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Which Country Has the World's Best Health Care?
by Ezekiel J. Emanuel
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“Bow your heads, folks, conservatism has hit America,” The New Republic lamented following the 1946 elections. “All the rest of the world is moving Left, America is moving Right.” Having dominated both houses of Congress throughout President Franklin Roosevelt’s three-plus terms in office (1933–1945), Democrats lost their majorities in a blowout. Some blamed it on the death of FDR, others on the emerging Soviet threat or the bumpy return to civilian life following World War II. The incoming Republican “Class of ’46” would leave a deep mark on history; its members, including California’s Richard Nixon and Wisconsin’s Joseph McCarthy, were determined to root out Reds in government and rein in the social programs of the New Deal.
One issue in particular became fodder for the Republican assault. In 1945 President Harry Truman had delivered a special message to Congress laying out a plan for national health insurance—an idea the pragmatic and immensely popular FDR had carefully skirted. As an artillery officer in World War I, Truman had been troubled by the poor health of his recruits, and as chairman of a select Senate committee to investigate the defense program during World War II, his worries had grown. More than five million draftees had been rejected as “unfit for military service,” not counting the 1.5 million discharged for medical reasons following their induction. For Truman, these numbers went beyond military preparedness; they spoke to the glaring inequities of American life. “People with low or moderate incomes do not get the same medical attention as those with high incomes,” he said. “The poor have more sickness, but they get less medical care.”
Truman proposed federal grants for hospital construction and medical research. He insisted, controversially, not only that the nation had too few doctors, but that the ones it did have were clustered in the wrong places. And he addressed the “principal reason” that forced so many Americans to forgo vital medical care: “They cannot afford to pay for it.”
The facts seemed to bear him out. Close to half the counties in the United States lacked a general hospital. Government estimates showed that about $11 million was spent annually on “new treatments and cures for disease,” as opposed to $275 million for “industrial research.” Though the nation claimed to have approximately one physician per 1,500 people, the ratio in poor and rural counties regularly dipped below one per 3,000, the so-called danger line. On average, studies showed, two thirds of the population lacked the means to meet a sustained health crisis.
The concept of government health insurance was not entirely new. A few states had toyed with instituting it, but their intent was to replace wages lost to illness or injury, not to pay the cost of medical care. Truman’s plan called for universal health insurance—unlike the Social Security Act of 1935, which excluded more than 40 percent of the nation’s labor force, mostly agricultural and domestic workers. Funded by a federal payroll tax, the plan offered full medical and dental coverage—office visits, hospitalization, tests, procedures, drugs—to all wage and salary earners and their dependents. (“Needy persons and other groups” were promised equal coverage “paid for them by public agencies.”)
People would be free to choose their own doctors, who in turn could participate fully, partly, or not at all in the plan. Private health insurance programs would continue to operate, with policyholders required to contribute to the federal system as well—a stipulation the president compared to a taxpayer choosing to send a child to private school. “What I am recommending is not socialized medicine,” Truman insisted. “Socialized medicine means that all doctors work as employees of government. The American people want no such system. No such system is here proposed.”
It did him no good. At the first Senate hearing on the proposal, Ohio’s Robert A. Taft, a perennial presidential candidate known to his admirers as “Mr. Republican,” denounced it as “the most socialistic measure that this Congress has ever had before it.” A shouting match ensued, with one Democrat warning Taft to “shut your mouth up and get out of here.” Taft retreated, but not before vowing to kill any part of the plan that reached the Senate floor.
Taft was not without allies. A predictable coalition soon emerged, backed by pharmaceutical and insurance companies but directed by the American Medical Association, which levied a $25 political assessment on its members to finance the effort. At its crudest, the campaign pushed a kind of medical McCarthyism by accusing the White House of inventing ways to turn a brave, risk-taking people into a bunch of “dainty, steam-heated, rubber-tired, beauty-rested, effeminized, pampered sissies”—easy pickings for the nation’s godless cold war foe. “UN–AMERICAN SYSTEM BLUEPRINTED IN THE KREMLIN HEADQUARTERS OF THE COMMUNIST INTERNATIONALE,” read one AMA missive describing the origins of Truman’s plan.
Precious freedoms were at stake, Americans were told: when the president claimed that medical choices would remain in private hands, he was lying; federal health insurance meant government control; decisions once made by doctors and patients would become the province of faceless bureaucrats; quality would suffer and privacy would vanish. Skeptics were reminded of Lenin’s alleged remark—likely invented by an opponent of Truman’s heath plan—that socialized medicine represented “the keystone to the arch of the socialized state.”
