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A Few Comparative Facts

Nationalized Healthcare Kicks Our Butt

ome people have asked three questions which, taken at face value, are legitimate questions. What would the public option do to (a) reduce the overall cost of healthcare, and (b) improve the quality of my healthcare; and (c) what will the effect be on the deficit? The Congressional Budget Office estimates $1 trillion-plus. So how do we pay for that?

To take the last item first, the CBO analysis didn't factor in what could be saved by the public option, or by best-practice incentives, or by competitive price pressure on the private insurers. By the same rationale, fluorescent lightbulbs make no sense, because they're so much more expensive than incandescents. Except, of course, that they use less energy, so electricity bills go down, and they last much longer before needing to be replaced.

And in terms of cost going down (a), this is exactly what the insurance companies are fearful of: that an affordable, public alternative will prove a competitive cost pressure on their own premium prices. In fact, the insurance companies are so convinced that these would be the economics of their industry with a public option, they are fighting tooth and nail (and campaign contribution) to keep it from happening. So maybe we should ask them?

Also in terms of cost going down: the cat is out of the bag in terms of doctor-owned medical facilities and the scam that is pay-per-service medical care. The New Yorker article by Atul Gawande helped a great deal there, especially the examination of how some of the most successful (in terms of health, not necessarily profit) healthcare institutions are less expensive than most of the less successful ones. Add this to the efficiencies of electronic healthcare records, best practice education and incentives, and other cost-savings that we could implement today, without a single new drug or device being invented, and you've got a huge amount of savings.

As an aside, it's worth pointing out that the people screaming that a public option will be too competitive against private options should be screaming instead at the people who think the public option will be too slow and incompetent, a la the DMV. They can't both be true, after all. But cynically, the insurance companies, with the first fear, are financing much of the "outrage" over the second fear.

In terms of quality with the public option (b): the short answer is that it won't affect it, because you'll still have the same doctors and specialists you use today. But in truth, I can't answer that about the quality of YOUR healthcare. That's because I don't know what the quality of your healthcare currently is. You could have a gold-plated healthcare plan provided by your employer, and there is no reason why you can't continue to have such quality, just as today, when wealthy people will pay out-of-pocket for elective surgery or high-end specialists.

The real question therefore is: Would it improve the health of the nation overall, and thereby be the rising tide to raise all our boats? The evidence indicates that it would. Or, at least, that a public option has no connection with decline in quality, at any rate, so that there is no real economic argument against it and there IS a moral argument in favor it.

The U.S. currently spends more as a percentage of its GDP than any other country on healthcare (13.7%) -- but ranks 37th in the world in terms of its health system's performance (e.g., life expectancy, responsiveness, etc etc), and ranks 54th in the world in terms of the "fairness" (i.e., a closer relationshp between an individual's costs and an individual's income) -- behind Australia (7.8% GDP, 32nd in performance, 12th in fairness), Canada (8.6% GDP, 30th in performance, 17th in fairness), and the UK (5.8% GDP, 18th in performance, 8th in fairness).

I picked those three countries as comparisons because they're the ones that get mentioned most often, probably due to English as a common language. But among all the countries whose healthcare systems outperform the U.S.'s, 92% have more government contribution toward healthcare than we do (only Cyprus, UAE, and Morocco have less); 78% are more "fair" (e.g., fraction of average household spending minus food that goes to healthcare); and as already stated, 100% spend less overall as a percentage of GDP on healthcare than the U.S. does.

All of which is to demonstrate that we have the most expensive (than even France, Switzerland or Germany, yet all still outpeform us), among the more unfair (Oman and Portugal are only slightly less fair, yet again, still outperform the U.S. overall in healthcare), and among the less efficient (we're behind Costa Rica in performance, but, hey, we outrank Slovenia!) systems.

Now, will making our healthcare system look even marginally closer to that of the more developed countries among the 36 whose systems outperform ours mean that it will automatically bring costs down and quality up? No, there isn't a simple formula that will show that. And it's important to say that the public option ALONE won't accomplish this. That, I think, is where the question (how will the public option bring my costs down and my quality up?) ultimately fails in its sincere attempt to find some clarity in all this noise. It's asking for a 1-to-1, arithmetic relationship between the public option and personal cost or personal quality, and that will be different for each individual. If you get great medical care today, you probably won't see a lot of improvement in the quality; if you get bad or no care, you should see an improvement. If you or your employer spend a lot of money now on healthcare compared to others, you should end up paying less. If you or your employer spend very little now but you (somehow) get great care -- I dunno, maybe your sister is an internist -- then it'll probably end up costing you more.

But I would also turn it around on those who say the public option will make health care more expensive or less effective: What is the proof, math or argument that keeping the public option off the table will "keep costs down" (even though ours are higher than anyone's) or "keep quality high" (even though 36 other countries do a better job there, too)?