Medical Tourism

The Daily Telegraph reports that 50,000 of the UK's citizens will travel abroad seeking medical treatment. Andrew declares victory: "Tony Blair poured millions into Britain's socialized healthcare system, pumping unprecedented resources into a healthcare system that Michael Moore admires and the American left loves. This is the result."

But as Ezra Klein points out we can find articles about 50,000 Americans going to just one hospital in Thailand over the course of 2005. And the UK's still spending under half of what we spend here in the US.

Comments

I think the many problems with Britain's NHS say something about how not to structure one's universal healthcare program. What they don't say is that it's not desirable to have a universal healthcare program.

Posted by Jasper | October 29, 2007 12:14 PM

From the Telegaph article:

"India is the most popular destination for surgery, followed by Hungary, Turkey, Germany, Malaysia, Poland..."

They ain't coming to the U.S. for treatment, Andy.

Posted by witless chum | October 29, 2007 12:17 PM

They ain't coming to the U.S. for treatment, Andy.

Probably because they can't afford it. That doesn't mean the product provided by the US healthcare sector isn't often quite superb. If more Americans buy Hyundais than Rolls Royces, it hardly means the former is a better product. Nor does any of this mean that the US doesn't enjoy a robust business in high end medical tourism.

I agree the system in place in the US to deliver healthcare if inefficient, overpriced, and often highly dysfunctional -- as well as inhumane. But said product is, broadly speaking, among the very best available on the planet.

Posted by Jasper | October 29, 2007 12:27 PM

My local Thai restaurant provides information about medical tourism to Thailand and will help you book a trip. It's becoming popular now. The reason is obvious: the cost savings of a medical procedure in Thailand are more than enough to pay for the entire trip. I'm considering dental work on my next trip to Thailand.

Posted by fostert | October 29, 2007 12:29 PM

A UK resident has three choices.
1. national Health.
2. domestic private health care -- note there has always been an option for the Brits to use private healthcare and there is a significant private healthcare sector in the UK.

3. Go abroad.

So when an individual elects to go abroad they are rejecting the British private healthcare system as well as National Health.

Posted by spencer | October 29, 2007 12:30 PM

Well, it's unprecedented that a country would spend half what we do and get better care.

Posted by Jeffrey Davis | October 29, 2007 12:43 PM

Heh.

Posted by yoyo | October 29, 2007 12:56 PM

let's see: people don't want to wait for non-emergency surgery. can't blame 'em, but it ain't like no one waits in america (sometimes they wait because they can't afford said surgery).

and hospitals are good sources of infection, an insight so staggering that...american hospitals, aware of the problem, try to get you home asap.

so the victory that andrew declares is...exactly what?

Posted by howard | October 29, 2007 12:58 PM

Not that it really matters, but the number touted in The Daily Telegraph article is 70,000 not 50,000. .

While it is true that the cost of medical care in the UK is much less than the US, one has to wonder if Americans will accept such cost-saving measures as 8-bed wards, the standard for hospitals in the UK. The standard in the US has been the 2-bed semi-private room.

Posted by RW Rogers | October 29, 2007 12:59 PM

Well, it's unprecedented that a country would spend half what we do and get better care.

They don't get better care.

Posted by Mixner | October 29, 2007 1:08 PM

The Daily Telegraph reports that 50,000 of the UK's citizens will travel abroad seeking medical treatment. Andrew declares victory: "Tony Blair poured millions into Britain's socialized healthcare system, pumping unprecedented resources into a healthcare system that Michael Moore admires and the American left loves. This is the result."

But as Ezra Klein points out we can find articles about 50,000 Americans going to just one hospital in Thailand over the course of 2005. And the UK's still spending under half of what we spend here in the US.
=================================================
Matt and Klein have totally missed what's going on here.

Sullivan's point is that these surgeries are FREE in the UK and people are willing to pay to have them done outside the country to avoid waiting lists and marginal care. In the US these aren't free, people have to pay for these in insurance costs or deductibles (or for cosmetic surgery that isn't covered at all) and leave the country to save money.

The motivations of US and UK medical tourists are totally different

Posted by Campesino | October 29, 2007 1:18 PM

Ezra seems to be missing the obvious differences:

American medical tourists are typically folks in the 55-64 age range who 1) don't have health insurance, 2) aren't eligible for Medicare yet; 3) are affluent enough to travel overseas for care and be ineligible for Medicaid.

In other words, American medical tourists are going overseas to save money, because it would be more expensive to pay for their procedures out of pocket here.

British medical tourists, on the other hand, are going overseas to spend money, since their health care at home is, ostensibly, free, thanks to their nationalized/universal health care system.

So why would Brits with free health care fly overseas for the privilege of paying for it? Because of rationing and months-long waiting times at home.

If lefties are concerned with the 15% of people here without health insurance (probably about a third of whom are here illegally, and another third who can afford health insurance but chose not to pay for it), why not deal with that problem? Why the zeal to make things worse for the majority of Americans who are responsible enough to have health insurance? Isn't liberalism usually guided by a utilitarian concern for the needs of the many (those with health insurance) versus the needs of the few (those without it)?

The simplest solution for the uninsured would seem to involve:

1) Require everyone to have at least a high-deductible, lower premium form health insurance.

2) Subsidize those who truly can't afford it.

3) Show the door to illegal aliens who drain more in health care and other government resources than they pay in taxes.

Posted by Fred | October 29, 2007 1:31 PM

I've noticed Sullivan and other defenders of America's brain-dead healthcare status quo tend to focus a lot on Britain and not so much on France or Holland or Australia or Denmark.

Funny, that.

Posted by Jasper | October 29, 2007 1:41 PM

Those 50,000 are for "cosmetic procedures."

Jeff Schult, author of "Beauty from Afar," a guide to medical tourism, estimates that more than 100,000 Americans a year travel beyond the boarder for cosmetic procedures alone.