The economist Milton Friedman once described the AMA as “perhaps the strongest trade union in the United States.” It influenced medical school curriculums, limited the number of graduates, and policed the rules for certification and practice. For the AMA, Truman’s proposal not only challenged the profession’s autonomy, it also made doctors look as if they could not be trusted to place the country’s needs above their own. As a result, the AMA ran a simultaneous campaign congratulating its members for making Americans the healthiest people in the world. The existing system worked, it claimed, because so many physicians followed the golden rule, charging patients on a sliding scale that turned almost no one away. If the patient was wealthy, the fee went up; others paid less, or nothing at all. What was better in a free society: the intrusive reach of the state or the big-hearted efforts of the medical community?
Given the stakes, the smearing of national health insurance was not unexpected. What did come as a surprise, however, was the palpable lack of support for the idea. For many Americans, the return to prosperity following World War II made Truman’s proposal seem less urgent than the sweeping initiatives that had ended the bread lines and joblessness of the Great Depression. Even the Democratic Party’s prime constituency—organized labor—showed limited interest. During the war, to compensate workers for the income lost to wage controls, Congress had passed a law that exempted health care benefits from federal taxation. Designed as a temporary measure, it proved so popular that it became a permanent part of the tax code.
Unions loved the idea of companies providing health insurance in lieu of taxable wages. It appeared to offer the average American the sort of write-off reserved for the privileged classes, and indeed it did. Current studies show that union members are far more likely to have health insurance and paid sick leave than nonunion workers in the same industry. Employer-sponsored health insurance now amounts to the nation’s largest single tax exemption, costing the government more than $250 billion annually in lost revenue.
At about the same time, popular insurance plans like Blue Cross emerged to offer cheap, prepaid hospital care, followed by Blue Shield for doctors’ visits. In 1939 fewer than six million people carried such insurance; by 1950, that number had increased fivefold. In the years after Truman’s plan died in Congress, the government filled some of the egregious gaps in the private insurance system with expensive programs for the poor, the elderly, and others in high-risk categories, thereby cementing America’s outlier status as the world’s only advanced industrial nation without universal health care.
What the United States does have in common with several of these nations, says Ezekiel Emanuel in his valuable Which Country Has the World’s Best Health Care?, is that its health care struggles have not been unlike theirs, despite the markedly different outcomes. The United Kingdom, for example, decided in favor of national health care at the very moment that Truman’s plan was being shredded. And the main adversary turned out to be the British Medical Association, which used the hated specter of Nazism (as opposed to Bolshevism) to demonize the proposed National Health Service as a Hitlerian menace run by a “medical fuhrer.”
The NHS succeeded because the Labour Party won a landslide victory in 1945 in a country battered by war and facing a bleak economic future—precisely the opposite of the American experience. Opinion polls in the UK showed strong support for a government-run system offering universal, comprehensive, and free health care financed by general taxation. But the threat of a physicians’ strike forced Labour’s health minister, Aneurin Bevan, to scrap the idea of turning doctors into full-time government employees. Senior specialists (or “consultants”) would be allowed to see private patients beyond their salaried employment in Britain’s government-run hospitals, and general practitioners could retain their status as independent contractors, though they would get virtually all their income through the NHS. Generous pensions and other benefits sweetened the deal. “I stuffed their mouths with gold,” Bevan recalled.
The UK and the US are the bookends of the eleven health care systems that Emanuel has studied—not so much to determine which one is “best” or “worst,” as which one most closely resembles a socialized system. (The others are Australia, Canada, China, France, Germany, the Netherlands, Norway, Switzerland, and Taiwan.) The UK excels in universal coverage, simplicity of payment, and protection of low-income groups. While the NHS remains quite popular, it also is seriously underfunded: the UK ranks dead last in both health care spending per capita ($3,900) and health care spending as a percentage of gross domestic product (9.6) among the six European nations under examination. The most common complaints, not surprisingly, concern staff shortages and wait times for primary care appointments, elective surgeries, and even cancer treatments, which can stretch for months. “The public does not want to replace the system with an alternative,” writes Emanuel. “All the public wants is a fully operational NHS.”
By contrast, the US health care system—if one can call it that—excludes more people, provides thinner coverage, and is far less affordable. It combines socialized medicine practiced by the Department of Veterans Affairs, four-part federal Medicare (A, B, C, D) for the elderly and disabled, state-by-state Medicaid for the poor, health coverage provided by employers, and policies bought privately through an insurance agent or an Affordable Care Act exchange—all of which still leave 10 percent of the population unprotected. Among the biggest problems, says Emanuel, is that Americans are baffled by their health care: uncertain of the benefits they’re entitled to, the providers that will accept their insurance, the amount of their deductibles and copays, and the accuracy of the bills they receive. It is a system, moreover, in which people are regularly switching insurers out of choice or necessity—a process known as churning. “The United States basically has every type of health financing ever invented,” Ezekiel adds. “This is preposterous.”
