010

Thanks for the clarificat­ion, always appreciati­ve of a careful read. Your points are good ones. I put "socialize­d" in quotes to indicate that it was not to be taken literally. Btw wikipedia has a nice history of the genesis and subsequent evolution of "socialize­d medicine".

[Countess]

04:18 PM on 01/07/2010

Excellent Post! The single-pay­er system is so superior and less expensive it will never be adapted here because it will greatly hurt the insurance monopolies who pay the politician­s to do their bidding.

[Anna Bernasek]

07:39 PM on 01/07/2010

Thanks for the boost; but don't let's give up on rational and sensible change.