The Oft-Missed Component When Evaluating European Socialized Health Care

Yes, the Europeans pay less per person for health care.  Is the care as good?

Well, when life-expectancies are adjusted for things that are not amenable to the health care system (like murder rates), Americans have the highest life expectancy in the world, and by far the highest cancer survival rates.

The prices we pay for drugs and medical devices, while high, effectively subsidize the entire world's medical R&D.

Oh yes, and we don't have to wait 6 months to get treated.  The wait time issue is often poo-poo'd by elites in the political debate, but it seems to be an important issue for real people:

In a survey, people were asked how they felt about various forms of medical care for a urinary tract infection or for influenza. While people preferred traditional, office-based care, they would opt to see a nurse-practitioner at a retail clinic if they could save at least $31.42. They would wait one day or more for an appointment if they would save at least $82.12.

The researchers concluded that the appointment wait period is the most important determining factors in an individual's choice on where to seek care for minor health problems such as influenza. Primary-care doctors who fear their business will be undercut by the growing popularity of retail health clinics may want to offer more same-day appointments and walk-in hours."

"This study is the first in the United States to quantify the relative importance of and the utility associated with the main attributes of retail clinics. The utility (willingness to pay) associated with receiving same-day care is more than twice the utility associated with receiving care from a physician. Primary care physician practices, especially in competitive markets, are therefore likely to derive greater competitive advantage by addressing patient convenience features (such as same-day scheduling, walk-in hours, and extended hours) than by reducing fees."

Follow the link for more and a link to the original study.  Patient convenience is the LAST thing government health care systems design for, but apparently, what actual people most want.

I say over and over, yes, we could reduce the cost of medical care (but by increasing the accountability of individuals for paying for their own care, exactly the opposite direction taken by the Obama plan).  But a big reason that we pay more is not because we are stupid and incompetent, but because we can because we are wealthier.  It is incontrovertible that we are wealthier per capital than the Europeans -- is it surprising that we would choose to spend a large portion of this extra wealth on our health?


  1. Dan:

    I agree with you on the need to reduce cost by increasing accountability. Co-pays need to be higher for those (like me) who can afford it.

    Right now, I only pay $25 every time I take one of my kids to their pediatrician. It costs so little, we think nothing of just going. We've probably been there five or six times this winter (lots of ear infections and colds). But we're not paying the full cost of these visits; the insurance company and our employers are. Multiply this by millions of people doing the same, and it's easy to see why costs explode.

    Maybe if we had to pay $100 for the visit (probably more in line with the actual value), we'd think twice about going, or we'd go more often to the Minute Clinic at CVS, where we pay a nurse practicioner to do a quick exam, with no insurance money involved.

    I don't understand why Americans believe they have a right to bargain healthcare supplemented by huge insurance companies and employers. As a society, we're being penny-wise and pound foolish.

  2. Sameer:

    Any study about people's spending habits that is based on "people were asked" is not worth the paper it is printed on.

    Revealed preferences, please. Anything else is blowing smoke.

  3. Sameer:

    I'll also point out that assigning cardinality to utility (vs just ordinality) is complete hogwash.

  4. me:

    There are a number of factors to consider here. One: I frequently run into the argument that something must be qualitatively better because it is more expensive. Let's put that one to rest right away.

    Two: Comparing to "European" healthcare. It is worth noting that there is no such thing. All the nation states of Europe have systems that are structured very differently, both in terms of cost distribution and allocation of procedures.

    Three: Quality sampling. Are there cases where some health care in America is provided much better than some in some European country? Certainly. The reverse, though, is also true. And I can draw on my own experience with respect to quite a few countries world wide, the cost of care and the quality of care. And for that small statistical subset, American care ends up looking rather badly.

    Now, this doesn't mean that American care is bad overall, it might just mean that my sample size is too small. What I noticed, though, was that the prices I paid for substandard to ok care were orders of magnitude larger in the US.

    Which brings me to my point four: the debate around healthcare is framed very much in extremes - it is either world best and criticizing it is amoral, or it is so bad that it needs to be reformed from ground up. Clearly there are some things working very well in American health care. Clearly there are some things that are not working so well. As an engineer, I believe firmly that it's possible to isolate the subsystems that malfunction and make small, targeted improvements that improve the whole.

    We're paying 10 times more for shots, office visits and standard surgeries (again: personal experience) with equal outcomes in quality: that's a candidate for investigation and improvement. I don't buy the "we pay more because we're wealthier" argument - that is simply proof that healthcare could benefit from free market competition (we're not paying ten times more for computers, household appliances or coffee).

