Thursday, May 14, 2009

Obama’s health care quackery

Countries with universal health coverage are economically worse off than the U.S.

True to the advice of his chief of staff to never let a good crisis go waste, President Barack Obama is using the current economic crisis to sell a top item on the liberal wish-list: universal health care. "You can't fix the economy," he has repeatedly said, "without fixing health care." But the president needs to take a big chill pill before committing America to a huge new entitlement: One is hard pressed to find any evidence from abroad showing that universal coverage has grown the major industrialized economies more than ours in the past—or shielded them more than us from the global slump now.

At the president's behest, Democrats are exploring ways to ramrod a health care reform bill through Congress this fall by using procedural shenanigans to avoid a Republican filibuster. In his budget, Obama has already proposed an additional $634 billion—nearly three-quarters of a trillion dollars—in health care spending over the next few years. If he gets his way, this money will be the first installment toward a government insurance plan that will compete with private plans to allegedly put affordable coverage within everyone's grasp.

But whatever else universal coverage might bring, there is no evidence that it will bring economic nirvana. If anything, contrary to what the president suggests, the correlation runs the other way for countries with universal coverage such as Canada, England, France, Germany, and Japan. On nearly every economic front, their performance has been worse than America's—even, surprisingly, in controlling health care costs.

Contrary to popular perception, even though America is at the epicenter of the financial crisis, it has suffered less than its industrialized peers in terms of economic growth. According to the latest International Monetary Fund figures two weeks ago, the U.S. economy actually grew 1.1 percent last year even as Japan's shrank by 0.6 percent. France and England's both grew 0.7 percent, and Canada's only 0.5 percent—or less than half of America's. Only Germany did slightly better at 1.3 percent.

What's more, despite all the gloom and doom about the American economy, IMF expects its gross domestic product to shrink 2.8 percent this year compared to anywhere between 3 percent (France) to 6.2 percent (Japan) for these other economies. (Figures from the U.S. since the IMF projections suggest that the U.S. economy contracted more than expected in the first quarter of this year but it is not yet clear how the other countries performed.)

Not only is America hurting relatively less now, its economic performance in the prior 18 years—from 1990 to 2007—has also been visibly better than everybody else's. Calculations based on Department of Agriculture data show that America's GDP grew at an average annual rate of 3 percent during this period. By contrast, Canada's grew 2.88 percent; England's 2.3 percent; France's 1.92 percent; Japan's 1.74 percent and Germany's 1.59 percent.

Besides experiencing lower growth rates than America in the past, with the exception of Japan, these countries have also experienced chronically higher unemployment rates. Setting aside last year, between 1997-2007 America's peak unemployment rate was below its peers by anywhere from 1 percent (Canada) to 5.7 percent (France). Japan has always had an unusually low unemployment rate, never hitting over 5.3 percent partly because of its policy of guaranteed employment in urban areas that forces workers to share jobs to keep more people employed.

All of this has made Americans much wealthier than all these countries, given that Americans' per capita income in 2006, adjusted for purchasing parity, was about $6,000 more than the next country, England.

But are these countries fiscally stronger? Not by a mile. European countries started reining in their soaring deficits in the years prior to the downturn, thanks to the European Union's requirement that these levels not rise above 3 percent of GDP. But that meant that they had to either dismantle their social spending programs—including universal health insurance—a politically difficult task, or maintain their sky-high taxes. For the most part, they have chosen the latter.

The upshot is that whereas America's 2007 taxation rate was 28.3 percent of GDP, Canada's was 33.3 percent; Germany's 36.2 percent; England's 36.6 percent and France's 43.6 percent. Japan's taxation level of about 28 percent is at par with the United States'—but only at the price of a government debt that totaled a jaw-dropping 170 percent of GDP last year, nearly three times that of America's. Such taxation rates have left these countries limited room to respond to crises, which is why European countries roundly dismissed Obama's calls to increase stimulus spending right now.

