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The contradictions at ObamaCare’s heart
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At the heart of the economic case for U.S. healthcare reform is a simple comparison: Whereas America spends 16 percent of GDP on healthcare, the average across OECD countries was 8.9 percent, as of 2007.
So what do these frugal healthcare systems look like from the ground? T.R. Reid tries to find out in his book “The Healing of America: A Global Quest for Better, Cheaper and Fairer Health Care.”
In this health-policy travelogue, Reid visits a number of nations and interacts with their healthcare systems as he seeks help for a bum shoulder.
The main commonality is far from revelatory: lots more government. In one country, government determines the prices for medical treatment, in another it’s running the hospitals and employing the doctors.
So, too, would various Democratic plans for U.S. healthcare reform increase government intervention. Greater subsidies for the purchase of private insurance, new regulations on insurance companies, and, most likely, some sort of new government-run health plan.
But when one imagines what a post-reform American healthcare system might look like, there are two notable aspects in which it would still differ greatly from other OECD nations.
First, American doctors may pay as much as a hundred times more for malpractice insurance than their foreign counterparts, and will likely be sued several times during a career. Democratic healthcare reform would mostly leave this system in place.
But there is reason to believe that medical-liability reform could produce big cost savings. The Congressional Budget Office pegs the savings in overall healthcare spending at $110 billion over 10 years.
Some private estimates are far higher. A new study by the healthcare analytics unit of Thomson Reuters finds that defensive medicine — such as overuse of antibiotics and lab tests — by malpractice-jittery doctors costs the United States as much as $300 billion a year.
Another important difference is in what healthcare providers are paid. Reid’s book is full of examples of spartan medical facilities and doctors compensated more like high-end New York Times reporters than low-end Manhattan hedge fund managers.
Yet seeking to appease the doctors lobby, Democrats recently tried and failed to shield physicians from $250 billion in Medicare reimbursement cuts over the next decade. Expect them to try again.
Can ObamaCare “bend the curve” of rising healthcare costs? Not if it attempts to pay for reform more through higher taxes than by cutting compensation for doctors and trial attorneys.
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What a shallow column. Did you even read the book? The only thing you had to say about it was that there was “more government?” Care to say whether they performed better or worse, if so, in what way? A sentence for god sakes. The government runs all kinds of institutions, some work well and others don’t.
If you advocate that we get rid of malpractice lawsuits, are you proposing alternative ways of keeping physicians accountable?
You want tort reform? Just make doctors federal employees (GS-13). When is the last time you saw someone from the federal government get personally sued for executing their duties… and lose. Think Waco. Think Katrina. Drop malpractice insurance altogether. Back doctors with the FDIC.
Probably the most insightful article Mr Pethokoukis has ever written. So many people talk about health care in other countries, but they don’t have the facts or the other factors that come in to the equation. I am an American living in Europe with socialized medicine. Everyone hates it, including the poor who have to use it. We have 23% tax, but you don’t hear the crying leftist lib Obamaphiles wanted that. There is also tougher tort laws, which means you can’t just sue someone b/c of your own lack of common sense, and you have to pay all court costs up front. We also have forced castration for pedophiles and rapists. OK now let’s put that in the bill with Nobama care.
The Baby-Boomers have left my generation nothing but decline…and Society wonders why all the youth live to hate and disrupt.
The baby-boomers want the youth to kiss their asses….yet, when once in the same boat, the Baby-Boomers were the most infamous generation on record for disrespecting the accepted Authority and their elder generations.
The Baby-Boomers totally suck and it will only get worse. This mess America is living in wasn’t created yesterday…but has been encroaching upon our Culture from a time before my generation’s birth….
and just in time for the old hippies to start making their escape via old age and death, the mess has finally come to fruition….thanks a freakin’ million.
Another shallow excuse for an article in less than a week.
Congratulations…
Why all the preoccupation – worry about higher taxes James?
The OECD countries you reference all have lower taxes (aggregate) and higher quality heath care. So what gives?
I agree, a pretty lame column…
16% of GDP, headed to 20% is a whole lot of money. While we have a litigious society and benefit from having 70% of the world’s lawyers, the numbers you present do not add up to the difference between 8-10% of GDP and 16% of GDP.
