Tag Archives: The Atlantic

Why Do Other Rich Nations Spend So Much Less on Healthcare?

Why Do Other Rich Nations Spend So Much Less on Healthcare?

 JUL 23 2014, 9:57 AM ET

“Despite the news last week that America’s healthcare spending will not be rising at the sky-high rate that was once predicted, the fact remains that the U.S. far outspends its peer nations when it comes to healthcare costs per capita. This year the United States will spend almost 18 percent of the gross domestic product (GDP) on healthcare—six percentage points more than the Netherlands, the next highest spender. Because the U.S. GDP in 2014 will be approximately 17 trillion dollars, those six percentage points over the Netherlands amount to one trillion dollars in additional spending. The burden to the average household through lost wages, insurance premiums, taxes, out-of-pocket care, and other costs will be more than $8,000.

Why does the United States spend so much more? The biggest reason is that U.S. healthcare delivers a more expensive mix of services. For example, a much larger proportion of physician visits in the U.S. are to specialists who get higher fees and usually order more high-tech diagnostic and therapeutic procedures than primary care physicians.

Compared with the average OECD country, the U.S. delivers (population adjusted) almost three times as many mammograms, two-and-a-half times the number of MRI scans, and 31 percent more C-sections. Also, the U.S. has more stand-by equipment, for example, 1.66 MRI machines per 6,000 annual scans vs. 1.06 machines. The extra machines provide easier access for Americans, but add to cost. Similarly, occupancy rates in U.S. acute care hospitals are much lower than in OECD countries, reducing the likelihood of delays in admissions, but building that extra capacity adds to cost. Aggressive treatment of very sick elderly also makes the mix expensive. In the U.S. many elderly patients are treated in intensive care units (ICUs), but in other countries they would receive only palliative care. More amenities such as privacy and space in hospitals and more attractive clinics also add to U.S. costs.

While the U.S. mix of services is disproportionately tilted toward more expensive interventions, the other OECD countries emphasize a “plain vanilla” mix. Compared with the U.S., the average OECD country has 30 percent more physician visits and more than 30 percent more hospital days per capita.

One reason for the more expensive mix in the U.S. is it produces more income for drug manufacturers, specialist physicians, and others who have considerable influence on policy. Second, some patients prefer the more expensive mix, just as some prefer to shop at Whole Foods rather than Walmart. Third, some workers mistakenly believe that employers pay for their healthcare and that more expensive means better care. Health economists believe that the premiums for employer-sponsored insurance come out of potential wages. Similarly, the extra money the government spends for health could be used for education, infrastructure, the environment, and other public investment, but these alternatives are not readily apparent or agreed upon. Does the more expensive mix result in better health outcomes? There are no definitive studies to answer this question. Superficially, it appears that the systems in the other countries are more effective because their life expectancy is higher. But their advantage may be attributable to non-medical factors such as significantly lower poverty rates.

A second important reason for higher healthcare spending in the U.S. is higher prices for inputs such as drugs and the services of specialist physicians. The prices of branded prescription drugs in the U.S. are, on average, about double those in other countries. The fees of specialist physicians are typically two to three times as high as in other countries. The lower prices and fees abroad are achieved by negotiation and controls by governments who typically pay for about 75 percent of all medical care. Government in the U.S. pays about 50 percent, which would still confer considerable bargaining power, but the government is kept from exerting it by legislation and a Congress sensitive to interest-group lobbying.

The third and last important reason for higher spending in the U.S. is high administrative costs of insurance. This includes private insurance which covers more than half the insured population. Each year scores of insurance companies must estimate appropriate premiums for plans they wish to sell to several million employers plus 20 to 30 million individuals. In addition, hospitals, clinics, and individual physicians incur substantial costs in billing for each test, visit, and procedure regardless of whether they are covered by private or public insurance or self-pay. Many of our peer countries have lower administrative costs through more coordination, standardization, and in some countries a single national system or several regional healthcare-insurance systems, even when the provision of care is primarily a private-sector responsibility.

