Healthcare Reform

True health care reform cannot happen in Washington. It has to happen in our kitchens, in our homes, in our communities. All health care is personal - Mehmet Oz

Healthcare Reform

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The question often arises, "What is heath care reform and why do we need it?" The answer is almost always something like: The U.S. spends more than any other industrialized country on health care, but gets worse-quality health care. And, the U.S. is the only country that doesn't provide universal coverage to all of its citizens. What are the health care reform facts?

In turns about that each of these claims is technically true, but also very misleading. When you look at the data, the picture gets far more nuanced. And the alleged advantages foreign countries have over the U.S. start to dissipate.

Health Care Reform Facts: U.S. Spends Too Much?

One common measure of health care systems is to compare how much each country spends on health care as a share of its total economy, or gross domestic product (GDP).

On that score, the U.S. is at the high end. More than 17% of the nation's GDP is going to health care. That's far above the next country, Switzerland. It devotes a little more than 12% of its GDP to health care, according to data from the Organization for Economic Co-operation and Development.

That's followed by France (11.5%), Germany at (11.3%), Sweden at (10.9%), Japan (10.7%) and Canada (10.4%). Norway, Austria and Denmark round out the top 10 biggest spending countries. Each devotes just over 10% of their economies to health.

So, no question, the U.S. spends more on health care. Whether that is "too much" is far from clear. The U.S. also gives far more to charities than any other nation in the world. According to the Charities Aid Foundation, charitable donations in the U.S. equals 1.44% of GDP. The next closest country is New Zealand, at 0.79%. Does that mean the U.S. gives "too much" to charity?

Keep in mind that the U.S. is also one of the richest countries in the world. It has a per capita GDP of close to $60,000. As a nation gets wealthier people will devote a greater share of each extra dollar to luxuries. That includes state-of-the-art health care.

The data show this. From 1990 to 2016, GDP growth in the U.S. was 211.5%. Over those same years, spending on necessities climbed far more slowly. The amount spent on clothing and footwear climbed only 100%. Household supplies went up 141%.

But look at what happened to luxury items. Gambling went up 443%, college education spending shot up 440%, spending on financial services rocketed up 447%. Spending on phones went up a whopping 906%.

The increase in health care spending looks modest by comparison. It went up by 327% over those years. You can read more about this topic here.)

That's not to say that health care isn't expensive in this country, or that it couldn't be cheaper. Both are also true. But simply looking at spending as a share of GDP isn't the best measure of what is "too much."

Health Care Reform Facts: Who Pays?

Another common misperception is that in other countries, their governments cover the cost of health care, with everyone covered under a national "universal" health plan.

The fact is that every country — even communist China — relies on a mix of public and private payers, as well as out-of-pocket spending, to cover the cost of care. There are, of course, differences in the share covered by these entities. But no country relies 100% on government to pay for health care.

Take Canada, for example, which is often cited by health care reform advocates as a model of government-run health care. There, the government actually only pays 69% of the nation's health costs. Canadians pay 15.4% of the costs out of pocket, and private insurance covers 12.4%.

In the U.S., by comparison, government pays 54% of health costs. Private insurance pays 35%. And 11% is paid out of pocket.

Citizens in supposedly socialist countries like Denmark pay almost 14% of health costs out of pocket. In Norway, it's 14.6%, and in Sweden, 15%.

Likewise, other governments involve private insurance in different forms to provide coverage.

Germany relies heavily on nonprofit public "sickness funds," to which individuals and employers pay premiums. The wealthy can access private health insurance.

Japan has a mandatory insurance system which is comprised of an employment-based insurance for salaried employees, and a national health insurance for the uninsured, self-insured and low income, as well as a separate insurance program for the elderly.

Health Care Reform Facts: Worse Quality of Care?

The two most common ways to compare the quality of a nation's health care system are life expectancy and infant mortality. And on those measure, the U.S. ranks poorly. It ranks 31st for overall life expectancy, behind countries like Chile, Slovenia, Israel, Spain, and Costa Rica, according to the World Health Organization.

The U.S. fares even worse on infant mortality, coming in 56th place, according to the CIA World Factbook. That's behind countries like Cuba, Latvia, Bosnia and Serbia.

Here's how the Commonwealth Fund characterized these findings: "At 17.1% of GDP, the U.S. devotes at least 50% more of its economy to health care than do other countries. (Yet) on several measures of population health, Americans had worse outcomes than their international peers."

