Liberty and Medicine

Does Canadian health care really stack up so well?

2007-09-29T14:53:00.000-07:00

A new study from the National Bureau of Economic Research questions the alleged superiority of Canada’s nationalized health system in comparison to the United States.

In Health Status, Health Care and Inequality: Canada VS. the U.S., June O’Neill and Dave O’Neill, of Baruch College, look at several issues regarding the delivery of health services to the general public and what they found will not particularly please some people.

They first argue that the use of infant mortality rate and life expectancy are very poor measures of health care delivery. We explained some of those reasons here. The NBER report also noted that “infant mortality is strongly linked to low birth weight and to preterm births.” This is important because teen mothers tend to have low weight babies and the US has the highest teen pregnancy rate of developed nations and almost 3 times that of Canada. That skews the infant mortality rate in favor of Canada but it not related to the health system.

And when they look the mortality rates within specific birth rates the US actually does as well or better than Canada. Canada does better overall because fewer high risk mothers are giving birth to low weight infants. The NBER study says that if weight distribution in Canada were similar to the US their infant mortality rate would rise to 7.06 which would actually be higher than the rate in the US which is 6.85. There advantage is not health care related but due to the lower rate of teen pregnancies.

Similarly life expectancy is not a gage of health care because it includes things such an accidental deaths and homicides. And there is the fact that Americans are fat. A third of US females are overweight while the rate in Canada is 19%. This impacts life expectancy but obesity is not a result of poorer health care. Fewer calories, up to a point obviously, increases life expectancy.

What this paper prefers to look at are actual indicators of health. What percentage of people with a specific illness obtain treatment for that problem. And they looked at the issue of equality in health care. Does the Canadian system actually deliver less wealthy individuals the same amount of care as it does to the better off and how does Canada compare to the U.S.?

In a self reported health survey 62.5% of Canadians, ages 20 -64, said their health was very good or excellent. In the United States the number was 67.5%. For those over the age of 65 it was 38% of Canadians and 40% for Americans. And one reason could be that Canadians, regardless of the single-payer system, were less likely to actually receive treatment.

In Canada 84.1% of those with high blood pressure were receiving treatment for it. In the United States the number was 88.3%. Those with emphysema or related illnesses are far better off in the US where 72% are receiving treatment versus 52% in Canada. In the US 69.6% of individuals with heart disease receive treatment while in Canada the rate is 67.2%. When it comes to coronary heart disease 84.8% of American sufferers receive treatment as compared to 88.9% of Canadians with the problem. Out of eight conditions they investigated Americans have higher treatment ratios in six categories with Canada leading in asthma and angina. These were for individuals age 18 to 64.

But these differences remain fairly consistent for individuals over the age of 65 as well. The only change was for angina where the U.S. now has a higher treatment rate than Canada: 77.7% to 73%. The report noted that “the U.S. generally performs better with respect to treatment of all conditions except that of asthma.”

What about preventative procedures like PAP smears, mammograms and PSA tests for prostate cancer? Again higher percentages of the American public receive such tests than do Canadians. In the U.S. 88.6% of women ages 40 to 69 have had a mammogram. For Canada it was 72.3%. In the U.S. 74.9% of the woman had the test within the last two years where only 54.7% of Canadian women had a recent test. For PAP smears the rate was, over the last three years, was 86.3% for American woman versus 88.23% for Canadian women. The men get a worse deal in both countries when it comes to testing for prostate cancer. In the same age group, 54.2% of men have been tested while in Canada the rate was an abysmal 16.4%. And testing for colorectal cancer is done, both for men and women, about six times as often in the United States as in Canada.

When the study looked at survival for cancer in both countries they also found that Americans were slightly better off. They looked at the ratio of the mortality rate to the incidence rate for cancers and found that Americans are ahead. They concluded, “in terms of the detection and treatment of cancer, the performance of the U.S. would appear to be somewhat better than Canada’s.”

The use of MRIs and CT scans are also much, much rarer in Canada. Canada has 5.5 MRI scanners per million people as of 2005. The US, in 2004, had 27 per million. When it came to CT scanners the US had 32 per million in 2004 while Canada, for 2005, had 11.3.

Considering that one of the alleged virtues of Canada’s health system is the “equality” factor it is interesting to see that more individuals in the US, with specific conditions, are receiving treatment than do their counterparts in Canada. The report also found that the poor in the United States reported as much, or more health care, than those in Canada did.

This report also noted that waiting time in Canada for care is significantly longer than in the United States. The absence of care, they contend, is more problematic than the ability to pay for the care. As they note “costs may be more easily overcome than the absence of services.” That is, it is easier to find a way to pay for care that is available than to make the care available when it doesn’t exist.

And, when patients in both countries are asked to rate their satisfaction with the care they receive, the typical American, in spite of a reputation for complaining, was happier than the typical Canadian.

The NBER report conclusions basically are these:

Americans have a slightly higher incidence of chronic health problems than Canadians, but they also have higher treatment rates.

The discrepancies between income and health care received has not disappeared in Canada and is actually steeper than in the United States.

More Americans report satisfactory health care than do Canadians.

That some are recommending the Canadian system for the United States seems odd if the NBER report holds up. Even while promoting Canadian style care for the U.S., the New York Times admitted that the “country’s publicly financed health insurance system... is gradually breaking down.” It reported waiting times growing ever longer. And in light of the inability of the Canadian system to provide the care it promised the nation’s Supreme Court ruled that bans on private medical care were unconstitutional and inhumane.

Once the court opened the way for private care Canadians were flocking to the new private alternatives. Even in Quebec, a hotbed of support for socialized care, the premier has announced that the state system will be sending patients to private care facilities for treatment that the state is incapable of providing. In spite of a severe doctors shortage in the country Quebec is still forbidding physicians who provide private care from working in the state system, yet in spite of that regulation, the province has more private clinics than any other province. The Times reported new private clinics opening in Canada at the rate of one per week.

The recently elected head of the Canadian Medical Association, Dr. Brian Day, actually runs one of the largest private hospitals in Canada. And he is planning to open several more. But what started in 1996 with 30 doctors now has 120 physicians on staff. And the provincial state care system has sent them over 1,000 patients for operations that they simply couldn’t do in a timely way.

The Times reports that nationalized health care in Canada has long been “sacrosanct” and “even central to the national identity.” The explosion of private health services there marks a dramatic shift. Antonia Maioni, of McGill University says that there has “been a change in what is feasible and what is permissible in public debates” regarding nationalize health care in Canada. “Five years ago someone like Brian Day would never have been elected president of the Canadian Medical Association. Five or 10 years ago there was much more a consensus about the sustainability of the public system.” Apparently the confidence in that system is waining based on the experiences it is providing.

Do survival rates matter?

2007-08-21T15:42:00.000-07:00

Sure, I know that just one mention of why I dislike nationalized health care sends some of my left-of-center readers into a frenzy. It seems that the cause d’jour on the Left is the implementation of a state run system of health care in America. It is the public policy version of the Holy Grail.

Questioning nationalized health care is, to them, a similar sort of heresy as questioning the necessity of baptism by immersion at a Baptist tent revival. Alas, I’m used to the role of village atheist so I don’t mind.

Of the various state systems of health care the National Health Service in England holds a special place in the pantheon of state system -- mainly because it one of the first and one of the most pervasive. It has gone through a process of beatification in some circles. And I think it qualifies. And like anyone who is beatified that means it is declared holy on insufficient grounds and it is dead. Maybe it's not clinically dead but it certainly is on life support with the struggle more and more difficult each year.

Ask any member of the nationalize health sects where they would rather be sick, America or the U.K., and they will dutifully tell you how the British system is more fair and gives more health care to more people. That is the argument I generally hear. Giving out lots of care is easy and can be done cheaply. But the real issue is not what you give out but what are the results of the actual care given?

So ask yourself what you want to do if you had cancer. Would you prefer to get “equal” care or more effective care? Would you rather have a system that equalizes the treatment rate or one that maximizes survival rates?

A research team for The Lancet Oncology has looked at the survival rates for individuals diagnosed with cancer. This rate is determined by the number of patients who are still alive five years after being diagnosed with cancer. They ranked the various nations of Europe and then compared the survival rate to that of cancer patients in the United States -- the Great Satan of Health Care.

National Health Care covers England, Scotland and Northern Ireland and Wales.

If you are a female in Scotland, your chances of surviving five years after a cancer diagnosis is 48%. In Northern Ireland it is slightly better at 51% and even better in England at 52.7%. Wales comes out tops there with 54.1%. The percentage of American women who survive more than five years after a cancer diagnosis was 62.9%. This, by the way, is a higher survival rate than any of the European countries that were surveyed. And the survey included all the major European health system except France, where the statistics were not made available.

Male cancer survival rates show that 40.2% of Scottish men live five or more years after diagnosis. In Northern Ireland it is 42%, England is 44.8% and and Wales is 47.9%. The United States has a male survival rate of 66.3%.

If 100 English women are diagnosed this month with cancer, then 47 will, on average, die in the next five years. In the United States, with all the problems the health systems does have, an extra 16 women per 100, will live. Sure, its just statistics, unless you happen to be one of those 16 women. And for every 100 English men diagnosed this month 55 will die in the next five years. If the same 100 men lived in the United States an extra 21 of them would live.

One of the researchers from Scotland, Prof. Ian Kunkler saays that one reason for the low survival rate in the U.K is partially due to the long waiting periods before treatment. He says that there is “good evidence that survival for lung cancer has been compromised by long waiting lists for radiotherapy treatment.”

Oddly the BBC managed to report this story without once mentioning the higher survival rate in the United States. But they do publish the European mean survival rate for men and women. They have a graph showing the survival rates but it is not calibrated too finely. My best estimate from the chart is that mean average survival rate for women appears to be around 51% about 11 points behind the U.S. And for men it appears to be 47% or about 19 points behind the U.S.

Lung cancer survival rates in England and Wales are very depressing. Only 6% of either sex survive. The U.S. survival rate is between two to three times higher, or up to about 16%. However, one relatively new regimen of care developed in the U.S. has shown survival rates of up to 29%.

Perhaps there are arguments as to why one might prefer to live in England versus the US (I spend more time in the UK than I do the US myself) but certainly if survival rates count for something -- and they do those who are trying to survive -- I know which I would pick.

A snapshot of socialized health care in one country this week.

2007-08-06T10:22:00.001-07:00

I lived in the United Kingdom just enough to know what Michael Moore has denied -- there are long queues of people waiting for care from the National Health Service. Michael seems to think people waltz right in and are treated immediately.

I tried an experiment with Google news search last night. I typed in just two things. The first was the abbreviation for the National Health Service, NHS, and the word “waiting”. Remember since this is a Google news search it only searches for a specific period of time. These are not old stories but news reports on the current situation.

The first report I want to mention is from the Independent newspaper. What makes this story different is that a senior trauma surgeon is breaking NHS rules to speak out. Physicians, nurses and other employees of the NHS are forbidden to speak to the media. Transparency is not their middle name.

But Martin Bircher talked because he said he couldn’t endure the suffering that patients were being put through. He described, “a system paralysed by red tape and disputes over funding, which is putting thousands of patients waiting for treatment in specialist wards at risk.” The paper says:

Every one of Britain's specialist trauma beds is full, which means some patients can wait up to three weeks after their accident before badly broken bones can be repaired. The delay, says Mr Bircher, can jeopardise recovery. With nothing but praise for frontline staff, he says patients who have been critically injured in road or other accidents have to wait an average of 12 days – often in agonising pain – before they can receive the vital specialist treatment.

These a victims of severe trauma who are being denied treatment not people with earaches or sore throats. But trauma beds are expensive and the way socialist systems provide medical care cheaply is by restricting access to expensive treatment. They don’t want more trauma beds being used because it drives up costs and that destroys the illusion of the efficiency of socialist care.

Trauma care is limited to certain hospitals. Patients needing this care are first treated in a regular hospital and then have to be moved to the trauma units later. But NHS bureaucrats,

...are involved in making the final decision as to whether a patient can be moved. If they have to move them there is often a conflict or reluctance because the new area does not want an extra cost. So after initial admission to a general hospital’s emergency wards, where lives are saved, patients can find themselves waiting up to three weeks before their real recovery process can begin.

Bircher says that the physicians and nurses are doing the best they can “but are hampered by layers of managers whose major concern is the budget rather than patient care.”