I have to take eye medication — I get it in Europe for $15 for a 2 month supply. In the US it costs $70. Exact same stuff! What do doctors make in Europe as compared to the US? While not as egregious as bankster pay, it is still way out of whack compared to other professions requiring similar training and expertise. People can burp in the US and get a CT scan at the imaging clinic co-owned by their physician.
I don’t trust Obama and his democratic cohorts to reform health care… and columns such as this only serve to mis-inform the public and only serve to muddy the waters.
Get rid of private insurance entirely — single payer now.
Adopting the British tort system in which the loser pays all would instantly reduce the cost of health car in the US by hundreds of billions of dollars. They don’t have significantly more malpractice, just fewer lawsuits.
What a shallow and naive comment by “Just another person”. It sounds like you didn’t read the whole article. The biggest part of the problem is the waste, innefficiency, needless overtesting and overprescribing of antibiotics and over-the-top lawsuits. Much of the waste comes from outdated paper medical forms and physicians not willing to share patient medical records and the result is tons of copying errors, and doctors performing extra tests which aren’t necessary just to cover themselves from some person looking to sue and get rich. Another great way to solve the tort issue is to have the person filing the lawsuit pre-pay all court costs, and put a cap on the settlements. Socialized medicine is terrible and means more taxes and more government control and lower standard of care. When has the government ever run or controlled anything and it turned out to be efficient?
Unless costs are controlled the so called health care reforms will end up costing us all even more than what we have to pay now. This article is right on target. We don’t need bigger government telling us what to do. We need to take money OUT of the system to reduce costs.
Where did that number of $300 Billion for malpractice/tort related costs come from. I’ve heard that major tort reform would save 2% of costs, or at the high end – $40 Billion.
Cutting compensation and wages for doctors is just going to drive good people away from the field. Furthermore, its unwarranted. It’s not an easy job; in comparison to investment banking, it’s a pretty terrible job. In addition to a four year undergraduate job, there is four years of medical school, and 3-8 years of residency (depending on non-surgical vs surgical). An average physician begins “life” at 8-10 years later than a college graduate, say 30 years old. Up to finishing residency, a doctor has been compensated minimally and averaged an 80 hour work week with minimal time off. Now, the person is eligible to make the “big bucks” as a doctor (which is not immediate, contrary to popular belief). Now this person can use his “high-end NY Times salary” to begin to pay off his $150,000-200,000 in student loans (plus newer debt, malpractice insurance, etc), and continue the rest of his life working 60 hour work weeks over odd hours. Cutting compensation to doctors is not going to fix healthcare. Regulating frivolous lawsuits that drive up malpractice might help (and then you could cut back on wages some). Secondly, expand infrastructure. Basically, there are not enough doctors and nurses to treat all the people that are to be included in goverment healthcare- it will bog down the system and cost even more money. Start government programs that draw graduates into healthcare (nurses, technicains, etc). Lastly, overhaul the current system for producing doctors. Japan has a great system for producing doctors, and they are skilled doctors (in less time, so less money). We can recruit doctors from other countries as well. We can’t drastically increase demand (healthcare for non-insured people) without increasing supply (nurses, doctors, hospitals). Healthcare reform isn’t something that can be done overnight, nor in a presidential term. It has to be slow and calculated, otherwise it won’t work.
I agree that this is a pretty shallow article. Tort reform, if done without removing our ability to be compensated for real losses might help. What would help a lot more is to pay primary care physicians more and specialists less and to pay a lump sum for care to a healthcare group rather than paying per procedure. There would be a lot fewer stupid tests run and, I bet, we would get good electronic medical records real fast.
16% for healthcare per year? Jesus, I spend waaay more on food.
Ok, altruists.. (democrats and republicans, alike), why don’t we make food free??
And clothes and shelter??
Of course government will provide us with cheaper health-care.. at point of a gun!
