Liberty and Medicine

Saturday, September 29, 2007

Does Canadian health care really stack up so well?

A new study from the National Bureau of Economic Research questions the alleged superiority of Canada’s nationalized health system in comparison to the United States.

In Health Status, Health Care and Inequality: Canada VS. the U.S., June O’Neill and Dave O’Neill, of Baruch College, look at several issues regarding the delivery of health services to the general public and what they found will not particularly please some people.

They first argue that the use of infant mortality rate and life expectancy are very poor measures of health care delivery. We explained some of those reasons here. The NBER report also noted that “infant mortality is strongly linked to low birth weight and to preterm births.” This is important because teen mothers tend to have low weight babies and the US has the highest teen pregnancy rate of developed nations and almost 3 times that of Canada. That skews the infant mortality rate in favor of Canada but it not related to the health system.

And when they look the mortality rates within specific birth rates the US actually does as well or better than Canada. Canada does better overall because fewer high risk mothers are giving birth to low weight infants. The NBER study says that if weight distribution in Canada were similar to the US their infant mortality rate would rise to 7.06 which would actually be higher than the rate in the US which is 6.85. There advantage is not health care related but due to the lower rate of teen pregnancies.

Similarly life expectancy is not a gage of health care because it includes things such an accidental deaths and homicides. And there is the fact that Americans are fat. A third of US females are overweight while the rate in Canada is 19%. This impacts life expectancy but obesity is not a result of poorer health care. Fewer calories, up to a point obviously, increases life expectancy.

What this paper prefers to look at are actual indicators of health. What percentage of people with a specific illness obtain treatment for that problem. And they looked at the issue of equality in health care. Does the Canadian system actually deliver less wealthy individuals the same amount of care as it does to the better off and how does Canada compare to the U.S.?

In a self reported health survey 62.5% of Canadians, ages 20 -64, said their health was very good or excellent. In the United States the number was 67.5%. For those over the age of 65 it was 38% of Canadians and 40% for Americans. And one reason could be that Canadians, regardless of the single-payer system, were less likely to actually receive treatment.

In Canada 84.1% of those with high blood pressure were receiving treatment for it. In the United States the number was 88.3%. Those with emphysema or related illnesses are far better off in the US where 72% are receiving treatment versus 52% in Canada. In the US 69.6% of individuals with heart disease receive treatment while in Canada the rate is 67.2%. When it comes to coronary heart disease 84.8% of American sufferers receive treatment as compared to 88.9% of Canadians with the problem. Out of eight conditions they investigated Americans have higher treatment ratios in six categories with Canada leading in asthma and angina. These were for individuals age 18 to 64.

But these differences remain fairly consistent for individuals over the age of 65 as well. The only change was for angina where the U.S. now has a higher treatment rate than Canada: 77.7% to 73%. The report noted that “the U.S. generally performs better with respect to treatment of all conditions except that of asthma.”

What about preventative procedures like PAP smears, mammograms and PSA tests for prostate cancer? Again higher percentages of the American public receive such tests than do Canadians. In the U.S. 88.6% of women ages 40 to 69 have had a mammogram. For Canada it was 72.3%. In the U.S. 74.9% of the woman had the test within the last two years where only 54.7% of Canadian women had a recent test. For PAP smears the rate was, over the last three years, was 86.3% for American woman versus 88.23% for Canadian women. The men get a worse deal in both countries when it comes to testing for prostate cancer. In the same age group, 54.2% of men have been tested while in Canada the rate was an abysmal 16.4%. And testing for colorectal cancer is done, both for men and women, about six times as often in the United States as in Canada.

When the study looked at survival for cancer in both countries they also found that Americans were slightly better off. They looked at the ratio of the mortality rate to the incidence rate for cancers and found that Americans are ahead. They concluded, “in terms of the detection and treatment of cancer, the performance of the U.S. would appear to be somewhat better than Canada’s.”

The use of MRIs and CT scans are also much, much rarer in Canada. Canada has 5.5 MRI scanners per million people as of 2005. The US, in 2004, had 27 per million. When it came to CT scanners the US had 32 per million in 2004 while Canada, for 2005, had 11.3.

Considering that one of the alleged virtues of Canada’s health system is the “equality” factor it is interesting to see that more individuals in the US, with specific conditions, are receiving treatment than do their counterparts in Canada. The report also found that the poor in the United States reported as much, or more health care, than those in Canada did.

This report also noted that waiting time in Canada for care is significantly longer than in the United States. The absence of care, they contend, is more problematic than the ability to pay for the care. As they note “costs may be more easily overcome than the absence of services.” That is, it is easier to find a way to pay for care that is available than to make the care available when it doesn’t exist.

And, when patients in both countries are asked to rate their satisfaction with the care they receive, the typical American, in spite of a reputation for complaining, was happier than the typical Canadian.

The NBER report conclusions basically are these:

Americans have a slightly higher incidence of chronic health problems than Canadians, but they also have higher treatment rates.