The paper reported the case of a young woman, Lucy Lynn-Evans what was riding a scooter when a truck smashed into her and ran her over. Her laptop, in a backpack, saved her life since it took the brunt of the force as the truck rolled over her spine. But her pelvis was smashed to pieces. The local hospital stopped her from dying but only a few hospitals in the country are given the speciality equipment needed to repair her pelvis. She was put on morphine for pain and told it would take three weeks before a bed would open up in one of the hospitals equipped to deal with her problem.

Lucy said the pain was so bad she begged father to take her to the other hospital and dump her on the steps if necessary thinking this might speed up the wait. Other patients were considered more urgent and Lucy kept losing her place to those with more need. When a bed became available the local hospital fund manager had to approve the transfer. He didn’t show up to work until 9:30 that morning and by the time he reached the form for Lucy the bed that was available was gone. Lucy’s mother knew some of the top NHS officials and was able to use her contacts to create a fuss and get Lucy into a bed early. She confessed she felt awful doing this, “I know that in securing a bed for Lucy someone else had to wait longer.” But one reality is that under socialized medicine people with political pull can jump the queue.

Next from Aberdeen comes this report about desperate dental patients seeking help from the NHS. Recently, the Aberdeen Evening Express reported that there are 25,000 people waiting in line for care with NHS Grampian “meaning it could take years before a NHS dentist is available.”

One local patient was having trouble getting seen for a filling. He signed up for a low-cost private care program for two check-ups per year. He then discovered that NHS decided to punish him for doing this. They dropped him back to the bottom of the queue telling him that since he paid that this proved he was not in need and thus not urgent.

The Norwich Evening News for July 30th, reports that their local NHS is making an effort to cut the waiting lists. Under a new “Choose and Book” plan patients, with their GP, can actually pick the hospital of their choice for treatment. You would think that normal. But it wasn’t. What is truly revolutionary is that the NHS, to cut down waiting lists is now allowing patients to seek care at private hospitals. The paper reports: “Now a contract between BUPA Hospital and Norfolk Primary Care Trust means thousands of patients will be able to get seen by a specialist in a much quicker time.”

A business manager for the private hospital says, “It means people can be treated closer to home or work.” So to cut their waiting lists the NHS turned to private hospitals to help with the work. Hmm, do you think Michael will mention that?

The Scotsman reports on one hospital that did manage to cut the waiting time to get admitted to hospital. Last year one-fifth of all patients waited more than four hours to be admitted, discharged or transferred at this hospital. The hospital was happy that last week it managed to get it down to 3%. That’s good but does one week make a trend? And this hospital is being praised because it is the exception, or at least was the exception one week.

In another story the Scotsman reports that NHS Lothian was crowing about how they are dealing with cancer patients who are referred for “urgent” treatment by their GP. Please remember this is “urgent” care requirements for cancer patients. That is not something you wait for. Their goal is to have 95% of these urgent patents treated within two months. Two months? What would the waiting time be if the case were not deemed urgent?

Of course 5% of those patients will be waiting over two months, if NHS Lothian reaches its goal, which it hasn’t. Last month 12% of the urgent cancer patients had gone more than two months with no treatment. I’m still wondering if two months waiting for “urgent” cancer patients is all that successful. Surely with urgent cancer cases even two weeks is unacceptable.

Another recent report says that there are 2,474 NHS dentists working in Scotland. which is 173 more than last year. And the budget has increased by about another $200 million. Yet the number of patients registered with a dentist has actually declined. It was 49.9% in 2000 and 46.2% currently. It also reported: “In some areas, less than a third of adults were registered with an NHS dentist.” There are around 58.4 dentists per 100,000 Americans or one dentist for every 1,712 people. Each dentist in Scotland, under socialized care, has to treat 2,068 patients. So there are considerably fewer dentists relative to the population. Fewer paid dentists, with long waiting lines, is a way to keeping costs down.

We previously reported on a 108-year-old woman in Deal who was told she would have to wait two years for a hearing aid. So it is somewhat of a relief to report that the waiting period in Scotland is not quite that bad. Patients in Lauriston Place were only waiting up to ten months, in Livingston it was a wait of 35 weeks, in Edinburgh they can wait up to 43 weeks. The NHS target for Scotland is 26 weeks -- that is what they consider the goal that they would like to reach If I couldn’t hear I’m not sure I’d consider a 26 week wait all that lovely. But no worries since they haven’t come close to even this modest a goal.

I also came across a report from Malta, of all places, about NHS care. It reports that more patients from England are flying to Malta for health care. It reports:

Due to lengthy NHS waits and concerns about the high risk of MRSA infections in NHS hospitals, a growing number of Britons are taking advantage of affordable, high-quality private healthcare abroad, combining it with a relaxing holiday. They save thousands of pounds compared with having the treatment done privately in the UK. Already, many British patients travel to Belgium, Hungary and Poland and even further afield to countries such as India and Brazil.

MRSA is a bacterial condition caused by unclean conditions and it seems rather prevalent in NHS hospitals. In 1999 there were 487 deaths from the infection. But in 2003 it had risen to 955 deaths. And a report in the Daily Mail for February 4, 2005 said that “hospital-acquired infections overall strike around 100,000 people each year in England”. They also report that the health care workers union says the number of MRSA related deaths is actually much higher because many death certificates don’t mention MRSA as being a factor even when it is. But not that is old material and my focus is on current stories. But apparently MRSA hasn’t diminished much if the Malta report is correct.

In Ambleside NHS dental patients were in for some bad news. The local dentist is getting on in years and retiring. And he won’t be replaced. He has 3,000 patients registered with him and more on a waiting list who can’t get in. The 3,000 patients will have to try to get on the waiting lists for dentists in other towns.

I will stop with this next story but these are only the first few stories that appeared in my Google search. There are many more. The last one is interesting because it contrasts care under the NHS and care in the United States. The story is about Fraser Brown, the young son of the Prime Minister. Fraser has cystic fibrosis. The first point that I found interesting is that the average life expectancy for a patient with cystic fibrosis in the UK is 31 years, two years less than in the United States. But it also revealed that some US centers have managed to get life expectancy up to 47 years.

And this article compared how this center operates versus the best in the UK:

Successful treatment of cystic fibrosis requires extraordinary commitment, attention to detail and a refusal to accept second best. While the average centre might accept lung function at 75 per cent of normal, at Fairview they are not content with 80 or even 90 per cent. They aim for 100 per cent. They question everything they do and act immediately when standards slip, rather than accepting it as an inevitable by-product of the illness. In Britain, we do not think about medicine in this way - as a daily battle against the forces of sickness and decay in which every centimetre of ground gained deserves celebration, and every centimetre lost explanation.

It tells how the Cystic Fibrosis Foundation in the US has published the success rates of every one of their centers on line for the public to read. Physicians can see who is doing better and perhaps learn why. Patients can pick the center with the best performance. Not so in the UK. In principle there is an agreement to do this, eventually. But “directors are worried the data may be misinterpreted and used to beat ’under-performers.’”

The article suggests that the UK needs to learn how to compare performance between services. It says the Brits need “a healthy dose of American belligerence” to do this. But why do Americans compare between service providers? Because in the US the providers compete and Americans are not normally assigned to a specific provider with no other option.

There are over 600 more stories in the last few weeks. Perhaps not all of them about the National Health service and waiting times. One was about a high school football player who attended a school abbreviated NHS. But many of these stories are. I didn’t cherry pick. I just went down the list and opened up and reported what was said. But I will cheat on one story that I saw which was further down the list. It’s one of those “good for them” stories.

Tony and Greta Dodd are both pensioners. And they have a common problem with old people. Both of them suffer from knee problems. Tony’s knees went first. Then Greta followed suit. Even a short amount of walking puts them in excruciating pain. Tony says: “I’ve been on the NHS waiting list for six months and up to now I’ve heard nothing, not even a proposed date for an operation.”

But Tony and Greta got lucky. No, the NHS didn’t call them with new knees. Better. They won the lottery. And they plan to celebrate by going private and buying new knees for the both of them.

And the great thing is that they won by accident. Like so many people they play the same numbers week after week. But Tony went to the newsagent to purchase a ticket and forget the slip with the numbers on them. Well, with bad knees he wasn’t walking back home. And so he tried from memory. He could only remember the first five numbers correctly and so for the last one he picked a number randomly. In his case it certainly was true: he had more of a chance in winning the lottery than getting the surgery he needed from the NHS.

The reality is that Michael Moore was fudging the facts when he implied that British health care is so wonderful. The daily news stories from the UK indicate a system that is mired in debt, bound up in red tape and constantly denying care to people in order to vainly attempt to lower health care costs. One British columnist, Giles Whittell, of the Times of London even challenges how much cheaper it is than US care.

He pointed out that last year the NHS had a budget of around

...£104 billion. That’s roughly £1,733 per man, woman and child. Multiplied by four for a typical two-child family, then divided by 12, that equates to median monthly family healthcare expenditure of £577, or $1,155 in American money. I can buy some very respectable US health insurance for $1,155 a month. In fact, on a quick and painless stroll through the web site for Kaiser Permanente, a leading nonprofit US healthcare provider, entering my basic family details and the Beverly Hills zipcode, the most expensive family policy I can find that does not depend on contributions from the state or an employer costs $400 less than the sum Gordon Brown currently chooses to spend from my taxes, each month, on the NHS.

I don’t know anyone who says there aren’t problems in the US health care system. It certainly is a bastardized system of conflicting incentives and regulations many of which harm consumers deeply. But there is this blind, utopian vision of the virtues of socialized health care that can only be compared to religious belief not rational policy making. And as this snapshot would clearly indicate one can not produce a “documentary” which deals with British health care, and do the smallest amount of reading, without being aware that these problems are rampant. If the documentary then appears to give the opposite conclusion the only warranted conclusion is that the documentarian is dishonest.

Photos: Our first photo is the fabricator himself. The second photo is an actual queue at an NHS dental service that announced it could take 300 additional patients. Hundreds more turned up than could be accommodated

Centenarian told to wait 18 months for care.

2007-07-31T11:53:00.001-07:00

No doubt you’ve heard the old joke about the man who walks into a store to buy something. He looks at the price and complains to the shop owner that they are “ripping people off and the guy down the street has it at half that price.” The shop keeper says to him, “So why don’t you buy it down the street?”

“I would, but they don’t have any.”

National health care is a similar sort of enterprise. They brag it’s a lot cheaper but the shortages (not having any) is a problem. And the plight of Olive Beal illustrates this.

Olive is a senior citizen. That’s a modern euphemism that means she’s old. Her eyesight isn’t that good. She has to use a well chair and she has trouble hearing. She went to the National Health Service doctor who examined her and told her she definitely has to have a new hearing aid. The one she has now doesn’t work for her.

The glitch is that every health service in the world has to ration care. The advocates of socialized services, like the NHS, try to pretend that: 1) this doesn’t happen; 2) if it does happen it doesn’t happen often; 3) that when it happens it is not that significant.

For Olive it was significant. She was told that the she can have a new hearing but she must wait one and half years for it. Apparently that’s not bad for the government system. A spokesman for the Royal National Institute for the Deaf told the Guardian, “I am afraid this is a common problem. In some parts of the country there are over two year waiting lists, which is shocking.”

It may be that the bad publicity about Olive’s situation will bump her to the front of the line so that the British Labour government can show everyone how well the system works. That just means that people already on the list have to wait longer themselves. It doesn’t solve the problem it merely makes it disappear from the headlines.

Olive’s granddaughter, Marie Scott, 52,.... Hold on! Isn’t that a typo? Shouldn’t it be 25? Nope. The granddaughter is 52. Oliver happens to be 108 years old. That’s the only reason she is getting publicity -- unlike the many others waiting for a hearing aid.

There is something absurd in a system that asks a women who is 108 years old to wait another year and a half for a hearing aid. In essence they are denying her the hearing aid. Certainly they are aware that her ability to wait that long is highly doubtful.

No socialized system of health care has been able to get around the rationing issue. When consumption of health care is not directly paid by the consumer the demand for health care will always exceed the supply.

And every nationalized system tries to ration in one way or another. The Canadians and Brits ration health care through the use of waiting periods. In Germany the care is rationed by underpaying physicians, working them long hours and placing a huge percentage of the costs on their shoulders -- that creates supply problems when it comes to physicians.

The French tried to avoid rationing to the current generation of consumers by running up massive debts that will eventually mean rationed care to future generations. They are basically denying care to their children or grand children. In New Zealand they tell you which treatments you may have and which you may not. If what you need is not on the approved list too bad. If what you need is approved you are in luck, provided you can afford to wait.
Another common trait of these systems is spiraling debt. The care is costing more than they can afford. Each year they are finding it more and more difficult to keep the system running.