In 2005, for example, Bumrungrad Hospital in Thailand served more than 50,000 American patients, a 30 percent increase from the previous year.

Posted by Dave | October 29, 2007 1:45 PM

Fred: You are almost starting to make sense and veering dangerously close to the Democratic health care proposals. Your proposal would have to make it possible for people with pre-existing conditions to actually get insurance -- which currently is not available for some of the most minor conditions, much less for cancer survivors, diabetics, etc.

Your point about the illegal aliens is facetious. The data shows that they actually pay more in taxes than they receive in services.

Posted by J Bean | October 29, 2007 1:47 PM

Jasper, Mixner: They get better care in the sense that they all get care. The "spend twice as much" is per capita on the average, not a price-comparison of the best hospitals in each country. Maybe that the best state-of-the-art American care is better than the best care anywhere else, but most people don't get that and that's not what we're arguing about.

Posted by John Emerson | October 29, 2007 1:51 PM

John Emerson,

They don't "all get care." "Being insured" or "being covered" is not the same thing as "getting care." And "getting care" is not the same thing as an improvement in health. There is abundant evidence that the relationship between health insurance and health is weak.

Posted by Mixner | October 29, 2007 1:58 PM

Re: The motivations of US and UK medical tourists are totally different

Not so totally different at all: both people feel that they can get better value elsewhere, the US because medical services are seen as severely overpriced, the Brits because the quality of the service is seen as inadeqeute. Both are examples of legitimate consummer choice and point to major structural problems with the respective products on offer.

Re: If lefties are concerned with the 15% of people here without health insurance (...) why not deal with that problem?

You should be happy then with the proposals now offered by the leading Democratic candidates: all of them pretty much leave existing health coverage alone while creating a parallel system for people who cannot or do not want to buy into the current coverage system. What's wrong with choice?

Posted by Jonf | October 29, 2007 2:05 PM

Here's the underlying survey. The figure is 50,000 - I don't understand where the Telegraph gets the "over 70K" figure from. Of the 50k, 20,000 are for dental work and 14,500 for cosmetic surgery, so we're actually talking about 15,500 people here - and apparently quite a lot of them are going to Spain for IVF treatment.

The NHS in the South of England does actually contract out quite a lot of orthopaedic work to French hospitals, and I suspect that this might make up quite a lot of the gap between 50k and 70k.

Posted by dsquared | October 29, 2007 2:11 PM

Mixner, Jonf, my brother and cousin are Canadian, and you're morons. I don't especially want to hear your talking points.

15% without care is a lot, and that's an underestimate.

Why don't you just say that in the U.S. people get the care they deserve, but in Canada unworthy people get care? Why don't you say that it's a good thing for private companies to soak up enormous administration costs, because that's the free market, but that if the government administers the system more cheaply, that's government parasitism? Why don't you say that when people have complain about problems with private insurance companies, they're grumbling because they want to be free-riders, but when they whine about government insurance, they're freedom fighters.

Canadians get good care even when in the U.S., because they're covered when travelling.

Posted by John Emerson | October 29, 2007 2:14 PM

"They don't get better care."

Based on what? Britain healthcare system is ranked higher than the US.

""Being insured" or "being covered" is not the same thing as "getting care." And "getting care" is not the same thing as an improvement in health. There is abundant evidence that the relationship between health insurance and health is weak."

Precisely. The US's healthcare system is not focused on care and improvements in health. It's focused on a for-profit insurance industry. Why would we keep the current system if it is the cause of the problem?

Posted by Rihilism | October 29, 2007 2:20 PM

"You should be happy then with the proposals now offered by the leading Democratic candidates: all of them pretty much leave existing health coverage alone while creating a parallel system for people who cannot or do not want to buy into the current coverage system. What's wrong with choice?"

Do the plans allow insurance companies to underwrite insurance applicants based on risk profile and charge them according to those risk profiles? Do they allow the insurance companies to evaluate the efficacy of various treatments and procedures? Do they force insurance companies to offer every applicant gold-plated insurance that includes psychiatric counseling, chiropractic care, etc.? If they do any of these things, the plans are really an attempt to stick the Camel's Nose of nationalized health care under the tent of our current system, and the ultimate result will be a lack of choice.

Posted by Fred | October 29, 2007 2:20 PM

Ooh, apparently quite a lot of laser eye surgery in the remaining 15,500, which is also not usually available on the NHS (or at least, not as the elective operation that we're talking about in most cases). I think we are really beginning to chew this figure down in terms of actual NHS-covered medical procedures - I note that the biggest company mentioned in this report does 40 patients a month.

Posted by dsquared | October 29, 2007 2:21 PM

John Emerson,

Mixner, Jonf, my brother and cousin are Canadian

They have my sympathies.

15% without care is a lot,

That's 15% without insurance, not without "care."

Posted by Mixner | October 29, 2007 2:22 PM

Canadians get good care even when in the U.S., because they're covered when traveling.

IF they purchase travel health insurance.

Canada's Medicare will only reimburse foreign hospitals the rates paid in Canada. Which means an underinsured Canuck snowbird who has a stroke in a Florida hospital will be presented a bill for the, say, $185,000 in costs not covered by his provincial plan (of course, what they'll try and do is medevac his ass back to Canada, but sometimes that's difficult when one is truly sick). By the way, Canadians not only purchase travel medical insurance when they go abroad, they often purchase it when they travel from province to province, too, because of the issue of differing provincial reimbursement rates.

Posted by Dual Citizen | October 29, 2007 2:27 PM

rihilism,

Based on what?

The evidence of differences in the health care received by Britons and Americans.

Britain healthcare system is ranked higher than the US.

By whom? Ranked higher according to what measure?

The US's healthcare system is not focused on care and improvements in health. It's focused on a for-profit insurance industry. Why would we keep the current system if it is the cause of the problem?

