Does the US need health care reform?
With quite a bit of heat and very little light, the United States is involved in an amazing and sometimes amusing debate over health care reform. At least, it would be amusing if the stakes weren’t so high.
Before we get to the rhetoric, seems to me that the first question to ask is: Does the US need major health care reform? To answer that, I think we need to look at the current system in a few different ways.
Since my training is in economics, the first question I’ll ask is: Are Americans getting value from their health care system?
From a macro perspective, the value is quite poor. Health care spending as a percentage of GDP is extremely high in the US. According to the OECD factbook, the US spent 15.3% of GDP on health care, while the rest of the OECD averaged 8.7%. But cost is only one part of value. The higher spend might be justified if the outcomes are substantially better in the US than elsewhere. So what does the US get for all this spending?
On the one hand, individual outcomes in the US do seem to be quite good. Outstanding health care is common, though not universal, and if you have a serious health issue and good insurance (or deep pockets) the chances of getting some of the world’s best treatment are quite good. But individual outcomes are not the same as value, and even that argument has embedded within it some of the problems within the system.
Trying to answer the question with data suggests the outcomes are pretty ordinary. Life expectancy at birth in the US (2005) is 77.8 years, which is coincidentally the average of all other OECD countries. The US ranks 26th out of 37 OECD countries, behind Portugal but ahead of Slovenia. So if we measure outcomes in terms of life expectancy, the US pays twice as much for the same result as other countries. I have seen a couple of other ways of measuring outcomes, all of which suggest it is not good value.
Another question worth asking is: Is the current system fair? The quest for fairness seems to be innate in humans, and there are very few people who legitimately believe an unfair system is better than a fair one. On this measure, the US system would have to get very low marks. The cost and quality of care varies dramatically depending upon what insurance you have, a substantial percentage of the population has no insurance, and the self employed or contract workers often can only afford minimal coverage.
The ultimate cost to Americans is high. The majority of individual bankruptcies involve unpaid medical bills. The cost to self insure is greater than the average mortgage. The cost of medical care continues to grow.
Is there anyone who genuinely believes the US health care system does not need reform?
