The Great Divide - Part One

By Cernig

Here's a lazy bit of blogging for you. In view of the furore generated by the SCHIPS debate - and the attendant debates being generated about U.S. healthcare in general - I thought it would be a good time to re-post an old article of mine that looked at some of the myths, costs, and possibilities for U.S. healthcare. This article was originally posted on 2/1/05

The Great Divide: Public vs. Private Healthcare.
Part One - Getting to the Facts.

First, let us look at some of the myths.

The UK has huge waiting lists for things like heart surgery, proving that public healthcare doesn't provide enough service.

This is partly true. The UK does have large waiting lists, mostly for elective surgeries and some of them are unreasonably long. Some are even for treatment for life-threatening ailments which is unacceptable. The other side of the coin? Well, the waiting lists are getting smaller and shorter. They became atrocious because Conservative administrations consistently underfunded the health service in order to divert funds to tax breaks and to manufacture a crises thus setting the scene for reform with more private plans. Funding is up 25% on those days and is approaching the European norm and so the lists dwindle. They will never disappear, but then again, the US system has unacceptable waiting times to see a GP or for ER treatment, waits that simply don't occur in the UK. Public health systems also seem to garner organ donors better, another area where the US wait is unacceptably massive compared to the UK.

Public healthcare destroys drug companies' incentives to provide new drugs and treatments.

Medical research and development happens all over the world. It's funded primarily by governments. Recent advances in stem-cell research are one of the most prominent examples of this. Another is the Pasteur Institute (government-funded) in France that discovered HIV in 1983. Privatised medicine and the big companies that profit so hugely off it are the free riders, seeking profit from research funded by taxpayers.

Public healthcare is always more bureaucratic than private healthcare.

Anyone who can say this has never worked for an insurance company. I worked in insurance for 12 years and can testify that no-one does bureaucracy better. The US loses around 25% of its healthcare dollars to administration under the present system. The UK loss is about 11%. So this one simply isn't true. Nor is the UK pushing too much of it's paperwork onto doctors. If it was, the level of care would suffer, right? See below for independant findings that this is just not the case.

Public healthcare erodes liberty and the right to choose.

Nonsense. It is no more a loss of liberty to have universal healthcare than it is to have universal suffrage. The opposite is true. Not having healthcare you can afford to use (like 45 million Americans, half of whom are children) is the true loss of liberty. 40% of all Americans have at some time in the last year passed up on medical treatment because of cost. And losing that liberty costs more in the long run.

Uninsured patients are usually charged the most for their hospital visits. While insurance companies have negotiated huge discounts, the uninsured have to pay full price. A complaint filed against Provena Health, a Chicago-area hospital, alleges that uninsured patients are charged two to three times the rate collected from insurance companies.
New Standard

Let's face it, the HMO providers are not altruists either. Their job is to make profit and pay dividends to shareholders. Take it from an insurance insider (12 years experience as a broker and Correspondent at Lloyd's of London) - insurance companies would rather make $10 total profit from one customer than lose $10 total from a million customers all told. They will rig and re-rig their rates or drop coverage on certain customers until the profit margin is achieved, and then do it some more to increase profit. This is not a basis on which the intelligent provide healthcare because they have no vested interest in providing care to the sick, only to the well. The simple fact is that the current system is failing and insurers would be glad to get out of it and start providing "luxury" cover on top of a public healthcare system. It would be more profitable for them. It would also mean less debt for patients.

About half of insured adults with a high-deductible health plan have medical bill problems or debts, compared with less than one-third (31%) of those with lower- deductible plans, according to new research from The Commonwealth Fund. Individuals with high-deductible plans are also more likely than those with
lower-deductible plans to experience access problems such as not filling a prescription, or skipping a medical test, treatment, or follow-up when needed, due to cost
The Commonwealth Fund

In any case, every country that offers a public healthcare system also offers privately insured healthcare for those who really must go right to the top of the list for their (probably elective) surgery or really can't stand being amongst the hoi-polloi. Again, from working in the UK insurance industry I know that these private plans are marketed as luxuries for those who can afford them, not as a necessary alternative to the horrors of public health. Choice does not suffer.

The quality of healthcare under a public system is always poorer and the citizens always sicker. (One of the most often used examples is British dental health.) This is the big one.

Lets deal with the dental thing first. The vast majority of British dentists (97%) are outwith the public health system. An NHS dentist charges about $18 for a basic dental health check but private practices routinely charge over $50. Even so, the NHS dentists can afford nice houses and mercedes cars. They are also overwhelmed and in many areas a patient cannot even find one and is forced to visit a private, price-gouging, practitioner. Dental work is the one area where most Brits report they have foregone treatment because of cost.

Now, on several conservative or libertarian websites you will find links by the dozen to articles talking about one or the other crisis in "socialist" public healthcare systems in other nations. Let us leave aside the illogicality of citing the "liberal media that cannot be trusted" - maybe they can be trusted about other countries when they can't be trusted about the US. Let us leave aside the realisation that it is the work of the media (liberal or otherwise) to point up flaws in any system so that those flaws become subject to public scrutiny and are hopefully adressed. Is it true that public healthcare is always poorer healthcare?
In a word, no.

The Commonwealth Fund, a nonpartisan group, has been looking at comparisons in healthcare for the last five years. They have developed a system of key indicators for quality of healthcare. Here is what they said about the UK and America.

United Kingdom
Areas of good performance: Suicide rates were notably lower in England* than in the other four countries. The polio vaccination rate was the highest. The incidence of pertussis was the lowest. U.K. citizens reported virtually no financial barriers to medical care, diagnostic tests, or prescription drugs and the least difficulty seeing a specialist. Opportunities for improvement: Cancer survival rates were lowest. Measles incidence was higher than elsewhere. U.K. citizens reported the longest waits for elective surgery. U.K. physicians were rated poorly on asking patients for their opinion, discussing the emotional burden of illness, and overall responsiveness.

United States
Areas of good performance: Breast cancer survival rates were highest in the U.S. Cervical cancer screening rates were very high. Waiting times for elective surgery were lowest. U.S. doctors were the most likely to ask for the patient's opinion and to discuss the emotional burden of illness. Opportunities for improvement: Asthma mortality rates are increasing in the United States while they are decreasing in the other countries. Transplant survival rates were relatively low. U.S. citizens reported trouble seeing doctors, particularly on nights and weekends and for same-day appointments. They also reported the most financial barriers to care and the most coordination-of-care problems.

Their conclusion was that "each country has at least one area of care where it could potentially learn from international experience".

There is no prima facie case why the US should not have a system of public healthcare in place. If it doesn't, it must be for reasons of cost, right?

We will look at costs in Part Two.
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Articles and websites referenced for this post:
1)American Healthcare Crisis: A Perfect Storm
2)The Problems With Socialized Health Care
3)Calpundit: Healthcare in America
4)First Report and Recommendations of the Commonwealth Fund's International Working Group on Quality Indicators
5)Primary Care and Health System Performance: Adults' Experiences in Five Countries
6)Addressing the crisis in US health care: moving beyond denial
7)US analyst awards NHS top marks
8)Crooked Timber: Health Costs
9)Scots NHS dentistry about to 'collapse'
10)New Upsurge In Uninsurance