So I take it you oppose all three of the leading Democratic presidential candidates' health care plans. They all preserve this alleged fatal flaw of for-profit private insurance in our health care system.

Posted by Mixner | October 29, 2007 2:28 PM

Has anybody seen this comparative evaluation of health care. According to the summary:

"Despite having the most costly health system in the world, the United States consistently underperforms on most dimensions of performance, relative to other countries. This report—an update to two earlier editions—includes data from surveys of patients, as well as information from primary care physicians about their medical practices and views of their countries' health systems. Compared with five other nations—Australia, Canada, Germany, New Zealand, the United Kingdom—the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives. The U.S. is the only country in the study without universal health insurance coverage, partly accounting for its poor performance on access, equity, and health outcomes. The inclusion of physician survey data also shows the U.S. lagging in adoption of information technology and use of nurses to improve care coordination for the chronically ill."

Posted by Peter H | October 29, 2007 2:45 PM

By the way, an interesting chart from the Commonwealth Fund showing the percentage of adults who've spent more than $1,000 out-of-pocket on medical expenses in 2004:

http://www.commonwealthfund.org/doc_img/482798.gif

24% of Americans with below-average incomes spent more than $1,000 on out-of-pocket medical expenses in 2004.

Posted by Peter H | October 29, 2007 2:57 PM

J. Bean:

1) Your use of "facetious" in your comment above is a malapropism.

2) Much of the problem with preexisting conditions comes from people who let their insurance coverage lapse. My father had cancer for 20 years (most of that time in remission) and was never dropped from his private health insurance, nor was it raised to a level he (earning a social work administrator's salary) couldn't afford. Why? Because he never let his insurance lapse. With that insurance, he got treated at one of this country's best cancer hospitals, Memorial Sloan Kettering. I do think insurance companies should offer coverage to everyone, but that they ought to be able to set the premiums as high as actuarial reality dictates. If those premiums are out of reach for a small percentage of individuals with preexisting conditions, I'd rather see the government subsidize these individuals than replace the whole system, and make things worse for the vast majority of Americans.

3) You are misinformed about the societal costs of illegal aliens (and low-skilled immigrants generally). They do consume much more in government services than they pay in taxes. If you don't believe it, look up the data from the National Academy of Sciences.

Posted by Fred | October 29, 2007 3:01 PM

Peter H,

The rankings in the Commonwealth Fund study you cite are meaningless. The "Healthy Lives" rank, for example, is based on aggregate health statistics that tell us nothing whatsoever about the effectiveness of the health care system.

Posted by Mixner | October 29, 2007 3:09 PM

David Gratzer, a physician who used to work for Canada's socialized health care system, notes how American cancer treatment compares with that of some countries with socialized medicine:

"... if we measure a health care system by how well it serves its sick citizens, American medicine excels. Five-year cancer survival rates bear this out. For leukemia, the American survival rate is almost 50%; the European rate is just 35%. Esophageal carcinoma: 12% in the U.S., 6% in Europe. The survival rate for prostate cancer is 81.2% here, yet 61.7% in France and down to 44.3% in England — a striking variation."

Posted by Fred | October 29, 2007 3:09 PM

Well, since it can cost less to fly to an Eastern European country from Luton than to take a train into London, I understand why someone would want to go abroad for treatment.

Posted by KathyF | October 29, 2007 3:14 PM

"David Gratzer, a physician who used to work for Canada's socialized health care system, notes how American cancer treatment compares with that of some countries with socialized medicine:"

Cancer 5-year survival rates are a poor measure of health care. It's heavily a function of how often you test for the cancer, and doesn't always equate to a longer life. If prostate cancer is diagnosed at 60 or at 66 and the patient lives to 70 it wasn't a function of the health care system but one "lived for 10 years with prostate cancer" and one "lived for 4 years with prostate cancer" The more likely case is that one just got diagnosed with cancer earlier than the other, and both lived with the cancer about the same amount of time.

Posted by JordanT | October 29, 2007 3:20 PM

Do we have any reliable numbers on how many medical tourists get cosmetic surgery?

"Jeff Schult, author of 'Beauty from Afar,' a guide to medical tourism, estimates that more than 100,000 Americans a year travel beyond the boarder for cosmetic procedures alone."

Posted by bob | October 29, 2007 3:43 PM

Fred,

Cancer survival rates deal with cancer patients, i.e. cancer sufferers who actually received medical treatment for this condition. It does not include data for people who were cancer victims, but who did not receive medical treatment.

Since the American pool of cancer survivors is going to consist of a smaller percentage of actual cancer sufferers than the European pool, and since the American pool is going to include a far larger proportion of people who had access to private care paid for out of their earnings and insurance, it's not unexpected that survival rates for American cancer patients will be better than European ones.

What's more relevant is what percentage of cancer victims in the US actually receive medical treatment compared to cancer victims in Europe. It's wonderful that American healthcare beats healthcare in European healthcare, but if American healthcare is available to a far smaller proportion of its citzenry than European systems are, that doesn't make it a better SYSTEM.

What we really need in this debate are true apples-to-apples comparisons. Data for medical treatment needs to be broken out by income-level, in order to have a true apples-to-apples comparison.

Posted by eltoro | October 29, 2007 3:47 PM

READ DSQUARED

Everyone should read those comments before posting anything else at risk of looking like an idiot otherwise.

As I suspected, it seems a good number of the British medical tourists seek elective cosmetic, dental and optical procedures, as do many of the Americans seeking medical treatment abroad. Those will always be the sorts of procedures that it is easiest to seek out abroad, as you aren't traveling while you are actually sick and you can schedule them for any time.

Sullivan should really have comments in order to be credible.

Posted by bob | October 29, 2007 3:51 PM

The rankings in the Commonwealth Fund study you cite are meaningless. The "Healthy Lives" rank, for example, is based on aggregate health statistics that tell us nothing whatsoever about the effectiveness of the health care system.