The discrepancies between income and health care received has not disappeared in Canada and is actually steeper than in the United States.

More Americans report satisfactory health care than do Canadians.

That some are recommending the Canadian system for the United States seems odd if the NBER report holds up. Even while promoting Canadian style care for the U.S., the New York Times admitted that the “country’s publicly financed health insurance system... is gradually breaking down.” It reported waiting times growing ever longer. And in light of the inability of the Canadian system to provide the care it promised the nation’s Supreme Court ruled that bans on private medical care were unconstitutional and inhumane.

Once the court opened the way for private care Canadians were flocking to the new private alternatives. Even in Quebec, a hotbed of support for socialized care, the premier has announced that the state system will be sending patients to private care facilities for treatment that the state is incapable of providing. In spite of a severe doctors shortage in the country Quebec is still forbidding physicians who provide private care from working in the state system, yet in spite of that regulation, the province has more private clinics than any other province. The Times reported new private clinics opening in Canada at the rate of one per week.

The recently elected head of the Canadian Medical Association, Dr. Brian Day, actually runs one of the largest private hospitals in Canada. And he is planning to open several more. But what started in 1996 with 30 doctors now has 120 physicians on staff. And the provincial state care system has sent them over 1,000 patients for operations that they simply couldn’t do in a timely way.

The Times reports that nationalized health care in Canada has long been “sacrosanct” and “even central to the national identity.” The explosion of private health services there marks a dramatic shift. Antonia Maioni, of McGill University says that there has “been a change in what is feasible and what is permissible in public debates” regarding nationalize health care in Canada. “Five years ago someone like Brian Day would never have been elected president of the Canadian Medical Association. Five or 10 years ago there was much more a consensus about the sustainability of the public system.” Apparently the confidence in that system is waining based on the experiences it is providing.

Labels: ,

Tuesday, August 21, 2007

Do survival rates matter?

Sure, I know that just one mention of why I dislike nationalized health care sends some of my left-of-center readers into a frenzy. It seems that the cause d’jour on the Left is the implementation of a state run system of health care in America. It is the public policy version of the Holy Grail.

Questioning nationalized health care is, to them, a similar sort of heresy as questioning the necessity of baptism by immersion at a Baptist tent revival. Alas, I’m used to the role of village atheist so I don’t mind.

Of the various state systems of health care the National Health Service in England holds a special place in the pantheon of state system -- mainly because it one of the first and one of the most pervasive. It has gone through a process of beatification in some circles. And I think it qualifies. And like anyone who is beatified that means it is declared holy on insufficient grounds and it is dead. Maybe it's not clinically dead but it certainly is on life support with the struggle more and more difficult each year.

Ask any member of the nationalize health sects where they would rather be sick, America or the U.K., and they will dutifully tell you how the British system is more fair and gives more health care to more people. That is the argument I generally hear. Giving out lots of care is easy and can be done cheaply. But the real issue is not what you give out but what are the results of the actual care given?

So ask yourself what you want to do if you had cancer. Would you prefer to get “equal” care or more effective care? Would you rather have a system that equalizes the treatment rate or one that maximizes survival rates?

A research team for The Lancet Oncology has looked at the survival rates for individuals diagnosed with cancer. This rate is determined by the number of patients who are still alive five years after being diagnosed with cancer. They ranked the various nations of Europe and then compared the survival rate to that of cancer patients in the United States -- the Great Satan of Health Care.

National Health Care covers England, Scotland and Northern Ireland and Wales.

If you are a female in Scotland, your chances of surviving five years after a cancer diagnosis is 48%. In Northern Ireland it is slightly better at 51% and even better in England at 52.7%. Wales comes out tops there with 54.1%. The percentage of American women who survive more than five years after a cancer diagnosis was 62.9%. This, by the way, is a higher survival rate than any of the European countries that were surveyed. And the survey included all the major European health system except France, where the statistics were not made available.

Male cancer survival rates show that 40.2% of Scottish men live five or more years after diagnosis. In Northern Ireland it is 42%, England is 44.8% and and Wales is 47.9%. The United States has a male survival rate of 66.3%.

If 100 English women are diagnosed this month with cancer, then 47 will, on average, die in the next five years. In the United States, with all the problems the health systems does have, an extra 16 women per 100, will live. Sure, its just statistics, unless you happen to be one of those 16 women. And for every 100 English men diagnosed this month 55 will die in the next five years. If the same 100 men lived in the United States an extra 21 of them would live.

One of the researchers from Scotland, Prof. Ian Kunkler saays that one reason for the low survival rate in the U.K is partially due to the long waiting periods before treatment. He says that there is “good evidence that survival for lung cancer has been compromised by long waiting lists for radiotherapy treatment.”

Oddly the BBC managed to report this story without once mentioning the higher survival rate in the United States. But they do publish the European mean survival rate for men and women. They have a graph showing the survival rates but it is not calibrated too finely. My best estimate from the chart is that mean average survival rate for women appears to be around 51% about 11 points behind the U.S. And for men it appears to be 47% or about 19 points behind the U.S.

