Thin Skins Across the Pond

There's been a bit of a fuss in Britain the last few days. It's keyed to Americans taking a look at the performance of their government-run health care system, the National Health Service, or NHS, and finding it wanting.

It seems that more than a few Britons are taking this personally, as if our horror at seeing, for example, Britons routinely denied potentially-lifesaving cancer drugs because of their cost is a hostile, anti-Britain sentiment.

Quite the contrary: If we did not like you, we wouldn't be so horrified.

This debate is more than of passing interest to me because this week the National Center for Public Policy Research will release its newest book, "Shattered Lives: 100 Stories of Government Health Care."

The chapter on Britain is the longest.

Beginning soon, we'll be running a story a day from the book in this blog. As we do, I expect I'll also be editorializing a good bit more about what our friends in Britain have said in defense of their own health system, and their attacks on our own.

In the meantime, I recommend this excellent post on the Classically Liberal blog, which contains several stories from Britain. [See below]

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The NHS, life expectancy and America's health care debate

Excerpt from the post mentioned above

Bureaucrats who work for the British government’s health care system are unhappy that their system of centrally planned care is being used as an example of what Americans should fear with Obamacare. One such individual, from the Faculty of Public Health, Alan Maryon-Davis, claimed “The NHS (National Health Service does a damn fine job.” And his proof: “We spend less on health in terms of GDP than America but if you look at health indices, especially for life expectancy, we have better figures than they do in America.”

What is interesting is how Maryon-Davis was able to include so much misinformation into one sentence. It is almost breathtaking. So let’s unpack his claim one phrase at a time. “We spend less on health in terms of GDP than America...” This is true. But does it mean anything?

Americans spend more on cars, in terms of GDP, than do Brits. Does this mean Brits have better automobile transportation than Americans? Not at all, they have significantly less. The British government puts a lid on health care in some very simple ways: they deny it. So you can’t get the treatments in the UK that you can get in the United States.

Americans can choose to spend on these treatments, British subjects can not. If we cut the amount of health care we give out, we could cut our costs significantly. Take one example that was in the news recently, because this British woman, agreed to be interviewed by opponents to Obama’s take-over of health care.

Katie Brickell asked for a pap smear when she was 19. The NHS told her she could not have it. When she turned 20, she was told, she could ask again. She asked again, one year later. Now they told her they had changed the rules and she could only have a pap smear when she turned 25. So, once again she delayed the test. When she was 23 they told her she had cervical cancer, the very thing the test is designed to detect. She said: I gave an interview and everything I saw was truthful...” She said: “I would say to anybody in my situation now that if they had the money, they should go private.”

Luckily she was working a company that also provided private insurance. So she was immediately put on drugs that, so far, have saved her life, and appear to have put the cancer in remission. She has to take two different drugs and she acknowledges, that under NHS care “I would have had to get a lot of clearance to get that level of care. On private, that just was not an issue. If I needed a scan, it was immediate. On the NHS, it was often a two or three-week wait.”

The NHS was doing what it was designed to do: cut the costs of health care by rationing health care according to edits set by bureaucrats as their best guess as to what, is a good idea, on average. The rules are set to cut costs. In most cases a 19-year-old doesn’t need a pap smear, Katie wasn’t “most cases.” The system can’t individualize needs the way that private care can.

Thelma Nixon was told that her case of wet macular degeneration would mean she would go blind. She need injections into the eyes to prevent this. Injections, or blindness, there was no other option. The NHS told her she didn’t fit their guidelines because the cost was too great. So they decided she needed to go blind, after all NHS provides health care at a lower cost than the US and that’s a good thing.

Thelma remortgaged her home while the Royal National Institute for the Blind went to bat for her. The press caught on to the story and started campaigning for her. Since British health care is politically controlled this was causing bad publicity for the ruling party and the NHS relented—for Thelma. Those who don’t manage to create a media frenzy around themselves are not so fortunate.

But Thelma’s initial treatments were paid for by herself, from the house mortgage. And when that ran out a local businessman gave her the funds for two more treatments. Other readers of her local paper rallied to her case and provided funding. ONLY after this media frenzy was created did the NHS relent. They sent up new guidelines for assessment and will not disqualify people from care according to the new policies.

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British woman gives birth on pavement 'after being refused ambulance'

Don't you just love that good ol' NHS?

A young mother gave birth on a pavement outside a hospital after she was told to make her own way there. Mother-of-three Carmen Blake called her midwife to ask for an ambulance when she went into labour unexpectedly with her fourth child. But the 27-year-old claims she was refused an ambulance and told to walk the 100 metres from her house in Leicester to the city's nearby Royal Infirmary.

Her daughter Mariah was delivered on a pavement outside the hospital by a passer-by, just before ambulance crews arrived. Today the Trust that runs the hospital said it would look into any complaint made about the advice and care the 27-year-old received.

