Monday, January 04, 2010

The U.S. Is Special

But sometimes in ways which it might not wish to be. Noblejoanie posted two interesting graphs on Daily Kos, having to do with health care spending and various outcome measures (I borrowed one of them above).

She also links to a blog post which argued that the higher costs in the U.S. are due to fee-for-service in medical care, the system which lets providers earn more the more individual bits they can sell to the consumers:

Why the high cost? The U.S. has a fee-for-service system—paying medical providers piecemeal for appointments, surgery, and the like. That can lead to unneeded treatment that doesn't reliably improve a patient's health. Says Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health who studies health insurance worldwide, "More care does not necessarily mean better care."

Except that fee-for-service is no longer as common in the U.S. as it once was, and it's not the only reason why the U.S. health care costs are higher than those in comparable countries while not appearing to provide better health outcomes.

There is a whole list of such reasons, including higher research costs in the U.S. than in many comparable countries, higher prices for pharmaceuticals, life-style differences (meaning higher murder and car accident deaths here) and differences in the population to be served (such as greater income inequality in the U.S. and a greater lack of access in the poorer areas).

Listing them like that is very misleading, because it tends to make all the explanations look equally important (which they are not) and it tends to make people pick the explanation they like to account for the difference. In addition to that, the list does not include the most important difference between the U.S. and the comparison countries which is the much larger share markets have here. For reasons I've discussed elsewhere, health care markets tend to produce high prices because that's the nature of the beast.