Why is it meaningless? I agree that aggregrate health outcomes do not tell us the whole story about the merits of health care systems (since many determinants of health still lie outside health care), but it certainly does more than "tell us nothing". One of the measures the Commonwealth Fund uses in assessing "Healthy Lives" is "Mortality Amenable to Health Care", which is a concept commonly used by researchers to evaluate health care quality.

Anyway, there are four other dimensions of the report: quality, access, efficiency, & equity. The Commonwealth Fund report is not perfect, but I think it is more useful than a Daily Telegraph article about medical tourism.

Posted by Peter H | October 29, 2007 3:54 PM

Another interesting dimension to this medical tourism is whether it might go from an option people choose for some elective surgeries to something people have to do because they can't afford healthcare in the US. In fact, another blog post on this (link http://my.barackobama.com/page/community/post_group/MyPolicyHealthcareHQ/CSKy link) notes that SC Blue Cross and Blue Shield already covers a Thai hospital -- how long before you HAVE to go abroad to get your care, yet another thing outsourced.

Posted by Aadil | October 29, 2007 4:17 PM

Re: Mixner, Jonf, my brother and cousin are Canadian, and you're morons. I don't especially want to hear your talking points.

I'm not sure why you are classifying me with Mixner but if you read my post you will notice I am speaking well of the main Democratic healthcare reform porposals. Maybe you read what I initially quoted and thought those were my words instead?

Re: Do the plans allow insurance companies to underwrite insurance applicants based on risk profile and charge them according to those risk profiles?

IMO, that is a profoundly unethical practice that should be banned outright. Everyone should be charged the same price for the same product-- an assumption that is normal and uncontroversial in almost every other industry and business. In fact, it's a necessary ground rule for the efficient functioning of markets. Instituting universal community rating and ending "cherry picking" is a first and vital step if you want a real healthcare market. I'm sure insurance execs are bright enough, or have decent software, to determine a price that allows their company to maintain profitability.

Re: Five-year cancer survival rates bear this out.

Actually no. This is deceptive data. It is based largely on earlier diagnosis, not enhanced survival rates. If two persons, an American and a Canadian both develop cancer at age 50 and die at age 60, but the American is diagnosed at age 53, while the Canadian does not get the dagnosis until 55, then the American's stats will show seven years, the Canadian five years-- but in fact both live equally long.

Re: It does not include data for people who were cancer victims, but who did not receive medical treatment.

I doubt you will find many people in the US do not receive treatment for cancer, outside those religious groups who eschew all modern medicine. Uninsured people do get treatment for things like cancer: they then end up in bankruptcy court to clear the debts, and if their condition does not improve they end up on either Medicaid or Medicare due to disability.

Posted by JonF | October 29, 2007 4:34 PM

Peter H,

Why is it meaningless? I agree that aggregrate health outcomes do not tell us the whole story about the merits of health care systems (since many determinants of health still lie outside health care), but it certainly does more than "tell us nothing".

Because any effects on aggregate health indicators from differences in health care systems are likely to be swamped by other differences between the countries. The average life expectancy of a nation's population isn't the "outcome" of its health care system, it's the outcome of a vast network of factors that influence health and longevity. Everything from the rates of smoking, alcohol consumption and drug use, to the rates of violent crime and motor vehicle crashes. You simply cannot draw any meaningful conclusions about which health care system is more effective at producing "healthy lives" by comparing crude health indicators like average life expectancy and infant mortality rate.

Costa Ricans live almost as long on average as Americans. Does this mean Costa Rica's health care system is as good as America's? Of course not. Costa Rica is a poor country. It spends only 5% as much per capita on health care as the U.S. spends. It has only half as many doctors per capita. It can barely afford to provide its people with basic health care like immunizations and antibiotics, let alone MRI scans and statins and all the other high-cost, high-tech pharmaceuticals and tests and surgeries that Americans receive.

So how come Costa Ricans live as long as Americans? First, their smoking rate is only half what ours is. That makes a huge difference right there. Then there's the fact that they have far fewer motor vehicles. That means they do a lot more walking (healthy exercise) and lose fewer lives to motor vehicle crashes. Their diet is also a lot healthier than ours.

Posted by Mixner | October 29, 2007 4:51 PM

JonF:

Do you even understand how insurance works? In order to stay in business, an insurance company needs to actuarially determine the odds associated with covering different risks and price those risks accordingly. Otherwise, it won't have enough capital on hand to pay out claims, and will go bankrupt when the inevitable claims come in. That's true not just of health insurance but of life insurance, auto insurance, etc. The only way a health insurance company could charge everyone the same rates and stay in business would be to price the different risk profiles actuarially (as they do now) and then average everyone's rates. That would mean a decrease in rates for fifty year old overweight smokers, for example, and an increase in rates for twenty five year old non-smoking fitness enthusiasts. Maybe that makes sense in your world.

"Re: Five-year cancer survival rates bear this out.

Actually no. This is deceptive data. It is based largely on earlier diagnosis, not enhanced survival rates."

And you know this is true based on what evidence, exactly?

"If two persons, an American and a Canadian both develop cancer at age 50 and die at age 60, but the American is diagnosed at age 53..."

You think that the typical person with esophageal cancer, for example, lives for three years without treatment, let alone is asymptomatic? What percentage of cancer patients do you imagine find out they have cancer from early detection screenings versus after noticing symptoms (e.g., a lump)? And shouldn't there be more early detection in a nationalized system where, presumably, such screening would be free? If the data showed the opposite, that cancer survival rates were significantly higher in Europe, advocates of socialized medicine would accept it as an unequivocal evidence of the superiority of socialized medicine; because it goes against their ideological bias, it has to be dismissed.

The reality is that foreigners who can afford to do so flock to Memorial Sloan Kettering, M.D. Anderson, and other top U.S. cancer centers.