And extremely expensive. America dwarfs other nations in both health care spending per capita ($10,700) and health care spending as a percentage of GDP (17.9). Hospital stays, doctor services, prescription drugs, medical devices, laboratory testing—the excesses are legion. Childbirth costs on average about $4,000 in Western Europe, where midwives are used extensively and charges are bundled together, but close to $30,000 in the US, where the patient is billed separately by specialists—radiologists, pathologists, anesthesiologists—whom she likely never meets, and where charges pile up item by item in what one recent study called a “wasteful overuse of drugs and technologies.” There is no evidence that such extravagance makes for better health care outcomes. The rates of maternal and infant death in the US are higher than in other industrialized nations, partly because the poor, minorities, and children are disproportionately uninsured.
For head-spinning price disparities, however, nothing compares to pharmaceuticals. Americans account for almost half the $1 trillion spent annually for prescription drugs worldwide, while comprising less than 5 percent of the world’s population. It is probably no coincidence that the pharmaceutical industry spent almost twice as much on political lobbying between 1998 and 2020 as its nearest competitor, the insurance industry. (The hospital/nursing home industry came in eighth.) Drug companies won patent protection, restraint-free pricing, and direct-to-consumer advertising (outside the US, only New Zealand allows this). “This high spending for drugs,” writes Emanuel, with some understatement, “is a result of high drug prices, not high drug use by Americans.”
How do other countries keep drug costs down? By using the full power of government (or a surrogate) to negotiate lower prices, as opposed to the market fragmentation that diminishes consumer leverage in the United States. Some governments shop for pharmaceuticals, paying no more than the lowest prices charged by other developed nations. And some use an internal metric that pegs prices to what that country already pays for drugs in the same class. Canada, which employs both methods, has become a haven for consumers south of the border, even though the importation of prescription drugs into the United States is generally illegal. Emanuel favors no single approach; he is open to almost anything that avoids the highway robbery Americans wearily tolerate. “I am agnostic about how best to regulate drug prices,” he admits, but “having some objective and rigorous system for setting prices is definitely better than leaving it to drug companies with monopoly pricing power.”
Emanuel is a man of many lists. “I rank everything,” he writes:
I rank the 10 best meals I’ve ever had (#1 Alinea in Chicago…). I rank chocolates (#1 Askinosie…). I rank Alpine cheeses (#1 is a tie between Alpha Tolman and Alp Blossom). I rank colleges. I rank academic departments of bioethics and health policy that compete with my own. I rank the meals I cook, the races I run, the bike rides I take, the speeches I give.
A bit obsessive, no doubt, though it’s hard to imagine anyone better suited to rank the world’s health care systems than an oncologist with a Harvard medical degree and a Harvard Ph.D. in political philosophy who was deeply involved in crafting the Affordable Care Act and currently chairs the Department of Medical Ethics and Health Policy at the University of Pennsylvania. Emanuel likes controversy and the limelight that comes with it. Several years ago, he wrote an essay for The Atlantic insisting that he had no interest in living past seventy-five, the approximate age, he said, at which people appear more burdensome than productive. Rather than killing himself, Emanuel vowed to refuse all measures to prolong his life, from cancer screenings to antibiotics to the flu shot. (Those who skimmed the lengthy piece may have overlooked the disclaimer “I retain the right to change my mind” carefully tucked into the final paragraph.) Few people took him seriously, I suspect, beyond the likes of Newt Gingrich and Sarah Palin, who had previously (and falsely) accused Emanuel of wanting to create “death panels” to deny treatment to the elderly and disabled.
Ranking the world’s health care is something of a cottage industry. The gold standard, until now, has been the Commonwealth Fund, which publishes periodic assessments comparing the US system to those of ten other countries, much as Emanuel has done. The 2017 Commonwealth study includes two nations (Sweden and New Zealand) not on Emanuel’s list; his study includes two nations (Taiwan and China) not on the Commonwealth list. Both employ similarly broad categories such as access, equity, coverage, efficiency, financing, and delivery. The Commonwealth studies rely heavily on surveys of patients and primary care doctors, as well as comparative data drawn from sources like the World Health Organization. Emanuel takes a more qualitative approach, providing histories of each nation that elegantly describe the impact of politics and culture on current policy. He also is more hesitant to rely on data that are not easily compared among nations with different approaches to managed care. Such numbers, he writes, must “be taken with heaping grains of salt.”
So who are the winners and losers? The 2017 Commonwealth study ranks the UK first, followed closely by Australia and the Netherlands. In last place, hands down, is the United States, which fails in almost every category. Emanuel ranks the United States next to last—but only because his study includes China. While acknowledging dramatic progress made there in health care outcomes such as infant mortality and life expectancy, Emanuel has little good news to report about China beyond the hope that its rapidly growing middle class will soon be demanding better medical care.
