Health Care - Defining the Problems

Part I

There is a great debate going on about the state of health care in this country. There are few who would agree that our health care system and how we cover our citizens is just fine as it is. Instead, it seems the debate is trying to figure out what’s broken and what needs fixing.

Often, we hear arguments against universal health care, which is offered by most of the developed world, versus our fee for service – private health care insurance model. Many believe that our model produces the best health care system in the world. However, the data doesn’t support that claim.

Let’s start with some facts so we can try to identify the key issues. According to the United Nations World Population Prospects 2005-2010 report, the life expectancy and infant mortality rankings of the U.S. when compared to other key nations that are often used to measure our health care system are quite illuminating.

Life Expectancy - Infant Mortality
1. Japan - 3. Japan
5. Australia - 12. France
10. France - 14. Germany
11. Canada - 17. Australia
22. United Kingdom - 22. United Kingdom
23. Germany - 23. Canada
38. United States - 33. United States

Others notables ahead of us:
30. Costa Rica - 10. South Korea
33. United Arab Emirates - 12. Slovenia
34. South Korea - 28. Cuba
37. Cuba

However, according to the Federal Interagency Forum on Aging-Related Statistics when we in the U.S. reach the age of 65, we have an above average life expectancy and rank 9th on a list of 27 countries. I pulled the same 27 countries from a World Health Organization (WHO) study which covers all ages and on that list we rank 21st out of 27. Could this improvement from 21st to 9th be because at 65 we are all universally covered by the government run health program known as Medicare?

However, even when we reach universal coverage status, we still find Japan (#1), and France (#3) ahead of us in the 65+ life expectancy rankings. Even so, this report shows the benefits of universal coverage. When everyone is covered we moved from 21st to 9th place. We even surpassed the UK (#14) and Germany (#15) in the 65+ rankings. (Canada and Australia were not in this report, so I don’t know how we did against them).

What this suggests is that universal coverage, 100% access to health care, is one of the keys to improving life expectancy and infant mortality.

We often hear about private enterprise and the free market as the most efficient method of administering health care. Governments are deemed bureaucratic and inefficient at running any program. Yet according to a report by the World Health Organization (WHO), the U.S. has the worst cost versus care provided in the developed world. We spend more per capita on health care than anyone in the world and yet we rank 37th in health care rankings.

The following table compares where the U.S. ranks in health care expense versus health care quality against other key nations.

Country - Health Expense Per Capita - Health Care Ranking
United States - 1 - 37
Germany - 3 - 25
France - 4 - 1
Canada - 10 - 30
Italy - 11 - 2
Japan - 13 - 10
UK - 26 - 18
Cyprus - 39 - 24
Chile - 44 - 33
Costa Rica - 50 - 36

All of these countries have government run health care programs and they are delivering better health outcomes for a lot less money. Even Cuba, which has a spending rank of 118th, delivers the 39th best health care system. This is only slightly behind the U.S. system, and as noted above Cuba outperforms the U.S. in life expectancy and infant mortality.

It’s clear to me that the lack of universal coverage lowers the ranking of our health care system. The high cost of premiums and the ability of insurance companies to deny coverage for any reason, but especially for pre-existing conditions are the primary reasons for our inability to achieve universal coverage. Thus, it appears that the insurance companies and private enterprise are costing us far more money than we should be paying and it is affecting our ability to deliver the best health care possible.

Compare the table below from data produced by the Organization for Economic Co-operation and Development (OECD) from its 2003 study. (The numbers in parentheses after the country name are the WHO world health rankings).

Per Capita Expenditures Share as %
Country (rank) - Per Capita Expenditures - % Share of GDP
United States (37) - $5,711 - 15.2%
Australia (32) - $2,886 - 9.2%
Canada (30) - $2,998 - 9.9%
France (1) - $3,048 - 10.4%
Germany (25) - $2,083 - 10.8%
Italy (2) - $2,314 - 8.4%
Japan (10) - $2,249 - 8.0%
UK (18) - $2,317 - 7.8%

The average of the seven countries listed after the U.S. is $2,685 per capita and 9.2% as a share of GDP. The U.S. is spending more than double that average per capita and 65% more as a percentage of our GDP for a health care system that ranks 37th in the world. This is outrageous and must be changed. I will further this discussion in my next posting and offer my solutions.