Posted by Fred | October 29, 2007 5:16 PM

Also from Dr. Gratzer's essay that I liked to above: if you factor out homicides and auto accidents, Americans have the highest life expectancies in the Western world:

"Americans live 75.3 years on average, fewer than Canadians (77.3) or the French (76.6) or the citizens of any Western European nation save Portugal. Health care influences life expectancy, of course. But a life can end because of a murder, a fall or a car accident. Such factors aren't academic — homicide rates in the U.S. are much higher than in other countries.

In The Business of Health, Robert Ohsfeldt and John Schneider factor out intentional and unintentional injuries from life-expectancy statistics and find that Americans who don't die in car crashes or homicides outlive people in any other Western country."

Posted by Fred | October 29, 2007 5:23 PM

"The evidence of differences in the health care received by Britons and Americans...By whom? Ranked higher according to what measure?"

There's the WHO rankings in addition to the CWF mentioned above.

"So I take it you oppose all three of the leading Democratic presidential candidates' health care plans. They all preserve this alleged fatal flaw of for-profit private insurance in our health care system."

Well, yes, I'm not in favor of continuing for-profit insurance. If profit is the incentive, what reason would an insurer have for providing coverage to those high risk groups that actually need the insurance and are driving most of the health care costs right now because they are seeking and receiving treatment under emergency conditions rather than at earlier stages when treatment, medications, and follow-up would make the most difference? Treatment, medications, and follow-up they'd receive if they could afford it (i.e., they had access to insurance).

The whole point is if we cover everybody, we reduce costs for everybody. I'd like to take it a step further and say if we're going to spend taxpayer money on it, why shouldn't it be for "break-even" companies/organizations. Paying another overpaid CEO's salary seems to miss the point of bringing prices down while extending coverage to everyone.

"Why? Because he never let his insurance lapse."

Well, let's get out the "way-back" machine so everyone that has currently allowed their insurance to lapse, can go back and come up with the money for bridging coverage that they didn't have the first time around.

"I do think insurance companies should offer coverage to everyone, but that they ought to be able to set the premiums as high as actuarial reality dictates. If those premiums are out of reach for a small percentage of individuals with preexisting conditions, I'd rather see the government subsidize these individuals than replace the whole system, and make things worse for the vast majority of Americans."

Perhaps we can subsidize them with tax breaks for taxes they don't currently pay.

Yes, why not pay what the costs will allow without having to pay for all the useless overhead like executive bonuses? Can someone please explain to me the value of having a for-profit insurance industry? What are the innovations that come from overpaying CEOs and what "advantages" come from "cost-savings" incentives that amount to increasing bonuses by denying the most care? What the fuck is the point? It's actuarial science for crying out loud with some bureaucratic infrastructure to maintain records.

But, yes, by all means, let's implement yet another corporate welfare system so that insurance executives can get rich off of government contracts. It's worked so well for the military.

Posted by Rihilism | October 29, 2007 5:34 PM

There's the WHO rankings in addition to the CWF mentioned above.

The WHO rankings are just as meaningless as the Commonwealth Fund ones. Again, you can't draw meaningful conclusions about the quality or effectiveness of a nation's health care system from its average life expectancy.

Posted by Mixner | October 29, 2007 5:45 PM

rihilism,

Can someone please explain to me the value of having a for-profit insurance industry?

The same value of having a for-profit industry of any other kind. Am I to understand that you advocate government takeover of not just health insurance, but all other types of insurance too (home insurance, life insurance, car insurance, disability insurance, mortgage insurance, credit card insurance, etc.)? And why stop at insurance? Why not all other financial services too, if you think it would be better for the government to provide these services than the private sector?

Posted by Mixner | October 29, 2007 5:51 PM

"Why not all other financial services too?"

Why stop at financial services? Think of the money consumers would save if we cut the profit out of other industries and had the government take them over. Imagine how much cheaper the salad bar at Whole Foods would be if we cut out the fat cat executive salaries -- why should selling food be a for-profit business? Can someone tell me what fucking efficiencies we get out of it? For that matter, why is the new iPhone so expensive? So profits can go to bloated pay for Steve Jobs and rising stock prices for greedy investors? If we could turn Apple into a non-profit, every American could afford an iPhone, not just affluent hipsters like Matt Yglesias.

Posted by Fred | October 29, 2007 5:58 PM

It's a shame commenters on the left and right have turned health care outsourcing/medical tourism into a food fight over health care policy.

We've really missed the real story here, which is that improvements in transportation and logistics have generated a huge opportunity for massive gains in trade between Westerners and developing nations with well-educated professionals.

Everybody who was worried about all that outsourcing can now see a huge gain from outsourcing: Inexpensive quality health care.

This is a massive gain for people of any ideological stripe. Health care outsourcing relieves many cost pressures facing the American health care system, and it relieves the pressures facing many nationalized health care systems. It's a massive gain from trade that we get by accessing other nations' brainpower.

It also creates a major opportunity for people who want to achieve valuable social goals but who rightly worry about shackling the economy with high rates of taxation. Medical outsourcing can allow governments to gaurantee a basic minimum of health care without bankrupting their treasuries or overburdening taxpayers.

This just illustrates another situation where free trade makes everybody better off, regardless of their ideological preferences.

Posted by Keith | October 29, 2007 5:59 PM

"The same value of having a for-profit industry of any other kind."

For-profit industries don't work for all types of services. I can turn your argument around and say why don't for-profit companies supply all essential services (roads, police, fire fighters, etc.)? Universal health care will likely not make us healthier or provide cheaper care. The only way to provide cheaper care would be to use less of it, which is the method all the other countries use. It just happens that health care isn't all that important to life expectancy, especially the super expensive end of life care that the US gives.

Posted by JordanT | October 29, 2007 6:32 PM

JasperT,

For-profit industries don't work for all types of services. I can turn your argument around and say why don't for-profit companies supply all essential services (roads, police, fire fighters, etc.)?

