New business … and a new master.

FEE Timely Classic:
“The Awesome Powers of Government” by Murray Weidenbaum

This ranking is curious because the actual life expectancy of the average American differs very little from that of the average European. At birth, average life expectancy in the European Union is 78.7. For the average American it is 78. And this doesn’t adjust for factors that can affect the averages which are unrelated to health care, such as lifestyle choices, accident rates, crime rates, and immigration. Health isn’t entirely about longevity but it certainly is a major component. 

What is not mentioned by Moore, or others citing the WHO report, are the measures being used to rate the various countries and who is doing the measuring. There are many ways to nudge ratings in one direction or another that are not directly related to the actual item being measured.

For instance, one might produce a study on transportation. The purpose of transportation is to get people from where they are to where they wish to be. You might rate how quickly people can move, how cheaply they can move relative to their income, how conveniently they can move, and how free they are to move. 

You would think the United States would rate high in such a study. Americans tend to be wealthier than the rest of the world. There is widespread ownership of cars. Gasoline prices are lower than in most other countries. On average, the typical American can travel quicker, cheaper, and more conveniently than people in most parts of the world. But what if this index included other factors as well? For instance, if a major component was the percentage of commuters who use public transportation, that would push the United States far down in the ranking. A larger percentage of the people in other countries have no other option but public transportation. 

In 2000, when the report was issued, WHO was run by Gro Harlem Brundtland, a former prime minister of Norway and a socialist. She doesn’t think the results of a health system alone are important. Rather, she wants to know if the system is “fair.” In introducing the WHO report she wrote that while the goal of a health system “is to improve and protect health,” it also has “other intrinsic goals [that] are concerned with fairness in the way people pay for health care.” She is clear about the ideological factors she thinks are important: “Where health and responsiveness are concerned, achieving a high average level is not good enough: the goals of a health system must also include reducing inequalities, in ways that improve the situation of the worst-off. In this report attainment in relation to these goals provides the basis for measuring the performance of health systems.”

True to her ideological roots, Brundtland prefers socialized medicine over private care. Drawing her first conclusion about what makes a good medical system, she declares: “Ultimate responsibility for the performance of a country’s health system lies with government. The careful and responsible management of the well-being of the population—stewardship—is the very essence of good government. The health of people is always a national priority: government responsibility for it is continuous and permanent.”

One WHO discussion paper states, regarding “fairness” in financing, “we consider only the distribution, not the level, as there is no consensus on what the level of health spending should be.” Equal results, not necessarily good results, are the focus. 

When Moore or others refer to the WHO index as proof that private health care doesn’t work, they aren’t being totally honest because they fail to disclose that the index lowers the scores of systems that don’t satisfy socialist presumptions.

A Second Rigged Study

The New York Times in August editorialized that American health care “lags well behind other advanced nations.” The newspaper relied in part on the WHO rankings as proof. For the rest, it relied on a more recent study by the Commonwealth Fund. But that study, which compared the United States to five other wealthy countries, has weaknesses similar to the WHO study.

The Commonwealth Fund marked down the United States partly because “All other major industrialized nations provide universal health coverage, and most of them have comprehensive benefits packages with no cost-sharing by the patients.” Again the American system loses points because it doesn’t provide socialized medicine. And the Times neglected to note that “no cost-sharing” means the people have paid through taxes whether they receive the care or not. 

Non-Emergency Visits

The United States also was penalized because seeing a physician for non-emergency reasons is harder to do on nights and weekends than in the other five nations. The Fund said “many report having to wait six days or more for an appointment with their own doctors.” 

The survey didn’t look at the treatment of serious conditions. Waiting weeks or months for chemotherapy is not held against a health-care system, but waiting a few days to have a check up is. Waiting time for “elective” surgery is counted (the United States was a close second to Germany), but waiting time for non-elective, serious surgery did not count, though that is precisely where socialist systems do the worst.

