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Sunday, May 06, 2007

Voting For Your Health

Here's an excellent analysis of the differences between health systems in the US, Great Britain, Canada, France and Germany. I bring this up because the upcoming US national elections will probably be a catalyst for a change in the US healthcare system. That is, unless the Republicans manage to field a candidate who can win. It's still a long time until the elections, but every head-to-head contest right now shows the major Democratic candidates beating the major Republican candidates.

How does this affect business? I think one of the reasons why US businesses find it hard to compete with foreign businesses is they are simply overwhelmed by healthcare costs. A new Democratic president would probably try to change that.

Here is the Cliff's Notes version of the article with some of my comments…


Canada, whose system is the most costly of other countries, and it still manages to spend only 52 percent per capita on health care of what we do here in the US. Canada's is a single-payer, rather than a socialized, system. That means the government is the primary purchaser of services, but the providers themselves are private. (In a socialized system, the physicians, nurses, and so forth are employed by the government.) The virtue of both the single-payer and the socialized systems, as compared with a largely private system, is that the government can wield its market share to bargain down prices

The median wait time for elective surgeries in Canada: Slightly over four weeks. The median wait time for diagnostic tests: Three weeks. No wait time for emergency surgeries. In contrast, 32 percent of American patients waited more than a month for elective surgery, and 5 percent waited more than four months.


The government provides basic insurance for all citizens, albeit with relatively robust co-pays, and then encourages the population to also purchase supplementary insurance -- which 86 percent do, most of them through employers, with the poor being subsidized by the state. This allows for as high a level of care as an individual is willing to pay for, and may help explain why waiting lines are nearly unknown in France. The French can see any doctor or specialist they want, at any time they want, as many times as they want, no referrals or permissions needed. The French hospital system is similarly open.


Britain's health system is very good AND very cheap. Per capita spending in Great Britain hovers around 40 percent what it is in the United States, and outcomes aren't noticeably worse. Great Britain has a socialized system, wherein the government directly employs most of the providers.


The German system retains the insurance industry but ends its ability to profit by pricing out the sick and shifting financial risk onto individuals. The German system's insurers are 300 or so different "sickness funds" that act both as both payers and purchasers for their members' care. Each one has open enrollment. All, however, are heavily regulated, not for profit, and neither fully private nor publicly owned. The funds can't charge different prices based on age or health status, and they must continue covering members even when the members lose the job or status that got them into the fund in the first place. The equivalent would be if you could retain membership in your company's health-care plan after leaving the company.

The US Veterans Health Administration

First off, as a friend of mine who is a nurse practitioner for the VHA called to tell me, Walter Reed is run by the US Army, not the Veteran's Health Administration (VHA). The problems at Walter Reed are not found in VHA hospitals.

The VHA is a truly socialized medical system. The unquestioned leader in American health care is a government agency that employs 198,000 federal workers from five different unions, and nonetheless maintains short wait times and high consumer satisfaction. Eighty-three percent of VHA hospital patients say they are satisfied with their care, 69 percent report being seen within 20 minutes of scheduled appointments, and 93 percent see a specialist within 30 days. All records are kept electronically (no more filling out forms every time you go to a new office). Despite dealing with clientele that are on average older and sicker than most Americans, the VHA's spending per patient in 2004 was $540 less than the national average.


The goal of health care is to get everyone covered, at the lowest possible cost, with the highest possible quality. But in the United States, there is another element in the equation that mucks up the outcome: Our system seeks to get everyone covered, at the lowest possible cost, with the highest possible quality, while generating the maximum possible profits for insurance companies. Within that context, the trade-offs and outcomes all seem to benefit the last goal, and so we tolerate 45 million uninsured Americans, unbelievably high prices, and a fractured system that lacks the proper incentives to deliver high-quality care.

That's not to say that there's no room for profit within the American health-care system, but that it's time the discussion stopped focusing on how to preserve the interests of moneyed stakeholders and started asking how to deliver the best care, for the lowest cost, at the highest quality -- to every American. Such a system will probably still have private insurers (at least at the high end of care), pay enough to encourage pharmaceutical innovation, and allow for choice and competition and market pressures. But it will take as its guiding principle the health of the populace, rather than that of the providers. That, in the end, is what all the model health-care systems have in common. Except ours.

Again, you can read the whole of the article by CLICKING HERE.

My takeaway analysis: Our health care system is broken. If we can fix it after the election, we can make US businesses much more competitive. We'll also see a huge transfer of funds from health care company profits to other sectors of the economy (medical technology, for example). I think Health Insurance companies will be a "sell" the closer we get to the election.

Of course, that's only if the next US president has the drive to push real health care reform past the powerful US insurance lobby.

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