Health Policy I

By the usual standards, the United States does poorly in health outcomes; we rank 19-25 among OECD in infant mortality, maternal mortality, and life expectancy from birth (but we do a lot better with life expectancy after age 65). Many reasons have been proposed to explain these differences such as the heterogeneous population in the U.S. or the prevalence of resuscitation of premature infants, but the hard outcomes still trouble me. Furthermore, race-stratified outcomes are even worse; African American men have very poor life expectancy compared to Caucasians or women. Many of our gains in life expectancy are in upper socioeconomic status groups (and many from decline in tobacco use). While we're making improvements, these are not equitably distributed.

Yet the costs of our medical care is stunning. Our health expenditures were 16.2% of the GDP in 2007 (California HealthCare Foundation); with the recent economic recession, the % of GDP is even higher since healthcare is more insulated than other industries to recession. Projections for healthcare % of GDP are hard to make but uniformly, estimates suggest larger and larger proportions of the GDP will be spent on health without clear benefits (since our outcomes haven't changed much). Indeed, compared to other nations, our expenditures are staggering.

Why do things cost so much? We seem to have much more specialists, but not more doctors. Perhaps our payment valuations (fee for service) are wildly unreasonable. Compared to other countries, our doctors are paid more; there's a larger gap between physician and non-physician salary in the United States. From a hospital standpoint, we have more ICU beds, expensive procedures, and technology even though hospital stays are shorter.

Costs vary a lot; states like Minnesota spend the least on health care while states like Florida spend a staggering amount. We have a good bit of administrative overhead, but estimates seem to hover around 14% of health care expenditures, suggesting that increased efficiency would save some but not a whole lot of money. Many doctors claim defensive medicine (especially with imaging) drives up costs. You'll also hear practitioners complain about the aging population, but other countries have an aging population as well. Economists will cite lack of cost competition and market forces; I really don't know enough to comment. The government will claim it is a lack of investment in information technology.

Costs are tied to everything. Nearly all students favor universal health care, but I heard a recent insightful comment. We can't even pay for Medicare for those who have it now; how can we talk about expanding Medicare to everyone? Things aren't even working now, without universal health coverage; how do we expect to get universal health care to work?