Next installment: how Sweden’s military is actually better than the US’s, if you look at the statistics in the right way.

http://www.marginalrevolution.com/marginalrevolution/2003/12/who_are_the_uni.html

The money quote:

15 million of the uninsured have incomes of $50,000 or more. The fastest-growing population of uninsured has incomes exceeding $75,000. About 14 million are eligible for Medicaid or the State Children�s Health Insurance Plan but are not enrolled.

First: your father implies we spend 50% more than France on healthcare and the difference is all in the end game. Actually it is more than that because they have a fraction of our administrative costs. So, the French don’t have ICUs, heart surgery, cancer treatment and trauma centers???? I just don’t buy it, not to that degree. This sounds just too self serving.

And the assertion that 30% of the uninsured make over 70K per year. So lack of insurance is a middle class and upper middle class problem? Again, I think not. Show me a link. I work in public sector health care and the folks who are using the clinics are definitely not the 70K+ crowd. I actually know an uninsured individual who makes more than 70k, but he is uninsured because he cannot get insurance. And they will not tell him why…

One last point: I have another acquaintance who is also uninsurable due to an industrial accident about 15 years ago. Fortunately, he is well off due to a settlement. Recently he had a tumor removed, thankfully benign. He needed an MRI. He was told that the cost was $1500 since he was uninsured. When he said he was paying cash up front, the cost dropped to $325.

You say “we spend vastly more on health care than these other countries do, yet there are millions of Americans with NO access to care.” This is false. Uninsured people almost always have access to health care through free clinics, emergency rooms (which are legally required to admit such patients), and other forms of subsidized health care. While it is true that the uninsured get less medicial care than the insured, they do usually get it. As a side note, did you know that about 30 percent of the uninsured make more than 70,000 a year?

You say “the free-market model of competition lowering prices doesn’t really work for medicine.”

You’re both right and wrong here. The model doesn’t work well when third parties dominate and the government intervenes frequently. However, in certain areas of medicine, we’ve seen the benefits of free markets. Specifically, laser-eye surgery and plastic surgery have both fallen in cost in the past decade (and improved in quality) because they are procedures sold in a free market with price advertising, competition and consumer driven purchases. The lesson, I think, is to try to make other areas of medicine mimic the structure of these markets.

You’re right about one point: we still haven’t quite figured out how to make free market medicine work well. I personally believe that it is possible to make such a market work well, although it will require considerable institutional innovation. Health saving accounts are a big step in the right direction. Eliminating the 141 billion dollars in subsidies for employer-based insurance would be another.

Singapore offers a nice example of how it could be done: Singapore makes extensive use of health savings accounts (everyone is required by law to have one) and government generally refrains from interfering with the market for private insurance. The result: not only have Singapore’s health care costs been rising at a rate below that of most other countries, but, measured as a proportion of total private consumption, health care expenditures have actually declined since 1986. What other developed country can claim the same?

I think the problem is that we have a for-profit system in which there are so many more people who have to get paid — not just the care providers, but all the insurers, administrators, marketing people, etc. And the free-market model of competition lowering prices doesn’t really work for medicine. For instance, drug companies benefit from taxpayer-funded research at universities (not to mention training of scientists) but enjoy patent monopolies that allow them to charge exhorbitant prices. That power to charge what the market will bear might be checked a little bit if there were more big health care providers that could negotiate lower prices, or if the companies faced competition from drugs re-imported from lower priced markets like Canada. But the extraordinary profits of the pharma industry gives it enormous political clout to squash potential competition. Think of the Medicare bill — the industry successfully lobbied to prevent drug importation or negotiation of lower prices by the government.

Or take malpractice insurance. Texas passed a state law limiting the size of medical malpractice damage awards, but malpractice insurance premiums for Texas MDs have continued to climb, even though the legislation was successful in limiting the insurance companies’ liability in lawsuits. You might think that insurance companies would compete for doctors’ business by offering lower premiums, which they could better afford to do if they weren’t paying out as much in claims. I’m sure that’s how the legislation was supposed to work, but instead the insurance companies used the opportunity to boost their profitability.

I think what it all boils down to is, where are the opportunities to make money in health care delivery? The drug companies and insurance companies are behaving as well-run businesses should, they’re protecting their bottom lines. They take advantage of the fact that the demand for what they have to sell is not very elastic. If you’re a doctor, you HAVE to have malpractice insurance. If you or someone in your family is sick, you’ll want the best possible treatment and you’ll be willing to sacrifice a lot to get it. So to make money in health care, you charge the most money you possibly can while delivering the minimal amount of service. For third-party payers, it means competing with each other for the healthiest patients, and dumping the sickest ones (or not covering the procedures they need, or charging them an arm and a leg). This “competition” is not the kind that produces pressure to lower prices or expand coverage.

I think we need to acknowledge that while the “free market” model works wonderfully in many areas, it’s not necessarily the best or most efficient approach to every problem.

For a slightly less anecdote-driven perspective on this issue you might check out Richard Epstein’s _Mortal Peril_, which is a decade old but still very relevant.

Also, don’t concede the “we don’t have better outcomes” talking point to the socialists. The stats everybody repeats to back this one up are infant mortality and life expectancy at birth. The former, as bystander noted, is skewed by measurement diffs, and is in any case a very, very bad proxy for anything more general. The latter is basically unaffected, to any extent large enough to discern from noise, by differences in health system quality once you get past the third-world level. See Arnold Kling’s article:

http://www.techcentralstation.com/032105B.html

And see also:

http://www.portal.telegraph.co.uk/news/main.jhtml?xml=/news/2002/01/18/nhs118.xml&sSheet=/news/2002/01/18/ixnewstop.html

for evidence that at least some private insurers, and not ones limited to the rich either, can provide better coverage than at least some first-world socialized systems for not significantly more money.

Big lies, repeated a lot, persuade people.