TCS Daily


You Get What You Pay For?

By Paul Howard - March 10, 2006 12:00 AM

Last week, actuaries at the Centers for Medicare and Medicaid Services estimated that U.S. health care costs will rise to 20 percent of GDP by 2015. Their estimate generated a predictable outcry of media angst that U.S. health care costs will swamp the economy.

Critics who focus only on spending forget what all that money is buying: better health care. American spending has paid tremendous dividends in three categories: cancer, heart disease, and infant mortality,

When Richard Nixon declared a "war on cancer" in 1971, patients viewed cancer as an automatic death sentence. In 1996, Lance Armstrong was diagnosed with late-stage testicular cancer that had spread to his lungs and brain, and he not only survived, but thrived — winning the Tour de France seven times after his recovery. Last year, the National Cancer Institute reported that, from 1993-2002, mortality rates from all cancers combined fell by 1.1 percent per year. Mortality rates also fell for 12 of the top 15 cancers in men, and nine of the top 15 cancers in women.

Cancer treatment in the U.S. is the world's gold standard because new cancer drugs are reimbursed generously, giving companies a powerful incentive to market new medicines. In Europe, on the other hand, cancer patients often have to fight to get access to new drugs. A recent report by the Karolinska Institute on disparities in European cancer care found that many "[p]atients have to wait too long to obtain the benefits of newer therapies and the biggest hurdle to the uptake of new drugs is the proactive allocation of financial resources and budgets in the health care systems by policy and decision makers." The bottom line is that Europe, in general, spends too little on innovative cancer treatments and patients suffer as a result.

When President Clinton received quadruple heart bypass surgery in September 2004, he was just another statistic — one of the millions of Americans whose lives have been saved by advances in the treatment and prevention of heart disease. Except for one year (a blip in 1993), mortality from heart disease has fallen every year since 1980, and declined by 2.8 percent from 2001-2002 alone.

New medical technologies deserve credit for revolutionizing patient care and slashing death-rates for patients like President Clinton. Fifty years ago, physicians had few strategies for managing heart disease. Today they have stents and angioplasty to open clogged arteries; beta-blockers and diuretics to lower blood pressure; and statins and aspirin to prevent heart attacks. David Cutler, an economist at Harvard University, has estimated that today the average 45-year-old can look forward to about three extra years of life thanks to improvements in heart disease treatment. He also estimates that for every dollar the U.S. spends on treatment, we get about $4 in added value.

One statistic that critics of U.S. health care love to tout is the U.S.'s infant mortality rate compared to Europe — or better yet, Cuba. Last year Nicholas Kristof of the New York Times wrote that "If the U.S. had an infant mortality rate as good as Cuba's, we would save an additional 2,212 American babies a year."[1] Kristof is trying to score cheap points — but this is an isolated statistic that ignores a complex reality.

Take Navy Anderson, and her twin brother Jackson, who were born more than four months premature. Jackson died within a few hours, but Navy spent 116 days in 4 neonatal intensive care units and survived. In 2005, Navy, a happy, healthy seven-year-old, was named the March of Dimes National Ambassador. According to the March of Dimes, some 500,000 U.S. children are born premature every year. These children face enormous risks, but U.S. hospitals and physicians do their best to give each one a fighting chance at a healthy future.

According to the CDC, over the past century U.S. infant mortality rates have fallen by 90 percent. In fact, infant mortality rates have been either flat or declining since 1958. In 1940, infant mortality in the U.S. averaged over 40 deaths per 1,000 live births. In 2002, there were just seven.[2] Incubators, steroids, neonatal surgery, and, above all, a willingness to spend money mean that many low-birth weight, pre-term infants who aren't even counted as live births in other countries survive here. But even with heroic efforts, many pre-term infants do not survive. Ultimately, our efforts to save these at-risk babies lower our overall infant mortality statistics without painting a true picture of U.S. health care.

