Myth #2

Although The United States Spends More On Health Care Per Capita Than Countries With National Health Insurance, Americans Do Not Get Better Health Care.

Figure 4

This myth is often supported by reference to two facts: that life expectancy is not much different among the developed countries and that the U.S. infant mortality rate is one of the highest among developed countries.

Mortality Rates and Health Care.

General population mortality rates tell us almost nothing about the efficacy of health care systems because, throughout the developed world, there is almost no relationship between health care and general mortality – either among or within countries. General mortality rates are far more closely related to socioeconomic factors and lifestyle.

For example, in Sweden, there are striking differences in health outcomes between Stockholm and Hollard, a rural, agricultural area in the nation's south: [17]

  • Infant mortality in Stockholm is almost twice as high as in rural Hollard, and mortality among 40-year-olds in Stockholm is 50 percent higher.

  • Even the middle-class suburban area outside of Stockholm city has an infant mortality rate 71 percent higher than Hollard's.

  • Yet no one has seriously claimed that these differences are the result of the Swedish health care system.

In Norway, people in the urban areas of Oslo and Akershus have the most contacts with physicians. But infant mortality in those areas is still higher than in, say, Hordaland in western Norway. [18] In virtually every country, there is a positive relationship between income and health status and between social class and health. Lifestyle also appears to matter. For example, in Norway, children born to unmarried women between 1971 to 1975 had a 55 percent higher (perinatal) mortality rate than children born to married women. Between 1976 and 1980, the rate for unmarried women was 40 percent higher. [19]

Where Health Care Makes a Difference.

A population's general mortality is affected by many factors over which doctors and hospitals have little control. For those diseases and injuries modern medicine can affect, however, it makes a big difference where a patient lives. For premature babies, for children born with spina bifida or for people who have cancer, a brain tumor, heart disease or chronic renal failure – the chances of survival are best in the United States.

Access to Modern Medical Technology in Canada.

Figure IV compares the availability of modern medical technology in the United States and Canada. As the figure shows:

  • On a per capita basis, the United States has eight times as many magnetic resonance imaging (MRI) units – which use magnetism instead of x-rays – as Canada.

  • The United States has seven times as many radiation therapy units (to treat cancer) per person.

  • The United States also has about six times as many lithotripsy units (to destroy kidney stones and gallstones with sound waves) per person.

  • And, per capita, the United States has about three times as many open-heart surgery units and cardiac catheterization units (for the treatment of heart disease).

Note that the figures contrast the United States with Canada two years later. Contrasting the two countries in the same year would reveal an even greater disparity. While critics of the U.S. health care system claim that we have too much technology, all the evidence suggests that Canada has too little – as a result of the conscious decisions of government officials. Doctors in British Columbia have taken out full-page newspaper advertisements warning that their patients' lives are endangered by government's refusal to purchase lifesaving medical technology. It is easy to understand why these and other Canadian doctors are complaining. Consider what the shortage of diagnostic equipment means for patients: [20]

  • Seattle, Washington (pop. 490,000) has more computerized axial tomography (CAT) scanners (used, for example, to detect brain tumors) than the entire province of British Columbia (pop. 3 million).

  • There are more MRI scanners in Washington state (pop. 4.6 million) than in all of Canada (pop. 26 million).

  • The province of Newfoundland (pop. 570,000) has only one CAT scanner, causing patients who need a CAT scan to wait an average of two months.

  • Prince Edward Island (pop. 128,000) has no CAT scanner, and patients who need a CAT scan must leave the province in order to obtain one.

  • Because of a shortage of laboratory testing equipment in 1988, women in Newfoundland waited up to five months for a Pap smear (needed to detect cervical cancer) and two months for an "urgent" Pap smear.

  • Also because of an equipment shortage, women in Newfoundland waited as long as 2-1/2 months for a mammogram (used to detect breast cancer).

  • Women on Prince Edward Island wait from four to eight months for mammograms, and even "emergency" patients can wait as long as one month.

Access to Modern Medical Technology in Britain.

In an extensive study of Britain's National Health Service (NHS), Brookings Institution economists estimated the number of British patients denied treatment each year, based on U.S. levels of treatment. Most of the patients suffered from life-threatening diseases and the denial of treatment meant certain death. Table II presents these estimates, along with estimates of what it would cost the NHS to bring British treatment up to U.S. standards. As the table shows:

  • Each year, about 9,000 British kidney patients fail to receive renal dialysis or a kidney transplant – and presumably die as a result.

  • As many as 15,000 cancer patients and 17,000 heart patients fail to receive the best treatment modern medicine can offer.

