Friday, June 3, 2011

Growing Health Care Cost is a Civilizational Problem

In my somewhat rare position as a Canadian who closely follows both US and Canadian politics, one annoying trend I see is the probably intentional overly narrow focus on rising health care costs in particular government run programs as being somehow particular to those programs.  Typically of course, you mostly see this sort of thing on the right, by opponents of those programs who are covertly or overtly pushing privatization of either Medicare, Medicaid, or the Canadian UHC system. 

In Canada, the talk from the right, taken up by a few of our "Villagers" (though we don't have the same sick Versailles clique in Ottawa as exists in DC) is that it is time to "experiment" with private delivery of services.  This has long been a goal of Stephen Harper's (that link claims that the think tank Harper ran, the "National Citizen's Coalition" was actually originally founded in the late 60s to undo Canada's universal health care system, if so, wow.)   The talk is all of how Canada's UHC is eating up a bigger share of provincial budgets and that the program is unsustainable. 

In the US, this talk tends to focus on Medicare (the single payer universal system for persons over age 65).  Some on the left do a fairly good job of pointing out that Medicare's costs have been rising more slowly than other portions of the US health care system (particularly the private insurance market system for most everyone under age 65 who isn't poor enough to qualify for Medicaid).  What I'd like to see is more of this, from (naturally) Paul Krugman:
What is true is that the U.S. Medicare is expensive compared with, say, Canadian Medicare (yes, that’s what they call their system) or the French health care system (which is complicated, but largely single-payer in its essentials); that’s because Medicare American-style is very open-ended, reluctant to say no to paying for medically dubious procedures, and also fails to make use of its pricing power over drugs and other items.
So Medicare will have to start saying no; it will have to provide incentives to move away from fee for service, and so on and so forth. But such changes would not mean a fundamental change in the way Medicare works.
 Which is to say a broader focus on the fact that no nation's health care system should be considered in isolation, and that countries across the rich world are seeing their health care spending as a proportion of GDP increase.  This is not a national problem for any particular nation, it is civilizational problem.  Canadian pundits suffer from this myopia too, in focusing too narrowly on some purported malaise in the Canadian model that makes costs rise, which privatization could somehow solve (though no one ever gets more specific on this point than hand waving about markets bringing "efficiency").

One or more things are happening here:  1) People are just demanding more health care services 2) the development of ever new services and techniques now provide many more life-extending expensive treatments, or 3) capitalism is driving up costs to pad profit margins.  Note I don't include an option "4" which is some kind of growing inefficiency of the government run services because there is no evidence for such a proposition, either in Canada, the US or elsewhere.  In fact, advocates for increasing Canadian health privatization should take note of this (already linked above):
Not only is Canada’s public health care spending not ‘skyrocketing’, Canada’s public expenditures on health care are below the OECD average. The public share of overall health care costs in Canada is 70%. The OECD average is 73%. 
Canada is already "above" average in terms of private service delivery in health care, and yet we have one of the most expensive health care systems.  We're beat by Switzerland, and the US, which have even more privatized systems.  Anyone looking to privatize more Canadian health care to lower costs needs to describe how that could work, because it already isn't working, and seems to work worse in places that are more privately delivered than us.

At any rate, don't let them get away with trying to paint a picture of some government program running particularly badly without getting into specifics of what is going wrong, and how it works better somewhere else.  Yes, costs are rising, and I welcome serious analysis into why, but I don't welcome those who want to wave the magic wand of privatization.  It's not 1980 anymore.  We have lots of real world evidence that privatization is not some panacea.  Kenneth Arrow was right, Health Care is a market failure and if our systems are ailing, the answer almost certainly does not lie with more private delivery on either side of the border.


  1. right, privatization won't bring prices down. unlike government, corporations want to make the largest profit possible. this doesn't mean lower prices. it means filling up the pockets of the corporations.

  2. I think you can find instances where privatization of blue collar functions will bring costs down, usually because the private sector just pays shitty wages. Even there, outsourcing of things like city waste collection is hit-and-miss from everything I read, with no guarantee of success.

    More certainly for the more costly parts of health care there is little evidence that the private sector can either find real efficiencies or drive wages or drug costs down. If anything, these things rise because specialist doctors and drug companies can charge more from insurance companies than they can from government.

  3. right. and to find shitty wages they go outside the country.

    but in healthcare that's not possible. and you get this: