John Goodman on the Health Care Olympics
By Arnold Kling
I refer to the attempt to measure national health care efficiency by comparing outcomes to expenditures as the international health care Olympics. The conventional wisdom is that the U.S. does poorly. John Goodman disagrees. On spending, he writes,
the U.S. has fewer doctors, fewer physician visits, fewer hospital beds, fewer hospital stays and less time in the hospital than the OECD average. We’re not just a little bit lower. We are among the lowest in the developed world. In fact, about the only area where we “spend” more is on technology (MRI and CT scans, for example)
His point is that we use fewer health care inputs than other countries, even though we spend more on those inputs. This is the same observation that forms the basis of the classic piece by Uwe Reinhardt and others, “It’s the Prices, Stupid.” However, Reinhardt argues that our health care providers earn too much. Goodman argues that health care providers in other countries have their incomes artificially repressed. Either interpretation might be reasonable.
For what it’s worth, I think that we utilize our inputs more intensively. I think our doctors work longer hours and perform more procedures per hour, although I do not have data on this. I have seen data (and included it in Crisis of Abundance) showing that we have a higher ratio of specialists to ordinary doctors than other countries. This may or may not be a better allocation of resources (I suspect that it is not). But simply counting up doctors is not the right way to measure inputs.
What about outcomes? Do we get more and better care for the resources we devote? Here the evidence is mixed. As the second table shows, we replace more knees per capita than any other country and it’s hard to believe that any of these are unnecessary procedures.
Not so hard to believe, actually. My late mother-in-law was told by one orthopedist that she was not a good candidate for knee replacement. She found another surgeon who was willing to do it. The outcome was more consistent with the opinion of the first orthopedist.
Goodman is on stronger ground when he writes,
What about life expectancy statistics — a favorite of the critics, since Americans don’t score very high? It turns out that when you remove outcomes doctors have almost no impact on — death from fatal injuries (car accidents, violent crime, etc.) — U.S. life expectancy jumps from 19th in the world to number one!
To me, the real question in the health care Olympics is how well costs and benefits are aligned. I am fairly sure that in the United States, a lot of medical procedures are undertaken that have high costs and low benefits. I have little information about other countries, but it would not surprise me if it turns out that they undertake fewer of these high-cost, low-benefit procedures.
UPDATE: Joshua D. Gottlieb apparently has some evidence on the growing use of high-cost, low-benefit procedures.