And first place? The answer is…blank. There are too many variables and too few precise measurements to pick an overall winner, Emanuel confesses to the reader on page 351. The best that he can do is to lump the eleven nations into tiers, with Germany, the Netherlands, Norway, and Taiwan at the top. Which ranks highest depends on your priorities. If your main ones are the choice of doctor and hospital, short waiting times, and good long-term care, you probably will pick Germany. If you’re focused on rock-bottom prescription drug prices and an outstanding electronic records system, Taiwan is the place. If you worry about copayments and deductibles, England and Canada await. Finding the best heath care, it appears, is harder than finding the best Alpine cheese.
Shortly after this book was published, Emanuel was interviewed on a podcast with a very insistent host. Asked point-blank which nation had the best health care, he first refused to say. “I was ready for your evasive answer,” the host responded. “Which system would you want to buy into?” Cornered, Emanuel chose the Netherlands. “I think that they have a very good combination,” he declared:
You get to choose your private insurer, you get to choose your primary care doctor. And their primary care doctors are really gatekeepers to a higher level of care. They’re also innovative…. But there are lots of other alternatives I’d be more than happy with.
This is hardly a revelation. The Dutch have long been content with their system. It doesn’t lead in any of the main categories, but it does everything well. Where Emanuel and fellow rankers part ways is in their vision of the future. Emanuel is bullish on America. He sees it emerging as a world health care leader, despite its dismal current standing and the politically charged opposition of most Republicans to meaningful change. “The United States does excel on some dimensions, particularly innovation and experimentation in payment models and care delivery,” he writes. “I’m optimistic about [its] long-term performance.” Time will tell.
The first order of business, Emanuel believes, is universal coverage. No system that shuts out so many people can claim to be just or effective. Other industrialized nations have achieved universal coverage through automatic enrollment, and Emanuel thinks it could work here by funneling people into Medicaid or one of the lower-cost insurance exchanges. The process will entail larger government subsidies for the uninsured and underinsured, including middle-class families, but it will also ease the rampant confusion that keeps millions of Americans from claiming the benefits they already are entitled to. Emanuel sees automatic enrollment as both essential and nonthreatening—a social good requiring little systemic change.
More controversial is his recommendation aimed at bringing some order to the current system. He likes the idea of having everyone covered by one of two options: either employer-sponsored insurance or a government-sponsored alternative that combines Medicare, Medicaid, and the Obamacare exchanges into a coherent entity. At the very least, it would be simpler to navigate, streamline medical billing, reduce the administrative quagmire faced by providers, and supply some added leverage against monopolistic price-gouging. Studies estimate that the United States spends a staggering $500 billion annually on “billing and insurance-related costs,” with $240 billion classified as “excess”—or waste. The average US physician practice spends four times as much on billing as its Canadian counterpart.
It is hard to imagine that anyone intended to design a system this dysfunctional. The good news, says Emanuel, is that underperformance of such magnitude inevitably spurs innovation. The surge in costs has generated new interest in payment models that have worked elsewhere, such as capitation, which pays the physician a fixed fee for a patient’s care over a specified period of time, and bundling, which puts multiple health care services under a single billing code. America is becoming a leader in coordinating the care of patients with chronic physical and mental conditions—innovations Emanuel clearly lays out here. Even the system’s once-static care delivery system has been invigorated by additions like the physician’s assistant, who is licensed to treat illness and prescribe medication, and the “virtual” office visit that has become so essential during the current pandemic.
Covid-19 arrived just as Emanuel’s book was heading to the printer. Not surprisingly, his editor asked him to compose an addendum suggesting what the coronavirus might tell us about the nation’s health care system. Written obviously in haste, it still covers the bases rather well. The absence of universal coverage, combined with high deductibles and copays, made it less likely for people with symptoms to seek medical help, thus endangering them and the rest of us. America’s hospitals and health care facilities now face a sea of red ink, with losses estimated in the hundreds of billions of dollars. Elective surgeries, a primary revenue stream, have slowed to a trickle, while prices for drugs and protective equipment have steadily mounted. It is too early, of course, to attempt a serious ranking of the effectiveness of countries’ responses to Covid-19. That surely will come, with perhaps predictable results. What can be noted at this point is the exemplary performance of the nation’s front-line health workers and first responders.
There are signs that the pandemic has had an effect on public attitudes. Since June, voters in deep red Oklahoma and Missouri have defied their political leaders by supporting constitutional amendments that require the expansion of eligibility for Medicaid, one of the provisions of Obamacare that many Republican-controlled state governments have refused to implement. South Dakota may follow suit in 2022. The AMA has also evolved over the years: its current “vision on health care reform” now calls for “freedom of choice, freedom of practice, and universal access for patients,” which is another way of saying that it endorses the expansion of the Affordable Care Act for those without insurance while still opposing a single-payer national health plan. This alone is progress—seventy-five years after President Truman’s clarion call for health care justice.
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