Lung cancer survival rates in England and Wales are very depressing. Only 6% of either sex survive. The U.S. survival rate is between two to three times higher, or up to about 16%. However, one relatively new regimen of care developed in the U.S. has shown survival rates of up to 29%.

Perhaps there are arguments as to why one might prefer to live in England versus the US (I spend more time in the UK than I do the US myself) but certainly if survival rates count for something -- and they do those who are trying to survive -- I know which I would pick.

Labels: , ,

Monday, August 06, 2007

A snapshot of socialized health care in one country this week.

I lived in the United Kingdom just enough to know what Michael Moore has denied -- there are long queues of people waiting for care from the National Health Service. Michael seems to think people waltz right in and are treated immediately.

I tried an experiment with Google news search last night. I typed in just two things. The first was the abbreviation for the National Health Service, NHS, and the word “waiting”. Remember since this is a Google news search it only searches for a specific period of time. These are not old stories but news reports on the current situation.

The first report I want to mention is from the Independent newspaper. What makes this story different is that a senior trauma surgeon is breaking NHS rules to speak out. Physicians, nurses and other employees of the NHS are forbidden to speak to the media. Transparency is not their middle name.

But Martin Bircher talked because he said he couldn’t endure the suffering that patients were being put through. He described, “a system paralysed by red tape and disputes over funding, which is putting thousands of patients waiting for treatment in specialist wards at risk.” The paper says:
Every one of Britain's specialist trauma beds is full, which means some patients can wait up to three weeks after their accident before badly broken bones can be repaired. The delay, says Mr Bircher, can jeopardise recovery. With nothing but praise for frontline staff, he says patients who have been critically injured in road or other accidents have to wait an average of 12 days – often in agonising pain – before they can receive the vital specialist treatment.
These a victims of severe trauma who are being denied treatment not people with earaches or sore throats. But trauma beds are expensive and the way socialist systems provide medical care cheaply is by restricting access to expensive treatment. They don’t want more trauma beds being used because it drives up costs and that destroys the illusion of the efficiency of socialist care.

Trauma care is limited to certain hospitals. Patients needing this care are first treated in a regular hospital and then have to be moved to the trauma units later. But NHS bureaucrats,
...are involved in making the final decision as to whether a patient can be moved. If they have to move them there is often a conflict or reluctance because the new area does not want an extra cost. So after initial admission to a general hospital’s emergency wards, where lives are saved, patients can find themselves waiting up to three weeks before their real recovery process can begin.
Bircher says that the physicians and nurses are doing the best they can “but are hampered by layers of managers whose major concern is the budget rather than patient care.”

The paper reported the case of a young woman, Lucy Lynn-Evans what was riding a scooter when a truck smashed into her and ran her over. Her laptop, in a backpack, saved her life since it took the brunt of the force as the truck rolled over her spine. But her pelvis was smashed to pieces. The local hospital stopped her from dying but only a few hospitals in the country are given the speciality equipment needed to repair her pelvis. She was put on morphine for pain and told it would take three weeks before a bed would open up in one of the hospitals equipped to deal with her problem.

Lucy said the pain was so bad she begged father to take her to the other hospital and dump her on the steps if necessary thinking this might speed up the wait. Other patients were considered more urgent and Lucy kept losing her place to those with more need. When a bed became available the local hospital fund manager had to approve the transfer. He didn’t show up to work until 9:30 that morning and by the time he reached the form for Lucy the bed that was available was gone. Lucy’s mother knew some of the top NHS officials and was able to use her contacts to create a fuss and get Lucy into a bed early. She confessed she felt awful doing this, “I know that in securing a bed for Lucy someone else had to wait longer.” But one reality is that under socialized medicine people with political pull can jump the queue.

Next from Aberdeen comes this report about desperate dental patients seeking help from the NHS. Recently, the Aberdeen Evening Express reported that there are 25,000 people waiting in line for care with NHS Grampian “meaning it could take years before a NHS dentist is available.”

One local patient was having trouble getting seen for a filling. He signed up for a low-cost private care program for two check-ups per year. He then discovered that NHS decided to punish him for doing this. They dropped him back to the bottom of the queue telling him that since he paid that this proved he was not in need and thus not urgent.

The Norwich Evening News for July 30th, reports that their local NHS is making an effort to cut the waiting lists. Under a new “Choose and Book” plan patients, with their GP, can actually pick the hospital of their choice for treatment. You would think that normal. But it wasn’t. What is truly revolutionary is that the NHS, to cut down waiting lists is now allowing patients to seek care at private hospitals. The paper reports: “Now a contract between BUPA Hospital and Norfolk Primary Care Trust means thousands of patients will be able to get seen by a specialist in a much quicker time.”

A business manager for the private hospital says, “It means people can be treated closer to home or work.” So to cut their waiting lists the NHS turned to private hospitals to help with the work. Hmm, do you think Michael will mention that?