As a tourist while in the US I found myself stung by a bee and dying from anaphylaxis (extreme allergic reaction). The US medical system saved my life… all credit to it… and they charged me $450US to do it. Some years later my family hosted a Japanese student here in Australia who was stung by a bee.. and she found herself dying as well. The cost to save her life (which she had to pay since she was a tourist) was $50AUS (about $40US). This was explained to me as being the ‘real world’ cost of her treatment, which is to say neither subsidized nor at profit. I was present at both treatments and they were identical, down to blood oxygen monitoring, adrenaline shot and observation.
Currently, here in Australia, we are embroiled in the issue of whether to significantly raise personal income tax to extend our public health system into dental care in 2010. But you wont find much outrage being generated by the general public over the proposal. All it requires is the ability to recognize it as a deal that gives you more than it takes away and a certain trust in your government that, being freely elected, should be inherently conveyed.
By all means argue to slap the hands of those pesky trial lawyers and huge victim payouts… but it does not magic away the fury the average US citizen feels in their heart when confronted with even the idea of having their taxes raised… nor does it do away with the undercurrent of the US public’s dislike for big government. As your piece said, public health requires (at its core) large government involvement (just as it does in education). If the will of the people is against that.. then how do they triumph?
Who are these Reuters “columnists”? Every time I turn around here’s another conservative hack with a warped opinion. Why are these people given air time? This whole thing Reuters has done in starting these blogs and BS commentary by these morons is 100% negative. Just stick to the news and responsible journalism. ENOUGH WITH THE TALK RADIO ATMOSPHERE!
Even Reuters columnist can’t grasp the difference of a government insurance option as opposed to government run healthcare. It’s like your university system … you have state universities and private universities. Consumers can choose.
Doctors need to be held accountable for their mistakes… If they were Gov employees, nobody would be able to sue them for their mistakes, and people wouldn’t be able to receive compensation for harmful/debilitating procedures. BUT, tort reform is very much needed to keep people from suing doctors for $30 Million for an amputated foot.
“Just another” makes some good points, but the author got the main point right: Tort Reform! Lawyers are killing this country in every way, shape, and form, not just healthcare! Rather than giving the “victims” a profit motive, set reasonable limits for damages, and hold the doctors responsible with jail time and/or fines for REAL cases gross malpractice.
THE HIGH COSTS OF HEALTHCARE IN THIS COUNTRY ARE A FIRST AND FORMOST THE FAULT OF THE INSURANCE INDUSTRY THEY CHERRY PICK THEIR INSURED AND THOSE WHO CANT AFFORD TO PAY OR HAVE PRE-EXISTING CONDITIONS ARE LEFT BEHIND TO BECOME WARDS OF THE STATE. IF INSURANCE IS MANDITORY THE COST OF INSURING THE UN OR UNDER INSURED WOULD BE EVENLY DIVIDED AMONG THE ENTIRE INSURED BASE. THIS WILL LEVEL THE PLAYING FIELD LOWER OVERALL COSTS, AND ALLOW ALL THE INSURERS TO WRITE BASIC HEALTH CARE INSURANCE. FOR THOSE WHO FEEL THEIR STATION IN LIFE REQUIRES THAT THEIR POLICY BE A STEP ABOVE THE COMMON MAN THEY SHOULD BE ABLE TO BUY SUPLIMENTARY POLICIES TO ADD ALL THE BELLS AND WHISTLES THEY WANT AT THEIR OWN EXPENCE. THE RATES FOR PAYMENT OF SERVICES FOR BASIC HEALTH CARE SHOULD BE SET BY THE STATES IN WHICH THE SERVICE WAS RENDERED AS THIS WOULD FOSTER COMPETION FOR SERVICES THUS REDUCING THE OVERALL COST AND ELIMINATE THE OVERCHARGING WHICH IS COMMON. HMO’S SHOULD BE ABOLISHED THEY ARE A LICENCE TO STEAL FROM THE INSURERS AND THE INSURED,BECAUSE THEY DONT ALLOW PATIENTS TO SEEK HEALTHCARE FROM ANY OTHER DOCTOR WHO IS NOT IN THEIR CONTROL AND THEY DO CONTROL. LAWYERS WELL THEIR LAWYERS THEY MAKE MONEY ON OUR PAIN AND THEN ROB US AFTER THE SETTLEMENT. WHAT WE HAVE FOR HEALTHCARE NOW DOSEN’T WORK,CHANGE IT NOW OR THE SYSTEM WILL ROB US ALL OF OUR WEALTH AND HEALTH. CHARLES BOWEN
OK, the Reuters article you cited stated $800 billion in wasteful medical spending every year, but malpractice will save $11B a year ($110 over 10 years)? Wow, you cleared the 1.5% hurdle. If doctors are so poorly paid, suffering from insurance woes, playing defensive medicine and ‘will likely be sued’ (is that an actuarial term?) why is it so hard to get into med school? Why do I see posh private clinics and drug stores on every corner of suburbia, not the ‘spartan medical facilities’ that you describe? This much deep thought already has a home on Fox.
