American health care system

I was reading an article about german health care in the Economist and how it needed reform. Now I had been under the impression that german health care was one of the best health care systems in the world. In fact a lot of Norwegians went there some years ago when we still had a lot of problems with waiting lines for treatment. So I googled for "best health care system in the world" to find out how they ranked or rather where the best health care system is considered to be.

Unfortunately it seemed most articles I came across seemed to be about the US. Not about how it was the best but about dispelling the myth (in the words of the article) that it was the best.

Of course it was no great surprise to me that the US health care is not the best in the world. But there are a a number of things I could never quite grasp about it:

1. Since it is a system based on competition, how come it is so expensive? Normally when you have competition that leads to better resource utilization and lower prices. In advance my hunches was the price was driven up by the very high doctors salaries and their high premiums on insurance against being sued for maltreatment.


2. A lot of money is spent on health care in the US and the US is one of the leading countries in medical science. Then why do they have such poor ratings compared to other countries on almost every measure of health care quality?


3. Having lived in the US for a year, it seemed like the health care facilities were very good. In fact it looked better than the ones I encountered at home in Norway and the Netherlands. Facilities looked very modern and doctors seemed to know very well what they talked about. Things seemed a lot better organized at the hospitals and doctors offices than what I am used to.

However there was a number of things I noticed that kind of set the alarm clocks ringing.

1. I had to fill out a lot more paper work when I visited a physician than either in the Netherlands or Norway. In fact it was quite insane the amount of paperwork needed. Pages up on pages with not too relevant information.


2. For just a simple cold I got two types of pills. They seemed to prescribe to the idea that it is better to treat too much than too little. I got antibiotics to treat throat infection although no infection had been confirmed and my throat was not hurting. Apparently this was common practice.


3. I had one simple visit to the physician once about my shoulder. It was hurting when went jogging. The physician could not find anything wrong. He suggested that I'd just pop a painkiller when I went running. He said he did it himself frequently when doing physical exercise. I was quite shocked to hear this. No physician in Norway would ever say such a thing. From talking to other I seemed to get the idea reinforced that in the US, taking painkillers is a life style.
   
   But just as disturbing was the fact that for just this simple visit it took almost two months to get the bill reimbursed by the insurance company. The insurance company even called me to ask a number of questions about why I had went to the physician. They had even gotten somebody who talked Norwegian to call me. What a waste of resources I thought.


4. It was disturbing how often I meet normal working people who did not have any health insurance at all. They didn't seem to care much though.

This article show the poor rating the US has on many indicators (poor relative to the amount of money spent).

When googling I read this article among others that seemed to explain a lot of the things that I could not make sense of.

1. The health system is expensive for many reasons but the ones I found interesting are that: I it a system in which two parts are fighting each other. The hospitals want to get as much money as possible from insurance companies as possible and the insurance companies want to give as little money as possible. To this insurance companies create a maze of paper work for the hospitals to get through to hinder them. Thus the insurance companies have to hire a lot paper pushers to create this maze and the hospitals have to hire a lot of paper pushers to navigate this maze. All this is just wasted resource that creates no health care.


2. When it comes to great medical science and equipment in the US, it is apparently being misused. Cure is more profitable than prevention. The US has the worlds best instant care. If you are in an accident or have sudden hearth failure, cancer etc then there are few places that are better to be in than the US. They have super advance equipment and some of the best doctors in their field to treat you. This is were large amount of the resources go. Unfortunately little resource go to making people healthy so they don't need instant care. Poor people without health insurance only get care when something goes terribly wrong with them. It would have been much cheaper to treat them at an earlier stage.

The problem and the solution
I don't know what the solution to health care is. Socialized medicine has it obvious problems with waiting lines and under-treatment. But it is also obvious that a free market health care system does not work because health care does not follow the same rules as goods and services normally do. Since people do not buy the health services directly but get it through and insurance company the supply and demand principle in a free market which is supposed to drive prices down is basically broken.

The other thing that is a problem is that doctors are not like manufactured products. If one company makes a good car and another makes a bad car then the company that makes good cars will start selling more cars. Thus there is a drive to make better cars. However doctors are not produced like cars. The number of good and bad doctors is fairly constant. High demand for a good doctor doesn't make more of him/her. Thus demand outstrips supply.

What I am trying to say is that free-market evangelists should see reality in the eyes. As much as they like the principle of free market, it doesn't work for health care. Despite all its problems I think the european model is closest to the best working model.

The American health care system is so complicated that the American government actually spend more money per capita on health care than Canada ($1533 vs $2168 in 2001) despite the fact that the public health care in the US does not cover all citizens, just groups like seniors and veterans, while the canadian health care system covers everybody and cost less.

The future
I think it is interesting what is mentioned in the article about american health care and competitiveness.
If the US doesn't wake up to this reality, they are going to have a big problem. Health care prices increase so rapidly in the US now, that the US might become uncompetitive in the future, because companies have to pay such large amount of money for their workers health care.

But a more likely scenario I think is that companies are simply going to stop paying for the health care. Americans would have to pay for it themselves, leaving even more without health care and others with less disposable income.

In any regard it seems unlikely that the health care system in the US is going to change. The current system benefits big corporations and they have strong influence on politics through lobbying and campaign donations. E.g. strong patent laws and the little bargaining power that individual buyers have ensure that drug prices are extremely high in the US. Advocates of the current system could always argue that the US is the leading nation in medical research and that people are coming to them for treatment and not the other way around.