Another way these countries keep down their cost is that they are subsidized by American health consumers. Here is how that little scheme works.

Pharmaceutical companies spend billions developing new drugs. When they develop something that seems to be effective they seek a patient. The patient allows them to market the product over a span of 20 years and then its public domain. So they have to recoup the costs of that drug, and all the costs of drugs that didn’t work, in that relatively short time period.

The moment they apply for the patient the 20 year time clock starts ticking away. The problem is that it can take almost half that time just to get the drug through the regulatory process. So the time period to recoup their costs is dramatically reduced by bureaucratic inefficiency and regulatory red tape.

Let us now say that eight years down the road they have the approval to market the drug. Let us say it is efficient and effective. It’s a winner. These socialized systems want the drug. But they aren’t particularly interested in the R&D costs, etc. They want to know how much it costs to produce one pill. And they generously offer to pay the producer a small profit on top of that marginal cost.

This is only a profit on the marginal cost of producing pills not on the total cost. And international patient law is set by governments who are the monopoly health care providers in many of the major drug markets. Under that law the government can declare the drug as something needed by their citizens and then ignore the patient. In essence they can then take the total marginal profit income for themselves at the expense of the people who developed the treatment.

With that threat hanging over the head of producers they know that a profit on the marginal cost is better than nothing. But there are still the research and development costs of this drug and for those that weren’t winners. So how do they cover that cost? They sell the same drug at a higher price in the United States. This is what the whole reimportation debate is about.

Of course, if the US put in a similar heath system they could also threaten to confiscate the formulas and discoveries of the pharmaceutical industry. Then everyone would supposedly pay only the marginal costs of production. The problem with that is this means there is no longer any reason to invest in pharmaceuticals. Better to open a taco stand. The net result would be a collapse of the research and development of new drugs. But that keeps down the health care costs -- no new drugs, no new expenses. And the advocates of socialized health care will call that efficiency. And a second goal of the socialists would also be accomplished -- equality. Everyone would be equally denied the drugs that never came into existence. Equality and a low price! Who said socialism doesn't work?

Photo: Olive Beal. I don't know what she's drinking but I think she's going to need a few refills.

Wait and Die. The nationalized health alternative.

2007-07-13T06:36:00.000-07:00

A short film, about 8 minutes, discussing how Canada rations health care and the results of that policy.

Who are the uninsured in Ameica?

2007-07-13T06:11:00.000-07:00

A 9 minute film exploring which groups comprised the uninsured in America.

New Zealand's nationalized care spends more, cares less.

2007-07-13T05:31:00.000-07:00

New Zealand has one of the pioneering nationalized health services in the world. But, as with all nationalized systems, they ration health care out. There is no other option. Free health care for all is an illusion.

New Zealand uses the standard form of rationing: queues. You can have health care if you can afford to wait for it. If your problem kills you before you get to the front of line that improves the waiting time statistics. Lots of Kiwi voters were unhappy with the growing wait periods. And, in the last election, the ruling Labour government was in deep trouble.

A massive spend-up on programs, along with hundreds of thousands in illegal campaign spending, kept Labour in office but barely.

One of the parts of the massive spend-up was an extra $4.5 billion was on health care. But, Heather Roy, health spokesman for the ACT Party, says that a report from the Treasury department shows that the extra spending has lead to no extra health care!

She quotes a Treasury report, “increased staff numbers have not led to higher outputs.” So, why is that? If the health services can’t handle the care required, and you increase staffing, shouldn’t the number of patients treated also increase? You would think so. But, it really depends on who you hire, and what they do.

Roy noted that while some of the extra $4.5 billion was spent on staff it didn’t pay for “doctors and nurses”. Instead, “the new staff has largely been made up of pen-pushers -- staffing levels at the Ministry of Health’s head office has increased by around 40 percent under this government...”

So, the extra staffing covered management and file shufflers, but not more health care. The government now has more people filing more pieces of paper, but no extra medical care. In fact, with the expansion of clerical staff, the nationalized system, in New Zealand, now has more staff members than hospital beds. As Roy put it, “if every single bureaucrat in the health system fell seriously ill today, there wouldn’t be enough beds to treat them all -- let along anyone else.”

Because the waiting lists were getting embarrassingly long the Labour government came up with an idea to solve the problem. They ordered the district health boards to kick people off the waiting lists. Roy says a document leaked from the Waitemata DHB showed they had been threatened with a $3 million penalty if they didn’t remove 800 people from their waiting lists. They were told to send the patients, waiting for care, back to their physicians instead, even though the physicians were the ones who sent them for specialist care in the first place.

Of course, if Michael Moore made a film on the nationalized system in New Zealand, it would only show empty waiting rooms and pretend none of this was happening. He wouldn't tell people the waiting rooms were empty because the patients were sent back to their physicians so they could start the process all over again.

Forced insurance scheme runs into problems.

2007-07-01T04:51:00.000-07:00

In one of his previous political incarnations Mitt Romney pushed through a universal health coverage plan in Massachusetts. It is now in operation.

About 10% of the state residents didn’t have insurance prior to the imposition of compulsory insurance. Two-thirds of them still don’t have care. Those who are poor received state insurance at the expense of the taxpayer. They didn’t mind signing up but they weren’t the majority of uninsured.

One of the problems with stats about America’s “uninsured” is that while the total percentage is thrown about it is never broken down. Who are they and why are they uninsured?

One of the policies that politicians pushed through in the past linked health insurance, for most people, to employment. The unions liked that idea, it was a way of forcing through pay increases in the guise of something else. So they pushed hard for employer provided health benefits. Sounds good doesn’t it?

Yet that is one of the reasons people are not insured. The insurance is linked to their employment and people change jobs. When people change jobs their old insurance is cancelled and they have to get new insurance. Sometimes there is a time lag between that job and the next. And during that time they are uninsured. Many of the uninsured in the US were transitioning between jobs. Around 9 million of the uninsured in the US are people between jobs and a third will be reinsured within four months and the remainder reinsured within one year.

But there is another problem that kicks in because of these connection between insurance and employment. People sometimes develop illnesses while on one job. If they change positions and are uninsured that illness becomes a pre-existing condition that is not covered by insurance. The union push to tie insurance to jobs also ties people to jobs. If they change jobs, perhaps taking a better opportunity, they may find they have no health insurance and can’t get it for the very thing for which they need it most.

Another group that often tends to be uninsured are people who can easily afford insurance. The reality is that wealthy individuals don’t need insurance. In fact insurance might well be a bad idea for them particularly if they have been wealthy for much of their life. People who can pay for heart bypass on their own don’t need insurance. For instance Mitt Romney, who pushed through compulsory insurance in Massachusetts, can afford all the health care he wants. He doesn’t need insurance.

A third group of uninsured have been the young who assume they don’t need health insurance. And for the most part that assumption is entirely valid. People who are young and healthy tend not to need insurance. They know that the likelihood of a serious illness over the next 20 to 30 years is minimal. And they’d rather have the cash than the care. The need the one more than they need the other.

And the compulsory system in Massachusetts is finding that of the uninsured “not all are rushing to get coverage. Many of them are healthy young people in their 20’s and 30’s, state officials say.” The state is spending $3 million just advertising the mandatory insurance scheme. As one 25-year-old who is employed told the New York Times, she will choose to remain unemployed and pay the fines the states will levy on her because that is “cheapest and easiest.”

The US as a whole has the same problem. Young, healthy individuals don’t want health insurance. Almost 40% of the uninsured in the country are under 25 years of age and almost two-thirds are under 35.

Again much of the burden for insurance falls on small companies. Employees who work more than 35 hours a week must be offered insurance by the employer. Deb Maquire runs a small pub in Falmouth, She offers insurance to her employees but only a third of them have taken it. It costs them $42 per week bu Maquire has to pay $45 per week for the same employee. Under the compulsory system the other two-thirds will be forced to join and Maquire says her business simply can’t afford to triple the amount they pay out.

One way around this is that smaller companies are cutting people work time. More and more people will be pushed from the private insurance market into the state subsidized system. And the tax burden will have to increase in order to pay for that. But higher taxes mean less jobs and more unemployment meaning more people qualifying for state insurance. Even an analysis prepared by the state legislature indicates that they expect the plan to be in the red to the tune of $160 million within two years.

What is interesting is the amount of force that the state has to use against the uninsured. The Times reports:

In 2008, the penalty for those not insured will be a loss of state tax exemption, worth about $219; later the penalty will be up to half of a monthly insurance premium for each month a person is uninsured. Also, while any insurance is acceptable at first, by January 2009, everyone must have drug coverage.

No doubt people would be more willing to take health insurance is a third party paid for it. The uninsured who did sign up in Massachusetts tend to be people who are qualified for state provided insurance. But that the state has to penalize and punish, rather severely, people who don’t sign up for health insurance does show that a good number of the “uninsured” don't want it.

And there is one additional problem. People who are uninsured tend to consume less health care than they need. No one questions that. But often it is forgotten, or ignored intentionally, that those with third party payment plans often over-consume health care.

If the insurance scheme means that a consumer pays a flat rate per month and a third party insurer pays out for that care the consumer sees any use of the health service as “free”. There is no link between their consumption and and their payments. That is the very link that advocates of universal health care are trying to severe quite intentionally. But the net result is that consumers will then tend to over medicalize as compared to their previous habit of under medicalizing.

All third party payament plans have this problem of perverse incentives. Consumers tend to demand more care than they need and to be less informed about care options available.

As coverage expands consumption of care increases more than was expected. The result of more people chasing a limited amount of care is to push up costs more rapidly than before. This is one of the problems the welfare state systems are facing. Health care costs are skyrocketing and they are finding themselves unable to cope. That forces the rationing that Michael Moore deceptively ignores in parts of his docufraud and simply lies about in other parts.

The 15,000 dead that Michael Moore forgot about.

2007-06-29T06:17:00.000-07:00

In 2003 France experienced a heat wave and the result was almost 15,000 deaths. USA Today reported that most the victims “died during the height of the heat wave, which brought suffocating temperatures of up to 104 degrees.”

Not long ago I spent half a year in Phoenix. And Phoenix is a very hot city. That region of the world has been hot long before we started blaming everything on CO2. Just outside Phoenix is a retirement community known as Sun City. It is a town of around 33,000 elderly people. The median age in Sun City is just over 72 years of age. And the average high temperature in Sun City is 106 degrees summer after summer.

So 33,000 elderly people thrive in temperatures higher than those that hit France where 15,000 people died. And according to USA Today many of the victims in France were elderly. What are some of the reasons that elderly people in America flock to a climate that routinely exceeds the temperatures of France’s heat wave without the dire consequences that France experienced?

Like most issues there are numerous causes involved. One is that the elderly in Sun City know that the temperatures will go above 100 degrees every day during the summer. Knowing this means they are prepared.

For instance every home and business in the Phoenix area will have air conditioning. Very few homes and business in Europe have this sort of decadent luxury. On a hot day shopping in Europe is often a horrid experience since the shops are stuffy and temperatures inside often are warmer than outside.

The reality is that Europeans have a much lower standard of living. They don’t like to admit it but it’s true. They have regulated and taxed themselves to such an extent that they live much less comfortably than do their counterparts in the United States. Average income in Europe is below average income in the United States. Then the welfare states in Europe gobble up vast amounts of the income that is earned. So the average European not just earns less but pays more in taxes. And then costs for virtually everything is much higher. I suspect something in Europe has to be cheaper than in the US but I don’t know what it is.

With lower levels of income the average home is much smaller in Europe. People don’t drive as much but walk, ride bicycles or take public transit. Cars are discouraged by the Green fanatics. Of course when heat waves hit that means old people are trying to bicycle to the store. Actually I should say stores.

In the US an older person heads to one grocery market and picks up everything they need. Such large stores go against the European mentality. So there are mostly smaller stores with minimal selections. So this means going from store to store. When it is hot out this extra exertion doesn’t help the elderly.

If the elderly in Sun City had to walk from store to store to store to buy their groceries and ride their bicycles in the 106 degree temperatures, instead of driving, they would probably be dropping dead in massive numbers as well. Luckily for them they don’t live in a town that is as “eco-friendly”.