The Scotsman reports on one hospital that did manage to cut the waiting time to get admitted to hospital. Last year one-fifth of all patients waited more than four hours to be admitted, discharged or transferred at this hospital. The hospital was happy that last week it managed to get it down to 3%. That’s good but does one week make a trend? And this hospital is being praised because it is the exception, or at least was the exception one week.

In another story the Scotsman reports that NHS Lothian was crowing about how they are dealing with cancer patients who are referred for “urgent” treatment by their GP. Please remember this is “urgent” care requirements for cancer patients. That is not something you wait for. Their goal is to have 95% of these urgent patents treated within two months. Two months? What would the waiting time be if the case were not deemed urgent?

Of course 5% of those patients will be waiting over two months, if NHS Lothian reaches its goal, which it hasn’t. Last month 12% of the urgent cancer patients had gone more than two months with no treatment. I’m still wondering if two months waiting for “urgent” cancer patients is all that successful. Surely with urgent cancer cases even two weeks is unacceptable.

Another recent report says that there are 2,474 NHS dentists working in Scotland. which is 173 more than last year. And the budget has increased by about another $200 million. Yet the number of patients registered with a dentist has actually declined. It was 49.9% in 2000 and 46.2% currently. It also reported: “In some areas, less than a third of adults were registered with an NHS dentist.” There are around 58.4 dentists per 100,000 Americans or one dentist for every 1,712 people. Each dentist in Scotland, under socialized care, has to treat 2,068 patients. So there are considerably fewer dentists relative to the population. Fewer paid dentists, with long waiting lines, is a way to keeping costs down.

We previously reported on a 108-year-old woman in Deal who was told she would have to wait two years for a hearing aid. So it is somewhat of a relief to report that the waiting period in Scotland is not quite that bad. Patients in Lauriston Place were only waiting up to ten months, in Livingston it was a wait of 35 weeks, in Edinburgh they can wait up to 43 weeks. The NHS target for Scotland is 26 weeks -- that is what they consider the goal that they would like to reach If I couldn’t hear I’m not sure I’d consider a 26 week wait all that lovely. But no worries since they haven’t come close to even this modest a goal.

I also came across a report from Malta, of all places, about NHS care. It reports that more patients from England are flying to Malta for health care. It reports:
Due to lengthy NHS waits and concerns about the high risk of MRSA infections in NHS hospitals, a growing number of Britons are taking advantage of affordable, high-quality private healthcare abroad, combining it with a relaxing holiday. They save thousands of pounds compared with having the treatment done privately in the UK. Already, many British patients travel to Belgium, Hungary and Poland and even further afield to countries such as India and Brazil.
MRSA is a bacterial condition caused by unclean conditions and it seems rather prevalent in NHS hospitals. In 1999 there were 487 deaths from the infection. But in 2003 it had risen to 955 deaths. And a report in the Daily Mail for February 4, 2005 said that “hospital-acquired infections overall strike around 100,000 people each year in England”. They also report that the health care workers union says the number of MRSA related deaths is actually much higher because many death certificates don’t mention MRSA as being a factor even when it is. But not that is old material and my focus is on current stories. But apparently MRSA hasn’t diminished much if the Malta report is correct.

In Ambleside NHS dental patients were in for some bad news. The local dentist is getting on in years and retiring. And he won’t be replaced. He has 3,000 patients registered with him and more on a waiting list who can’t get in. The 3,000 patients will have to try to get on the waiting lists for dentists in other towns.

I will stop with this next story but these are only the first few stories that appeared in my Google search. There are many more. The last one is interesting because it contrasts care under the NHS and care in the United States. The story is about Fraser Brown, the young son of the Prime Minister. Fraser has cystic fibrosis. The first point that I found interesting is that the average life expectancy for a patient with cystic fibrosis in the UK is 31 years, two years less than in the United States. But it also revealed that some US centers have managed to get life expectancy up to 47 years.

And this article compared how this center operates versus the best in the UK:
Successful treatment of cystic fibrosis requires extraordinary commitment, attention to detail and a refusal to accept second best. While the average centre might accept lung function at 75 per cent of normal, at Fairview they are not content with 80 or even 90 per cent. They aim for 100 per cent. They question everything they do and act immediately when standards slip, rather than accepting it as an inevitable by-product of the illness. In Britain, we do not think about medicine in this way - as a daily battle against the forces of sickness and decay in which every centimetre of ground gained deserves celebration, and every centimetre lost explanation.
It tells how the Cystic Fibrosis Foundation in the US has published the success rates of every one of their centers on line for the public to read. Physicians can see who is doing better and perhaps learn why. Patients can pick the center with the best performance. Not so in the UK. In principle there is an agreement to do this, eventually. But “directors are worried the data may be misinterpreted and used to beat ’under-performers.’”

The article suggests that the UK needs to learn how to compare performance between services. It says the Brits need “a healthy dose of American belligerence” to do this. But why do Americans compare between service providers? Because in the US the providers compete and Americans are not normally assigned to a specific provider with no other option.