Because those services are public goods. Consumption of the good by one individual does not significantly reduce the amount of the good available for consumption by others, and no one can be effectively excluded from using the good.

So, again, why should health insurance not be run as a for-profit industry, just like home insurance, car insurance, life insurance, etc.? Or do you share rihilism's apparent view that the government should take over all insurance?

Posted by Mixner | October 29, 2007 6:59 PM

Re: In order to stay in business, an insurance company needs to actuarially determine the odds associated with covering different risks and price those risks accordingly.

Of course! But it can do that at the group level, not the individual level. In fact, that's actually preferrable from a business standpoint owing to a mathematical feature called the Law of Large Numbers (look it up). This is why large employer groups get discounted rates: because it's cheaper to insure across a large group of people as one than it is to insure them one by one. Their health outcomnes are far more predictable too. It's pretty much guesswork figuring out if one person will get cancer. Take a million people though and you can predict with high confidence that some X percent of them will get cancer and their medical bills will run up to Y dollars (plus or minus some reasonable uncertainty factor). Why is this so alien to you? It's how insurance mainly works already! I'm just saying let's make it 100% that way. Why should people discrminated against because they aren't working for GM or some Wall Street bank? Make everyone part of a large group and you get the maximum efficiencies and certainties that large groups bring.
Want to save private health insurance? Fine. Make it fair and universal. As I said, I'm sure the execs are bright enough to pull it off.

Re: The only way to provide cheaper care would be to use less of it

This is absolute nonsense. Consider: even despite some recent inflation the price of food is about as low as it has been throughout all history, yet it is certainly not true that we are consuming less food! If anything the opposite seems to be true. So how can we have such low food prices without a program of widespread starvation in place?

Posted by JonF | October 29, 2007 7:35 PM

"Think of the money consumers would save if we cut the profit out of other industries and had the government take them over."

Funny, I don't recall saying that.

"Or do you share rihilism's apparent view that the government should take over all insurance?"

That either.

Apparently someone should let the VA system, not-for-profit hospitals, and non-profit hospitals that they are violation of the laws of supply-side economics are therefore do not exist.

"Imagine how much cheaper the salad bar at Whole Foods would be if we cut out the fat cat executive salaries -- why should selling food be a for-profit business? Can someone tell me what fucking efficiencies we get out of it? For that matter, why is the new iPhone so expensive? So profits can go to bloated pay for Steve Jobs and rising stock prices for greedy investors? If we could turn Apple into a non-profit, every American could afford an iPhone, not just affluent hipsters like Matt Yglesias."

The difference being that most people can live without extra tofu chips and the latest Beyonce download.

Sheesh! The level of downright white-knuckled fear and Pavlovian salivating that overtakes some Randians when you suggest "Hey, maybe this is too valuable to waste resources on yet another overpaid CEO", is truly astounding. Yeah, I'm a pinko, I'd rather not shell out my own money (now) for some suit to tell his subordinates something they knew all ready. I guess suggesting that the government require taxpayer health dollars go to private or governmental not-for-profit/non-profits is just one step shy of Viva La Revolucion!

"Because those services are public goods. Consumption of the good by one individual does not significantly reduce the amount of the good available for consumption by others, and no one can be effectively excluded from using the good. "

And promoting the general welfare has no place in the Public Sphere. So, effectively excluding someone from the good means you don't have to sacrifice any of "your" good. How humanitarian of you. Oops, I forgot, Ayn wasn't a big fan of altruism.

Well, sooner or later you're going to realize that while you may momentarily have access to your "free market" health care insurance, eventually you're going to see your deductibles go up and your coverage go down. Your cost will continue to increase and, if you're lucky, you'll get sick while you have insurance and maybe you won't have to sell your home. But you can rest assured that those "freeloaders" will be worse off than you are.

Posted by Rihilism | October 29, 2007 9:06 PM

rihilism,

That either.

Really? So when you asked "Can someone please explain to me the value of having a for-profit insurance industry?" you didn't mean to imply that you think a not-for-profit insurance industry would be better?

Given your conflicting statements, perhaps you could clear up the confusion. What, exactly, is the position you are advocating, and why? Are you proposing a government-funded, single-payer system for all insurance? Or just for health insurance? Or what? If it is just for health insurance, why just that, rather than every other kind of insurance also?

Posted by Mixner | October 29, 2007 9:27 PM

"So when you asked "Can someone please explain to me the value of having a for-profit insurance industry?" you didn't mean to imply that you think a not-for-profit insurance industry would be better?"

Health insurance, you twit, the insurance everybody's been talking about in these comments. I leave out one adjective and it confuses the hell out everybody (or at least you).

Come to think of it, a not-for-profit life, mortgage, and disability insurance is not the worst idea I've ever heard of. Wonder if anyone's ever thought of that?

As to car and boat, well, I've no problem with someone making a profit off of someone else's desire to compensate for a small penis.

"Why not all other financial services too, if you think it would be better for the government to provide these services than the private sector?"

Last time I checked, Credit Unions were in the private sector. And somewhere along the way I thought I'd heard that they were not-for-profit.

You do understand that not all not-for-profit companies and organizations are run by the government, don't you? Or that mandating insurance is not the same as government run insurance. I'm suggesting that if we use taxpayer healthcare dollars, we try to minimize overhead on said healthcare dollars. Why is that so unreasonable?

Posted by Rihilism | October 29, 2007 10:31 PM

"Again, you can't draw meaningful conclusions about the quality or effectiveness of a nation's health care system from its average life expectancy."

Try googling "health care rankings", I'm sure that would lead you to eight factors that went into WHO's rankings.

Posted by Rihilism | October 29, 2007 10:41 PM

In The Business of Health, Robert Ohsfeldt and John Schneider factor out intentional and unintentional injuries from life-expectancy statistics and find that Americans who don't die in car crashes or homicides outlive people in any other Western country."