The complexity of private-sector insurance is not in the public interest. Each company offers many plans that differ in coverage, deductibles, co-pays, premiums, and other features that make it difficult for buyers to compare the prices of different policies. For most goods and services, wider choice for consumers is assumed to contribute to well-being. In the case of health insurance, however, the fact that the customer knows more than the insurance company about his or her likely use of care results in adverse selection. If the company sets a premium based on average utilization, the company will lose money on the high users and will lose as customers those who expect to use less than the average. It is not efficient or fair to allow a family to choose a plan with generous maternity benefits when they are planning to have a baby and then switch to a plan with no maternity benefits when they are not.

If we turn the question around and ask why healthcare costs so much less in other high-income countries, the answer nearly always points to a larger, stronger role for government. Governments usually eliminate much of the high administrative costs of insurance, obtain lower prices for inputs, and influence the mix of healthcare outputs by arranging for large supplies of primary-care physicians and hospital beds while keeping tight control on the number of specialist physicians and expensive technology. In the United States, the political system creates many “choke points” for diverse interest groups to block or modify government’s role in these areas.

For those who would like to limit government control, there is an alternative route to more efficient healthcare through “managed competition,” proposed by Alain Enthoven, a Stanford University Business School Professor, more than 25 years ago. It is based on integrated group practice, which brings the insurance function, physicians, hospital, drugs, and other elements of care into a single organization that takes responsibility for the health of a defined population for an annual risk-adjusted per capita payment. Examples include the Group Health Cooperative of Puget Sound in Seattle and the Kaiser Permanente organizations in California.

Such organizations deliver high-quality care at lower costs, and some employers offer such a plan as one option, but most don’t. And even those employers that do offer a low-cost integrated group practice as an option typically pay the same percentage subsidy of premium regardless of whether the employee chooses an expensive plan or the low-cost plan. For managed competition to be most effective, employees should be required to pay the marginal excess of a high-cost plan over the low-cost plan. For one large employer who did follow this approach, 71 percent of the hourly paid men chose the low-cost integrated group practice while 63 percent of the salaried men chose one of the more expensive plans.(This statistic comes from a study in progress by Enthoven and myself.)

With regard to healthcare, the United States is at a crossroads. Whether the Affordable Care Act will significantly control costs is uncertain; its main thrust is to reduce the number of uninsured. The alternatives seem to be a larger role for government or a larger role for managed competition in the private sector. Even if the latter route is pursued, government is the only logical choice if the country wants to have universal coverage. There are two necessary and sufficient conditions to cover everyone for health insurance: Subsidies for the poor and the sick and compulsory participation by everyone. Only government can create those conditions.”

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On Campus, Young Veterans Are Learning How to Be Millennials

On Campus, Young Veterans Are Learning How to Be Millennials

“…Arnett agrees: Today’s emerging adults are less motivated less by profit, and more by purpose, than previous generations. This has been misinterpreted as entitlement, he says. “They’re just not willing to work their lifetimes in a job they hate. That’s something admirable about them, not something we should be abusing them for.”..”

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The Joy of Exercising in Moderation

The Joy of Exercising in Moderation

 JUL 7 2014, 12:00 PM ET

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Why Kids Care More About Achievement Than Helping Others

“…While 96 percent of parents say they want to raise ethical, caring children, and cite the development of moral character as “very important, if not essential,” 80 percent of the youths surveyed reported that their parents “are more concerned about achievement or happiness than caring for others.” Approximately the same percentage reported that their teachers prioritize student achievement over caring…

Child psychologist and author Michele Borba told me the study was “incredibly important,” a “wake up call to parents, a clear indication that we need to reprioritize our parenting agendas ASAP. The science reveals the irony of the situation: happier and more successful kids care about others, they are able to relate, be concerned, and respect differences, and a lack of empathy makes kids less successful, and less happy.” Her email went on to explain,

Studies show that kids’ ability to feel for others affects their health,wealth and authentic happiness as well as their emotional, social, cognitive development and performance. Empathy activates conscience and moral reasoning, improves happiness, curbs bullying and aggression, enhances kindness and peer inclusiveness, reduces prejudice and racism, promotes heroism and moral courage and boosts relationship satisfaction. Empathy is a key ingredient of resilience, the foundation to trust, the benchmark of humanity, and core to everything that makes a society civilized….”