None of this means that every dollar that goes to health care is well spent. Study after study shows, for instance, that Medicare spending varies widely by state, but that increased spending isn't correlated with better health outcomes for seniors. So the question isn't what we're spending, but what we're getting for our money. At the end of the day, no one worries about consumer spending on computers or cars, because markets drive consumers to ration consumption of those products, and producers respond by offering better products at cheaper prices. Consumer-driven health care can help spur similar efficiencies, if it's given a chance. Let's hope that by 2015 we're bragging about U.S. health care spending, rather than worrying about it.

Paul Howard is the managing editor of the Manhattan Institute's Web magazine MedicalProgressToday.com.


[1] Nicholas Kristof, New York Times, January 12, 2005

[2] There was a small jump from 6.8 in 2001 (perhaps attributable to older women using fertility drugs to achieve high-risk pregnancies).

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16 Comments

see the monkey
Gloss of facts that don't support your point. If US health care is so good why aren't you guy's living longer then everyone else?

The Problem is the Rest of the World
Yes --- the problem IS the rest of the world. In order for new medical technology to develop, companies must pay for their research and dvelopment AND make a profit. But the rest of the world pays TOO LITTLE for healthcare in order to make that possible if we pay less. Therefore, the United States (its people) wind up subsidizing healthcare in the rest of the world --- especially since the rest of the world still limits access to this.
technology.

Ive traveled the world'stidying healthcare practices. We have the BEST healthcare, both in terms of technology and access, anywhere in the world. But we are going to have to pay for it. If only the rest of the world would pick up its share of the burden.

Silly-Assed Comment
You can't measure quality of healthcare by longevity. There are many factors involved, including genetics and lifestyle. Some people in isolated central Asian backwaters live "forever." Why? Simple diet, no major stresses, no contact with disease carriers because they're isolated. Maybe even genes are involved. Infant mortality rates may be going through the roof, but those who survive may live longer.

American society is high-stress, too fast-food-oriented and too inclined toward the spread of certain diseases --- why are we worried more about avian flu than the rest of the world?

Why do Scandinavians have such a high Type I diabetes rate? Genes. Why is Type I diabetes so prevalent in the UK? Genes from the Norsemen who invaded the islands during the Middle Ages. Type I diabetes patients tend to die young '(everywhere) because of the disease stress, increasing the youthful mortality rate. Does that mean the UK healthcare system just doesnt work for Type I diabetes patients?

Nicholas Kristof is either very corrupt or very ignorant and naive. The above is an incredible stat
Last year Nicholas Kristof of the New York Times wrote that "If the U.S. had an infant mortality rate as good as Cuba's, we would save an additional 2,212 American babies a year."[1] Kristof is trying to score cheap points — but this is an isolated statistic that ignores a complex reality.

Nicholas Kristof is either very corrupt or very ignorant and naive. The above is an incredible statement who would believe that?

Healthcare costs, longevity, and the hundreth monkey phonema
None of this means that every dollar that goes to health care is well spent. Study after study shows, for instance, that Medicare spending varies widely by state, but that increased spending isn't correlated with better health outcomes for seniors

This is an amazing statement. Increased Medicare spending is not the cause of the increasing health and longevity of us old folks. It follows then that what the old do outside the Medicare system accounts for their increasing health and longevity.
A front page headline in the 3/10/06 New York Times reads Census Report Foresees No Crisis Over Aging Generation’s Health. This is because of a significant drop in the percentage of older people with disabilities (a substantial limitation in a major life activity), from 26.2% in 1980 to 19.7% in 1999, and the increase in longevity.
The percentage of the U.S. population 65 and older is expected to grow from 15% in 2000 to 25% in 2050. Those over 85 are the fastest growing age group. Possible causes mentioned are that old people are now better educated and more prosperous than previous generations.
Education in particular is said to be a powerful factor in both life and health expectancy, but they are not sure why.
Bottom line: better education appears to have a far greater effect on better health and longer life than the health care system.
Perhaps it is the hundredth monkey phenomena, where a female monkey decided to was dirty sweet potatoes so she could eat them, taught this to her mom and others, and pretty soon the whole tribe on its isolated island were all washing their potatoes before eating. Soon thereafter whole tribes on other islands took up washing potatoes. Kind of like the way concentrated measurement of an electron causes it to stay in a particular state.
Perhaps by such concentrated attention on similar vital health problems by the aged leads to their adoption of improved diet and lifestyles. Or maybe they just read the newspapers or go to the library, bookstores, or the internet for information and after some study decide to adopt those practices that seem most efficacious to them individually. And, finding that one thing they adopted worked, they decide to try others, the cumulative result of which is less disability and longer life.