There are over 600 more stories in the last few weeks. Perhaps not all of them about the National Health service and waiting times. One was about a high school football player who attended a school abbreviated NHS. But many of these stories are. I didn’t cherry pick. I just went down the list and opened up and reported what was said. But I will cheat on one story that I saw which was further down the list. It’s one of those “good for them” stories.

Tony and Greta Dodd are both pensioners. And they have a common problem with old people. Both of them suffer from knee problems. Tony’s knees went first. Then Greta followed suit. Even a short amount of walking puts them in excruciating pain. Tony says: “I’ve been on the NHS waiting list for six months and up to now I’ve heard nothing, not even a proposed date for an operation.”

But Tony and Greta got lucky. No, the NHS didn’t call them with new knees. Better. They won the lottery. And they plan to celebrate by going private and buying new knees for the both of them.

And the great thing is that they won by accident. Like so many people they play the same numbers week after week. But Tony went to the newsagent to purchase a ticket and forget the slip with the numbers on them. Well, with bad knees he wasn’t walking back home. And so he tried from memory. He could only remember the first five numbers correctly and so for the last one he picked a number randomly. In his case it certainly was true: he had more of a chance in winning the lottery than getting the surgery he needed from the NHS.

The reality is that Michael Moore was fudging the facts when he implied that British health care is so wonderful. The daily news stories from the UK indicate a system that is mired in debt, bound up in red tape and constantly denying care to people in order to vainly attempt to lower health care costs. One British columnist, Giles Whittell, of the Times of London even challenges how much cheaper it is than US care.

He pointed out that last year the NHS had a budget of around
...£104 billion. That’s roughly £1,733 per man, woman and child. Multiplied by four for a typical two-child family, then divided by 12, that equates to median monthly family healthcare expenditure of £577, or $1,155 in American money. I can buy some very respectable US health insurance for $1,155 a month. In fact, on a quick and painless stroll through the web site for Kaiser Permanente, a leading nonprofit US healthcare provider, entering my basic family details and the Beverly Hills zipcode, the most expensive family policy I can find that does not depend on contributions from the state or an employer costs $400 less than the sum Gordon Brown currently chooses to spend from my taxes, each month, on the NHS.
I don’t know anyone who says there aren’t problems in the US health care system. It certainly is a bastardized system of conflicting incentives and regulations many of which harm consumers deeply. But there is this blind, utopian vision of the virtues of socialized health care that can only be compared to religious belief not rational policy making. And as this snapshot would clearly indicate one can not produce a “documentary” which deals with British health care, and do the smallest amount of reading, without being aware that these problems are rampant. If the documentary then appears to give the opposite conclusion the only warranted conclusion is that the documentarian is dishonest.

Photos: Our first photo is the fabricator himself. The second photo is an actual queue at an NHS dental service that announced it could take 300 additional patients. Hundreds more turned up than could be accommodated

Labels: , , ,

Tuesday, July 31, 2007

Centenarian told to wait 18 months for care.

No doubt you’ve heard the old joke about the man who walks into a store to buy something. He looks at the price and complains to the shop owner that they are “ripping people off and the guy down the street has it at half that price.” The shop keeper says to him, “So why don’t you buy it down the street?”

“I would, but they don’t have any.”

National health care is a similar sort of enterprise. They brag it’s a lot cheaper but the shortages (not having any) is a problem. And the plight of Olive Beal illustrates this.

Olive is a senior citizen. That’s a modern euphemism that means she’s old. Her eyesight isn’t that good. She has to use a well chair and she has trouble hearing. She went to the National Health Service doctor who examined her and told her she definitely has to have a new hearing aid. The one she has now doesn’t work for her.

The glitch is that every health service in the world has to ration care. The advocates of socialized services, like the NHS, try to pretend that: 1) this doesn’t happen; 2) if it does happen it doesn’t happen often; 3) that when it happens it is not that significant.

For Olive it was significant. She was told that the she can have a new hearing but she must wait one and half years for it. Apparently that’s not bad for the government system. A spokesman for the Royal National Institute for the Deaf told the Guardian, “I am afraid this is a common problem. In some parts of the country there are over two year waiting lists, which is shocking.”

It may be that the bad publicity about Olive’s situation will bump her to the front of the line so that the British Labour government can show everyone how well the system works. That just means that people already on the list have to wait longer themselves. It doesn’t solve the problem it merely makes it disappear from the headlines.

Olive’s granddaughter, Marie Scott, 52,.... Hold on! Isn’t that a typo? Shouldn’t it be 25? Nope. The granddaughter is 52. Oliver happens to be 108 years old. That’s the only reason she is getting publicity -- unlike the many others waiting for a hearing aid.

There is something absurd in a system that asks a women who is 108 years old to wait another year and a half for a hearing aid. In essence they are denying her the hearing aid. Certainly they are aware that her ability to wait that long is highly doubtful.

No socialized system of health care has been able to get around the rationing issue. When consumption of health care is not directly paid by the consumer the demand for health care will always exceed the supply.