Germany has a sales tax of about 20%. And energy is especially expensive so they can meet their Kyoto requirements. Of course they don’t meet their Kyoto requirements but they do heavily tax energy. With energy being expensive the result is that people can’t afford to air condition. It’s the same across Europe.

When the heat wave hit France people died because the cost of air conditioning is above what most people can afford. The welfare state reduces living standards and people can’t afford “luxuries” like air conditioning.

So what happened what that socialized health care? Docufraud producer Michael Moore is harping on about the benefits of the French socialized health system. He says: “The French system is the best in the world.” So why the 15,000 deaths there? How did the French system respond?

Much of it didn’t react at all. France has long mandated holiday periods for workers. The French brag about them. They pride themselves as to how little work they do, which is one reason they have chronic high unemployment. And August is the big holiday month when many French workers take the entire month off. That includes physicians, nurses, etc.

Again the news report stated: “The heat wave hit during the August vacation period, when doctors, hospital staff and many others take leave.” Of course France has a union for physicians, since every special interest group must have a union or they get screwed by the other union groups. And the National General Practitioners Union denies that vacations had anything to do with it since only 20% of all physicians were off on holiday. Only 20%! That’s one out of five physicians being gone for an entire month.

Apparently it wasn’t just the physicians and their extended holidays that were the problem. “...[T]he French Parliament released a harshly worded report blaming the deaths on a complex health system, widespread failure among agencies and health services to co-ordinate efforts, and chronically insufficient care for the elderly.” So the health system in France is complex and has “chronically insufficient care for the elderly.”

But this is one of the systems that Moore drools over when he advocates a socialist system for the United States.

It was this excellent health care that explained why 15,000 French old people died from temperatures that in Sun City would be just average. It is the excellent health care that caused the French Parliament to report that their own health system provides “chronically insufficient care for the elderly.” I suspect Mr. Moore will never mention that parliamentary report

Photo: The photo was taken in a French hospital showing elderly victims of the heat wave waiting for care. One fifth of all physicians were on holiday that day.

Universal Healthcare is what's Sicko!

2007-06-28T11:16:00.000-07:00

By Gen LaGreca

Michael Moore says he made the film, Sicko, to "ignite a fire for free, universal healthcare." How absurd is it for someone seeking proper healthcare to take an odyssey to Communist Cuba? That Moore's camera-rolling entourage would receive the same healthcare as a Cuban citizen stretches even a child's imagination. His film should be renamed "Another Celebrity Falls for Dictator's Dog-and-Pony Show."

People like Moore believe capitalism is the disease and government takeover the cure for our healthcare ills. They think people have a "right" to free healthcare simply because they need it.

If so, why stop at medicine? Couldn't we claim the same "right" to other necessities? Take food, for instance. What if the government seized control of the food industry and fed us for free with a new entitlement, "Foodcare"?

Initially Foodcare will empty the horn of plenty into your lap. With your appetite and wallet parting company, the lobster you ate only on your birthday will become regular fare, as will your favorite Belgian chocolates and filet mignon.

Because the same idea occurs to 300 million others, costs skyrocket, and a Foodcare crisis develops. Big Brother can no longer foot the bill for your busy mouth, so he must limit your mastication. This requires new agencies, bureaucrats, and a 100,000-page rulebook.

You visit your favorite restaurant to find it changed. Gone are the tablecloths, flowers, and cheerful hostess to greet you, enhancements you had gladly paid for in the price of your meal. The Department of Restaurants eliminated them as frivolous indulgences of the people’s resources.

The menu is reduced to a few modest offerings. Missing are the savory specials of the talented chef, whose last creation took forty pounds—not of ingredients but of paperwork—to gain approval from the New Recipe Administration.

You want steak, but getting it requires that the chef call a central office to obtain pre-authorization. With the clock ticking and a long line waiting to slide into your barely warm seat, you order hamburger instead. You notice your neighbor eating steak—and sitting at the best table. You remember when he was laid off and you bought him dinner. Back then, he thanked you for your charity and quickly got another job. But now that he has a “right” to food, he's stopped working to eat courtesy of your tax dollars.

You barely recognize the frazzled chef buried in paperwork. The once happy figure doting over your every need now slaves for a new master, one that denies his fee for serving Cognac, second-guesses his decision to make cheesecake, requires a Certificate of Need to buy an oven. You know that under Foodcare he's merely biding time till retirement. When he goes, you doubt he’ll be replaced because enrollment in chef’s schools has dropped as the number of bureaucrats hounding them has risen.

As time passes, everyone forgets how it started, but the crisis worsens. Michael Moore makes a pilgrimage to North Korea in search of adequate food.

You realize that the amount you pay into Foodcare exceeds what you had paid when you bought your own food and didn't obtain it for “free.” Then you didn't pay for bureaucrats and inspectors to tell you what to eat, or for those milking the system like your neighbor. Besides emptying your wallet, Foodcare has drained all the pleasure you once derived from eating.

Politicians blame their scapegoat, the capitalists—grocers, chefs, food manufacturers—and pass laws to prevent any from owning a Mercedes while someone goes to bed hungry in America. They tell us profit is evil and free food for all is a moral ideal.

You wonder: Is there something wrong with this picture? The ideal isn't the private system, with happy chefs and grocers earning a good living in return for their talent and entrepreneurial skill, and satisfied customers enjoying a Shangri La of affordable food. The ideal isn't a spectacular abundance, with everyone's standard of eating—including the poor—raised dramatically, and this achieved without government force—without fleecing taxpayers and robbing consumers and suppliers of their freedom to make their own personal choices and to interact voluntarily. Instead, the ideal is to transform free, self-determining individuals into state-controlled puppets.

The Foodcare scenario is actually playing out in healthcare. Once the gold standard of the world, American medicine has fallen to its knees from decades of crippling regulation, with the final blow about to come from universal healthcare.

To stop this despotism we must repudiate the notion that healthcare is a right. No one has a right to demand for free the goods and services produced by others. We have the freedom to take action to further our own lives—to work, earn money, and pay for the things we need—while respecting the same rights of others. We don't have any right to enact laws to seize people's money, control their activities, and force them to provide services on terms dictated by Big Brother.

No good can result when the means used to achieve it are plunder and coercion. Universal healthcare merits the label "sicko"—or more accurately "tyranny."

Genevieve (Gen) LaGreca is the author of Noble Vision, an award-winning novel about a doctor's fight for freedom in a state-run health system.

Sick and Sicker

2007-06-28T07:14:00.001-07:00

Michael Moore fictionalizes socialized health care.

2007-06-12T16:45:00.000-07:00

Michael Moore produces some of the most popular fictional films around today. Unfortunately he pretends they are based on reality. He prefers that everyone else pretend they are based on reality as well.

Recently he got a bit miffed because Canadian journalists were less than laudatory in discussing his new attack on America's quasi-private health care. Moore’s film promotes Canada, along with communist Cuba, as being his role model for health care. He simply overlooks the massive problems with Cuban health care.

The Canadian journalists knew his hype about the wonders of Canada’s system was a distortion of the facts. One journalist explained: “We Canucks were taking issue with the large liberties Sicko takes with the facts, with its lavish praise for Canada’s government-funded medicare system compared with America’s for-profit alternative.”

Moore implied that Canada provides all the health care people need or want. That is false. Every country, without exception, has to restrict access to health care. Advocates of state care brag that their care costs less than America's semi-private system. But they don’t admit that this is done by simply denying health care in one form or another.

Most countries, Canada included, reduce the demand for health care by forcing people to wait for care. Often people wait right up until they die. When they do die they are taking off the waiting list and politicians call that an improvement.

These systems forbid certain treatments or medicines outright because they cost too much, even when they are precisely what the patient needs and even if the cheaper alternatives don't work as well. Some countries, like Germany, also pay very low wages to the health care professionals. In a sense they move their expenses off the books. Instead of paying market wages to doctors and increasing taxes they reduce the wages of physicians. They indirectly impose high taxes on doctors. Thus they can pretend the health care is “cheaper” than it is in reality.

The New York Times mentioned how Canada’s health care system was a major election issue there. Why was that the case? If the system is as wonderful as Moore pretends what was the problem? According to the Times it was because of growing “waiting lines for care” and because “doctors and nurses [were] becoming sparse.” Every year or so the Canadian politicians make large promises how they will reduce the waiting lines for care. But the lines don't get shorter.

It is important to remember that Canadian health care costs are also kept artificially low because Canadians are forbidden by law to have private health care. One survey of just three American states found an average of around 1,000 Canadians per year seeking treatment, at their own expense in US facilities. Their spending is then listed as US spending and not as Canadian expenditures.

This was a study, that while claiming it was impartial, was constantly worded in a way which tried to down play the problems in Canada. They also cited a survey which showed “only 20” out of 18,000 Canadians sought care in the US. If that is the case that would be about 2,000 per year. This would be equivalent of 20,000 Ameicans per year running to Canada for their operations -- if that happened you can be assured it would widely publicized and Moore would feature it heavily in his film.

Why are 2,000 people a year seeking health care in the US when it’s “free” at home? Remember private health care in Canada is illegal. While it is not a crime to seek that care outside Canada how many people understand the distinction? Would people be reluctant to admit they sought care in the US due to fears, unfounded as they would be, about breaking the law? And this survey only shows how many actually went through the bother of traveling outside their own country to seek health care. It doesn’t show how many would have done so had they the means to do it.

What I run into from apologists for socialized service is that the reason for these problems is a shortage of funding. Now think about that for a second. They are saying that if they spent more money then state care wouldn’t have to be rationed out. And no doubt some of the problems would be solved by spending considerably more.

But so often they start out with an argument that socialized service is preferred because it is cheaper. Then they excuse the problems created by socialized medicine by saying these problems wouldn’t exist if it were more expensive. Doesn’t that undermine their original claim?

Assume they doubled the budget of health care thus making socialized care far more expensive than private care. Would that eradicate the waiting lines? It would not. Demand would continue to expand. People would still want more than they received and they would seek that extra treatment. Once again they would be rationing care. One reality of economics is that if something is free, and valuable, people will want more than exists. One way or another there is always rationing.

The problems of health care rationing and the ban on private care went all the way to the Supreme Court of Canada. In Quebec the province allowed private insurance only for procedures not covered by the socialized system. One elderly man, George Zeliotis, needed a hip replacement. But the socialized system had him wait for over a year. He wanted private treatment which he would pay for out of his own pocket and was told it was illegal. He went to court and the Supreme Court wrote a blistering ruling. They ruled:

“The evidence in this case shows that delays in the public health care system are widespread and that is some serious cases, patients die as a result of waiting lists for public health care.”

“In sum, the prohibition on obtaining private health insurance is not constitutional where the public system fails to deliver reasonable services.”

No wonder Canadian journalists were a bit testy with Mr. Moore and his praise for socialized health care. I’m sure Moore will have an explanation on why he is a better judge on the matter than the Canadian Supreme Court. And the explanation would be about as fictional as most his other work.

2007-05-12T07:04:00.000-07:00

The Mythology of Health Care Reform
by Michael D. Tanner

Health care is once again moving to the top of the national political agenda. The early evidence is that this debate will be dominated by misinformation and misconceptions. Advocates of a government-run, national health-care system will do everything they can to frighten Americans and discredit consumer-directed health care. But we would be advised to look at the facts and not the scare tactics.

The Claim: The U.S. spends too much on health care.

The Facts: It is true that the United States spends more on health care than any other country. Why is that a bad thing? There is no "right" amount to spend on health care or anything else. The United States spends more on athletic shoes than any other country. No one speaks of the athletic shoe crisis.

Economists consider health care a "normal good," meaning that spending rises or falls with income. As incomes rise, people demand more and better health care. America's wealth determines its spending on healthcare.

The real problem is the fact that the people spending the money are not the people paying the bills. Because those purchasing health care are able to pass the bill onto third parties, the usual market disciplines don't apply. True health-care reform would focus on giving consumers a greater stake in the decision-making process.

The Claim: Though we spend more, we get less.

The Facts: America offers the highest quality health care in the world. Most of the world's top doctors, hospitals and research facilities are located in the United States. Eighteen of the last 25 winners of the Nobel Prize in Medicine either are U.S. citizens or work here. U.S. companies have developed half of all the major new medicines introduced worldwide over the past 20 years. And Americans played a key role in 80 percent of the most important medical advances of the past 30 years.

If you are diagnosed with a serious illness, the United States is the place you want to be. Tens of thousands of patients from around the world come to this country every year for treatment.

