Health care has long been a dinner table topic. The heat behind the discussion has risen in recent years as firebrands like Michael Moore and others have made their contribution to the discourse. For many the debate hinges on whether to stick with America's market-driven private system or adopt a single-payer system like the ones practiced most famously by our European neighbors. If only the decision were that easy.
Michael Tanner
For one thing, we're not that market-driven, or private. For another, our European neighbors aren't having such a grand time with their single-payer public systems. Those are just a few of the conclusions Michael Tanner, director of health and welfare studies at the Cato Institute, draws in his recent policy brief titled, "The grass is not always greener: A look at national health care systems around the world." He is also author of Healthy Competition: What's holding back health care and how to free it. EBA Editor Robert L. Whiddon recently discussed the issue with Tanner.
Make sure to visit EBA's Raw Bar for an audio version of the entire conversation. Also, you can download Tanner's most recent policy brief from Cato's Web site.
EBA: Why did you write this brief and why did you write it now?
Tanner: The debate over health care reform and what kind of reform we should have has not [looked closely] at what the international systems really mean. In one sense they are sort of caricaturized by conservatives as all being a matter of huge waiting lists and people dying in the waiting rooms, that sort of thing. On the left they are characterized as sort of nirvana -- people get all the health care they want and it's free. We had Michael Moore praising the Cuban health care system, for example. I think the reality is much more nuanced and it was worth people talking about.
EBA: There is so much comparison data in your brief. It's only 35 pages long, but it has more than 100 citations. What are the key takeaways? If you could pick just three, what would they be?
Tanner: I think that it's important to recognize that most of the rest of the world is not the sort of single payer system we think about when we hear Michael Moore or others talk about it. There is no system out there that provides all the health care people want, when they want it, with the doctor of their choice, for free. The reality is much more complex. Systems either ration care or they require individuals to pay a substantial amount for their care. In fact most companies are actually moving away from centralized command and control styles to systems that incorporate much more market forces, consumer cost sharing, things of that nature.
EBA: I'm intrigued by the quick and, it seems, easy way you discredit the World Health Organization's rankings. Talk a little bit about the points you raise when questioning those rankings?
Tanner: It's well known that the World Health Organization gave the United States one of the worst rankings among industrialized countries for the quality of our health care system, but if you look behind the numbers what you find out is that most of the ranking has nothing to with the quality of our health care system. They have criteria, for example, called "fairness," which we get marked down on for not having a progressive enough income tax to fund health care programs, or we require consumers to pay too much out of pocket. We also get graded down for not having enough of an anti-smoking campaign. These things may or may not be good values, but they have nothing to do with the quality of the health care system. On those things that actually have to do with a health care system, like choice and innovation and responsiveness to patients, we actually rank very high and in some categories number one.
EBA: In addition to those points, I was struck -- and maybe they aren't central, but they grabbed my attention -- by your comments about violent crime rates and the prevalence of abortion and how those impact the very way countries are compared on the basis of life expectancy.
Tanner: Life expectancy is something that people point to a lot. They say how can the United States have the best health care system in the world, when people in countries like Britain live two or three years longer than us? Doesn't that mean they have a better health care system? The problem is that life expectancy is a terrible measure of the quality of the health care system because there are so many exogenous factors, things from outside, that affect it.
The homicide rates -- where we have extremely high rates compared to much of the rest of the world -- suicide rates, automobile accidents, all of those things fit into it. If you just want to consider life expectancy you have to ask how come Utah has a three year higher life expectancy than Nevada? They have substantially the same health care system.
The other measure that people use a great deal is infant mortality. [They] suggest that if other countries have lower infant mortality than us then they must have a better health care system. Those numbers are very hard to measure. Countries don't have a common definition of infant mortality. Just in terms of how long can a baby live and still be considered still born. In the United States, if a baby is born and takes a breath it is considered a live birth. In some countries the child can live as long as 12 hours and still be considered a still birth if it then dies. And there is also, of course, the impact of abortion. In many countries, Cuba for example, higher-risk pregnancies are aborted, never brought to term. In the United States they tend not to be. We tend to bring them to term then the child dies, which increases our infant mortality rates.
