Tuesday, June 7, 2011

On Comparing US healthcare to Canada

Krugman is doing good work as usual in bringing the right international context to the Medicare debate, and I want to highlight a point I made back at Open Left when this sort of "comparing the US to other places" was in vogue during the HCR debate, where I imagined two scenarios, one in which other rich countries had proportional GDP to America's, and the effect that would have on their absolute health spending levels, and then imagined that they also spent an equivalent amount of their new US-level GDP on health, and found that Canada would have an extra $95B 2006 dollars to spend on health (where we actually spent $125B):
As we can see, Canada could supplement its 176 MRI scanners with a hefty 5,300 more, just under the first scenario.  We probably wouldn't buy that many, so we could address our nurse and doctor shortage with some combination of 40,000 surgeons, 80,000 GPs or 300,000 nurses.  It would be less, as we'd have to build a bunch of hospitals to put them in, but I think the point is clear enough.  If Canada spent on health care like the US does, I'm not sure we would even know what to do with the money.  I have a hard time imagining there would be wait list problems for MRIs or hip replacements.
Realizing that there's many implied assumptions, but I think the basic point should be made that America is the most powerful and richest country in the history of the planet.  If Canada somehow managed to have a military that was even arguably superior to the American one (and I'm not knocking our military) this would be a big scandal in America, as what kind of amazing Pentagon incompetence would that entail?  That the health care system of a country one-tenth the population size and much lower population density and lower per-capita income even arguably beats the US system (and I believe it does) should be taken as a serious problem.  That we do so while spending less of our already smaller national income exacerbates the failure.

This reminds me of a second point, the Zombie Lie that Canadians flock in large numbers to the US for health care due to the deficiencies in our system;  While Paul posts the obligatory link to the great 2002 study "Phantoms in the Snow" which looked for these hordes of Canadians and couldn't find any evidence of them, I do have to say that for the reason above of just sheer economies of scale, no matter what kind of free market fairies Canada looses on its health care system, we will have wealthy Canadians going to the US for speciality treatment.  America will always be ten times our size, and will tend to have more centres of excellence in various specialities.  Canada can only have so many places like the University of Toronto, which produce ground breaking research, and the US will always have the advantage in this.  Canada has a free market consumer goods economy and yet Canadians actually do visit the US often enough for improved shopping opportunities.  The reason for this may slightly be about higher sales taxes, but generally it's just economies of scale and product availability.  Companies prefer the market with 300 million people to the one with 30 million people.   Anyone thinking the invisible hand would give Canada a half-dozen Mayo clinic equivalents is going to be disappointed if we ever do privatize our system because it won't happen.

1 comment:

  1. even arguably beats the US system (and I believe it does)

    and it doesn't even break a sweat.

    very good post and links daniel. one post linked by krugman ended this way: So feel free to have a discussion about the relative merits of the Canadian health care system compared to ours. Just keep it to facts.

    if the right did this, they would lose the debate in a day. they have to use lies and deception like the 'canadians flock to the us' meme.