Critics of American health care often point out that other countries have higher life expectancies or lower infant mortality rates, but those two indicators are bad ways to measure the quality of a nation's health-care system. In the United States, very low-birth-weight infants have a much greater chance of being brought to term with the latest medical technologies. Some of those low-birth-weight babies die soon after birth, which boosts our infant mortality rate, but in many other Western countries, those high-risk, low-birth-weight infants are not included when infant mortality is calculated.

Life expectancies are also affected by other factors like violent crime, poverty, obesity, tobacco, and drug use, and other issues unrelated to health care. When you compare the outcome for specific diseases like cancer or heart disease, the United States outperforms the rest of the world.

The Claim: A government-run health-care system would expand access to care.

The Facts: The one common characteristic of all national health care systems is that they ration care. Sometimes they ration it by denying certain types of treatment altogether. More often, they ration indirectly, imposing cost constraints through budgets, waiting lines, or limited technology. One million Britons are waiting for admission to National Health Service hospitals at any given time, and shortages force the NHS to cancel as many as 100,000 operations each year. Roughly 90,000 New Zealanders are facing similar waits. In Sweden, the wait for heart surgery can be as long as 25 weeks. In Canada more than 800,000 patients are currently on waiting lists for medical procedures.

The Claim: Health care is too complex for average Americans to make decisions about price and quality.

The Facts: Health care is increasingly high-tech and complex, but so are many other products and services that Americans purchase everyday without specialized expertise. A consumer does not need to know how an internal combustion engine works in order to buy a reliable car, or how silicon chips are manufactured before he selects a computer. When consumers have good information about product prices, quality and safety, they naturally gravitate toward the goods and services that offer the highest value for the lowest price.

There are numerous studies that show health-care consumers make decisions about price and quality. The current problem with the healthcare sector is that there isn't enough good information available for consumers to make sound decisions about which healthcare provider or facilities offer the best value. But that's rapidly changing as providers respond to increased consumer empowerment.

At the same time, patient advocacy companies are springing up to help health-care consumers make informed choices. When consumers, rather than insurers or employers, control the money, markets naturally respond.

The U.S. health-care system represents one-seventh of the American economy, and is literally a matter of life and death for millions of Americans. Here's hoping that they'll be able to sort the facts from the fallacies in the coming debate.

Michael Tanner is the director of health and welfare studies at the and director of Cato's Project on Social Security Choice. This is reprinted from the Cato website.

When judges try themselves: the problem of socialised medicine.

2007-04-29T04:30:00.000-07:00

I want to paint a scenario for you. Imagine a privately owned hospital, owned by a for profit corporation. At this hospital numerous premature infants die. The reason for the death is that the corporation did not maintain the ageing plumbing system and it was infested with a bacteria. The tap water literally killed the weakest patients and made many others sick.

Of course parents are traumatized over this matter. And as they would be expected to do they demanded that the hospital tell them what happened and why. The hospital refuses to do this. And the reason is that the corporation has a policy forbidding the revelation of such information to the parents. A top official of the corporation is asked why this information was keep secret and he says that public disclosure of this incident was not needed since the bacteria did not pose a threat to most people. It did post a threat to some however but not most.

In addition he says that secrecy over the deaths were warranted because they happened over a year ago. He also says that it was warranted to sweep this under the carpet because he didn’t think it would happen again. And if the public knew that several dozen babies became ill due to bad plumbing, with four deaths, they would “get the message” the hospital posed a “widespread risk”.

Under those conditions what do you think will be said about the private provision of health care by a profit-making corporation? Would you be surprised if there was an outcry that the hospital be nationalized with its supervision turned over to the State?

Something like this did happen at the Ste.-Justine Hospital. The pseudomonas bacteria was growing in the plumbing system. Four infants died as a result and 50 became ill. The hospital was not owned by a corporation but is part of the socialized health care system in Canada. And administrators refused to tell parents the cause of death because laws imposed by the State forbade them sharing such information with parents.

The public health department director said that it was fine to keep this information under wraps because it didn’t threatened everyone, had been over with, wasn’t going to happen again, and because he didn't want parents thinking the hospital “is a place full of germs and danger.”

In this case the government covered up for one of their own hospitals that was killing patients due to bacteria that was allowed to grow in a water system that had not been adequately maintained. Not maintaining things is another way that socialized medicine can “hold down costs” in its drive to prove it is cheaper than private care. Of course cheaper care is not necessarily better care or even equally sufficient care. And in this case it was deadly care.

Socialized health care in Canada is State-owned health care. The State is the corporate owner of national health services. So the owner basically enacted a law ordering another brach of the same entity to hide information that would embarrass the owners.

A private hospital acting the same way, with corporate owners making similar remarks, would be in for some serious legal scrutiny by the State. And a rule imposed by owners, mandating keeping the cause of deaths secret, would be deemed a cover-up. In the private market the parents of the dead infants would have a major law suit against the corporate owners.

If it were shown the hospital neglected maintenance in order to hold down costs, and then hid the truth from the parents, it would be unlikely this hospital would win any sympathy from a judge or jury. And there would be a State legal investigation regarding this neglect.

In this case the entity that is responsible for protecting people’s rights is the same entity that owns and operates the health system. That doesn’t bother advocates of socialized health care one bit. But it does worry me.

If this had been a private company no one would accept as valid the idea that one arm of the company is considered an “unbiased” judge of other branches of the same company. If McDonalds accidentally poisoned a few dozen children and then hid the information most people would want an independent investigation. If the matter goes to court, and it would, we’d also want a judge who is not employed by McDonalds.

How do you get this sort of independent investigation with a socialist enterprise? The State owns the health care service. The State sets the rules by which the service operates. If something goes wrong the State investigates the service. If a legal case is made the State judges the facts

To understand the problem consider a sport which has players interacting with one another. The game has some rules to it. And on the game field there is a referee. The referee observes the players, adjudicates disputes, and makes sure that the basic rules of the game are followed. His job is to be an independent judge of the conduct of the players.

But what if the referee were also a player in the game? Immediately problems are created. How can a player in the game be expected to judge the conduct of other players. And what if he is not just a player judging whether others are playing according to the rules but is also allowed to make up the rules as he goes along? Better yet he can make one set of rules for himself when he’s playing and another set of rules for others.

This is precisely what happens with a socialist enterprise. It is owned by the State. It has become a player in the game. But the State makes the rules by which everyone is playing and it judges whether people are playing fairly or not. As a player in the game it has a tendency to make one set of rules for itself and another set of rules for everyone else. It rigs the game in a dishonest fashion.

If a real game were played like this you would see players quitting and walking off the field. How can you honestly compete on the field when some players have special rules for themselves? If the referee can have his services purchased how can he fairly judge disputes? He can’t. If the referee is actually playing in the game how can he fairly judge disputes? He can’t.

When the referee joins the games he not only distorts the process of the game but he ceases to be an effective referee. The one task that justified his existence in the first place is neglected out of necessity as he becomes intertwined with the task of being a game player.

In normal judicial matters a judge is removed from cases if he has a personal stake in the matter. It is known, that even with judges of integrity, that it is often difficult to judge honestly when one is involved with the litigants. A judge would not be allowed to sit on the bench in a case involving his own mother.

But socialism requires this to happen. It makes the State not only the referee in the game but a player as well. The judge in the case is directly linked to specific players in the game. He can write rules that favor his team as he goes along. If referees started scoring goals in a game people would be upset. Yet they seem unable to see the problem of having the referee in social interactions, the State, playing directly in that game to the benefit of one team over another.

This case in Canada showed that the State is a poor referee or judge in matters involving itself. State bureaucracy has repeatedly been shown to be unable to honestly judge its own activities. But socialism inherently creates this conflict of interest. It makes the referee a team member and allows him to pass judgement on his own actions. And the results of a game played in that manner are bad for everyone except the referee in question.

NHS doctors discourage medicine as a career.

2007-04-12T11:51:00.000-07:00

You no doubt have heard about how so many parents want their children to grow up to be doctors. One group that doesn’t want that are doctors, more particularly those who worked for state medical monopolies, also known as socialised medicine.

A survey was done of physicians working for the state controlled National Health Service, in the United Kingdom, showed that the majority, of the 14,000 physicians who answered the questionnaire, said that morale in the NHS was poor. The chief executive of the Hospital Consultants and Specialists Association, Stephen Campion, said: “Traditionally, many doctors have followed in their parents’ footsteps and increasingly we are hearing doctors saying they wished they hadn’t recommended a career in medicine to their children. The survey showed that 69% of NHS physicians would discourage a career in medicine.

The Labour government claims things are going just peachy, a feeling not shared by physicians or patients. The health secretary Patrician Hewitt, claimed that 2006 was the best year ever for the socialist agency but 90% of physicians disagreed. A Department of Health spokseman said their own survey shows that NHS staff are “generally satisfied”.

2007-03-25T12:07:00.000-07:00

Health Facts And Fears: The Intolerance and Arrogance of the Modern-Day Anti-Smoking Movement

By Elizabeth M. Whelan, Sc.D., M.P.H.

Cigarettes kill. Cigarettes are bad for your health. The American Council on Science and Health has made that clear since we opened our doors in 1978. Cigarette smoking is the leading preventable cause of premature death, accounting for approximately 400,000 deaths annually in the U.S. -- nearly one in every four deaths, and one in every two premature deaths each year.

But we at ACSH hold to the belief that the best way to lose an argument is to overstate it. And overstatement is exactly what a growing number of members of the anti-smoking community are doing. Indeed, anti-smokers are becoming increasingly unscientific, arrogant, absolutist, and intolerant of dissenting views.

Two immediate examples come to mind.

First, scientific studies from around the world have now confirmed that smokeless tobacco is far less hazardous to health than is cigarette smoking.

No sane public health professional would advocate that non-smokers take up the use of smokeless tobacco. But it is an undeniable fact that, for an addicted, inveterate cigarette smoker, the use of a smokeless product instead of cigarettes would dramatically reduce the level of health hazard he or she faces. The switch from cigarettes to smokeless tobacco in men in Sweden -- and the resulting decline in lung cancer and other systemic diseases associated with cigarette smoking -- is stark evidence of this harm-reduction phenomenon. While the risks of oral cancer associated with smokeless tobacco are still a concern, it is important to note that (a) the risks of oral cancer from cigarette smoking have always been significantly greater than the risks of oral cancer from using smokeless and (b) the smokeless products have been chemically altered over the years to significantly reduce the risk of oral cancer.

But the anti-smoking community has been vocal in its rejection of smokeless tobacco as a means of harm reduction for addicted cigarette smokers.

Indeed, their protests against smokeless have been so loud and permeating that they even misled the United States Surgeon General, Dr. Richard Carmona, into stating that smokeless tobacco was no less hazardous than cigarette smoking -- a clearly false statement.

About four years ago, ACSH hosted a media seminar on harm reduction as it relates to cigarette smoking and alcohol abuse. ACSH brought in speakers representing a variety of views, including one anti-smoker who vehemently rejected the option of smokeless tobacco as a means of harm reduction for cigarette smokers. Despite ACSH's attempt at balance, veteran members of the anti-smoking community were irate that ACSH was hosting such a meeting, and one anti-smoking leader called ACSH to announce that I would be "excommunicated" from the anti-smoking movement if I moved forward with this event. (ACSH did move forward, so I guess I am out.)

The message of the anti-smokers seems to be this: "Tobacco in all forms is bad and should not be tolerated. Cigarette smokers have only two choices: give up tobacco or die."

ACSH begs to differ.

Second, the anti-smoking movement has gone off the deep end over secondhand smoke (also known as environmental tobacco smoke).

Sure, exposure to cigarette smoke has all types of negative acute effects, including increased risk of earaches, inner ear infections, asthma, upper respiratory ailments, and more. No argument about that. And it smells nasty, makes your clothes and hair stink, and can ruin a perfectly nice dinner (ACSH did a report in 1999 on the limited but real effects of secondhand smoke).

But anti-smokers can't let it rest at that. They claim that even transient exposure to secondhand smoke causes everything from breast cancer to heart disease.

A few egregious examples: a leading tobacco researcher made the improbable claim that the smoking ban in Helena, Montana resulted in a 40% decline in heart attack admissions in a six-month period after the ban. "We used to think that heart disease came after years of exposure" said Dr. Richard Sargent, an anti-smoking Montana physician, who then went on to argue that even short-term exposure to exhaled smoke can damage the heart: "if you go into a restaurant for a sandwich, if you go into a bar for a beer, and you get exposed to a heavy amount of secondhand smoke, you're just as at risk for a heart attack as a smoker."

