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Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you:

Wednesday, July 29, 2009

Health Care: Can It Work Better?

The summer's hot topic is health care. To apply a phrase-of-the-day, "This is big." Apparently Congress will recess for August without enacting reform legislation, but the underlying issues are not going to go away during their vacation.

Outcomes Don't Seem To Match Outlays
Here's a first problem with the performance of the U.S. health-care system: 16% of Americans say they have no health insurance. This is a new number, from the Gallup Poll published just last week and coming out of their daily polling for June. The latest official number from the U.S. Census Bureau covers 2007; it was 15.3%. Gallup's figure is actually down; it had reached 16.6% in May. The hardest hit in these uninsured ranks are Hispanics, of whom 41.5% are without coverage; low-income workers making $36,000 a year or less report 28.6% without coverage, and young adults ages 18-29, 27.6%. When these people get sick, they generally get some kind of care, but their situation is awkward and it's expensive for the rest of us, who actually pay their bills, through the back door.[1]

Another "big" problem. The U.S. spent 16.2% of its GDP on health care in 2007, far and away more than any other country. But life expectancy here is not far and away the greatest; our life expectancy at birth in 2005 was 77.8 years, ranking 24th among 30 major industrial countries, right behind Portugal at 78.1. Japan is the longest, 82.6 years.[2] Why on earth don't we get more for our money?

We can't begin to answer these issues constructively. About the insurance, it's easy to say "universal coverage" or "just pass H.R.3200", the bill currently working its laborious way through Congress. But we immediately run up against the cost issue, with current spending already seen as a problem and "ration" seen as an awful word that makes us all cringe.

So we offer here today two ideas, one an explanation for at least part of our problem and one a perspective toward improvement of the underlying situation.

But the U.S. Is Different
We begin by exploring one characteristic of the United States that would seem to set it apart from other countries: its vast diversity, racially and economically. We're fascinated by a 2006 study called "Eight Americas: Investigating Mortality Disparities . . . in the United States"[3]. The authors examine life expectancy and disease by race and county throughout the country. They identify eight distinct population groups with markedly different susceptibilities to various causes of death: HIV/AIDS, cancer, cardiovascular disease, crime, etc. The groups range from Asian populations that have the lowest probability of dying from anything at a given age, even better than those in Japan, to high-risk urban blacks, whose life expectancy is more comparable with that in El Salvador and Armenia. Interestingly, available information shows that insurance coverage and health facility usage vary only modestly among these groups, suggesting that attempts to improve the lots of the weaker groups may not respond to a single, standardized approach. From this analysis of how non-standard our very population is, it seems much less mystifying that our health dollars and our expectations for overall health look so different from those of other countries.

And We Have Better Results on Serious Conditions
We've chosen words carefully in describing our conclusion just now. Overall life expectancy in the U.S. may, on the face of it, seem disappointing compared with other countries. But we hasten to point out that recovery rates from specific conditions can look far better. Other information shows that five-year survival rates for cancer are much higher here: U.S. women have a 63% cancer survival rate, compared with 56% for European women. Men in the U.S. have a 66% rate, compared with 47% for men in Europe. In Canada, mortality is 25% greater for breast cancer, 18% more for prostate cancer and 13% higher for colorectal cancer. Interestingly, the use of the screening tools now increasingly familiar to U.S. adults – mammograms, PSA tests and colonoscopies – is much less prevalent in Canada. U.S. heart patients have better survival and functioning results than those in Canada. There is a 60% higher incidence of hypertension in Europe, which some attribute to less use of relevant prescription drugs there. These outcomes and others indicate that there's clearly something right about health care in the U.S. and some room for improvements among other countries.[4]

Supply-Side Approaches to Health Care Dilemmas
So is there anything we can do to make our own health care system work better? We're into economics here, so we have to say that supply is important in the performance of the health care system, just as much as demand. There are two projects "out there" that are just getting started in earnest toward making health care delivery more efficient. One is electronic medical records, getting to be known by its acronym EMR. I have a P.C.P. and a gynecologist. Why do they have to have two entirely separate sets of duplicate paper? When I get a mammogram or bone density test, a standardized result can go to both of them automatically. And does your doctor now fax prescriptions to the pharmacy or the mail order service? Or does she do email with you to answer simple questions or schedule appointments? Things like this we take for granted in business have been slow to come to medicine. [I know you might have a misgiving. I'll come to that.] But they will help ever so much to streamline a growing volume of activity. To say nothing of the help it can be if you live in New York but you get sick in Anaheim – or you're retired and spend every winter in Florida.[5]

Then there's "effectiveness research". [I can hear you wince about this too. Be patient.] This is also a fine tool: it asks what treatments work best while costing least? Centralized databases give your doctor and you clear guidelines on how to fashion your treatment. Medical research is working, too, on the organization of care. Maybe if you have a stroke, you might go to a small hospital that only treats stroke; this has been shown to be effective in India. Specialized institutions might not always be the best method, but it's worth checking them out.

Both of these tools, EMR and effectiveness research, can be misused. Critics, maybe even you, fear loss of privacy and the imposition of treatments determined not by your own physicians but by bureaucrats in Washington. So clearly, safeguards must be part of any major enabling legislation. We can only believe, though, that a technology that permits online banking can keep medical records as confidential as anything else.

Along the same lines, quality assurance in medical care is vital. We've learned in our recent reading that hospital and other care errors occur in other countries, though we tend to hear critics complain mainly about U.S. institutions. Correcting and preventing these mistakes can bring significant monetary savings – and yes, we know, that's hardly the main reason for wanting such improvements.

We're also fascinated by the fact that business schools are getting more and more into medical care management. A blend of the people from Harvard and other big-name institutions who know about "process" and "workflow" with the people who know disease and treatment has to help.

We All Pay -- Through Taxes, Wages and Prices
In all of this discussion, we hardly touch on the hot-button issue, "who pays". We'll have to face the details of that only too soon. One thing we can say now, though, aside from mentioning the flashy trillion-dollar cost estimate, is that we'll all pay. If we don't pay in insurance premiums, we'll pay in taxes, or in reduced wages or in higher prices for any good or service we might buy. So the ways to fix health care all have to come back to how we can deliver quality care with a low production cost. As the world population grows, and the populations of many countries get older and older, this is vital to our continuing vitality.

[1] Summaries of salient issues covered in Gallup Polls are available free of charge from

[2] These data are from a continuing tabulation by the Organization for Economic Cooperation and Development, the OECD.

[3] C. Murray, S. Kulkarni, C. Michaud, N, Tomijima, M. Bulzacchelli, T. Iandorio and M. Ezzati. "Eight Americas: Investigating Mortality Disparities across Races, Counties and Race-Counties in the United States". PLoS Medicine, September 2006, pp. 1513-1524. PLoS Medicine is an online, open-access, peer-reviewed journal found at

[4] J. Goodman, L. Gorman, D. Herrick and R. Sade. "Health Care Reform: Do Other Countries Have the Answers?" National Center for Policy Analysis. March 10, 2009. Working paper accessed from

[5] S. Spear and D. Berwick, "A new design for healthcare delivery". The Boston Globe, November 23, 2007. Accessed from Spear is a professor of management at MIT and Berwick is CEO and president of the Institute for Healthcare Improvement, Cambridge, MA.



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