see the monkey step in his own poo
Life span is determined by much more than just health care.

The biggest factor by far is lifestyle. Weight, excercise habbits, how often people shoot each other, driving habits.

The list is endless.

Unfortunately certain mental midgets like to boil complex questions down to simple answers. Such people generally like to think that all problems can be solved by getting govt involved.

wwgeek - the answer is very simple
We're subject to a lot of stress because we're the only adults around to child proof the world for simple furriners.

No doubt I'll offend a lot of folks but. . .
Certainly the biggest waste of health care dollars is our massive investment of resources in prolonging the lives of premature infants.

This makes no sense as a societal expenditure, especially in a culture that views unborn fetuses (or whatever you want to call them) as disposables.

Just as a woman should have the right to terminate a pregnancy, she should have the obligation to incur any expenses associated with care of an offspring until it is a full human being - defined as full term normal birth.

infant deaths
In Germany, any infant that dies within 48 hours of birth is counted as a still birth, rather than a live birth. As a result, that very short life is not counted in the life expectancy calculations.

Somehow it seems better not to turn to Germany as. . .
Somehow it seems better not to turn to Germany as an exemplar on right to life type issues.

Perhaps in 39 years or so doing that will be less fraught with unwanted implications.

So refute him
Flo, you could always refute Kristof if you chose to. But please use statistics, not just insinuation. If your calculator is more accurate than NK's, let the world know.

Assuming that his batteries aren't discharged, it says something that a very poor island without extensive cash resources can save slightly more newborns than can the country spending by far the most on healthcare per person.

So? Or not so? Let's not just believe real hard. Let's look it up.

You'll never be pope in this town again
Prediscommunicate him! Then he'll never become Urban the Next. Out, heretic spirit!

You Get What You Pay For
I don't know whether to rejoice or cry. I am very thankful that I and my family are healthy. My monthly cost for healthcare insurance, a package that we don't meet deductible, exceeds the cost of my house payment.

I have several friends that work at a few major hospitals here and comment that the number of people that come to their hospitals without insurance continues to increase.

A college classmate friend of my daughter, tells an interesting story about the country he lives in in Africa. The national resource is diamonds. The government owns the diamonds and uses the proceeds to provide total care of all country citizens. This care includes transplants as well.

I should have changed my major. I sure would like to live in one of those "big" houses.

Yes --- BUT ---
Did your college clssmate tell you what the QUALITY of that healthcare is? Trust me --- you wouldn't want it. Did he also tell you how much of that diamond welth gets syphoned off into Swiss bank accounts of corrupt national leaders? Much more than goes into healthcare. If there was enough AVAILABLE wealth in any country in Africa, it couldn't make much of a dent on the deficiencies of the existing healthcare systems.

How would we know about any medical stats from Cuba.
How would we know about any medical statistics from Cuba. Particularly in the area of infant mortality were we know different countries count live births differently and where some countries use medical abortion forcefully. It is impossible, so without the real numbers we must use what information that we do see. Cuba lacks the equipment and money to keep early preterm babies alive. Cubans when they arrive here do not look all that robust, they are generally smaller than Americans of Cuban descent. Therefore it seems self evident that a country where most people have trouble getting enough to eat will have a higher infant mortality than the USA. Anyone that would think for himself and not listen to the UN of the lame news media (who want to keep access to Castro) would not believe that Cuba has a lower infant mortality than the USA.



PS Consider Nicholas Kristoff refuted eom

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