This issue is not unknown to the Commonwealth Fund. In 1999 it published The Elderly’s Experiences with Health Care in Five Nations, which found significant delays for “serious surgery.” Only 4 percent of the American seniors reported long waits for serious surgery. The rate was 11 percent in Canada and 13 percent in Britain. For non-serious surgery the differences were more obvious: 7 percent in the United States, 40 percent in Canada, and 51 percent in Britain. 

In the latest survey, the United States came in dead last for health “safety,” but many of the scores were only a few points apart. For instance, 15 percent of American patients said they “believed a medical mistake” had been made in their treatment within the last two years. Notice this is merely patient perception and nothing objective. But the best score was in Britain, where 12 percent said this.

The United States is also marked down because 23 percent of patients report delayed or incorrect results on medical tests they took. That is far worse than the best country, Germany, at 9 percent. But what constitutes a delay? If a result is expected in a week but takes two, that is a delay. But if it is expected in three weeks and arrives then, that isn’t a delay. Thus what constitutes a delay depends on expectations, leading to counter-intuitive results.

The United States also lost credit because fewer Americans report having a regular doctor for five years or more. But Americans are more mobile than many other people. CNN reports that Americans move every five years on average. In comparison, Britain has a moving rate of 10 percent a year, or an average of once a decade. And 60 percent of those move about three miles.

Freer to Change Doctors

Americans are also freer to change doctors if they wish. Britain requires patients to sign up with physicians, and once they do so, they are pretty much stuck unless they want to end up on the waiting list of another physician. Patients often have to wait to get on the books of a physician and only then can they be treated; that is, they wait to get on a wait list. This is true even for heart transplants. The inevitable waiting is a disincentive to change doctors.

Another measure used by the Commonwealth Fund is centralization of medical records. If a country has a system that allows doctors anywhere to tap into the patients’ records, it is rated higher. The United States has no centralized database and so is rated lower. Many Americans may prefer to have their records private and dispersed. When the Clinton plan was proposed in 1993, one of the rallying points that helped defeat it was the centralization of health records.

Out-of-pocket expenses were counted against a system as well. In socialized health care these expenses are zero or very low but are replaced with taxes. Taxes, however, don’t lower a country’s score because the care “is free.”

Countries were also judged on the number of patient complaints. But different cultures have different attitudes toward complaining. Jeremy Laurance wrote in the Belfast Telegraph recently that the National Health Service needs “a healthy dose of American belligerence.”

Finally, the United States is ranked last among the six nations surveyed  in infant mortality. What is not discussed is that nations define infant mortality differently. Any infant, regardless of size or weight or premature status, who shows sign of life is counted as a live birth in the United States. Germany, which ranks number one in the Commonwealth Fund survey, doesn’t count as a live birth any infant with a birth weight under 500 grams (one pound). How valuable is a comparison under those circumstances?

One could easily design a survey that would rank American health care high and other nations low. But this does not mean the American system is what it should be. Its successes and innovation can be attributed to the vestiges of freedom, but government has saddled the system with so much intervention that it is far from market oriented. Instead of worrying about irrelevant international rankings, we should be working toward freeing the medical market.

The summer of 2007 was no exception. The seminar we participated in took place in July near Deva, Romania. This was our second trip to Romania; a 2005 IES-Europe seminar was held just outside the beautiful Transylvanian town of Cluj-Napoca. As in 2005, this year we began our Romanian adventure in Bucharest. We immediately noticed how much it has changed since 2005. Not only has Delta Airlines launched a direct flight there from New York (which we took), but near the Bucharest airport now stands a brand-new IKEA furniture store. Roads and driveways boast more new cars, and the downtown is blossoming with shiny new hotels, restaurants, and trendy retail stores.

Bucharest still has a long way to go. No one there is ever far from signs of Romania’s communist past. Especially prominent are the hideously ugly, dilapidated concrete-block buildings. And most of the public parks are strewn with litter and obviously have enjoyed no landscaping in decades. But also unmistakable is the progress that Bucharest has made in the recent past—and is still making.