The government already pays for 46% of healthcare. They are the problem….There are 6 specialist to each primary doctor in the US. Completely reversed in Europe. Our system is broken. Not the financing
Wow a 400 word essay, I had to write more in 4th grade! Wow they paid you to travel and write this article- hope you had a nice vacation, b/c I didn’t glean too much insight from your article! Why not report on systems like Switzerland which have kept private insurances and at the same time subsidize all inhabitants. Bottom line is that we expect after a year + of health care debate an article that is a little more in depth than just ho-hum government is taking over.
How can America ever compete with the world market with so much business overhead with lawsuit protection costs.
The only ones that gain are the parasitic lawyers. Not all are parasitic – however a huge percentage are. Where is the vaccine for this overhead leach system sucking our competitive abilities. add that to environmental overboard, regulatory compliance, etc etc and free trade is not even close to being fair.
It seems to me that the points you make are valid: US doctors, etc, are compensated far more richly than in other nations, yet seem to see themselves as righteously aggrieved. The numbers of physicians are inadequate, which is the ongoing fruit of the AMA’s campaigns, begun in the 1930s, to constrain numbers – in the name of ‘quality’, of course.
The malpractice complaint of the physicians seems well grounded.
Insurance companies are uniquely exempted from anti-trust regulation, and whine that they’re forced to pander to Wall Street while awarding their executives with massive salary and bonuses.
Administration costs twice (as a percentage) of what it does anywhere else.
In other words, the pandemic failures of the US system are reflective of the society as a whole and its political culture. As are the failings in education, for another example.
Essentially, the US simply can’t cut it by any standards except its own constantly lowering standards.
Are there pools of excellence? Of course.
Is the thing as a whole, including the current debate, yet another interminable soap opera of failure, paralysis, conflicts of interest, and sheer, simple dysfunctionality?
Yup.
Just another article that places profit ahead of real human concerns.
This is sick. In our country we treat medical care like a commodity that can be bought and sold. Good health is a basic human right. It’s not something that comes second to how much it will cost.
If your child were dieing would you give a good god damn about how much it cost to save them? All debate revolves around money. Our money has no real value. It’s simply a tool to facilitate the exchange of resources (work).
Money itself was NEVER intended to be the deciding factor in whether a person lives or dies. Or whether someone gets treated for a treatable condition or not.
All healers want to go about the work of healing. But profiteers make this impossible. Our “health care system” has been hijacked by merchants. Your suffering is merely an opportunity to profit. If you were made well again, then there would be no profit to be made from you. The the pharmaceuticals love it when you’re sick.
Insurance on the other hand ideally wants people that never get sick. This way they can collect premiums and not have to worry about paying out claims. Insurance is only needed because our health care system gouges patients.
You get lab work you don’t need or have already had done. Your records don’t transfer from place to place, etc. There’s a whole host of problems. But all of them revolve around extracting money at the expense of the patient or the healer or both. But it’s always about money.
Those against a single payer system or health care reform of any kind are only interested in extracting profit from the sick and suffering. Those who are not in the “business” of health care and are against reform are simply uninformed or misinformed about what the benefit is to them as a citizen.
This debate is supposed to be about health care. But all it’s ever been is about money. We love it. We worship it. And we sacrifice the future of our younger generations by cheapening the human condition into nothing more than a business opportunity.