The trillions of dollars that this administration is spending to stimulate the economy might be a complete waste of money. But such wastage is a luxury that America can afford because of its relatively lower tax-and-spend burden.

The one remaining economic argument for universal health insurance in the United States is that it will help rein in medical costs. The rap against America is that it spends over 15 percent of its GDP on health care—more than any other industrialized country—and yet leaves upwards of 45 million people uninsured. If it had universal coverage, the theory goes, uninsured folks would get care sooner—not wait till they have a medical emergency—saving the system a ton of money.

It is a nice theory, but there is no evidence that it is true. Although America's per capita health care spending soared in the 1980s, a 2007 study by Kaiser Family Foundation found that it slowed considerably in subsequent years. Indeed, between 1990 and 2003, the rate of growth of America's per capita spending was 3.6 percent, only a little bit higher than France, Germany and Japan's—but significantly lower than England's 4.2 percent. That's striking given that England engages in the most aggressive rationing known to the free world, routinely delaying care to patients unless they are critically ill.

However, Canada, which too indirectly rations care for many specialized treatments by putting patients in queues, has succeeded in limiting per capita spending to 2.4 percent. At best, then, universal coverage has a mixed record in controlling health care spending increases, even after resorting to rationing.

All in all, there is no major industrialized economy with universal coverage that has performed as well—let alone better—than the United States in the last decade. Universal coverage might not be the cause of their inferior performance. But the crucial point is that there is zero evidence that it has put them on a more solid footing. Before applying this exotic therapy to America, Obama needs to offer more than mere hunches that it will work. He needs to offer actual evidence. Over to you, Mr. President.


Blood clots after surgery kill thousands because NHS staff do not appreciate the risk

Thousands of NHS patients are still dying unnecessarily because of a lack of awareness of the risk of developing fatal blood clots after an operation. The condition, venous thromboembolism (VTE), causes one in ten fatalities in British hospitals — an estimated 500 people a week, more than MRSA infections, breast cancer, HIV and road accidents combined. But only one in three NHS hospitals is properly assessing which patients are at risk, while the public are also largely unaware of the dangers, campaigners say.

As many as half of all patients going into hospital are at risk of developing VTE, which occurs when part of a deep-vein thrombosis or blood clot migrates to the lungs, heart or brain. Such clotting is common after surgery, especially in the elderly, the overweight or those confined to bed for more than three days.

The National Institute for Health and Clinical Excellence (NICE) issued guidelines for the NHS in 2007 recommending that all patients should be assessed on admission to hospital for their risk.

But MPs say that while most patients admitted for common operations such as hip and knee replacements are now assessed by a healthcare professional or treated with anti-clotting drugs before the procedure, many other patients are not offered such preventive checks or made aware of the risks.

John Smith, chairman of the cross-party parliamentary thrombosis group, said: “Despite the Health Select Committee announcing the urgent need for action to stem the number of deaths from hospital-acquired blood clots four years ago, a third of NHS hospitals is still not carrying out proper risk-assessments on their patients.”

A survey of more than 1,000 patients by the thrombosis charity Lifeblood found that fewer than one in three were concerned about the risks of VTE when going into hospital, compared to three quarters who would be concerned about contracting a “superbug” infection such as MRSA.

The Department of Health said that while routine screening of patients was not a mandatory requirement, it would consider introducing legislation if the situation did not improve.

Ann Keen, the Health Minister, said that she expected the VTE risk assessment policy to be adopted throughout the NHS and that experts were visiting every trust in England to discuss the implementation of the checks.

“We will be monitoring the position closely and formally reviewing the policy in a year’s time,” she added. “If there is inconsistency... or lack of commitment, we will consider making it mandatory to perform risk assessments.”

Professor Beverley Hunt, Lifeblood’s medical director, said that more than 70 per cent of deaths due to VTE were preventable with proper awareness and treatment. She urged all patients going into hospital for a planned operation to talk to their doctor about the risks and symptoms.


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