Some of our Romanian friends note that this progress has a downside: horrible traffic. And, indeed, the traffic in Bucharest is nightmarish. Streets with more than two lanes are rare (and rarer still in parts of Romania outside of this capital city). And the roads are largely unkempt. They are typically narrow, poorly marked, and badly in need of resurfacing. So while private enterprise is hard at work supplying new cars, new eateries, and new retail outlets to Romanians, the government seems to be working at a snail’s pace at supplying those amenities for which it takes responsibility.

Back in the U.S.A. 

When we landed at New York’s JFK Airport on our return from Romania, Karol and I found ourselves with an unexpected windfall of extra time to reflect on our most recent experience in eastern Europe. Our connecting flight (back to our home near Washington, was scheduled to leave JFK two hours after our flight from Bucharest landed. Fortunately, that flight landed about five minutes early. But then we proceeded to wait on the tarmac for more than 30 minutes before pulling up to the terminal to unload. The reason for this delay, the pilot explained, was that our gate was occupied.

Part of the blame for this delay, I suspect, belongs to Delta Airlines. For whatever reason, it couldn’t load and prepare the plane departing JFK with sufficient dispatch. But another part of the blame, I’m sure, lies with the system Americans use to supply commercial passenger air transportation. All commercial airports in the United States are built and owned by government. This means that commercial airports are neither built nor operated in full accord with the profit motive. Political and bureaucratic incentives are the dominant forces in play to guide the construction and operation of these airports.

One result is too few gates for loading and unloading passengers at busy airports. With no profit motive guiding the building of such gates—or, more generally, with the price system not used to convey information about how many gates it would be best to supply—politicians and bureaucrats have too little incentive and information to ensure that the number of gates at airports is economically appropriate. So at busy airports such as JFK access to gates is too often allocated by waiting—such as the inordinate amount of time that our flight from Bucharest waited before it gained access to a gate.

Still, by the time we stepped off the plane into the terminal, we had just over an hour to catch our connecting flight. “We’ll make it,” I assured Karol. Because the flight from Bucharest was ten hours long, both of us recoiled at the thought of missing our flight from New York to Washington. Exhausted, we longed to sleep in our own bed.

Minutes later, though, we realized that we’d miss our flight to D.C. After walking down a long and dreary hallway to U.S. Passport Control, we and our fellow passengers were herded into the room where agents stood at their desks waiting to check our passports.

Despite the fact that JFK is one of the world’s busiest airports—despite the fact that summertime is the peak of the international travel season—despite the fact that other international flights were landing about the same time at that terminal—the U.S. Department of Homeland Security had a total of three agents employed that evening to examine the passports of U.S. citizens returning home. Three agents. That’s all. I didn’t count the number of agents assigned to inspect the passports of non-U.S. citizens, but I couldn’t help but notice that most of the passport-control desks stood empty, mocking the many tired and frustrated passengers lined up and waiting in a slow-moving queue to have their passports stamped, clear customs, and then catch their connecting flights.

It took us 50 minutes to have our passports checked. By the time we claimed our luggage and cleared customs, we’d missed our flight.

Government Health Care?

As I waited with increasing irritation in that line, I wondered why so many people want government to supply health care. Do these advocates of government-supplied health care never fly internationally during the summer? When these people wait in long lines just to clear passport control and, in the process, notice the many empty desks that could be (but aren’t) occupied by additional agents, do these people not think that similar poor service might, perhaps, also characterize government-run health care? Do these champions of state-run health care never visit the post office?

The queues at passport control and the post office, along with the indifferent “service” typically rendered there, are too common not to be symptomatic of government supply. When “customers” neither pay directly for what they receive nor have the option of either not paying for the product at all or of seeking an alternative supplier, suppliers have little motive to respond to the wishes of the people they are allegedly employed to serve.

So, for a good sense of what government-supplied health care would look like here, all you must do is to visit a foreign country (preferably during the summer), fly home on a late afternoon or early evening, and then watch government service in action. You’ll have plenty of time to observe.