Keeping Up with U.S. Health Reform - Can We Do Better than China?

Today, as the Washington Post reports that Congress is suspending consideration of health reform for its August recess, it is a good time for those of us interested in following the issues to catch up with where the reform is going. Slate Magazine’s Online Guide to health reform is a great link to add to your favorites if you want to stay abreast of the discussion. An articleby Timothy Nash in today’s Slate magazine refers to Atul Gawande’s influential June 2009 New Yorker magazine article in support of increasing the share of health care delivered by multi-specialty group practices. If you found Gawande’s article persuasive, as I did, you will be depressed by Nash’s conclusion that the reform bill currently before the House of Representatives would do little to encourage or reward a shift of the mix of US health care provision in that direction.

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Mead Over

Senior Fellow Emeritus

A simple comparison of health status and health care costs between the US and other rich countries, such as that published in Table 1 of this recent Annals of Internal Medicine Article, should be sufficient to convince anyone that this country and its citizens waste almost half of what we spend domestically on health care. The fact that the US system of health care financing burdens employers with paying for most of that wasted health care expenditure, forcing them to pass on these costs to their customers in the form of higher prices, justifies President Obama’s assertion that reforming health care is part of the solution to improving US economic performance.

The problem is that the “wasted” health care expenditure is not just thrown away. It goes into the pockets of honest, hard-working American voters. Some of these are physicians and nurses; others are the employees of health insurance companies or medical device manufacturers or pharmaceutical firms. So even if in Sweden or Canada or the United Kingdom or a half dozen other countries, the same health results could have been purchased at half the cost, the US citizens who currently receive these wasted dollars as incomes feel entitled to keep on receiving them in the future.

In an alternative version of today’s United States, we would all be better off. The health care consumers would have equal health status, the employers would have lower labor cost, the customers would pay lower prices and the workers, who in this fictional alternative world had never gone into jobs or professions that benefit from health care expenditures, would find their talents equally well remunerated in an alternative profession. Ideally US health care reform would press a button and transform us instantly from this America we live in to an alternative one, one with the same health status, but only half the health care expenditure. Better yet, we could use a portion of the saved health care expenditure to improve our average health status by extending health care access to the currently uninsured – as almost all of the other rich countries have done long ago.

Is there any way that the democratically governed US can possibly move us from our current wasteful situation to a future with a less costly and equally or more effective health system? The two problems are first to clearly define the future health system we are aiming for and second to sufficiently reconcile all the US voters who will unavoidably be hurt by the transition, perhaps by compensating them for their losses or facilitating their transition to alternative occupations. It seems to me that Congress has so far failed to achieve either of these objectives.

And the US is not alone in digging itself into a gridlock on health care policy by encouraging the proliferation of for-profit, fee-for-service medical practice. Adam Wagstaff and co-authors at the World Bank have just released a new book that has come to much the same conclusion about the Chinese health system. (See the article on the English web site of the People’s Daily which is flagged by today’s Kaiser Daily Global Health Policy Report.) Since the less democratic government of China will presumably need only to define where it wants to go, without worrying about compensating the losers from the transition, will it be more successful at reforming its health care system than the United States? And if China benefits from the World Bank’s advice on health reform, does that suggest the US might benefit from World Bank advice also?