  • As many as 1,000 British children fail to receive lifesaving total parenteral nutrition (TPN) therapy and about 7,000 elderly patients are denied pain-relieving hip replacements.

Willingness to Adapt to New Technology.

Some argue that countries with national health insurance delay the purchase of expensive technology in order to see if it works and is cost-effective. If true, the downside of this approach is that patients are denied access to lifesaving treatment while government bureaucracies evaluate it.

During the 1970s, for example, lifesaving innovations were made in kidney dialysis, computerized axial tomography (CAT) scanning and pacemaker technology. Yet as Table III shows: [21]

  • The rate of implants of pacemakers in the United States during the mid-1970s was more than four times that of Britain and almost 20 times that of Canada.

  • CAT scanners in the United States were more than three times as available in the United States as in Canada and almost six times as available as in Britain.

  • The treatment rate of kidney patients in the United States was more than 60 percent greater than in Canada and Britain.

There is considerable evidence, however, that cost-effectiveness is not what drives the bias of other governments against modern medical technology: [22]

  • CAT-scan technology was invented in Britain, and until recently Britain exported — probably with government subsidies — about half the CAT scanners used in the world. Yet the British government has purchased only a handful of the devices for the National Health Service and has even discouraged private gifts of CAT scanners to the NHS.

  • Britain also was the codeveloper of kidney dialysis, a lifesaving method of treating patients with chronic renal failure, yet Britain has one of the lowest dialysis rates in Europe.

One could argue that the "need" for technology varies from country to country. For example, the incidence of chronic renal failure may be higher in the United States than in other developed countries. Even if this were true, however, a comparison of Tables III and IV shows that every country had substantially increased the number of patients being treated by 1984, when even East Germany was treating more patients than Britain or Canada had treated eight years earlier.

The Politics of Medical Technology.

It would be a mistake, however, to think of the current U.S. health care system as ideal. The United States has not always been the first country to adopt new technology (even technology that works and is cost-effective). We do not always purchase the most technology. And we have not always made cost-effective choices among competing technologies.

In 1970, before a dialysis benefit was extended to the entire population under Medicare, the U.S. treatment rate for patients with renal failure was on a par with Britain's and less than half that OTSweden and Denmark. Only after Medicare provided a virtual blank check did the U.S. treatment rate soar. [23]

How we treat kidney patients was also dictated by government reimbursement policies. Studies show that home dialysis is less expensive than dialysis in a hospital or a clinic and prior to the Medicare expansion, about 40 percent of U.S. dialysis treatment was home-based. But because Medicare gave physicians incentives to avoid home-based dialysis, the rate fell to 12 percent by 1978. There is also evidence that kidney transplants are more cost-effective (over the long run) than dialysis. But because Medicare reimbursement policy favored dialysis, the United States was 12th of 20 developed countries in the percent of kidney patients treated by transplant in 1985. [24]

A more recent technological innovation is extracorporeal shock wave lithotripsy (ESWL) to disintegrate kidney stones and gallstones and eliminate the need for surgery. In 1989, the U.S. rate of lithotripters per capita was exceeded by rates in Germany (where ESWL was invented) and Belgium. [25]

Overall, the best way to think about government policies toward technology is in terms of the politics of medicine. As the role of government expands, health care tends to evolve from a pro-technology phase to an antitechnology phase. In the first stage. government tends to spend on items perceived as under-provided by the market or by conventional health insurance. Thus. practically every less-developed country has used government funds to build at least one modern hospital, usually in the largest city. and to stock it with at least one example of each new technology — even though the vast majority of citizens lack basic medical care and public sanitation.

As government's role in medicine begins to expand, more and more interest groups must be accommodated. In this stage, government policy tends to be antitechnology because the small number of people who need the technology are so heavily outnumbered. Along the way, these general trends may be violated with respect to any particular technology because of the varied, even random, ways in which special interest pressures are exerted. We analyze the politics of medicine in more detail below.

When the United States had a pure cost-plus health care system, technology tended to be adopted quickly because physicians – unconstrained by considerations of cost – found the technology useful. When the role of government was minimal, it was easier to acquire public funds where conventional insurance coverage was lacking (e.g., kidney dialysis and organ transplants). It is not surprising that the United States made great use of technological innovations.

Our experience in the future may be very different, however. In the United States we pay more for health care. We also get more. And what we get may save our lives. But increasingly, our health care system is acquiring the characteristics of the health care systems of other countries, in which access to medical technology is determined by rationing and politics. [26]