Even better, our inefficiency in providing healthcare is oft cited as proof of our economic superiority, since the added(wasted) healthcare cost is a substantial part of our higher GDP.

A remarkeable, and oft overlooked issue, is that having insurance does not equate to being financially covered. The insurance middle men have sliced and diced and excluded critical and common injuries to the point that people are likely to end up personally liable for 90 percent of the cost of serious accidents, even though they have the best policy these slime wads offer. For example, get in a car accident and get your teeth and facial bones smashed beyond recognition, you are likely not covered because dental and cosmetic procedures are specifically excluded. (my personal experience with a policy written by United Healthcare)

The first line of profit maximization by the middle man insurance industry is automatically deny covered claims, deny receipt of claims paper work, maximize paperwork from doctor's and the insured for claims, force people into claim review and wait for months before several layers of review committee turns them down, switch case managers several times, have new case managers refuse claims or confuse the paperwork trail.....

You get the picture.

One of the single biggest problems with health care in America is the profit oriented, middle man, managed care insurance carriers.

If Congress wanted to do anything they could immediately legislate the minimum coverage that must be offered, limit the exclusions, and open up the national government employee pool to all Americans and private companies with an independent congressional board to negotiate with the so called insurance carriers.

Among the biggest tradgedies of the American health care system is the scum sucking insurance cartel that Rudy Gulliani represents.

Dean,

Another incredibly significant factor that is always overlooked by the press is this: it is nearly impossible for anyone transitioning off a group plan who has any type of medical condition to obtain a private policy. Here in California, the underwriting process has become so selective as to exclude people who have been diagnosed with everything from mild hypertension to diaper rash. (That's right, my Blue Cross agent had clients who were denied covered due to a prior claim for diaper rash.)

Most people with group coverage are blissfully unaware of this reality. If their employer decides to drop its health plan, they had better be in perfect health, or they face joining the ranks of the uninsured (or obtaining coverage through a state high risk plan with exorbitant premiums and minimal coverage).

Of course, thanks to such "selective" underwriting, the privatized Blue Cross of CA is able to spend just 51% of collected premiums on actual health care. A staggering 49% of premiums go to agents, operating costs, and pure profit. What was the overhead for Medicare again? 2%?

The health care crisis is certainly worse than is being reported. At the rate things are deteriorating, something has to give and soon.

Small correction: The number of uninsured is 47 million, not 45 million.

Thanks Rex,

you're right, the number is 47 million. I should also report that Greg Mankiw had this number right in his column, the error was mine.

One of my pet peeves is the everlasting conflation of "health care" with health INSURANCE. Sure the two are related, but it's important to note, once in a while, that one is about medicine, the other is about money. What we have in this country is a lousy health INSURANCE system.

Maybe I am atypical (and lucky), but my own "health care spending" is almost entirely my health insurance premiums. My consumption of health CARE is (again, thankfully) almost zero. I am not complaining, mind you: I am no more interested in making a profit on my health insurance than on my homeowner policy, or my collision coverage. I simply wonder how my personal statistics figure into the national numbers. As a technical matter, I hope Dean can someday elaborate on how America's "health-care costs" are defined. Is it by adding up every American's SPENDING, or is it by adding up every health care provider's INCOME? I can well imagine that those two aggregate numbers are substantially different. Am I wrong?

-- TP

Dean

You are leaving out a significant factor - maybe the most significant factor - in the lower life expectancies of Americans vs. other countries. And that isthe fact that we don't take care of ourselves. I wonde how many of the commenters above are among the 33% of American adults who are obese? One adullt in three in the USA are obese - more then 30 lbs over their proper weight.

Just to give full disclosure, I am both a supplier of health insurance in my role as an employee benefits consultant, and a consumer (big time) as a Sloan Kettering patient.

Here's a good posting (if I do say so myself) that touches on the issue, on my weblog.
http://tomfaranda.typepad.com/folly/2007/11/cancer-politics.html

People - don't put up with it! Immigrate! Get one of those EU work permits and get out of Dodge.

"People - don't put up with it! Immigrate! Get one of those EU work permits and get out of Dodge."
Or maybe the overwhelming majority of citizens, who want Universal Healthcare should petition the Government to act for the vast majority of the population and not in the sole interest of the business elite.
Just a thought Mr. dissent.

Re Tom's comment: Obesity is a spreading pandemic that goes hand in hand with our style of eating, vastly encouraged by the companies producing reduced nutrition for higher calories, through advertising. On the one hand, McDonald's "I'm loving it", on the other hand school-marmish people "saying eat your carrots". no, it isn't that Americans take "less care of themselves" than Europeans (although they do walk less and watch a lot more TV) but it is that our commercial culture is turning food into a commodity, and we all suffer from this. As the food commodification spreads, so do our diseases.