(my bolds)

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June 25, 2014 · 7:51 pm

No, President Obama Did Not Break the Middle East

It’s so important to put into perspective what Obama has done during his presidency. Many people criticize him for not doing what he promised during his campaigns, but it’s important to note the context within which he’s working.

Congress is at an all time historical low for passing bills, they block everything the president wants to do (even shutting down the government in the process). Obama first came into office right at the beginning of the Great Recession and during a war between Israel and the Gaza-based Hamas in the Middle East.

Gun restrictions had been slowly loosened over the course of the past couple decades thanks to NRA-like lobbying. Inflation since the 70s and productivity since the 80s have been increasing without match, thereby plummeting their correlation to minimum wage. Meanwhile, corporations are finding more and more loopholes so that they can continue to increase their profit margins while simultaneously not allowing the profits to “trickle down” (instead all the excess profit is going into off-shore, non-taxed accts).

Manufacturing jobs have been gradually outsourced to other countries over the past couple decades, effectively slashing the averagely-skilled, middle-class workforce in the US. And the oil and rubber lobbyists have pretty much monopolized the entire energy economy in the US, making it near impossible to move beyond our out-dated, limited-resource-based energy systems.

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June 23, 2014 · 4:38 pm

The Case for American History

“…That is because reparations is not a claim against white Americans, anymore than reparations paid to interned Japanese-Americans was a claim against non-Japanese-Americans. The claim was brought before the multi-ethnic United States of America…

People who object to reparations for African-Americans because they, individually, did nothing should also object to reparations to Japanese-Americans, but they should not stop there. They should object to the Fourth of July, since they, individually, did nothing to aid the American Revolution. They should object to the payment of pensions for the Spanish-American War, a war fought before they were alive. Indeed they should object to government and society itself, because its existence depends on outliving its individual citizens…

The United States’ success as a state extends out from several factors, some of them good and others not so much. The mature citizen understands this. The immature citizen claims credit for all national accolades, while disavowing responsibility for all demerits. This specimen of patriotism is at the core of many (not all) arguments against reparations. Everyone claims to love their country, but considerably fewer know their country…”

I wish I could quote this entire article and get it painted on the side of my car.

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June 3, 2014 · 5:59 pm

How I Became an Unfair Teacher

“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
― Maya Angelou

I was invited to my first high school reunion this past December and I also recently received my first request for donations from the school’s alumni association (as if I have the money for that, ha!). These two events started the process in my head of sloughing through my massive memory bank of those years in my life, and I’ve come up with two conclusions so far: it was awesome, but it also sucked beyond belief. While I had a great social life, was involved in activities that continue to hold my interest to this day, and had some truly inspiring teachers along the way, I also had my fair share of rotten experiences.

I was always an advocate against ageism from a very early age, even before I knew what it was. My parents raised me more or less as an adult: I was allowed to drink alcohol at family dinners, I was socialized early on with “adults” and could hold my own in “grown-up” conversations, I was allowed to fashion myself with clothes and crazy hair colors, and my parents backed me up whenever I got in “trouble” at school. This “trouble” was often a result of my rebellions against the established pecking order of “teachers/administrators know best.”

