The article below appeared in Forbes Magazine in Nov. 2011. It was written by Avik Roy, a brilliant columnist, who is now at the Manhattan Institute, a policy think tank.
He helps to dispel the common myth that American healthcare is inferior to other parts of the world because of low life expectancy. In reality, the care provided in our country is superb. Many of the deaths in the U.S. are due to things not controllable by the healthcare system, such as violent crime and accidental death. If you control for factors such as that, we find our American medicine is the best in the world.
I do agree with many critics of the American health care system, both before and after Obamacare, that health care is too expensive. However, while they contend that increased regulation and government control will fix the problem, I believe the exact opposite. Because government, and crony capitalist insurance and hospital corporations put so many rules in place, and barriers to care (HMOs, networks, deductibles, copayments, prior authorizations, electronic records, etc.), it dramatically raises the overhead and expense of providing care. By eliminating the expensive government or corporate middlemen and letting doctors and patients contract directly, we could have not only the best health care system in the world, but also one of the most affordable. It is a principle that works every time it is tried. It is called The Free Market!
(P.S. By the way, if the American health care system is so bad, why do people come here for care from all over the world, including Canadian government officials, when they get sick?)
Michael A. Ciampi, M.D.
The Myth of Americans’ Poor Life Expectancy
It’s one of the most oft-repeated justifications for socialized medicine: Americans spend more money than other developed countries on health care, but don’t live as long. If we would just hop on the European health-care bandwagon, we’d live longer and healthier lives. The only problem is it’s not true.
Wealth begets health
Benjamin Disraeli, British Prime Minister under Queen Victoria, once said, “There are three kinds of lies: lies, damned lies, and statistics.” Nowhere is this more true than in the debates about health-care policy.
Life expectancy is an appealingly simplistic, but deeply flawed, way to think about the quality of a country’s health-care system. After all, shouldn’t good health care make you live longer? Well, yes, but. The problem, of course, is that there are many factors that affect life expectancy.
One is wealth. It’s gross domestic product per capita, and not health-care policy, that correlates most strongly to life expectancy. Gapminder has produced many colorful chartsthat show the strong correlation between wealth and health. Here’s one from Lane Kenworthy of the University of Arizona:
Measuring health outcomes at the point of intervention
If you really want to measure health outcomes, the best way to do it is at the point of medical intervention. If you have a heart attack, how long do you live in the U.S. vs. another country? If you’re diagnosed with breast cancer? In 2008, a group of investigators conducted a worldwide study of cancer survival rates, called CONCORD. They looked at 5-year survival rates for breast cancer, colon and rectal cancer, and prostate cancer. I compiled their data for the U.S., Canada, Australia, Japan, and western Europe. Guess who came out number one?
U-S-A! U-S-A! What’s just as interesting is that Japan, the country that tops the overall life expectancy tables, finished in the middle of the pack on cancer survival.
Car accidents and homicides don’t tell us much about health care quality
Another point worth making is that people die for other reasons than health. For example, people die because of car accidents and violent crime. A few years back, Robert Ohsfeldt of Texas A&M and John Schneider of the University of Iowa asked the obvious question: what happens if you remove deaths from fatal injuries from the life expectancy tables? Among the 29 members of the OECD, the U.S. vaults from 19th place to…you guessed it…first. Japan, on the same adjustment, drops from first to ninth.
It’s great that the Japanese eat more sushi than we do, and that they settle their arguments more peaceably. But these things don’t have anything to do with socialized medicine.
America doesn’t have one health care system, but three
Finally, U.S. life-expectancy statistics are skewed by the fact that the U.S. doesn’t have one health-care system, but three: Medicaid, Medicare, and private insurance. (A fourth, the Obamacare exchanges, is supposed to go into effect in 2014.) As I have noted in the past, health outcomes for those on government-sponsored insurance are worse than for those on private insurance.
To my knowledge, no one has attempted to segregate U.S. life-expectancy figures by insurance status. But based on the data we have, it’s highly likely that those on private insurance have the best life expectancy, with Medicare patients in the middle, and the uninsured and Medicaid at the bottom.
If we look at Switzerland, a country with private-sector, market-based universal coverage, we see very good health outcomes data. Put another way: if we compared the life expectancy of Americans on private insurance with that of centrally-planned Europeans, I’d bet that the U.S. would come out on top. And if that’s true, the argument that socialized medicine leads to longer life evaporates.
UPDATE: A number of mathematically astute readers have asked why some countries have increased average life expectancies once you take out fatal injuries. I asked Robert Ohsfeldt about this, who responded that the adjustment factor was based on fatal injury rates relative to the average. Hence, the adjusted numbers shouldn’t be seen as hard numerical estimates of life expectancy, but rather as a way of understanding the true relative ranking of the various countries on life expectancy excluding fatal injuries.
For further reading on the topic of life expectancy, here are some recommendations. Harvard economist Greg Mankiwdiscusses some of the confounding factors with life expectancy statistics, citing this NBER study by June and Dave O’Neill comparing the U.S. and Canada. (Mankiw calls the misuse of U.S. life expectancy stats “schlocky.”) Chicago economist Gary Becker makes note of the CONCORD study in this blog post. In 2009, Sam Preston and Jessica Ho of the University of Pennsylvania published a lengthy analysis of life expectancy statistics, concluding that “the low longevity ranking of the United States is not likely to be a result of a poorly functioning health care system.”