And every nationalized system tries to ration in one way or another. The Canadians and Brits ration health care through the use of waiting periods. In Germany the care is rationed by underpaying physicians, working them long hours and placing a huge percentage of the costs on their shoulders -- that creates supply problems when it comes to physicians.

The French tried to avoid rationing to the current generation of consumers by running up massive debts that will eventually mean rationed care to future generations. They are basically denying care to their children or grand children. In New Zealand they tell you which treatments you may have and which you may not. If what you need is not on the approved list too bad. If what you need is approved you are in luck, provided you can afford to wait.
Another common trait of these systems is spiraling debt. The care is costing more than they can afford. Each year they are finding it more and more difficult to keep the system running.

Another way these countries keep down their cost is that they are subsidized by American health consumers. Here is how that little scheme works.

Pharmaceutical companies spend billions developing new drugs. When they develop something that seems to be effective they seek a patient. The patient allows them to market the product over a span of 20 years and then its public domain. So they have to recoup the costs of that drug, and all the costs of drugs that didn’t work, in that relatively short time period.

The moment they apply for the patient the 20 year time clock starts ticking away. The problem is that it can take almost half that time just to get the drug through the regulatory process. So the time period to recoup their costs is dramatically reduced by bureaucratic inefficiency and regulatory red tape.

Let us now say that eight years down the road they have the approval to market the drug. Let us say it is efficient and effective. It’s a winner. These socialized systems want the drug. But they aren’t particularly interested in the R&D costs, etc. They want to know how much it costs to produce one pill. And they generously offer to pay the producer a small profit on top of that marginal cost.

This is only a profit on the marginal cost of producing pills not on the total cost. And international patient law is set by governments who are the monopoly health care providers in many of the major drug markets. Under that law the government can declare the drug as something needed by their citizens and then ignore the patient. In essence they can then take the total marginal profit income for themselves at the expense of the people who developed the treatment.

With that threat hanging over the head of producers they know that a profit on the marginal cost is better than nothing. But there are still the research and development costs of this drug and for those that weren’t winners. So how do they cover that cost? They sell the same drug at a higher price in the United States. This is what the whole reimportation debate is about.

Of course, if the US put in a similar heath system they could also threaten to confiscate the formulas and discoveries of the pharmaceutical industry. Then everyone would supposedly pay only the marginal costs of production. The problem with that is this means there is no longer any reason to invest in pharmaceuticals. Better to open a taco stand. The net result would be a collapse of the research and development of new drugs. But that keeps down the health care costs -- no new drugs, no new expenses. And the advocates of socialized health care will call that efficiency. And a second goal of the socialists would also be accomplished -- equality. Everyone would be equally denied the drugs that never came into existence. Equality and a low price! Who said socialism doesn't work?

Photo: Olive Beal. I don't know what she's drinking but I think she's going to need a few refills.


Friday, July 13, 2007

Wait and Die. The nationalized health alternative.


Labels: ,

Who are the uninsured in Ameica?

A 9 minute film exploring which groups comprised the uninsured in America.


New Zealand's nationalized care spends more, cares less.

New Zealand has one of the pioneering nationalized health services in the world. But, as with all nationalized systems, they ration health care out. There is no other option. Free health care for all is an illusion.

New Zealand uses the standard form of rationing: queues. You can have health care if you can afford to wait for it. If your problem kills you before you get to the front of line that improves the waiting time statistics. Lots of Kiwi voters were unhappy with the growing wait periods. And, in the last election, the ruling Labour government was in deep trouble.

A massive spend-up on programs, along with hundreds of thousands in illegal campaign spending, kept Labour in office but barely.

One of the parts of the massive spend-up was an extra $4.5 billion was on health care. But, Heather Roy, health spokesman for the ACT Party, says that a report from the Treasury department shows that the extra spending has lead to no extra health care!

She quotes a Treasury report, “increased staff numbers have not led to higher outputs.” So, why is that? If the health services can’t handle the care required, and you increase staffing, shouldn’t the number of patients treated also increase? You would think so. But, it really depends on who you hire, and what they do.

Roy noted that while some of the extra $4.5 billion was spent on staff it didn’t pay for “doctors and nurses”. Instead, “the new staff has largely been made up of pen-pushers -- staffing levels at the Ministry of Health’s head office has increased by around 40 percent under this government...”

So, the extra staffing covered management and file shufflers, but not more health care. The government now has more people filing more pieces of paper, but no extra medical care. In fact, with the expansion of clerical staff, the nationalized system, in New Zealand, now has more staff members than hospital beds. As Roy put it, “if every single bureaucrat in the health system fell seriously ill today, there wouldn’t be enough beds to treat them all -- let along anyone else.”

Because the waiting lists were getting embarrassingly long the Labour government came up with an idea to solve the problem. They ordered the district health boards to kick people off the waiting lists. Roy says a document leaked from the Waitemata DHB showed they had been threatened with a $3 million penalty if they didn’t remove 800 people from their waiting lists. They were told to send the patients, waiting for care, back to their physicians instead, even though the physicians were the ones who sent them for specialist care in the first place.