Health care reform advocates use this to argue that the U.S. could save money, expand coverage, and improve quality of care, by adopting health care systems like those of other countries.

But there are problems with these two measures as proxies for quality health care, for the simple reason that many other factors affect both of them.

Life expectancy rankings, for example, don't take into account socioeconomic differences between countries — like drug use, murder rates, obesity, lifestyle choices — that can drastically affect life spans, but that have nothing to do with health care. Obesity rates, for example, vary widely among countries. Where 40% of the U.S. is obese, the obesity rate in Sweden is just 13%. In Switzerland, it's only 10.8%. In Japan, a mere 4.2%. "Obesity alone accounts for approximately 40% of more of the differences in life expectancy between the U.S. and almost every other country," says Hoover Institution senior fellow Scott Atlas.

A recent study published by the Journal of the American Medical Association found widespread differences in life expectancy within the United States that have almost nothing to do with health care. When looking county by county, the JAMA study found that life expectancy at birth can range from 66 years to 87 years. That's a difference of more than 21 years, all in the same country.

The study found that behavioral and socioeconomic factors accounted for most of the variation. Factors like obesity, inactivity, smoking, hypertension, diabetes, poverty, education, unemployment and racial composition. Health care — insurance coverage, number of doctors or the like — accounted for just 27% of the differences.

If those factors — and not health care — can result in wide differences in life expectancy within the United States, they can account for differences in life expectancy between the U.S. and other countries.

There's a similar problem with infant mortality. Differences in lifestyle and socioeconomic factors can dramatically affect the chances of an infant mortality. But there's another complicating factor in the case of infant mortality. And that has to do with how countries define it.

As a study published by National Institutes of Health noted: "measurement problems arise in international comparisons because the data are not consistently gathered or reported" and that "can bias the resulting international rankings and comparisons."

For example, the study notes that "the United States may report as live births more low-birth-weight babies who are at high risk of dying in the first day, and then register those who die as infant deaths." In other countries, an infant can die days after being born and not be counted as an "infant mortality." One study published in a British journal found that differences in the definition of "infant mortality" account for up to 40% of the variation in death rates among Western European countries.

A more accurate way to compare quality of health care would be to measure things where medical intervention clearly makes a difference. Things like survival rates for various types of cancer, diabetes, high blood pressure, recovery from surgery, access to new drugs. For example, the U.S. scores better on cancer survival rates than other countries that are said to have higher quality health care based on longevity and infant mortality.

Is Health Care A 'Right'?

Another common point of comparison — and a rallying cry for health care reform — is that health care is guaranteed as a right in other countries, but not in the U.S.

As Sen. Bernie Sanders puts it, "We are the only major country on Earth that doesn't guarantee health care to all people as a right."

Fact-checking site PolitiFact rules Sanders' claim only "half true," because, it says, not every country guarantees health care to everyone.

It is certainly true that in the U.S., cost can be a barrier to accessing care. But in countries that guarantee coverage, what does the "right" to health care actually mean?

Not as much as many probably think. It doesn't mean that their citizens can get any care they want, or may feel they need.

In fact, countries with "universal" health care routinely ration care to their citizens to save money. An article in the British newspaper The Guardian noted in 2015 that "Patients are being denied mental health care, new hips and knees, and drugs to boost their recovery from illnesses including cancer as the NHS increasingly rations treatments to try to overcome its growing cash crisis."

Patients in countries like the UK and Canada also suffer chronic delays in getting treatment.

Tens of thousands of Canadians come to the United States to get care they can't get from their own "guaranteed" health care system. In 2016, 63,459 Canadians did so, according to the Canadian-based Fraser Institute.

Patients in the UK are increasingly spending money out of pocket to "jump the queue" or get care the National Health Service won't provide.

In short, just saying that a country "guarantees" health care as a right doesn't make it so.

Do We Need Health Care Reform?

Bottom line is that international comparisons are tricky.

They can be wildly misleading. Particularly when they're used to argue for health care reform ideas that involve fundamental changes in the U.S., such as "Medicare for all" or some other form of government-run, single-payer health care system.

Source: John Merline, Health Care Reform Facts: How Does U.S. Actually Stack Up Against Other Countries? Investor's Business Daily, December 17, 2018.

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Last Updated : Monday, November 16, 2020