Sargent, vice chairman of the Montana Tobacco Advisory Board, noted that secondhand smoke has "an acute, rapid effect on the heart...[T]hirty minutes of exposure doubles your risk for the next forty-eight hours."

Americans for Nonsmokers' Rights makes similar claims: "even a half hour of secondhand smoke exposure causes heart damage similar to that of habitual smokers. Nonsmokers' heart arteries showed a reduced ability to dilate, diminishing the ability of the heart to get life-giving blood."

Give me a break.

While being exposed to cigarette smoke for hours a day for many years certainly could have negative effects, it is unacceptable to use such exaggerated claims to justify a ban on smoking.

The good news is that the radical anti-smoking movement may at last have met its, er, match. Dr. Michael Siegel, a physician specializing in preventive medicine -- and an anti-smoking activist in his own right -- is taking on these hyperbolists. In his Tobacco Analysis blog, he calls these claims -- often used to justify outdoor smoking bans -- "ridiculous."

Funny thing about communication in science and medicine. When a politically correct theory or claim takes hold and is loudly trumpeted ( as in "secondhand smoke, even in trace amounts, kills"), dissenters are terrified to step forward and challenge that theory lest (a) they be called apologists for, in this case, the cigarette industry or (b) they be accused of not getting on the bandwagon of what is an inherently good public health cause.

At this point, with their hype and self-righteousness, the anti-smokers really have gone too far -- they have triggered a counterattack. Stay tuned for a major magazine expose by a well-known journalist (and network TV segment) on the smoke-and-mirrors statistics being spewed out by anti-smokers who decry the health effects of secondhand smoke to justify banning even outdoor smoking.

The moral of the story: stick to science. Cigarette smoking is a multi-faceted disaster for the smoker and for those who are exposed to secondhand smoke for long periods of time. Nothing is to be gained by exaggerating this already-grim story to get even more attention. The only result of such hyperbole is the loss of credibility of the public health profession.

Reprinted from the American Council on Science and Health.

A short course in brain surgery.

2007-03-23T07:55:00.000-07:00

Can there be too much health care?

2007-03-20T09:42:00.000-07:00

I’ve often seen ideologues play with numbers. It’s easy to do but inherently dishonest though some of it is simply due to ignorance and not intentional dishonesty. People have a tendency to stop looking when they find what they want to find.

One of my private passions has been understanding the role of incentives and economics. One thing a decent economist can teach you is to think beyond the obvious. Much of economics is counterintuitive.

For instance, raising the minimum wage doesn’t raise the income of the poorest workers. They tend to become unemployed. Most workers are above the minimum wage so it has no impact on them. Only a small number of workers have productivity levels higher that what their pay scale indicates. They will see their incomes increase and remain employed since their productivity is worth more than their wages. Those with lower productivity, at the bottom of the wage scale, will end up on unemployment. This is a bit more complicated that the simplistic idea that a high wage minimum raises income.

Recently, in the Christian Science Monitor, Donald Boudreaux took on Corinne Maier from the New York Times. She claimed that French workers were more productive than American workers. And since the French work fewer hours this difference is “proof that you can work better by working less.” That may be a good sound bite but its not necessarily good economics.

Boudreaux noted that French labor regulations make hiring people very expensive -- one of the reasons for the very high rates of unemployment especially among the least educated. High labor costs weed out the least productive workers from the workplace.

In Boudreaux’s example he suggests a $500 per hour minimum wage would automatically make American workers the most productive in the world. The reason is simple. Only those whose productivity is worth more than $500 per hour would have jobs while the zero productivity of the unemployed is never factored in to the productivity rates.

Strictly speaking, if the French also included the vast numbers of people who can’t find work in their productivity ratings they wouldn’t look so good. Consider a race between two groups of kids. In one group the teacher goes around breaking the legs of slowest runners. Then they have a competition where only those who can run do so. They add up the times and declare the first class has a higher average speed. Breaking the legs of slow runners would increase the average of those who run. That is what the French do -- they break the “productivity legs” of their slowest runners.

I thought Boudreaux’s editorial was quite enlightening and one of the best things on economics I’ve read in a long time. It takes a “fact,” as the media reports it and scrutinizes it -- something the media is not likely to do for a number of understandable reasons.

Over at Slate Darshak Sanghavi has done something similar. He looks at the much touted infant mortality rate. The Left, in particular, loves to quote this number. America has a higher infant mortality rate than most developed countries. That fact, in isolation, doesn’t tell us much. We really need to ask why this is and what it means. But people assume this is a marker for conclusions they have already drawn. So it is alleged to mean, “that capitalism fails”, that the “lack of national health care” kills people, “that welfare cuts are killing babies”, and a host of other conclusions looking for evidence.

Save the Children had one of the ready made conclusions: “We are the wealthiest country in the world” but children “are not getting the health care they need.” Really? Anna Bernasek, at the New York Times, blamed the high rate on the lack of national health care. Another one of those conclusions looking for evidence.

But Sanghavi says “a closer look reveals the counterintuitive possibility that high infant mortality in the United States might be the unintended side effect of increased spending on medical care.” We should consider this for a moment.

Americans spend more on health care than any other nation. The very idea that the US isn’t spending enough is absurd. The reason couldn’t be a lack of spending as Save the Children claimed. America is condemned by the advocates of socialized health care for both spending too much and for not spending enough. It is condemned no matter the spending level.

You would almost conclude that the reason for the condemnation has nothing to do with the spending patterns. Perhaps the advocates of socialized care condemn both too much spending and not enough spending for reasons that have nothing to do with the actual spending but with their purported solution. If you want to propose a “solution” you sometimes have to invent the crisis that needs solving, or at least convince people that one exists. Condemning US health care for spending too much on Tuesday and too little on Wednesday has a lot to do with the new system they want to impose on Thursday.

Elsewhere I have investigated some of the illusionary arguments used by advocates of socialized medicine noting that Americans have an abundance of health care, especially of the expensive kind. One way to keep health care costs down in nationalized systems is to ration it out. Deny expensive treatments to people and costs will drop. Americans get more of those expensive treatments.

And America’s infant mortality rate may be directly connected to this crisis of abundance. Sanghavi asks what is the cause of infant mortality in the US. He notes that in poor countries the cause is usually easily treated problems such as diarrhea in the first few months of life. Two things are necessary to be included in this statistic. First the infant must be born alive and second it must die before the age of one. If it is born dead it doesn’t count in the statistic.

Sanghavi says that somewhere between one third and one half of all infant mortality in the US is due to complications of prematurity. I checked this out and he’s right. MedicineNet.com puts the rate even higher: “In the United States, about two-thirds of infant deaths occur in the first month after birth and are due mostly to health problems of the infant or the pregnancy, such as preterm delivery or birth defects.”

Sanghavi argues that modern medicine is not particularly good at preventing premature births. And some new medical techniques actually increases the risk but are still used for understandable reasons. He notes that the number of women using technology to conceive has doubled and that the technology increases the number of multiple births and multiple births are “at a high risk of premature delivery.”

And he writes: “Despite a doubling of health-care spending as a portion of the gross domestic product since 1981, the rate of preterm birth has jumped 30 percent.” If, as Save the Children complained, the problem is not spending enough then the rate of premature births should not have increased as spending increased.

Another counter-intuitive problem for prematures is that the number of neonatal units the country has increased. So much money is available for neonatal care that more care is available than needed. Infants who normally wouldn’t be given this care are sent to the unit as a precaution. Sanghavi writes about a study in the New England Journal of Medicine: “The authors ominously suggest that ‘infants might be harmed by the availability of higher levels of resources.’ They argue that the availability of a NICU may mean that infants with less-serious illnesses may be admitted to one and then ‘subjected to more intensive diagnostic and therapeutic measures, with the attendant risks.’”

He also notes that hospitals which treat large numbers of premature babies have high success rates. The increase in the number of neonatal units has meant that each hospital treats fewer cases. With less experience the number of deaths increases. A study in the Journal of American Medicine noted that concentrating these prematures in fewer hospitals could reduce the death rate and lower costs as well.

If this study is correct then reducing costs by reducing the number of hospitals offering neonatal care may increase the survival rate for premature infants. It is possible that one can have too much of a good thing. And spending more on neonatal care may exacerbate the problem. The reason for it seems obvious. And if I may allow me to use Ikea as an example.

Putting together that furniture is a real chore. Sometimes is it is downright difficult. And if you are doing one of this and one of that each piece is hard work. But if you have ever done multiple examples of the same piece you quickly learn the process. With more experience you make fewer mistakes, are more prone to notice details and faster. Experience makes you better at the work. Why would neonatal health care be any different? The more experience one has the better one becomes.

American health care has so much money thrown at it that care is being diffused. More and more hospitals have neonatal units, even though such units are expensive. The number of patients are spread over a greater number of hospitals reducing the average experience at each hosptial. With reduced experience there is a higher mortality rate. As the JAMA article noted: “Risk-adjusted neonatal mortality was significantly lower for births that occurred in hospitals with large (average census, >15 patients per day) level III NICUs.” So by concentrating such care, in urban areas particularly, “has the potential to decrease neonatal mortality without increasing costs.”

As I said sometimes life is counter-intuitive.

Swiss voters reject single-payer health care

2007-03-16T17:00:00.000-07:00

Left-wing groups in Switzerland tried to force through a measure, by referendum, that would abolish competition between health care insurers. Under Swiss law residents are required to purchase health insurance but are free to pick any policy offered between 87 different companies.

The Leftist Mouvement Populaire des Families gathered 110,000 signatures to force a vote on their measure. They were supported by the Left-wing Social Democrats and various trade unions. Under the measure all insurance policies would be monopolized under one plan. Apparently these groups don’t mind monopolies as long as they create them and they clearly don’t favor freedom of choice for consumers.

Consumers, also known as voters, didn’t find this new plan very appealing. They rejected it with 71% voting against it.

The proponents said the new plan of single-payer would drive down health costs. Of course driving down health costs is easy for a single payer program. First, deny expensive treatment to patients entirely. Reduce, options and cut out certain types of care and medications. That policy alone accounts for much of the “savings” that socialized systems offer.

The second method of “saving” is to cut salaries of health care workers to below market levels. This technically doesn’t cut health costs as it merely transfers costs from taxpayers in general to the health workers instead. The downside of this is that you find health workers seeking employment in countries that don’t penalize them for working in this field.

The first proven method of cutting costs reduces the amount of health care. The second proven method of cutting costs reduces the numer of health care workers. Anyone can cut costs by offering less.

Ageing, population and the welfare state

2007-03-14T12:07:00.000-07:00

The United Nations Population Division is estimating that the world’s population will top out at 9.2 billion in 2050. They increased it a slight increase from their previous projection of 9.1 billion because of anticipated declines in the death rate from AIDS and other diseases.

There are some who will take this as bad news. I am reminded of a “reviewer” who attacked something I wrote on population. He first admitted he had never read the manuscript in question and then said that my thesis was “not that birth rates are too high but that death rates are declining”. He then attacked me for not offering “a solution to this problem.” The problem being declining death rates. My reply was that he should think globally and act locally and that he always had the power to reduce the population of the world by one. Of course when he whines about low death rates it is always the death rates of others that worry him not his own.

I actually question the UN’s projection and I do so for a very understandable reason. I’ve been watching the population issue for some years now and I’ve read their population reports regularly. They are consistently wrong and drop their projections as they get closer to the dates in question.

More importantly they are always wrong in the same direction. They constantly overestimate population growth rates. To their credit they do give a low, middle, and high estimate. But the reality tends to be closer to the low estimate than the high estimate. I suspect, based on this record, that one should take a position somewhere between their low and middle estimates and you will be far closer to the truth. In fact a good case can be made for their low estimates being the most likely.

The new report, as per the media, gives a distorted picture in one important sense. It says that “46 countries are expected to lose population by mid-century.” But more nations than that already have birth rates below replacement levels. The reason for the difference is the time lag between one being born and one dying -- a lag most of us appreciate and work at extending. That lag increases as death rates decline. As people live longer the population continues to grow even though the total fertility rate is below replacement levels. Of course once the two catch up there is a rapid decline in population numbers.

Another report in the press says that “Fertility has already reached below replacement levels in 28 developing countries which account for 25 percent of the world’s population...:” Again you need to be careful in what you read. This is 28 “developing” countries not 28 countries. For instance most the countries that are already developed need to be added to that list.

