Health Care II Lecture 12
How to be political about health care 1. Read Arrow (1963) 2. Choose your priority Coverage? Cost? Quality? Freedom? 3. Figure out the U.S. system 4. Look at the cross-national data 5. If necessary, return to (1) (Try not to shut down the government)
Priorities 1. Coverage Either forced participation, or extreme price discrimination (Arrow) Cost = a function of the size of the risk pool, i.e. coverage through participation rather than indigence (why?) 2. Quality By what standard? Best high-end or best low-end? Is the best high-end care even knowable? 3. Freedom Non-participation by individuals, discretion by doctors Not freedom to consume whatever healthcare you want, or need
Health Care Trilemma? (Swenson 2007) Freedom Pre-Reform U.S. Health System Various Forms of National Health Care Coverage / Cost Quality
Billions of U.S. Dollars (2010) Innovation? 60 2013 Tom Pepinsky Country 40 France Germany Switzerland UK/Sweden 20 United Kingdom United States 0 Abbott Laboratories AstraZeneca Bayer Bristol Meyers Squibb Eli Lilly GlaxoSmithKline Johnson & Johnson Merck & Co. Novartis Pfizer Roche Sanofi Source: Wikipedia Firm
Trilemmas in Practice 1. Pre-2008 US system Free choice but allow moral hazard and adverse selection 2. Single-payer national health care (like Medicare) Eliminate adverse selection but allow moral hazard and eliminate freedom of non-participation 3. Government provided health care (like the military) Eliminate adverse selection and contain moral hazard, eliminate freedom of non-participation and some doctor discretion Obamacare? A peculiar elaboration of mutant employment-based system, somewhere between (1) and (2)
A Peculiar Elaboration Swenson and Greer: Health care -> industrial and labor relations
A Peculiar Elaboration Ways of providing near-universal coverage 1. Individual mandate Individuals must buy insurance Common across the world (Japan, Netherlands) Governments must help to make the insurance markets 2. Employer mandate Employers must provide health insurance, or help to pay for it Also fairly common, often combined with individual mandate (France, Germany) Governments must make the insurance markets for employers that cannot 3. Nationalized health care Health care is like a road: it s there, free or very cheap, use it as you like, we all pay through taxes Can have government providers (U.K.) or private providers (Canada)
So, about those data All from the World Development Indicators, 2010
Health Expenditure and Life Expectancy AFG ALB DZA AGO ATG ARM AUS AUT AZE BHS BHR BGD BLR BEL BLZ BEN BTN BOL BIH BWA BRA BRN BGR BFA BDI KHM CMR CAN CPV CAF TCD CHL CHN COL COM ZAR COG CRI CIV HRV CUB CYP CZE DNK DOM ECU EGY SLV GNQ ERI EST ETH FJI FIN FRA GAB GMB GEO DEU GHA GRC GRD GTM GIN GNB GUY HTI HND HUN ISL IND IDN IRQ IRL ISR ITAJPN JOR KAZ KEN KIR KOR KWT KGZ LAO LVA LBN LSO LBR LTU LUX MKD MDG MWI MYS MDV MLI MLT MRT MUS MEX FSM MDA MNG MNE MAR MOZ NAM NPL NLD NZL NIC NER NGA NOR OMN PAK PAN PNG PRY PER PHL POL PRT QAT ROM RUS RWA WSM STP SAU SEN SRB SYC SLE SGP SVK SVN SLB ZAF ESP LKA LCA VCT SDN SUR SWZ SWE CHE SYR TJK TZA THA TMP TGO TON TTO TUN TUR TKM UGA UKR ARE GBR USA URY UZB VUT VEN VNM YEM ZMB 0 2000 4000 6000 8000 50 60 70 80 Life Expectancy Health Expenditure Per Capita GDPPC a a a a 20000 40000 60000 80000 2013 Tom Pepinsky
Health Expenditure Per Capita Health Expenditure and Life Expectancy, Rich Countries Only 8000 2013 Tom Pepinsky USA Luxembourg 6000 Norway Netherlands Switzerland 4000 2000 lovak Rep. Estonia Poland Czech Rep. Denmark Germany Austria Canada Belgium France Ireland Sweden Australia UK Finland Greece Iceland New Zealand Spain Italy Portugal Slovenia Rep. Korea Israel Chile Japan 75 77 79 81 83 Life Expectancy
Health Expenditure Per Capita Health Expenditure and Infant Mortality, Rich Countries Only 8000 2013 Tom Pepinsky USA Luxembourg 6000 Switzerland Netherlands Norway 4000 2000 Chile Slovak Rep. Canada Germany Austria Denmark Belgium France Australia Ireland Sweden UK Finland Greece Iceland New Zealand Spain Italy Japan Portugal Slovenia Rep. Czech Israel Korea Rep. Poland Estonia 8 6 Infant Mortality Rate 4 2
Health Expenditure Per Capita Health Expenditure and Number of Doctors, Rich Countries Only 8000 2013 Tom Pepinsky USA 6000 Luxembourg Netherlands Switzerland Norway 4000 2000 Chile Canada Denmark Germany France Belgium Ireland Sweden Australia UK Japan Finland Iceland New Zealand Italy Spain Portugal Slovenia Rep. Korea Slovak Rep. Czech Israel Rep. Poland Estonia Austria Greece 2 4 6 Physicians per 1000 citizens
Health Expenditure Per Capita Health Expenditure and Number of Nurses, Rich Countries Only 8000 2013 Tom Pepinsky USA Luxembourg 6000 Norway Switzerland 4000 2000 France Greece Italy Slovak Rep. Chile Austria Germany AustraliaSweden UK Japan Spain New Zealand Portugal Slovenia Rep. Israel Korea Czech Rep. Poland Estonia Denmark Ireland Iceland Belgium Finland 0 5 10 15 20 25 Nurses per 1000 citizens
Health Expenditure (% of GDP) 2013 Tom Pepinsky Private Health Expenditure Rich Countries Only 7.5 5.0 2.5 0.0 AUS AUT BEL CHE CHL CZE DEU DNK ESP EST FIN FRA GBR GRC Country IRL ISL ISR ITA JPN KOR LUX NOR NZL POL PRT SVK SVN SWE USA
Health Expenditure (% of GDP) Public Health Expenditure Rich Countries Only 2013 Tom Pepinsky 7.5 5.0 2.5 0.0 AUS AUT BEL CHE CHL CZE DEU DNK ESP EST FIN FRA GBR GRC Country IRL ISL ISR ITA JPN KOR LUX NOR NZL POL PRT SVK SVN SWE USA
Health Expenditure (% of GDP) Total Health Expenditure Rich Countries Only 15 2013 Tom Pepinsky 10 Expenditure Public Private 5 0 AUS AUT BEL CHE CHL CZE DEU DNK ESP EST FIN FRA GBR GRC Country IRL ISL ISR ITA JPN KOR LUX NOR NZL POL PRT SVK SVN SWE USA Total
So are Americans just sicker? Maybe we are just sicker, so we spend more and we get less! Well, yeah, but
Questions?