As someone who used to manage employee benefits, I've had vast experience with employees who decided that COBRA (the program that allows people to keep their health insurance when leaving a job for 18-36 months) cost too much and sought insurance in the private market. It's not just older people who are denied coverage. Anyone who has ever had anything will be denied. By the time you're 30, you've had some minor medical problem that will prevent you from obtaining insurance in the private market. Period.

Carol,

"it isn't that Americans take "less care of themselves" than Europeans (although they do walk less and watch a lot more TV) but it is that our commercial culture is turning food into a commodity".

Obviously, based on your own comments, we do "take less care of ourselves."

Peoninchief,

It depends on what state you live in, whether you can get guaranteed issue health insurance. in NY and NJ, two states I work in, you can; in CT. you can't.

Correction to the above; you can get health insurance on a guaranteed issue basis in CT; they have the equivalent of an "assigned risk" pool, but there are some limitations on the coverage.

tom, Europeans drink more, smoke more, and have more sex. You're going to have to try harder than that. Of course there are factors besides health care that affect life expectancy. But that doesn't mean those factors necessarily must break down in a manner that conveniently fudge the numbers in America's direction.

But you're right. American eating habits are out of wack. A little sensible regulation would go a long way, I agree.

Also, reading your linked article - I've lost the last shred of respect I had for David Gratzer, who has proven himself to be a mindless ideologue. Given his background, I doubt he's unaware of the following numbers, of which he quotes selectively in his article:

Britain: 26 out of 100,000 die of prostate cancer annually. 57 out of 100,000 are diagnosed with it.

France: 27 out of 100,000 die of prostate cancer annually. 55 out of 100,000 are diagnosed.

Germany: 28 out of 100,000 die of prostate cancer annually. 63 out of 100,000 are diagnosed.

Canada: 27 out of 100,000 die of prostate cancer annually. 110 out of 100,000 are diagnosed.

Australia: 28 out of 100,000, of 79 out of 100,000.

US: 26 out of 100,000, of 136 out of 100,000.

At the very least, you recognized Ezra Klein's insights on the topic - gloss over it quickly, though you did. Now's the time to apply some critical thinking. What is the most parsimonious explanation for what's going on?

People forget how thin the world was when I was Prime Minister in the late 1800s. We were thinner than Koreans are today!

America's obesity rate is 30% while Europe is just 10%

A huge difference that Dean Baker says is trivial.

Dean,

Greg Mankiw responds:

"Q: There has been a lot of blogosphere commentary on your piece. Are you going to respond to it?

A: No. Life is too short."

Is he ducking this debate? I've never heard someone claim "I'm too busy" as an excuse for not engaging in a legitimate debate that they started. Is this a cop-out?

Nobody has said much about this interesting bit at the end of Mankiw's piece:

"Fortunately, our incomes are growing, and it makes sense to spend this growing prosperity on better health. The rationality of this phenomenon is stressed in a recent article by the economists Charles I. Jones of the University of California, Berkeley, and Robert E. Hall of Stanford. They ask, “As we grow older and richer, which is more valuable: a third car, yet another television, more clothing — or an extra year of life?”

Mr. Hall and Mr. Jones forecast that the share of income devoted to health care will top 30 percent by 2050. But in their model, this is not a problem: It is the modern form of progress."

The implication -- spelled out by Hall, Mankiw et al. is that health care debate is really about income distribution.

I am rather dubious about his numbers over-all. It wasn't just the census bureau that pegged the number of uninsured, but there have been several studies all in the same ball park.

According to the detailed Montana study, 90% of those without insurance say that it is because they can't afford it. Only 13% of those unisured make over 200% of the Federal Poverty rate. The average premium is $265, or 21% of their income (with a $3000 deductible).

Employers themselves are quick to point out that their employees do not take participate in employer plans because of the high premiums and deductibles.

Also, it is not just child mortality and life expectancy that the U.S. lags. On almost every measure the U.S. is below the OECD average.

Actually, the U.S. does pretty well relative to the rest of the OECD in life expectancy at age 65. Of course for people of age 65 we have Medicare or "socialized medicine" as it is known in some circles.

Mr. Hall and Mr. Jones forecast that the share of income devoted to health care will top 30 percent by 2050. But in their model, this is not a problem: It is the modern form of progress."

There is no good reason to believe health care will be anything near 30 percent of GDP, or even 15 percent. Technological improvements will soon start to drive this ratio down. Neither the study authors nor Mankiw (nor Krugman nor Baker) understands what is being developed in medicine.