In 1999 the UN noted that 61 countries had already reaching below-replacement fertility rates and said that by 2015 that would be true for 87 nations. One indication of how rapid the deceleration of the world’s population will be is that the number of people over the age of 60 will triple in the next few decades. The population grows but at some point soon large numbers of old people start to die and when that happens population numbers will plummet with all sorts of consequences. Expect numerous government commissions urgently trying to reverse the situation even while today they are urgently trying to create it.

The UN says that there will be more people over the age of 60 than there will be under the age of 15 for the first time in history. Consider the crisis for the welfare states of Europe. Already the number of people under the age of 60 is in decline in Europe while the number over 60 is increasing. The number aged 0 to 14 went into decline in 1965. And those aged 15 to 59 went into decline in 2005. But every years the number over 60 has been increasing. This trend will happen in every region of the world.

In fact the UN’s report, if you read their material yourself, focuses on the rapidly ageing population of the world. The media report focuses an a relatively minor increase in the projected maximum, from 9.1 billion to 9.2 billion. After years of conditioning by hysterical population gurus like Paul Ehrlich the media can’t get over the idea that the population explosion ended years ago. All that is happening now is that the world is waiting for the old people to die! Shocking but true.

The UN report says that the world has gone through a transition where birth rates are low and the numbers of children, and working aged people, will go into decline while the number of elderly will skyrocket. They write: “Today most countries in the world are already well into the demographic transition...” Most countries! Yet you won’t have trouble finding groups proclaiming that the UN report is a “wake-up call” due to over population.

You have to realize that there will be entire nations, by 2050, where the median age of the population will be over 50. Consider what this means to the issue of welfare, pensions and medical costs. And the disaster is particularly dangerous for those nations stupid enough to go down the welfare state road.

The number of people relying on such benefits will grow rapidly but those who work and pay into the system will be disappearing. There will be fewer and fewer people sustaining the system just as more and more people need it. Millions of elderly people are suddenly going to find out that the safety net they were building over their lifetime can’t sustain them. And because of the high taxes they haven’t had the opportunity to create private alternatives. They will be left out in the cold -- sometimes literally -- because the welfare state is built on a model that is the complete opposite of demographic reality.

I personally suspect, based on past overestimates, that the world’s population will peak at 8.9 billion and in the year 2045 not 2050. But the real story here is not one of “birth control” (which I happen to support) but one of welfare control. The disaster we face is not one of an overpopulated world. That disaster has not been looming for decades. But a world filled with elderly people reliant upon a safety net that doesn’t exist scares the hell out of me.

Does the U.S. Spend More?

2007-02-23T16:13:00.001-08:00

The following report is reprint from John Goodman's Health Blog. It makes some important points on the distortion that takes place in comparing the health services between the US and other nations -- always used to justify socialized health care. He notes that these comparisons are false because many of the costs for other delivery systems is disguised in the manner he outlines below. We shall also be posting an article concerning how one way socialized health care keeps costs down is by refusing treatment to needy patients.

A new report from McKinsey claims that the United States spends $477 billion a year - $1,645 per person - more on health care than other OECD countries do, after adjusting for differences in income and wealth. To make matters worse, we do not get better care. Paul Krugman of the New York Times is going gaga over the report.

However, the study makes a fundamental economic error, surprising for McKinsey. The real social cost of any good or service is not the amount of money spent on it. It is the real resources used to produce it. This is especially important in health care, where the suppression of market forces in every country makes cash flows an unreliable indicator of real resource use.

Surprisingly, there are fewer practicing physicians, nurses and acute care bed days per capita in the United States than the average OECD country. We do use 54 percent more medical devices - defibrillators, pace makers, coronary stints, hip implants, knee implants, etc. But our consumption of drugs is 20 percent lower than in other countries. If health outcomes among developed countries are pretty much the same, the United States does not look so bad in terms of resources used to produce those outcomes.

In the McKinsey study, almost 60 percent of the higher U.S. cost of care stems from high prices paid for inputs. However, in other developed countries, governments use their buying power to force providers to accept below-market reimbursement, just as Medicaid and Medicare do in the United States. For instance, the income of a physician is 5.5 times that of the average worker in the United States, on average. The ratio for Germany and Canada is 3.4 and 3.2 respectively. The comparable ratio is 1.5 in Sweden and 1.4 in the United Kingdom.

Monopolistic buying power - however, does not lower the real social cost of health care; it shifts those costs. A different way of achieving the same result would be to pay doctors market-determined fees and then impose a special tax on them, leaving their net income where it is today. The virtue of this alternative is that it would be clearer that social costs have not been lowered; they have merely been shifted to the providers of care.

A few other economic errors in the McKinsey report are worth noting. They treat the profit of for-profit hospitals as a cost not borne by public hospitals - as though capital used by government has no opportunity cost. And they treat the taxes paid by for-profits as a cost not born by public hospitals - as though real social costs were affected by whom the government chooses to tax.

I'll save the quality discussion for another day, but leave you with this thought. If the United States performs far more knee replacements than other countries then one of two things must be true: either 1) we are increasing the quality of life for our seniors relative to seniors in other countries, or 2) we are subjecting our old folks to a lot of unnecessary (and painful) operations.

Everything is taxed and subsidized.

2007-02-16T06:32:00.000-08:00

The bureaucrats in Brussels, the headquarters of the European Union, are just as anxious to micromanage the lives of others, and to dictate to them, as those in Washington. In other words the people in Brussels are just another version of George Bush -- that ought to upset both Bush and the EU-acrates. Admittedly the Europeans aren’t as likely to torture you but sometimes you’d wish they would as that might be an improvement over the constant Nannying and harassment.

EU bureaucrats spend millions per year to “educate” people. Now I think there is very little doubt that smoking is bad you. You really ought not do it.

The EU claims that “some 80,000 people a year in the EU” are killed by “passive smoking”. No source for that is listed. And from what I’ve seen it is very tenuous to claim that passive smoking is this dangerous. Suffice to say the EU is intent on making Europe smoking free.

Oddly the EU benefits from people smoking. Most EU countries are welfare states that are in deep trouble. They promise pensions to their citizens along with health care and can’t deliver on the promises without constantly raising taxes higher and higher. But by doing that they destroy jobs and create high unemployment requiring massive welfare benefits. And they end up on this downward spiral. Smokers actually offer them some relief. One is that they pay massive taxes for the “privilege” of being allowed, by their political masters, to smoke. The other is that smoking does, on average, shorten their lives and that benefits the welfare state’s bottom line. While there are increased health costs due to smoking the reduced life expectancy means they collect pensions for a shorter time than non smokers. The result tends to be a net gain for the welfare state.

While the EU spends train loads of money to make Europe smoke free it then spends more train loads of money to subsidize tobacco production.

In an exchange in the British parliament one House member asked the Secretary of State for Environment, Food and Rural Affairs “what subsidies are available at (a) EU and (b) national levels to producers of tobacco in the European Union?”

The answer was that: “The European Union adopted budget for tobacco premiums in 2006 was € 920 million...” That’s a lot of cash folks. But we are assured that these subsidies are tied to “a quota system” and that “any tobacco grown beyond quota will only fetch market prices and no premium.” Now don’t you feel better?

The first 350,600 tons of tobacco produced fetches the farmer market value plus extra money from the European Union. And then anything over that will “only fetch” market prices. Oh, those poor farmers! They only get paid above market prices for their tobacco on 350,600 tons. The subsidy to grow tobacco is about 20 times higher than the subsidy to grow grain. There are something like 135,000 people, in Europe, paid by the EU to grow tobacco. You’d think with all these subsidies they could grow decent farm produce in Europe -- but from what I see they can’t. Vegetables are awful in Europe and the meat quality is pretty low. I’ve concluded that one reason the French use so many sauces is to cover up the quality of the meat.

But then subsidies tend to lower the quality of one’s goods and ultimately make one less competititve and more likely to fail.

The EU-acrates will note that a good deal of the tobacco is exported, much of it to poor nations. So the EU subsidizes cancer for the world’s poor. How nice of them! Of course, because of the higher death rates, they also send foreign aid to these countries to try and reverse some of the effects of smoking. It appears that the EU subsidizes everything! But to even things out they also tax everything! And Europeans like to think Americans are stupid?

Can the rights of physicians and patients be reconciled?

2007-02-08T15:51:00.000-08:00

A survey of physicians in the US shows a small, but significant, number of them believe they have no obligation to tell patients what medical options are open to them if those options violate the religious values of the physician -- regardless of the values of the patient. And 18 percent said they are not obligated to refer the patient to physicians who do provide that care.

Al Weir of the Christian Medical & Dental Associations argues this refusal of service protects the right of the doctor. “The doctor has the right to follow their own company and their own moral integrity.”

But there is a conflict here. It is not the doctor’s treatment choices that is under discussion. The physician is always free to follow his own advice with his own life.

But a physician may hold beliefs which conflict with the choices available to the patient. Should the physician be required to give advice if being truthful with the patient violates his “ethics”?

How does one protect both the rights of the patient and the physician? Is it possible to maximize the liberty of each?

The political Right tends to assume the doctor has the right to keep the patient in the dark about medical options because religious beliefs are paramount. Thus the patient can be kept the dark against their will. The political Left tends to assume the patient has the right to force the doctor to violate his own ethics. Each side is willing to use the force of law to impose their values on the other side.

Neither patient nor doctor should be put in a position of having the other make decisions for them without their consent. And it is possible for that to happen.

Let us assume a case where there are various treatments available: treatments A to J or ten treatments in all. The patient assumes the physician will let him know what options exist. That is a reasonable assumption to make and is mostly true.

But assume that the doctor has some sort of belief that makes treatments A, B, and C off the table for him. So he deceives the patient and tells him only of treats D through J. He can’t even tell the patient what treatments they might be because they violate his own values.

It seems the best option, which protects the maximum freedom of both physicians and patients, would be where the doctor is not obligated to discuss treatments he considers immoral. But he is obligated not to deceive this patient at the same time. It is a contractual duty. So the very least that is required of him is something along these lines:

“My personal beliefs do not allow me to inform you about options that may exist for you in regards to this condition.”

Such a statement informs the patient that he may wish to seek another physician. If the doctor feels he can not recommend another physician who would inform the patient about these treatments then he should be required to say: “Nor will I recommend physicians to you who might inform you about these treatments.”

At this point the patient is free to continue treatment or seek another physician. If they wish to allow the unknown beliefs of someone else to determine the medical care they seek is up to them. But it is unlikely many will take give this power over to the physician.

Since this option doesn’t require the physician to use or mention the treatments in question then why is that they have ot already opted for this alternative?

Could it be that some of these “morality” driven physicians are wish to protect their bottom line? If a physician who denies treatments to the patient based on his own values were to inform the patient that this was happening he knows that many, if not most, of the patients would desert him. His “values” are of value provided only the patient pays the cost of them.

If he is honest with his patients, and informs them that he intends to deny them information based on his values, he fears he will lose income. Deception of a patient for profit maximization is not a physician defending his highest moral values no matter what their defenders say.

If a physician has a moral value which forbids him or her from being honest with the patient then it is the physician not the patient who should pay the price for that value. Basic economics tells us that the number of physicians having said moral values will radically decline when they pay the price of their values instead of being able to pass them on to the uninformed patient.

Japanese cancer patients decry limits of "universal" system

2007-02-04T13:19:00.000-08:00

According to legislator Takashi Yamamoto, who was just diagnosed with cancer, “abandoned cancer refugees are roaming the Japanese archipelago.” Patients are told they’ll never get better, even when treatments exist, and many are not even informed of their diagnosis.

Japanese public television showed the stark contrast. In the U.S., multiple specialists meet to discuss a cancer patient’s care. In Japan, a single doctor usually makes the diagnosis and carries out treatment with minimal consultation.

Galvanized by a speech by Yamamoto, the parliament passed a bill calling for more cancer specialists and a permanent role for patients in policymaking.

But while patients want American-style treatment, policymakers are alarmed. With a huge national debt and corporations worried about higher taxes, they say Japan can’t afford to pour money into treatments that can’t extend lifespan by very much.

“America did too much of this and that’s why their medical costs have grown,” said Masaharu Nakajima, a surgeon and former director of the Health Bureau at the Ministry of Health, Labor and Welfare.

Since Japan enacted universal health insurance in the early 1960s, the emphasis has been on a minimum standard of care for all. People must pay a monthly health-insurance fee, and large companies pay also. Coverage decisions, doctors’ pay, and other rules are largely set by the central government.