EBA: What else needs more scrutiny? What other popular myths and traditional arguments need to be reconsidered?
Tanner: We also need to look at the fact that health care costs are a problem in every country in the world. It's true the United States spends a lot more on health care than other countries. In large part because we all want to live forever and because that drives a lot of medical innovation and lot of new technology that we want to have in this country. But beyond that you find that costs are rising at about the same rate in almost every other country. They spend less because they started at a lower base but they are going up about the same amount every year and it's threatening budgets everywhere. It's not a unique phenomenon in the United States.
EBA: I was struck by Figure 3 in the brief, which shows how much money different governments spend on health care. The U.S. comes in at about 45%, more than half of the max and more than double the low number, put up by Switzerland. Do you think American's would be surprised to learn how much money our government spends on health care?
Tanner: I think people would be amazed at the fact that the United States spends half of every health care dollar just about, and about another 35 cents is actually spent by insurance companies. Only 15 cents of each dollar is paid for out of pocket by consumers. That's actually at the relatively low end. In other countries we talk about France with its national health care system they spend about as much out of pocket as we do. In some countries, like Switzerland or Greece, [people] spend much more. The idea again that somehow health care is free in other countries is a myth.
EBA: You pay a lot of attention to the way doctors are paid when you go country by country. No matter where you go they seem to feel they don't get paid enough – sometimes they strike, sometimes they take bribes, and they have been known to abandon geographies, migrating to better paying regions. Is there a way to keep doctors happy without bankrupting a system?
Tanner: Doctor costs are a large portion of health care costs. Many other countries reduce their costs primarily on the backs of doctors. Look at France again, for example. The average physician makes about $55,000 a year. I don't think that's something we would stand for in this country. In Germany, physicians make about 20% of what on average U.S. physicians makes. I think that those have an impact and it tends to drive physicians out of the market and many of those countries are suffering from physician shortages.
EBA: For many of the countries you profile you make a point about the philosophy of the citizens and how they view health care. In America there is a movement, however slight and some might say disingenuous, for employers to put some muscle behind the old adage "our workers are our greatest asset." Is there a similar movement at the national level? Are there any examples of countries saying our "citizens are our greatest asset" and letting that belief inform and change the way they view and manage health care?
Tanner: You raise basically two different issues here. One is this whole question of whether employers should be responsible for health care. I think there is no logical reason for why employers should be providing health insurance … it's basically a trick of the tax law that tends to drive them there.
In other countries they are moving away from the whole idea of employers providing health insurance. In Switzerland, for example, all health insurance is individually purchased. I think that's a step in the right direction. The Netherlands has also moved to individually based insurance.
The second question is sort of a general attitude, which I think is very different in the United States than in much of Europe. In much of Europe, the question is would you prefer that you get the highest quality of health care or that everybody has equal health care. There is much more sentiment in Europe for equal health care than high quality. In the United States very few people seem willing to say I will give up my best quality health care in order to raise the standard for other people. We have a much more individualistic attitude.
EBA: Much of the brief focuses on health care at the macro level. There is an increasing focus, at least here in the U.S., on personal responsibility. If that focus continues to shift, does it then become a more logical area for employers to target? Or do you still disagree with the idea that employers should care about employee health?
Tanner: Well I think employers do care about their employees but at the same time employers are relatively indifferent about how they provide compensation. Whether you provide compensation in the form of wages or health insurance or taxes or 401(k) contributions, it's all the same to you as an employer. It's the cost of employing that worker. The question is what mix is most advantageous to the worker. In most cases the workers would just as soon have cash. The reason they don't [get cash] is because of the way the tax laws are in the U.S. that penalizes them for taking cash and rewards them for getting health insurance.