This tendency to resist authority figures usually ended in two ways:

1. They would give up and let me do what I want (which resulted in stuff like “science fair” projects on which brand of nail polish was more durable and how different heights of high heels affected walking rates)

Or,
2. They would cite an arbitrary rule that I was violating and punish me (one memorable instance being a ban in 6th grade on wearing costumes to school on Halloween day; instead of wearing “costumes,” my friend and I dressed up as Goths (a valid fashion trend at the time) and were promptly assigned pumpkin-carving duty for the 3rd graders and banned from attending the “Fall Dance” (we continued to protest by dressing as Goths at school for the next two weeks))

I continued this push against authority figures throughout my high school career and thus many of my memories from that time are about how these teachers and administrators made me feel. In one instance, I remember arguing with my 7th grade science teacher about whether clockwise is left to right and counterclockwise is right to left, or whether it depended on where you start. I argued that if you start at the bottom of a clock and go in a clockwise direction, you are going right to left. But if you start at the top of a clock and go in a clockwise direction, you go left to right. He refused to accept what I said as valid and continued on with his lesson. I remember feeling irate and disrespected, to the point of having to scream into my sweatshirt to release the anger.

A more psychologically damaging instance involved my P.E. teacher in 10th grade. I remember him being a retired military general or something of the sort, and, as a P.E. teacher, he continued his relationship with the military by offering community service hours to military personnel in exchange for helping with his classes for a day. So one day, we arrive for P.E. and he tells us that we will be playing a game with active military members for our daily activity. Now, at this point in time, I was an active member of a school club called S.A.W. (Students Against War). We were in the middle of the Iraq War and I had been developing an increasing distaste for all things military. So, to make a point, I calmly told the teacher that I would not be participating in the activity that involved the military personnel. He sneered at me and walked away. When the class had gotten to the field, I walked over to the side and sat down.

I saw the P.E. teacher say something to the military personnel and point over to me, and within minutes one of them walked over to me to ask why I was not participating. I told her that I did not believe in the military (probably a bad choice of words on my part) and she immediately launched into a yelled (yes, yelled) lecture about how the military is not make-believe and that there are people (her friends!) who are dying out there. I told her that, yes, I understood that the military was not make-believe and that I simply had no desire to participate with them in the activity. She continued to scream at me for another five minutes, during which the group of students that had followed my protest and sat on the edge of the field with me decided that it wasn’t worth the fight and went to participate in the activity.

At some point, the screaming turned into a lecture about physical activity. She was accusing me of being against physical activity and P.E. in general when my teacher walked over and joined her in the verbal assault. They both continued to yell at me even after I offered to take part in another P.E. class for the day that didn’t involved military personnel. I just sat there, stunned by the sheer amount of volume and vitrol that was being thrown my way. Eventually they realized that they weren’t getting anywhere and granted my request to join a different P.E. class. So I walked over to another teacher, asked if I could join their class, and played baseball for the rest of the period.

That day after school, I went home and told my parents the entire story and they offered their support if/when I decided to take action. I tried to get various teachers to help back my complaint to the principal, but none offered assistance and the issue eventually faded into the background of my memories.

Another example that had lasting effects on both myself and my friendships at the time was my 12th grade English teacher. Her and I had had numerous arguments and tensions throughout the year, all stemming from the fact that she refused to take my opposing opinions as valid. My opinions were often creatively “outside the box,” such as a statement I made once about chemistry being an art. I had argued that the mixing of chemicals could be considered just as artful as the mixing of paint or words. She laughed at me.

The most notable example of her blatant disrespect, however, happened toward the end of the year, when we were both ready to get out of each others’ hair. We had been studying the book Hamlet, which was a personal favorite of hers (I wouldn’t be surprised to learn she wrote her dissertation on it or something). The assignment that she had given us was to write a psychological evaluation of the character Hamlet, as revealed in his four soliloquies. She expressly instructed us to forget the rest of the play and just focus on the soliloquies. So I sat down one night and wrote out an evaluation in the voice of a stuck-up psychologist who insisted that “Sir Hamlet” was stuck in adolescence.

When we got to class, she instructed us to group into fours and read each others’ papers. We were then to choose the best one from the group and then read it to the class. My group chose my paper and, while I was reading it out loud, the teacher happened to be behind me. As I read, I kept noticing expressions of pain, disbelief, and confusion running over the faces of the others in my group so by the time I was done I knew I was in for something.