Actually, the U.S. does pretty well relative to the rest of the OECD in life expectancy at age 65. Of course for people of age 65 we have Medicare or "socialized medicine" as it is known in some circles.--Dean Baker

Our Medicare is a strange sort of socialized medicine. It's socialized medicine which because of deductibles and co-payments breaks down recipients of health care into those who can afford to pay and receive better health care and those who can't who end up self- rationing what health care they receive by cost.

These are the people who can't solve their health care problems by getting rid of the third car in the garage because they don't own a car. These are the people who live off of their social security or their social security and a small pension. These are probably 40% of all social security recipients.

It's reasonable to believe that as deductibles and co-payments rise our so called socialized medicine will end up with increasing deaths of those over 65. Many of those increasing deaths will be a result of medical care not received because of self rationing. Self-rationing that took place not because of bad choices but because there were no other choices remaining.

Life expectancy seems to be an inadequate unit to measure health care outcomes with. It is going to be impacted in nontrivial ways by differences in cultural and behavioral norms.

Is there an alternative unit of measurement for health care outcomes that manages to isolate the provision of health care itself that is free from any cultural baggage?

I would not dismiss life expectancy. It is a pretty damn good start. Furthermore, we were fatter and lazier than Europeans 30 years ago too, but the gaps in life expectancies mostly went in our favor back then.

Per Wikipedia, Cuba (with an average annual income of $2,000) has a better overall life expectancy than the US. This is partly due to more exercise, thanks to the petroleum shortage after the collapse of the USSR, and possibly to the drop in caloric intake during the Special Period. It's also due to their health care system. This is maybe the optimal situation: less food, more exercise and easy access to health care.

Here's the link to the Health Affairs study "Toward Higher-Performance Health Systems: Adults’ Health Care Experiences In Seven Countries, 2007"

It is extremely important reading for anybody interested in health policy. Note that this study is about perceptions and does not provide "objective" performance measures, although it includes data on alleged medical errors. The US responses stand out negatively in almost all aspects of the study. Interesting is that Germans also reported a high level of insatisfaction and lack of confidence despite reporting the lowest incidence of medical errors, easy access to medical care and short waiting times. My guess is that the insatisfaction reflects in part bad-mouthing by politicians and journalists, who constantly conjure up alleged health care crises and "cost explosions" (Germany's health care expense as a share of GDP is pretty stable at 11%). The neoliberal politics of the past 25 years has spawned countless "health care reforms" which all resulted in higher out-of-pocket costs. 20 years ago, everything from doctor's visit to prescription drugs to dental fillings was essentially free. Nowadays Patients are paying every time, much as in the US (if not as much). While these payments may not really cause hardship, they create a perception that you pay more and more, getting nothing in return.

http://content.healthaffairs.org/cgi/reprint/26/6/w717

"I would not dismiss life expectancy. It is a pretty damn good start.

Furthermore, we were fatter and lazier than Europeans 30 years ago too, but the gaps in life expectancies mostly went in our favor back then."

What does it even mean to say life expectancy "is a pretty damn good start." There are too many significant variables.

Id like to see Baker actually show that Americans were fatter than Europe in 1977, since obesity took off in the 1980s. Americans were thinner in 1985 than Europeans are today.

Please show that life expectancy was higher in the US than Western Europe in 1977.

Here's an obesity slide show 1986 to 2006... no need to show 1976.

http://health.msn.com/reports/obesity/

Given the most recent news about obesity, it may not have that much of an effect anyway.

Input statistics are things like Doctors per capita, hospital beds per capita. Process statistics are things like length of time to see your doctor. In all those, the US is beaten by the OECD average.

"I would not dismiss life expectancy. It is a pretty damn good start."

No. As a measure of the quality or effectiveness or performance of an industrialized nation's health care system, average life expectancy is MEANINGLESS. Any effects of health care interventions on life expectancy are swamped by socioeconomic and cultural factors.

Well, looks like this is moribund, but just in case anyone wanders in here, fascinating stats from McKinsey - http://www.mckinsey.com/mgi/publications/Framework_Health_Care_System.asp

Nothing from Canada, but for US vs. UK and Germany...
% overweight - Almost exactly matched:
US (F/M) 28.1/42.2
UK 33.7/43.4
Ger 26.9/44.1
So much for that argument Mr. Mankiw.
(BTW, Japan had predictably much less overweight, but like double the smokers).

Oh, and I vaguely remember reading that actually teenage births in the US have been dropping like a rock in the last few years too.

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