Wednesday, February 17, 2010

Some thoughts on health care

This is a quote from a NBER working paper (link is gated) by Fogel and Lee:
Saving lives, as important as it is, and as effective as modern medicine has become, is not the main activity of physicians and other health professionals. As I have already indicated, it is likely that past public reforms, improvements in nutrition and other living standards, and the democratization of education have done much more to increase longevity than has clinical medicine. The main thing physicians do is make life more bearable: to relieve pain, to reduce the severity of chronic conditions, to postpone disabilities or even overcome some of them, to mend broken limbs, to prescribe drugs, to reduce anxiety, overcome depression, and instruct individuals on how to take care of themselves.
Fogel and Lee go on to document that the United States -- a much richer nation than Britain -- has much higher demand for "access to specialists," "individually tailored health services," "inpatient care," and freedom of choice among alternatives. Each of these types of services is expensive, but Americans -- even those who economize on health care -- demand such services, whereas European nationals do not (at least not to the same extent). For example, Europeans are more willing to put up with long waiting lists for hernia operations (sometimes exceeding two years) when the typical wait in the United States is a few weeks.

Based on this discussion, Fogel and Lee conclude:
And so, what is viewed as "essential" health care in the United States includes items that in other cultures would be regarded as wasteful luxuries. This misunderstanding of the American system is relevant to the proposition that 15 percent of Americans are "uncovered" by health insurance. "Uncovered" does not mean untreated. The uninsured see doctors almost as frequently as the insured. Nor is it clear that the effectiveness of their care is always less than those who have insurance. The uninsured are treated in public clinics and in emergency rooms, which (although they lack the conveniences of insured care and may have long queues) provide competent services, both standard and high tech.
This paper sounds like it was written in response to the current health care debate, but it wasn't; it was written in 2003. Despite being written 7 years ago, this paper is now at the top of my list of must-read health care articles. I also recommend Friedman's How to Cure Health Care (2001).

1 comment:

  1. Very good points. I would also add to the debate the fact that buying health insurance is a form of gambling. You are taking a chance by paying monthly for insurance companies to pick up the tab if you happen to get sick. They are businesses and would not exist if that was not profitable. If individuals set aside whatever their payment to the health insurance companies would be each month in a savings account or low-risk, liquid mutual fund, they could then withdraw the money when and if they get sick. I would assume that for 99.9% of people, this would save them a lot money in the long run.
    The house always wins... well most of the time.


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