Of course, if Michael Moore made a film on the nationalized system in New Zealand, it would only show empty waiting rooms and pretend none of this was happening. He wouldn't tell people the waiting rooms were empty because the patients were sent back to their physicians so they could start the process all over again.

Labels: , ,

Sunday, July 01, 2007

Forced insurance scheme runs into problems.

In one of his previous political incarnations Mitt Romney pushed through a universal health coverage plan in Massachusetts. It is now in operation.

About 10% of the state residents didn’t have insurance prior to the imposition of compulsory insurance. Two-thirds of them still don’t have care. Those who are poor received state insurance at the expense of the taxpayer. They didn’t mind signing up but they weren’t the majority of uninsured.

One of the problems with stats about America’s “uninsured” is that while the total percentage is thrown about it is never broken down. Who are they and why are they uninsured?

One of the policies that politicians pushed through in the past linked health insurance, for most people, to employment. The unions liked that idea, it was a way of forcing through pay increases in the guise of something else. So they pushed hard for employer provided health benefits. Sounds good doesn’t it?

Yet that is one of the reasons people are not insured. The insurance is linked to their employment and people change jobs. When people change jobs their old insurance is cancelled and they have to get new insurance. Sometimes there is a time lag between that job and the next. And during that time they are uninsured. Many of the uninsured in the US were transitioning between jobs. Around 9 million of the uninsured in the US are people between jobs and a third will be reinsured within four months and the remainder reinsured within one year.

But there is another problem that kicks in because of these connection between insurance and employment. People sometimes develop illnesses while on one job. If they change positions and are uninsured that illness becomes a pre-existing condition that is not covered by insurance. The union push to tie insurance to jobs also ties people to jobs. If they change jobs, perhaps taking a better opportunity, they may find they have no health insurance and can’t get it for the very thing for which they need it most.

Another group that often tends to be uninsured are people who can easily afford insurance. The reality is that wealthy individuals don’t need insurance. In fact insurance might well be a bad idea for them particularly if they have been wealthy for much of their life. People who can pay for heart bypass on their own don’t need insurance. For instance Mitt Romney, who pushed through compulsory insurance in Massachusetts, can afford all the health care he wants. He doesn’t need insurance.

A third group of uninsured have been the young who assume they don’t need health insurance. And for the most part that assumption is entirely valid. People who are young and healthy tend not to need insurance. They know that the likelihood of a serious illness over the next 20 to 30 years is minimal. And they’d rather have the cash than the care. The need the one more than they need the other.

And the compulsory system in Massachusetts is finding that of the uninsured “not all are rushing to get coverage. Many of them are healthy young people in their 20’s and 30’s, state officials say.” The state is spending $3 million just advertising the mandatory insurance scheme. As one 25-year-old who is employed told the New York Times, she will choose to remain unemployed and pay the fines the states will levy on her because that is “cheapest and easiest.”

The US as a whole has the same problem. Young, healthy individuals don’t want health insurance. Almost 40% of the uninsured in the country are under 25 years of age and almost two-thirds are under 35.

Again much of the burden for insurance falls on small companies. Employees who work more than 35 hours a week must be offered insurance by the employer. Deb Maquire runs a small pub in Falmouth, She offers insurance to her employees but only a third of them have taken it. It costs them $42 per week bu Maquire has to pay $45 per week for the same employee. Under the compulsory system the other two-thirds will be forced to join and Maquire says her business simply can’t afford to triple the amount they pay out.

One way around this is that smaller companies are cutting people work time. More and more people will be pushed from the private insurance market into the state subsidized system. And the tax burden will have to increase in order to pay for that. But higher taxes mean less jobs and more unemployment meaning more people qualifying for state insurance. Even an analysis prepared by the state legislature indicates that they expect the plan to be in the red to the tune of $160 million within two years.

What is interesting is the amount of force that the state has to use against the uninsured. The Times reports:
In 2008, the penalty for those not insured will be a loss of state tax exemption, worth about $219; later the penalty will be up to half of a monthly insurance premium for each month a person is uninsured. Also, while any insurance is acceptable at first, by January 2009, everyone must have drug coverage.
No doubt people would be more willing to take health insurance is a third party paid for it. The uninsured who did sign up in Massachusetts tend to be people who are qualified for state provided insurance. But that the state has to penalize and punish, rather severely, people who don’t sign up for health insurance does show that a good number of the “uninsured” don't want it.

And there is one additional problem. People who are uninsured tend to consume less health care than they need. No one questions that. But often it is forgotten, or ignored intentionally, that those with third party payment plans often over-consume health care.

If the insurance scheme means that a consumer pays a flat rate per month and a third party insurer pays out for that care the consumer sees any use of the health service as “free”. There is no link between their consumption and and their payments. That is the very link that advocates of universal health care are trying to severe quite intentionally. But the net result is that consumers will then tend to over medicalize as compared to their previous habit of under medicalizing.