Given the kinds of people who would tend to get into car crashes and homicides, this is a useless comparison--essentially, America is better at weeding out the most violent and accident prone. If we started abandoning weak and sick infants to the elements our health care industry would start to look a lot better, I suppose.

My father had cancer for 20 years (most of that time in remission) and was never dropped from his private health insurance, nor was it raised to a level he (earning a social work administrator's salary) couldn't afford. Why? Because he never let his insurance lapse.

Apparently your father was just lucky his insurer didn't enter the adverse selection death spiral--rates are raised on non-lapsed coverage all the time. Your father was basically stuck with whatever premiums and services he got--he wouldn't be able to shop around for a new provider if either changed.

Private health insurance without community rating makes no sense (which itself doesn't make sense unless coverage is mandatory).

Posted by Consumatopia | October 29, 2007 10:46 PM

"The difference being that most people can live without extra tofu chips and the latest Beyonce download."

But people can't live without food and housing, and even though there are Americans who can afford neither, we haven't used that as a rationale to nationalize the grocery business or real estate; we simply subsidize food and housing for the small minority who truly can't afford them.

"Come to think of it, a not-for-profit life, mortgage, and disability insurance is not the worst idea I've ever heard of"

In insurance, as well as in other businesses, profits and competition provide incentives for innovations, different products, better services, and lower costs, e.g., GEICO's low-cost, direct-sales model.

"Given the kinds of people who would tend to get into car crashes and homicides, this is a useless comparison--essentially, America is better at weeding out the most violent and accident prone."

The "kinds of people"? You are conflating dangerous drivers and killers with their victims; they aren't the same kinds of people. Since homicide rates and car accidents are much more frequent causes of death in America than in Europe, this is a relevant and useful comparison. You can't simply dismiss facts because they are inconvenient to the cause of socialized medicine uber alles.

"Apparently your father was just lucky his insurer didn't enter the adverse selection death spiral--rates are raised on non-lapsed coverage all the time."

His rates did go up, but not by an insurmountable amount. They were still well worth it.

"Your father was basically stuck with whatever premiums and services he got--he wouldn't be able to shop around for a new provider if either changed."

What did he need to shop for? He was assured of treatment at one of the two best cancer centers in the country. He kept his coverage after he became eligible for Medicare to cover what Medicare didn't. His existing drug coverage was good enough that he passed on Medicare Part D.

Posted by Fred | October 30, 2007 12:31 AM

As to car and boat, well, I've no problem with someone making a profit off of someone else's desire to compensate for a small penis.

So that's why people own cars? Golly!

Posted by Adam Villani | October 30, 2007 4:52 AM

"So that's why people own cars? Golly!"

In my opinion, expensive cars that require high insurance premiums, yes. Certainly I'm not the first to suggest that that grandpa's recent purchase of a convertable Beemer roadster is to compensate for failing virility.

I, OTOH, can drive my fuel efficient car from A to B and still not pay a lot for car insurance. If someone wants to pay extra for "Corinthian Leather,...,mmmmm" then I have no problem with insurance companies charging extree to cover them.

Posted by Rihilism | October 30, 2007 6:43 AM

But people can't live without food and housing, and even though there are Americans who can afford neither, we haven't used that as a rationale to nationalize the grocery business or real estate; we simply subsidize food and housing for the small minority who truly can't afford them.

If we spent twice as much as the rest of the world (minimum) and got worse nutrition, we'd be a damn fool country NOT to.

Posted by Jeffrey Davis | October 30, 2007 8:55 AM

"In insurance, as well as in other businesses, profits and competition provide incentives for innovations, different products, better services, and lower costs, e.g., GEICO's low-cost, direct-sales model."

Will someone please tell this to the health insurance industry because I seem to be paying more and more for less product. I also seem to find that I have fewer and fewer reasonable cost "out-of-network" choices. Less coverage and fewer choices, thank goodness we didn't implement Hillarycare back in the 90's.

The talking gecko????!!!! The talking gecko is your idea of innovation????!!!! Thank God Geico "invented" the low-cost direct sales model. Would have never happened if those nasty socialists had anything to do with it.

Posted by Rihilism | October 30, 2007 9:09 AM

The "kinds of people"? You are conflating dangerous drivers and killers with their victims; they aren't the same kinds of people.

Statistically speaking, one would expect dangerous drivers to be more likely to die than safe drivers. Not everyone who dies in a car crash or homicide is violent or unsafe--but I'd expect a greater share of such people to die by these means than by old age. Causation is not correlation--but if we're talking about insurance, it's correlation that matters.

Since homicide rates and car accidents are much more frequent causes of death in America than in Europe, this is a relevant and useful comparison.

That's exactly why it's NOT a relevant and useful comparison--the populations of people who survive car crashes and homicides in America just isn't equivalent to those who survive them in Europe.

You can't simply dismiss facts because they are inconvenient to the cause of socialized medicine uber alles.

Given that America has the most expensive system in the world by far, it is up to defenders of this system to disprove the null hypothesis that America's system is no better than that of Canada/France/UK/etc. They've got a hard hill to climb, as most evidence indicates the reverse--that America's system is actually worse.

What did he need to shop for? He was assured of treatment at one of the two best cancer centers in the country. He kept his coverage after he became eligible for Medicare to cover what Medicare didn't. His existing drug coverage was good enough that he passed on Medicare Part D.

That's good, but since he wasn't capable of shopping around, it would appear that it wasn't market forces that caused that good outcome.

Posted by Consumatopia | October 30, 2007 10:47 AM

I'm repeating my earlier comment because the point is simply too valuable to get lost in the ideological food fight:

It's a shame commenters on the left and right have turned health care outsourcing/medical tourism into a food fight over health care policy.

We've really missed the real story here, which is that improvements in transportation and logistics have generated a huge opportunity for massive gains in trade between Westerners and developing nations with well-educated professionals.