Ms Blake said she started going into labour at about 7.15am on Sunday, August 2. She said: "I phoned up the Royal Infirmary, it's just across the road, and they said to go into a hot bath, and then to make my way over there. "I went into the bath and realised she was going to come quickly. I didn't think I'd be able to make it out of the bath, so I phoned the maternity ward back and told them to get an ambulance out. 'They said they were not sending an ambulance and told me I had had nine months to sort out a lift.'

Experienced mother Ms Blake today said she knew she had to get herself out of the bath and try to get to the hospital. 'The friends with me would have had no idea what to do. I knew at that point that she was nearly here so I had to get out of the house,' she said. 'I thought if I got across the road then at least somebody would be able to help me. 'I left the house and got to the end of the close, but there was no-one around to help.'

Eventually Ms Blake and her friends enlisted the help of a physiotherapist who happened to be passing on her way to work. She dialled 999 and helped deliver baby Mariah while waiting for emergency services. She even helped remove the cord from around the tot's neck, Ms Blake said today.

She said: 'I don't really remember much after that. Mariah was born, then the paramedics arrived then after that the midwives arrived. I think I went into shock. 'It's just lucky that the physio was there.'

Ms Blake said despite the happy ending she was upset she was told to make her own way to the hospital as, being an experienced mum, she knew she did not have the time.

Today a spokeswoman for the University Hospitals of Leicester NHS Trust said: 'We are disappointed that Ms Blake was not happy with the advice and care she received and will of course investigate any complaint. 'We are pleased that both Ms Blake and her daughter are well and healthy.' [Mealy-mouthed indifference]

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Flight to private health insurers in Australia

PEOPLE have flocked to private health insurance in an apparent rejection of the Rudd Government's ability to fix the public health system and in a bid to escape a new levy. The Private Health Insurance Administration Council will today report that private health coverage increased by about 43,000 people since the March quarter – or about 211,000 more people compared with the same time last year.

The Courier-Mail can also report that Queensland Health cancelled 273 elective surgeries in the past month – up from 121 the year before. "Queensland hospitals are currently experiencing an increased demand due to seasonal winter symptoms and H1N1 (and) the increased demand has resulted in some elective surgery patients being postponed due to no ward or intensive care unit beds," a spokesman said.

Federal Opposition health spokesman Peter Dutton questioned the ability of Queensland Health to run an effective system at a time when billions have been diverted to the public health sector, much of it to cut elective surgery waiting lists.

Today's release of the new private health statistics – recorded during rising unemployment, the global financial meltdown and a 6 per cent rise on premiums – comes just days before the Rudd Government introduces a Budget measure that will no longer give high-earners a rebate for taking up private health insurance. But the Bill will be knocked back in the Senate by the Coalition and Independent Senator Nick Xenophon.

The Coalition has accused the Government of breaking its promise to retain support for private health insurance. The Government has already implemented a measure this year, requiring more people to take on private health insurance or face a levy. It sparked the Opposition to claim people would drop out, thereby driving up premiums.

Buoyed by the results, Health Minister Nicola Roxon, who attacked the Liberals yesterday on News Ltd's online site, The Punch, said the Coalition should not use low and middle-income earners to prop up rebates for the rich. Under the new Bill, rebates will be removed for singles earning more than $120,000; reduced from 30 to 10 per cent for those earning more than $90,000; and to 20 per cent for those on more than $75,000.

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We Don't Spend Enough on Health Care

It's crazy to adopt a bean-counting mentality amid revolutionary, albeit expensive, advances in medicine.

Americans are being urged to worry about the nation spending 17% of its gross domestic product each year on health care—a higher percentage than any other country. Addressing the American Medical Association in June, Barack Obama said, "Make no mistake: The cost of our health care is a threat to our economy." But the president is mistaken. Japan spends 8% of its GDP on health care—the same as Zimbabwe. South Korea and Haiti both spend 6%. Monaco spends 5%, which is what Afghanistan spends. Do all of these countries have economies that are less "threatened" than that of the U.S.?

No. So there must be other factors that affect the health of a nation's economy.

Mr. Obama has said that "the cost of health care has weighed down our economy." No one thinks the 20% of our GDP that's attributable to manufacturing is weighing down the economy, because it's intuitively clear that one person's expenditure on widgets is another person's income. But the same is true of the health-care industry. The $2.4 trillion Americans spend each year for health care doesn't go up in smoke. It's paid to other Americans.

The basic material needs of human beings are food, clothing and shelter. The desire for food and clothing drove hunter-gatherer economies and, subsequently, agricultural economies, for millennia. The Industrial Revolution was driven by the desire for clothing. Thus Richard Arkwright's water frame, James Hargreaves's spinning jenny, Samuel Crompton's spinning mule, Eli Whitney's cotton gin and Elias Howe's sewing machine.

