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Business is Always Better? Consider Health Care, says Amy

John Stossel writes: “I bet my readers $1,000 that they couldn’t name one thing that government does better than the private sector. I am yet to pay. Free enterprise does everything better.”

John Stossel must be blind.

Consider health care, for instance. Professor Douglas Amy of Mount Holyoke College looked into this issue; here’s an excerpt from an extended essay of his:

Conservatives constantly warn us that adopting “socialized” medicine would put health care in the hands of government bureaucracies, which would be a recipe for incredible waste and inferior care. But is this really the case? We can answer this question by comparing the performance of public versus private health care systems. Every other developed country has some form of universal health care with a substantial amount of public funding and administration. In contrast, while the U.S. has a few programs like Medicare and Medicaid, most of our health care system is privately funded and administered. According to conservative mythology, this market-based system should produce better health care and do so more cheaply. But neither of these claims hold up when we look at studies of the actual performance of public and private approaches to providing health care.

First, studies have found that the U.S. health care system is by far the most expensive in the world. We spend 13.6% of our gross domestic product on health care – the highest in the world. The average for the other 13 industrialized countries in the OECD is 8.2%. We also rank number one in terms of health care expenditures per capita, with U.S. spending $4,090 a year for every citizen. The highest figures for other industrialized nations are $2,547 per year for Switzerland, $2,339 for Germany, $2,340 for Luxembourg, and $2,095 for Canada. But while we clearly have the most expensive health care system in the world, it does not always deliver the best health care nor does it provide health care in the most efficient way.

Research has shown that the U.S. ranks poorly compared to many other countries in terms of some common measures of health. For example, we rank 26th among industrialized countries for infant mortality rates. We also do much less well in terms of life expectancy. In one typical study, the World Health Organization (WHO) looked at “disability adjusted life expectancy”– the number of years that one can expect to lead a healthy life. The U.S. came in a disappointing 24th on this measure. As one WHO official concluded: “The position of the United States is one of the major surprises of the new rating system. … Basically, you die earlier and spend more time disabled if you’re an American rather than a member of most other advanced countries.” Moreover, an article in the Journal of the American Medical Association in 2000 noted with concern the results of a comprehensive study that compared how 13 industrialized nations were ranked on 16 different measures of health. The U.S. ranked an average of 12th – second to last.

Amy wrote this a decade ago, and you might be thinking that perhaps the United States’ performance relative to other nations with government-run health care might have changed since. You’d actually be right: relatively-speaking, in recent years other countries are doing even better compared to the United States. The World Health Organization’s updated life expectancy data ranks the United States 37th in its most recent data for the year 2011. An article published a year ago in the Lancet reveals that in disability adjusted life expectancy, the United States sat in 30th place among nations for men and in 33rd place among nations for women. In infant mortality, according to the surprisingly useful CIA Factbook, the United States now ranks more poorly than 50 other nations in its infant morality rate.

Follow the links to sources you’ll find above and look for the trend: the countries doing better than the United States have government-run health care systems. Business is always better? I don’t think so, no.

6 comments to Business is Always Better? Consider Health Care, says Amy

  • Dave

    Jim, WHO’s numbers on life expectancy show that the U.S. is behind small, homogenous, socialist white European countries, but ahead of small (and some large), mostly homogenous, South and Central American socialist countries populated with brown people. Just musing on this, but if statistics do not focus like a laser on socialism being the deciding factor, wouldn’t it be best to find other ways of making the point? Your comparison may have the unintended consequence of racial or societal factors.

  • Bill

    And yes, by all means, let’s have for-profit police and fire departments, health inspectors, child welfare agencies, and election regulators. That would solve pretty much all of our problems.

  • Dave

    Cheers, Bill. Hadsomemyself. Yes, I think income is the most important factor in many indicators of well-being. Certainly is in mine.

  • Dave

    I should have said “one important factor.” Now I can sleep.

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