She immediately launched into an attack of my paper; first citing the use of “Sir Hamlet” and then the use of “adolescent.” I hadn’t known this at the time, but “Sir” could only be used by someone who is socially above the person they are calling sir. Hence, Sir Hamlet was inappropriate because a psychologist would not be socially above a prince. My response was that the psychologist was haughty and considered himself above Hamlet, which she laughed at and disregarded.

The use of “adolescent” was a much bigger issue. My paper implied that Hamlet was still an adolescent in age, since I had not clarified that his actions and mindset were adolescent. She basically told me that I was wrong, that the play lists Hamlet’s age, and implied that I hadn’t read the play at all. I left class more irate than I’d ever been at school and launched into a tirade once I met my friends for lunch.

It turns out the play did in fact list Hamlet’s age in a monologue near the end of the play, which I only found out after screaming at my best friend who knew her Shakespeare well (that years-long relationship unfortunately ended soon after that episode). I then realized, however, that Hamlet’s age was not mentioned in the four soliloquies that the teacher had expressly instructed us to use exclusively when writing our papers.

I went to talk to her a few days later during lunch and said, “you instructed us to only use the four soliloquies, yes?” And she said, yes, she did. But the fact that Hamlet’s age was never mentioned in the soliloquies and thus we could arguably apply artistic license when extrapolating for the paper did not faze her. She simply interrupted me and said, “you may leave now.”

I later learned from a friend that she was using my paper as an example to other classes of an ignorant student who hadn’t read the play and thinks that Hamlet is an adolescent in age. She threatened that she had a way to check the paper against internet databases for plagiarism. In other words, she didn’t accuse me of plagiarism to my face but instead used my paper as an example of plagiarism to other students.

I told my parents the story and again they offered their support, my dad having actually witnessed me writing the paper itself. So I went to my school guidance counselor the next day and told her what I knew. She said there wasn’t much we could do until the teacher formally accused me of plagiarism. So we waited.

Nothing happened and the day came when she passed back the graded papers to the class. The moment came when she laid the paper face down on my desk and I held my breath as I turned it over. “98” is all it said. A red-inked 98 at the top of my paper. No grammar corrections, no spelling mistakes, no suggestions for further edits. Just a big, red 98.

I was stunned. I couldn’t decide whether to be happy or upset. I mean, hey! A 98! But had I earned it? Was my paper worthy of that grade? I don’t think it was. What kind of weird, twisted, psychological punishment was this??

I was encouraged by friends to just accept it and move on, they even implied that I was ridiculous to keep picking fights with her in the first place. I did move on and graduate and all that, but the psychological impressions exist to this day. I’ve returned to those memories every now and then over the years, and I’ve been tempted to write to the teachers who had damaging effects on my psyche to let them know that it wasn’t just “teenage hormones” that drove me to rebel. And that my opposing thoughts and opinions during that time period deserved the same amount of respect and attention as their ideas and teachings. But would it be worth it?

Would they actually listen to what I say now when they didn’t listen then? Does a handful of years in the “real world” validate my opinions and thoughts in their eyes? I doubt it.

Ageism still plagues me to this day, although I now have a less explosive and irate response to it. I experience it in stores, in bars, in the work place, and elsewhere. It occurs especially in the work place and in particular when I am applying for jobs. For instance, every time I work my part-time job in a gift shop, the volunteers and other workers always assume that I’m a volunteer. They often don’t heed my instructions for various tasks until after they realize that I’m a paid employee.

I’m glad that the above article comes from the perspective of a teacher. They often don’t realize how much of a profound, long-lasting difference their words and actions can have on a student’s life. Because of teachers I now hate the play Hamlet, and am wary of gym teachers and military personnel. But I also love art, history, and Brahms. How did teachers affect your life?

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June 2, 2014 · 9:38 pm