Medical spending in Japan is around 9% of the GDP, compared with 16% for the U.S., and is lower than in most Western European countries and Canada.

The average physician’s income in Japan is about half as much as in the U.S., and last year was cut by 1.36%, on top of a similar cut in 2002. Japanese doctors complain that they have no time to spend with patients. The experience of seeing a popular doctor is summarized as “a three-hour wait for a three-minute visit.”

Cancer mortality rates in Japan have been steadily climbing and are now more than 250 per 100,000, while U.S. rates are declining and are now around 180 per 100,000.

“Our rights as individuals are not being recognized,” stated lung cancer patient Hidesuke Hashimoto. Mr. Hashimoto, a former math teacher, undertook to study his options on his own, moving along to a different hospital when told there was nothing more that could be done, and sometimes paying out of pocket (Peter Landers, Wall Street Journal 1/11/07).

Commenting on the Wall Street Journal article, Craig Cantoni, a columnist in Scottsdale, Ariz., writes: “Like nationalized health care in other countries, the Japanese system is based on the premise that the state owns your body.” Therefore, “the state can dictate what medical care can be withheld from you, either by policy or by making you wait so long for care that you die in the meantime.”

A dysfunctional American market is not a justification for the change in ownership. “Nor is [it] justified by the fact that Japan spends about half as much per capita on health care as the United States, or by the fact that the Japanese have a longer life expectancy.”

Cantoni warns that if rights are taken away for reasons of efficiency or cost, “no right is safe from do-gooders and busybodies, from politicians and bureaucrats, and from the tyranny of the majority.”

Reprinted from News of the Day: Association of American Physicians and Surgeons.

Price controls and taxes reduce access to medicine

2007-01-30T12:38:00.000-08:00

The beginning of this year marked the introduction of the new amended medicine pricing regulations, which have been a bone of contention for a number of years. The initial regulations were proposed in 2004 and were immediately challenged by the retail pharmacies. The matter was heard in the Cape High Court, Supreme Court of Appeal and finally in the Constitutional Court where it was declared that the regulations were invalid and had to be amended.

The government has committed itself to reducing the cost of medicines and healthcare to patients in an attempt to improve the overall welfare and health of the nation. While the government may have good intentions in wanting to increase access to medicines and good quality healthcare, the imposition of price controls results in many unintended consequences. In the long run these controls will merely compromise SA’s healthcare system and reduce access to medicines.

Price controls are normally promoted and devised under the guise of assisting the poor and alleviating poverty. Yet in almost every case it is the poor that suffer most from price controls. In SA and most other countries, it is the rich that have access to the high volume, low mark-up retailers that can offer cheaper goods in large urban areas. SA’s poor generally shop in low-volume, high mark-up establishments in the townships simply because they are conveniently located. However, price controls tend to penalise the low volume establishments that serve the poor, therefore forcing them to travel to urban centres, incurring costs and inconvenience in order to shop.

The result of the imposition of the price controls is that a number of these low-volume, high mark-up establishments will simply close down. Indeed, the Pharmaceutical Society of South Africa (PSSA) estimates that over 100 small pharmacies have already closed since the introduction of the regulations. Moreover, the society estimates that as many as 75% of pharmacies may be at risk of closing as a result of the regulations. The closure of these pharmacies would severely affect access to medicines and decrease the provision of medical services to isolated communities. The regulations have also discouraged many individuals from entering the field and prompted others to relocate – this in an environment that is already constrained by a lack of qualified medical personnel.

SA has traditionally been a favoured destination for drug companies to conduct research and development because of the sound scientific base, good infrastructure and range of different population groups with widely different social statuses in which to run trials. The drug price regulations will reduce incentives to conduct such trials and invest in scientific infrastructure and knowledge as the ability to make appropriate returns on the investment has been reduced.

Despite the best intentions of the government to make drug prices as transparent as possible, the pricing regulations merely frustrate the efficient functioning of the market. SA is one of the few developing countries that do not levy significant tariffs on pharmaceutical products and devices and it should be commended for this and held up as an example for others to follow. However, the government continues to impose a value added tax (VAT) of 14 per cent on pharmaceutical products and devices. This tax is highly regressive since it disproportionately affects the most vulnerable members of our society.

VAT is counter-intuitive in the sense that it is levied purely to raise government revenue but if one of SA’s objectives is to have a healthy and productive population it makes no sense to levy a tax that penalises the sick. If the government is really concerned about increasing access to medicines it will eliminate all taxes on pharmaceuticals and other medical devices.

The government’s preferred policy of price controls will not result in increased access to medicines. On the contrary, in the long run it will simply serve to reduce access to medicines in SA.

Author: Jasson Urbach is an economist with the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author's and are not necessarily shared by the members of the Free Market Foundation

America's top 20 selling prescription drugs

2007-01-29T11:18:00.000-08:00

#1 Lipitor for high cholesterol, produced by Pfizer. Sales $8.4 billion.

#2 Zocor for high cholesterol, produced by Merck. Sales $4.4 billion.

#3 Nexium for heartburn,, produced AstraZeneca. Sales $4.4 billion.

#4 Prevacid for heartburn, produced by Abbot & Takeda. Sales $3.8 billion.

#5 Advair Diskus for asthma, produced by GlaxoSmithKline. Sales $3.6 billion.

#6 Plavix for heart disease, produced by Myers Squibbs & Sanofi-Aventis. Sales $3.5 billion.

#7 Zoloft for depression, produced by Pfizer. Sales $3.1 billion.

#8 Epogen for anemia, produced by Amgen. Sales $3.0 billion.

#9 Procrit for anemia, produced by Johnson & Johnson. Sales $3.0 billion.

#10 Aranesp for anemia, produced by Amgen. Sales $2.8 billion.

#11 Enbrel for rheumatoid arthritis by Amgen & Wyreth. Sales $2.7 billion.

#12 Norvasc for high blood pressure by Pfizer. Sales $2.6 billion.

#13 Seroquel for schizophrenia by AstraZeneca. Sales $2.6 billion.

#14 Effexor XR for depression by Wyeth. Sales $2.6 billion.

#15 Zyprexa for Schizophrenia by Eli Lily. Sales $2.5 billion.

#16 Singular for asthma and allergies by Merck. Sales $2.5 billion

#17 Protonix for heartburn by Wyeth. Sales $2.4 billion.

#18 Risperdal for schizophrenia by Johnson & Johnson. Sales $2.3 billion.

#19 Neulasta for side effects of chemotheraphy by Amgen. Sales $2.2 billion.

#20 Remicade for rheumatoid arthritis by Johnson & Johnson. Sales $2.2 billion.

Consider now the level of competition. In the top five selling positions there are five different pharmaceutical companies. Among the top ten selling drugs patents are held by nine different companies.

Of the top 20 selling prescription drugs in the United States three of the drugs are owned by Pfizer. But these drugs face stiff competition as well. Pfizer produces Lipitor for high cholesterol but Merck also competes with Zocor. AstraZeneca sells Nexium for heartburn but Prevacid by Abbot & Takeda, also for heartburn, is nipping on their heels and there is also Protonix by Wyeth.. Several drugs compete in the field of treating anemia and rheumatoid arthritis. There are two major drugs competing for the treatment of schizophrenia.

The fact is that the pharmaceutical industry is far more competitive than is often thought.

Will anyone lament Pfizer's loses?

2007-01-29T11:09:00.000-08:00

I can't tell you how often I have heard people whine about the "excessive profits" that pharmaceutical companies earn on some specific drug. A Google search on "pharmaceutical greed profit" turns up well over a quarter of a million hits.

One "activist" is quoted by the World Socialist Web Site as claiming that "Drug companies are killing people by charging excessive prices." and "The greed of AIDS profiteers is killing impoverished people with AIDS."

These activists tend to find a drug that has turned a high profit and harp about it endlessly. Other drugs, which inflict massive losses are not mentioned. Take the case of Pfizer and the drug torcetrapib, a drug that raises good cholesterol and ought to reduce heart attacks. Pfizer, according to the New York Times, has invested over $1 billion in just this drug alone.

It was widely seen as a major break through that would benefit millions. But testing shows it has side effects and it has been scuttled. The head researcher noted: "This drug, if it worked, would probably have been the largest-selling pharmaceutical in history."

And if it had worked, and was the largest selling drug in history, then Pfizer would have been constantly attacked for their greed and excessive profits. Will any activists now lament the $1 billion lost?

Pfizer is cutting staff by 10,000. It has already said it will be reducing its sales force by 2,200. The company says it has to cut its spending by $4 billion. Some of the drugs that it produced, which succeeded, are losing their patent protections shortly. Among them are Zoloft and Zithromax.

Other promising drugs are in the pipeline and may be profitable. But those are several years away from market. The regulatory system on drugs is very time consuming and costly. It can take years to get approval. Some of those "promising" drugs may turn out to be a torcetrapib rerun.

Anti-market "activists" frequently demand that profits for companies like Pfizer be "limited". Yet there is no way to limit losses. And more drugs fail than succeed. For every one drug that goes to market thousands are shelved. And of those that do go to market only 30 percent cover their costs.

The typical scam from "activists" is to take the profitable drug and announced how much it cost to develop just that one drug. They then show how the profits were vastly higher than the costs and cry "unfair profits," "corporate greed". What they ignore is the cost for the thousands of experiments that didn't work, where there are no profits just losses. They ignore the fact that successful drugs must pay for unsuccessful ones. Profitable drugs also pay for the drugs that do make it to market but lose money.

While the costs of the drugs are mentioned the "activists" rarely mention the "savings". And most people never consider this issue.

Someone who is HIV+ can reduce their rate of hospitalization by taking drugs. Yes, they spend more on drugs in the process but they also spend less on hospital care. It is estimated that new AIDS "cocktails" cut hospital costs by $2,000 per year. And the older treatments were less effective. In 1995 the number of U.S. deaths from AIDS was 50,610. By 2000 it had dropped to 15,245.

A paper for the National Bureau of Economic Research by Frank Lichtenberg found: "Replacing 1,000 old prescriptions with 1,000 new prescriptions will increase drug costs by $18,000 but will reduce the number of hospital stays by nearly six. Since the average cost of a hospital stay is $7,588, a total reduction of $44,469 in hospital costs could be expected." Even this underestimates savings "because use of new drugs reduces average length of stay as well as the number of stays." This research found that the savings in non-drug medical expenses "is about four times the increase in the costs of the drugs -- so reducing the age of drugs substantially reduces the total cost of treatment."

But the critics only look at the extra cost for the new medicines and not the extra benefits. One study found that the average 1998 price for drugs introduced in 1992 was $71.49 for each prescription. The older drugs these replaced averaged $30.47. The critic would notice the doubling of the prescription price but ignore that the financial benefits of the drugs for the patient exceeded the additional costs. "[R]eplacing older drugs with newer counterparts would have several important benefits: reductions in mortality, morbidity, and total non-drug medical costs. People taking new drugs were significantly less likely to die by the end of the survey than those taking the older medications. They were also significantly less likely to miss days at work than people taking old drugs."

The bottom line is that newer drugs improve the life of the patient and cut total medical costs. There are cheaper, older, generic drugs that would cut the cost of drugs per year but raise the cost of medical care in general.

The average profit of pharmaceutical companies is higher than the average company but then the research and development costs are much higher as well. An above average return reflects above average costs. And future R&D is paid for from these returns. Less profits mean less investment in future drugs. It is no coincidence that where drug prices are strongly regulated new developments are rare. The sad thing about the torcetrapib failure is not just the $1 billion loss but the future absence of billions in profits that would fund future research as well.

Another dishonest tactic used by "health activists" is to take the marginal cost of additional pill and compare it to the selling price. Say that drug X sells fro $3 per tablet. But once in production the production cost per pill might be 10¢. This is considered proof of the greed of the industry. After all the profit per pill is $2.90. But this assumes zero costs for R&D for this drug and it ignores the costs of drugs that failed to make it to market. The 10¢ may pay for that one pill but where does the money come from for everything else?

As the New York Times noted the failure of torcetrapib is "a big loss for Pfizer and heart patients." The company lost $1 billion in investigating this dead end. And heart patients will see no improvements in their condition.

Now it seems to me the Times headline is very perceptive. What is a big loss for Pfizer is also a big loss for patients. And what would have been a big gain for Pfizer would have been a big gain for patients. Next time some new drug makes record profits I hope the New York Times remembers this headline and what it means.