Friday, June 20, 2014

On the New Commonwealth Fund Report

The new Commonwealth Fund analysis of international health care systems is out and, not surprisingly, the USA ranks dead last out of 11 nations. Despite my contrarian nature, I'm not a defender of the USA health care system, but I do think that, relatively speaking, the USA gets a worse rap than it deserves. "Relatively speaking" is an important word. In an absolute sense, the system really is as bad as commonly believed. But, in a relative sense, other systems are vastly overestimated due to bad reasoning and, yes, zombies. It is also true that, as bad as the USA system is, even our system deserves a bit more credit than it gets at times. A few thoughts on the actual report:

1.) The study ranks the UK as being the best health care system of the 11 countries. This should be an immediate red flag that this analysis is more driven by an ideological preconceptions than a quest for an objective comparison. I could be wrong. But, the emphasis on "health care equity" certainly isn't helping their case. Neither is the fact that data on how long people in the UK have to wait for elective surgery (a measure that they probably wouldn't do all that well on) is missing from the study.

2.) Progressives are claiming this study as a slam dunk for their health care policy views. After all, the socialized UK system is on top and the USA system is at the bottom. But, a look at the in between rankings muddies up the picture. Switzerland, with a heavy reliance on private medicine and cost sharing (neither of which progressives are very big on), comes in at second place. Canada, with a single payer system, comes in at second to last, right above the USA.

3.) One of the biggest problems with these international health care system comparisons that supposedly "show" how bad the USA system is that they don't measure the best thing about the USA system: innovation. Yes, we spend a lot more money (more than we need to), and we don't get a ton of value. But, our decentralized system also offers more room for experimentation than the tighter models of Europe. The problem here is that the benefits from this innovation benefit the whole globe, so it doesn't show up in international comparisons of health care systems. Indeed, in some ways, these other health care systems that are supposedly so much better than ours "free ride" off of our innovation, and then brag about how they do so well with less money. Excellent (old) article on this by Tyler Cowen here.

I also plan on responding to TIE and Krugman about the idea of zombie arguments in the very near future. Stay tuned.

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