Arc Tenebrous said it best, “Is the thing as a whole, including the current debate, yet another interminable soap opera of failure, paralysis, conflicts of interest, and sheer, simple dysfunctionality?
Yup.”
We are not animals and we should not be content to live as such.
arc tenebrous , I totally concur with you that one can easily posit that AMA is to blame for the physician shortage,- and also think too that it was for keeping salaries high. But in someways right now our pool of physicians are and will suffer from practice contracture- what do I mean for this billable procedures are being less paid for to the physicians and all costs are eaten up by the infrastructure of a hospital, billing what have you. If as you imply that physicians need to be less compensated believe me there will be less students lining up to be 120k$ in debt to be educated in the US to be taught and licensed to practice medicine. We will simply import the students from other countries (where medical school is FREE) -> as is currently the situation for GP, INTL medicine and the other non-uber high paid practices in medicine.
Cheers for the rest of the comments re: administration costs, insurance comments.
Not much of value in this article. Clearly partisan and throws out a couple of zingers without suppling much substance. If you can really believe (from other healthcare news this week) that there is $800B per year in waste in healthcare, should be a priority. Haven’t seen any reports on that being a serious effort. If true and you could eliminate just 50% of the waste would cut healthcare costs in this country by 25%. I’m skeptical of these attention grabbing headlines.
The healthcare solution is as follows: 1) Federal and state militia groups should surround all healthcare facilities in the nation and force them to provide care without charge to everyone who asks for it, or be shot on the spot. 2) All health insurance companies and policies should hereby be abolished, and the insurance CEOs shot on the spot. 3) All pharmaceutical companies should be forced to provide citizens with any drug they ask for with or without a prescription and free of charge, or be shot on the spot. 4) Any healthcare provider who causes a patient’s death whether by accident, neglect, or willful murder will be shot on the spot. Do all these things and I guarantee meaningful reform.
What a complete waste of a hyperlink.
Mufaso ~
I think it’s important to have proper respect for due process and tradition . . .
how do you feel about guillotines?
Having worked in the U.S. healthcare system for twenty years before immigrating to New Zealand I feel qualified to compare the philosophic and practical differences between the two. First, there are no malpractice suits allowed in New Zealand with medical mistakes covered by a national no fault accident insurance plan. An incompetent practitioner here is not going to be sued but he/she is very likely to be investigated by the Medical Tribunal and be censured or even have their practicing certificate suspended or revoked. In the U.S. the various state medical boards practically never investigate or discipline incompetent practitioners. The argument about excess exams being done is inaccurate, doctors order far too many tests in New Zealand as well but the motivation is a fear of making a mistake so removing malpractice suits from the equation will not necessarily reduce the number of tests done. In my experience the real source of the failure of the U.S. healthcare system is best expressed in the famous fifty dollar aspirin you get at the hospital. When you treat people not as patients but as sources of revenue then honest healthcare goes out the window. Many times I saw old folks who were dying admitted to the hospital only to have tens of thousands of dollars in medical procedures performed on them as fast as possible before they died leaving their estate destitute. This happened to my mother. The number one cause of personal bankruptcy in the U.S. is medical costs whereas here it is unheard of. This is the reality you face if you have the misfortune to be a patient in an American hospital. Life expectancy in the U.S. is one of the worst in the OECD. The top ten countries in the OECD for life expectancy all have some kind of socialized medicine. In the U.S. health care providers are not in the business of maximizing your health, they are in the business of maximizing their profit.
IF CUTTING THE COMPENSATION AND WAGES OF DOCTORS DRIVES THEM AWAY FROM MEDICINE PERHAPS THEY SHOULD GO, AND MAKE ROOM FOR A DOCTOR WHO IS’NT IN IT FOR THE MONEY. IF MONEY IS ALL THAT KEEPS THEM THERE THEY DONT BELONG THERE. IF A DOCTOR TOLD ME THAT HE WAS IN THE MEDICAL PROFESSION JUST FOR THE MONEY HE WOULD’NT BE MY DOCTOR. CHARLES BOWEN