Everybody who was worried about all that outsourcing can now see a huge gain from outsourcing: Inexpensive quality health care.

This is a massive gain for people of any ideological stripe. Health care outsourcing relieves many cost pressures facing the American health care system, and it relieves the pressures facing many nationalized health care systems. It's a massive gain from trade that we get by accessing other nations' brainpower.

It also creates a major opportunity for people who want to achieve valuable social goals but who rightly worry about shackling the economy with high rates of taxation. Medical outsourcing can allow governments to gaurantee a basic minimum of health care without bankrupting their treasuries or overburdening taxpayers.

This just illustrates another situation where free trade makes everybody better off, regardless of their ideological preferences.

Posted by Keith | October 30, 2007 11:11 AM

"The talking gecko????!!!! The talking gecko is your idea of innovation????!!!! Thank God Geico "invented" the low-cost direct sales model. Would have never happened if those nasty socialists had anything to do with it."

Don't forget the cavemen. GEICO is a pretty big deal for those of us who are now paying dirt-cheap rates for car insurance in state that has historically been known for high rates. Part of the reason for that is GEICO's offer of the high-deductible policy I have. Another reason GEICO is their innovative sales method. A third reason GEICO is able to offer such low rates is that it manages its float so well, thanks to its chief investment officer Lou Simpson. In any case, I'm not the only one impressed by GEICO's innovation and execution -- so is Warren Buffett. That's why he bought the company. And, since shareholders of Buffett's Berkshire Hathaway get a discount on their GEICO premiums, I bought a Berkshire Hathaway b-share at $3200 (bought a few more later at $3600). Now they are trading at almost $4300. With the capital appreciation on that first share alone, I'm up about double what I spent on GEICO premiums so far. Thanks to those nasty capitalists.

"Will someone please tell this to the health insurance industry because I seem to be paying more and more for less product."

I have to say I've got the opposite experience. For the last few years, I was one of those folks "without health insurance" that you worry about. Like most people who lack health insurance, I could have afforded it, didn't, and took a calculated risk in not getting it. I paid out-of-pocket for medical treatment on a few occasions -- perhaps a total of a few hundred dollars in the last few years. Never had a problem getting a same-day appointment to see a physician. In any case, my girlfriend and I finally got around to sending in the domestic parter paperwork to her company, and now I'm covered on her insurance. The price for both of us? $93 per month. That comes out to $46.50 each per month -- and I've never paid that little for health insurance.

"That's exactly why it's NOT a relevant and useful comparison--the populations of people who survive car crashes and homicides in America just isn't equivalent to those who survive them in Europe."

What is it that you don't understand here? The point of the comparison is to compare American life expectancies with those in other Western countries after adjusting for the high number of homicides and auto fatalities here. When the researchers did that, they found that American life expectancies were the highest in the Western World.

Granted, average life expectancies, by themselves, aren't evidence of better health care, as health care isn't the biggest determining factor, but considering that other factors are skewed against America (e.g., we have higher rates of obesity), this comparison is noteworthy.

"Given that America has the most expensive system in the world by far, it is up to defenders of this system to disprove the null hypothesis that America's system is no better than that of Canada/France/UK/etc."

We've already demonstrated that American health care does a better job of treating sick people - look again at huge difference in cancer survival rates. Part of the reason American health care is more expensive is that we spend more on R&D for treatments for cancer and other diseases; as Dr. Gratzler pointed out, just one of our cancer research centers (M.D. Anderson in Texas) spends more on research than all of Canada. That's one of the reasons that affluent foreigners who can afford to do so tend to come here when they need the best treatment, instead of going to Canada, France, or Britain.

"That's good, but since he wasn't capable of shopping around, it would appear that it wasn't market forces that caused that good outcome."

Market forces helped him to get the excellent insurance in the first place.

"I'm repeating my earlier comment because the point is simply too valuable to get lost in the ideological food fight"

It was an interesting comment.

Posted by Fred | October 30, 2007 1:52 PM

Fred -- your father was very lucky. Had he lost his job prior to the age of 65 and attempted to get private insurance after a cancer diagnosis, he would have been severely limited in what was available. Apparently your father was able to continue employer based insurance. My mother was not so lucky. The plural of anecdote is not data, but it is very clear that it is extremely difficult and costly to get non-employer based insurance for a pre-existing condition.

I am too lazy to search for data on undocumented workers and costs, but I know that they are not a drain on the economy. They pay taxes and are generally a young and healthy population. Although health care for UWs are a problem at certain hospitals, over all, they are a minor cost. Additionally, they pay taxes.

Posted by J Bean | October 30, 2007 4:25 PM

"Fred -- your father was very lucky. Had he lost his job prior to the age of 65 and attempted to get private insurance after a cancer diagnosis, he would have been severely limited in what was available."

He would have maintained his coverage through COBRA, which would have given him 18 months to find another job.

"I am too lazy to search for data on undocumented workers and costs..."

Perhaps you can find an "undocumented" worker to search for you (assuming you can find one who is literate -- most of the ones my RN sister treats at an inner-city hospital are illiterate in Spanish). Failing that, you can start here:

"Households headed by illegal aliens imposed more than $26.3 billion in costs on the federal government in 2002 and paid only $16 billion in taxes, creating a net fiscal deficit of almost $10.4 billion, or $2,700 per illegal household."

This study, incidentally, goes on to note that unskilled, uneducated illegal aliens are less of a drain on government resources than unskilled, uneducated American citizens (because citizens of similar incomes are eligible for more government benefits), but illegals are still a net drain on federal resources. They are a drain on state resources as well, of course, and they also lower wages for unskilled Americans at the bottom of the income ladder. On the plus side though, they provide cheap, docile labor for low-wage business interests, and their kids grow up to be reliable voters for the Democratic party -- hence, the reason Bush and mainstream Democrats are both in favor of increasing unskilled immigration.

Posted by Fred | October 30, 2007 6:01 PM