More Slides from Ed Dolan’s
Econ Blog http://dolanecon.blogspot.com/ What Can the US Learn from Other Countries’ Health Care Systems? Posted February 27, 2011 Terms of Use: These slides are made available under Creative Commons License Attribution—Share Alike 3.0 . You are free to use these slides as a resource for your economics classes together with whatever textbook you are using. If you like the slides, you may also want to take a look at my textbook, Introduction to Economics , from BVT Publishers.

Health Care at Center of
US Politics <ul><li>The Patient Protection and Affordable Care Act of 2010 (“Obamacare”) did not resolve the issue of health care policy for the United States </li></ul><ul><li>Issues of who is covered, who pays, and how services are provided, continue to be hot topics of political debate </li></ul><ul><li>It seems only reasonable to ask—what can we learn from other countries’ health care experience? </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com Photo source: Infrogmation, http://commons.wikimedia.org/wiki/File:YesNoTVCameraHealthcareProtestNOLA.JPG

Opinion: Is the US Health
Care System the Best? <ul><li>A 2008 survey by the Harvard School of Public health found that a plurality of all Americans, and a majority of Republicans, think the United States has the best health care system in the world </li></ul><ul><li>Other surveys suggest that even many Americans who are critical of the system as a whole are satisfied with the health care they personally receive </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com Source: Harvard School of Public Health, Press Release, March 20, 2008 http://www.hsph.harvard.edu/news/press-releases/2008-releases/republicans-democrats-disagree-us-health-care-system.html

WHO Ranking of World Health
Care <ul><li>One of the most widely cited international rankings of health care systems was published by the World Health Organization in 2000* </li></ul><ul><li>It ranked the United States 37 th in overall health care system performance, just behind Costa Rica and just ahead of Slovenia and Cuba </li></ul><ul><li>France was No. 1 in the ranking, and Myanmar was last among 190 countries surveyed </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com *For the full survey, see WHO, http://www.who.int/whr/en/ . A convenient summary of the main findings can be found at http://www.photius.com/rankings/healthranks.html

Criticisms of the WHO Ranking
<ul><li>The WHO ranking comes in for criticism, in part, because it is based on a weighted average of data that measure average population health, distribution of health care, fairness of the financial burden, and efficiency </li></ul><ul><li>The WHO methodology is subject to several paradoxes: </li></ul><ul><ul><li>A country with uniformly bad care could score higher in terms of equality than a country with good care for the poor and excellent care for the rich </li></ul></ul><ul><ul><li>A country with very good results obtained at great expense could score higher in terms of efficiency than a country with mediocre results obtained very cheaply </li></ul></ul><ul><ul><li>A country with good health habits in areas like diet and tobacco use could score higher in national health indicators than one with poor health habits, but a health care system that did a better job of treating the resulting medical conditions </li></ul></ul><ul><li>These and other methodological problems of the WHO rankings are discussed in detail in a study by Glen Whitman, published by the Cato Institute. (See http://www.cato.org/pubs/bp/bp101.pdf ) </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com

Amenable Mortality <ul><li>A less subjective
method of ranking health care systems is based on amenable mortality rates </li></ul><ul><li>The amenable mortality rate measures deaths among people under 75 from causes like infections, treatable cancer, diabetes, and heart disease that can be helped by timely prevention or medical care </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com

Amenable Mortality <ul><li>The ranking in
the table is based on data from a study by Ellen Nolte and Martin McKee of the London School of Hygiene and Tropical Medicine </li></ul><ul><li>It shows that the United States ranked last among 19 OECD countries in 2002-03 </li></ul><ul><li>It also showed that the US made the least improvement of any of the countries between 1997-98 and 2002-03 </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com

Health Care Costs <ul><li>The low
rankings of the US health care system cannot be explained by failure to spend enough </li></ul><ul><li>Instead, the United States spends more on health care, both in absolute terms and as a share of GDP, than any other country </li></ul><ul><li>Countries with higher-ranked ranked health care systems, like France and Japan, spend much less but obtain better results </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com

Health Care Costs vs. Performance
<ul><li>Still another international comparison, this one from the Commonwealth Fund, ranks health care systems according to performance </li></ul><ul><li>The United States ranks last of the 7 countries studied, despite having the highest level of spending </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com The complete Commonwealth Fund report is available at http://www.commonwealthfund.org/Content/Publications/Fund-Reports/2007/May/Mirror--Mirror-on-the-Wall--An-International-Update-on-the-Comparative-Performance-of-American-Healt.aspx

Efficiency <ul><li>Two kinds of inefficiency,
or a combination, might cause the US to have poor health care results despite high spending </li></ul><ul><li>The US production function (PF2) might be lower than those of other countries (PF1), indicating that more inputs are needed to produce a given health care result (point B instead of point A) </li></ul><ul><li>Perverse incentives might lead to too much spending, reaching a point like C where the extra spending has no positive effect on health care results </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com A paper by Alan Garber and Jonathan Skinner suggests that both kinds of inefficiency are found in the US health care system. (See http://www.aeaweb.org/articles.php?doi=10.1257/jep.22.4.27 )

The Bottom Line <ul><li>Different methods
can be used to rank national health care systems, but regardless of the method used, it is hard to support the claim that the US has the world’s best </li></ul><ul><li>The world’s highest costs combined with good, but not outstanding, health care outcomes suggests substantial inefficiencies </li></ul><ul><li>Further posts in this series will look at what can be learned from the health care experience of individual countries </li></ul>Posted Feb. 27, 2011 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com