All third party payament plans have this problem of perverse incentives. Consumers tend to demand more care than they need and to be less informed about care options available.

As coverage expands consumption of care increases more than was expected. The result of more people chasing a limited amount of care is to push up costs more rapidly than before. This is one of the problems the welfare state systems are facing. Health care costs are skyrocketing and they are finding themselves unable to cope. That forces the rationing that Michael Moore deceptively ignores in parts of his docufraud and simply lies about in other parts.

Labels: ,

Friday, June 29, 2007

The 15,000 dead that Michael Moore forgot about.

In 2003 France experienced a heat wave and the result was almost 15,000 deaths. USA Today reported that most the victims “died during the height of the heat wave, which brought suffocating temperatures of up to 104 degrees.”

Not long ago I spent half a year in Phoenix. And Phoenix is a very hot city. That region of the world has been hot long before we started blaming everything on CO2. Just outside Phoenix is a retirement community known as Sun City. It is a town of around 33,000 elderly people. The median age in Sun City is just over 72 years of age. And the average high temperature in Sun City is 106 degrees summer after summer.

So 33,000 elderly people thrive in temperatures higher than those that hit France where 15,000 people died. And according to USA Today many of the victims in France were elderly. What are some of the reasons that elderly people in America flock to a climate that routinely exceeds the temperatures of France’s heat wave without the dire consequences that France experienced?

Like most issues there are numerous causes involved. One is that the elderly in Sun City know that the temperatures will go above 100 degrees every day during the summer. Knowing this means they are prepared.

For instance every home and business in the Phoenix area will have air conditioning. Very few homes and business in Europe have this sort of decadent luxury. On a hot day shopping in Europe is often a horrid experience since the shops are stuffy and temperatures inside often are warmer than outside.

The reality is that Europeans have a much lower standard of living. They don’t like to admit it but it’s true. They have regulated and taxed themselves to such an extent that they live much less comfortably than do their counterparts in the United States. Average income in Europe is below average income in the United States. Then the welfare states in Europe gobble up vast amounts of the income that is earned. So the average European not just earns less but pays more in taxes. And then costs for virtually everything is much higher. I suspect something in Europe has to be cheaper than in the US but I don’t know what it is.

With lower levels of income the average home is much smaller in Europe. People don’t drive as much but walk, ride bicycles or take public transit. Cars are discouraged by the Green fanatics. Of course when heat waves hit that means old people are trying to bicycle to the store. Actually I should say stores.

In the US an older person heads to one grocery market and picks up everything they need. Such large stores go against the European mentality. So there are mostly smaller stores with minimal selections. So this means going from store to store. When it is hot out this extra exertion doesn’t help the elderly.

If the elderly in Sun City had to walk from store to store to store to buy their groceries and ride their bicycles in the 106 degree temperatures, instead of driving, they would probably be dropping dead in massive numbers as well. Luckily for them they don’t live in a town that is as “eco-friendly”.

Germany has a sales tax of about 20%. And energy is especially expensive so they can meet their Kyoto requirements. Of course they don’t meet their Kyoto requirements but they do heavily tax energy. With energy being expensive the result is that people can’t afford to air condition. It’s the same across Europe.

When the heat wave hit France people died because the cost of air conditioning is above what most people can afford. The welfare state reduces living standards and people can’t afford “luxuries” like air conditioning.

So what happened what that socialized health care? Docufraud producer Michael Moore is harping on about the benefits of the French socialized health system. He says: “The French system is the best in the world.” So why the 15,000 deaths there? How did the French system respond?

Much of it didn’t react at all. France has long mandated holiday periods for workers. The French brag about them. They pride themselves as to how little work they do, which is one reason they have chronic high unemployment. And August is the big holiday month when many French workers take the entire month off. That includes physicians, nurses, etc.

Again the news report stated: “The heat wave hit during the August vacation period, when doctors, hospital staff and many others take leave.” Of course France has a union for physicians, since every special interest group must have a union or they get screwed by the other union groups. And the National General Practitioners Union denies that vacations had anything to do with it since only 20% of all physicians were off on holiday. Only 20%! That’s one out of five physicians being gone for an entire month.

Apparently it wasn’t just the physicians and their extended holidays that were the problem. “...[T]he French Parliament released a harshly worded report blaming the deaths on a complex health system, widespread failure among agencies and health services to co-ordinate efforts, and chronically insufficient care for the elderly.” So the health system in France is complex and has “chronically insufficient care for the elderly.”

But this is one of the systems that Moore drools over when he advocates a socialist system for the United States.

It was this excellent health care that explained why 15,000 French old people died from temperatures that in Sun City would be just average. It is the excellent health care that caused the French Parliament to report that their own health system provides “chronically insufficient care for the elderly.” I suspect Mr. Moore will never mention that parliamentary report

Photo: The photo was taken in a French hospital showing elderly victims of the heat wave waiting for care. One fifth of all physicians were on holiday that day.

Labels: , ,