Though it hasn't been widely realized, the desire for shelter was a major driver of the U.S. economy during the second half of the 20th century and the first several years of the 21st. About one-third of the new jobs created during the latter period were directly or indirectly related to housing, as the stupendous ripple effect of the bursting housing bubble should make painfully obvious.

Once these material needs are substantially met, desire for health care—without which there can be no enjoyment of food, clothing or shelter—becomes a significant, perhaps a principal, driver of the economy.

A little-noticed feature of the current recession is the role of the health-care industry as a resilient driver of the general economy. Health-care now accounts for 10.4% of nonfarm employment. Health-care employment grew by 19,600 jobs in July 2009, on a par with the average monthly gain for the first half of 2009, which was down from an average monthly increase of 30,000 in 2008. Remarkably, these gains occurred in a period during which total employment shrank by 6.7 million.

The U.S. health-care economy should be viewed not as a burden but as an engine of growth. Medical and orthopedic equipment exports increased by 65.1% from 2004 through 2008. Pharmaceutical exports were up 74.6%. The unprecedented advances expected to come out of American stem cell, nanotechnology and human genome research—which other countries' constricted health sectors cannot support—will send these already impressive figures skyward.

A study by Deloitte LLP has found that more than 400,000 non-U.S. residents obtained medical care in the U.S. in 2008, and it forecasts an annual increase of 3%. Some 3.5% of inpatient procedures at U.S. hospitals were performed on international patients, many of them escaping from Canada's supposedly superior health system.

"Inbound medical tourism," Deloitte stated, "is primarily driven by the search for high-quality care without extensive waiting periods. Foreign patients are willing to pay more for care within the United States if these two factors play a large role." The deficiencies of the foreign health-care systems the Obama administration wishes to emulate can be counted on to generate ever-increasing revenues for U.S. providers and employment for Americans.

In a 2007 study, Stanford University economists Robert E. Hall (who will take office next year as president of the American Economic Association) and Charles I. Jones reported that modeling they've conducted has found that mid-21st century U.S. health-care expenditures would optimally amount to 30% of GDP or more. They wrote:

"We examine the allocation of resources that maximizes social welfare in our model. We abstract from the complicated institutions that shape spending in the United States and ask a more basic question: from a social welfare standpoint, how much should the nation spend on health care, and what is the time path of optimal health spending? . . .

"Viewed from every angle, our results support the proposition that both historical and future increases in the health spending share are desirable. . . . [W]e believe it likely that maximizing social welfare in the United States will require the development of institutions that are consistent with spending 30 percent or more of GDP on health by the middle of the century."

The administration's health-care plan is biased toward bean-counting rather than designed to maximize American physical and mental well-being. We need to ask ourselves whether there is truly anything more valuable to us than our loved ones and our own health and longevity.

In the signature radio sketch of Jack Benny, whose performing persona was laughably frugal, actor Eddie Marr snarled at him, "Don't make a move—this is a stickup. Now, come on: Your money or your life." Benny didn't respond. The "robber" said, "Look, bud—I said your money or your life!" Whereupon Benny shot back, "I'm thinking it over!"

Confronted for the first time in history with a constant stream of medical innovations that are marvelously effective but tend to be very expensive, our legislative representatives—in particular, the Blue Dog Democrats—would do well to stop "thinking it over" and to commit themselves to action that will preserve the ability of Americans to choose life over money.

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I want my referee

Currently, consumers enter into a health-care contract with an insurance company. This contract has an asymmetric payoff, in that the insurance company gains when a consumer stays healthy, and the consumer gains if they fall ill. If a consumer falls ill, the insurance company would like to renege on its obligation. Yet it cannot, because the contract is enforced by an unbiased referee. That referee is the United States government.

The fundamental problem with the Democrat's health care proposal is that it will cause the the government to abandon its "referee" role in order to become my "contractual opponent." Democrats suggest that government can play the role of both opponent and referee. Maybe I'm too competitive, but I prefer when my opponent and my referee are not the same person.

Opposition to "health care reform" is not so much philosophical as it is practical. Sarah Palin learned something at the University of Idaho that a lot of folks didn't learn at Harvard: when contractual payoffs are asymmetric, you need a referee to ensure compliance. I want my referee, and the Democrats are trying to take it away from me. Doesn't that justify a little anger?

To clarify, this debate is one of degrees. The government has been involved in providing health care for decades, and from that perspective, perhaps current proposals may not seem so radical. Yet at some point, the government's engagement as a contractual opponent will cause it to abandon the role of referee. My concern is that the current proposals before Congress would push us well past that point.

I'm not much interested in defending the current system we use to provide and finance health care in the United States. However, the "right way" to do it (whatever that may be) is going to incorporate the role of an unbiased referee. Health insurance contracts are designed such that the insurer (regardless of whether it's an insurance company or the federal government) always has an incentive to shirk on their end of the bargain. The referee's job is to make sure they don't.

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