  5. Rathtyen:

    There may also be other reasons. On average, European diets are better than US ones, with a healthier outcome. They are also smaller: a small size in the US is jumbo in most other parts of the world.
    Diet is not THE factor, but it is one factor in the equation.

  6. Greg:

    I agree with you and Dan. We don't have insurance at the moment (we'll go for a health saving plan later this year) so we go to the Doc a lot less than we did when we had the full benefit.

    Spokane (WA) has a number of these small clinics, which we've used, and the convenience is definitely worth some premium over the main hospital and whatever drive time/scheduling/wait issues may be involved.

    I definitely think people want convenience and quick answers to their issues. I think our system, generally, does quite well with that. Not that it's perfect, but it's pretty good.

    I expect that the reason that we pay so much more than the Europeans is that we can. Care is available with very little wait and fuss, generally, and with the insurance it's certainly cheap enough. We see little cost on our end (if we have the insurance) so we're tempted to use more than otherwise. If we had to pay real costs then our use would fall way off. we might even learn a little first aid.

    If the Europeans had the same system and similar wealth I expect the quality of their diets would decline and their health care use, and costs, would rise appropriately.

  7. joe:

    I'm living in Italy and the health care here is good for 1978, great pediatricians and nurses,
    but access to anything high tech involves waiting. My wife needed an ultrasound, we had to wait
    2 weeks for the test and a week for the results.

    any appointment with a specialist goes through the GP, and requires a trip to another bureaucracy to
    setup the appointment, meaning you'll lose another morning waiting in lines.

    the big advantage here is that people don't use the emergency room as primary care, so if you do have
    an emergency you go straight to triage and then to see a doctor.

  8. rxc:

    Here in France, the doctor charges are MUCH less than in the US, but we think the quality of care is comparable, or even better in the sense that it is possible to see a doctor quite quickly (we had to wait 4 weeks for an appointment in the DC area, once, and other times the wait was well over a week for non-emergencies). Prescription drugs are cheaper, but OTC drugs are often more expensive (you can't buy them at a place like Costco, but only in small pharmacies). We have no waiting lists for treatment, like they have in the UK and Canada, but the govt also pays for people to take "the cure" (spa treatments) periodically.

    Everyone says that the diets here are "better" than in the US, but I would say that they are just different. Lots more bread, different fats (goose and duck here in the southwest), and different snacks. Portion sizes in restaurants are going up, because restaurateurs have discovered the American marketing strategy (raise postion size a bit and you can make a LOT more money). Mc Do is extremely popular, because it makes itself available to families who want to go out for a meal together, and provides local food, not just hamburgers. Fries are universal - in Belgium they are served with mayo(!).

    One thing that Europeans do more is walk, and the exercise may be a factor. But then, they also drink a lot of strange stuff that is traditional but no one really knows what is in these drinks. Hell, one can always argue that the smokey flavor of scotch is due to polycyclic aromatics that can be "associated" with some desease or another.

    Overall, I think it is very difficult to compare health care systems and their results, because the variability of the people and their cultures is such a confounding factor. Most of this sort of discussion is really just junk science masquerading as informed analysis.

  9. Gil:

    Is longevity a reliable factor for determining freedom? Freedom-lovers just happen to be risk-takers which in turn leads to death in middle-age. Quite frankly, anyone who is born into a place where there's clean water, clean food, clean environment (esp. lack of deadly infectious diseases that blight the Third World) then there's no reason why anyone can't live to be 100 years or so. However since Libertarians kick up a stink when there's retrictions on unhealthful habits - drinking, smoking, drugs, etc., then they're more likely to be drinkers, smokers, drug takers, etc., and more likely to die relatively young.

  10. Stephanie:

    I cannot comment on health care in the US as I do not know all the facts. I am not a US citizen nor do I reside in the US. I thought though that this article may be of interest to Warren and the people who follow his blog.

    This writer is eighty years old and has spent a half century working with handicapped and deprived people and advocating on their behalf while caring for her own workung-class family. She spends her "Sunset Years" in writing and struggling with The System.

    Her article can be viewed on this link.

  11. orthodoc:

    Sameer, no offense, but you're full of it.

    Decision analysis and time tradeoff techniques are utilized all the time, and depend on subjects making value judgments. And these techniques ALWAYS use a cardinal scale, as opposed to a ranking or ordinal value. Try reading the study. The link is here:

    Warren's conclusion is valid: Americans like convenience, and will not tolerate long waits.

  12. frankania:

    Again, If you are paying out of pocket for anything, you will chose the right provider, and pay the "right" price in a capitalist society, because of competition.

    Here in Mexico, we know of nobody who even HAS health-insurance. We all pay cash for doctor visits, medicines, dental work--everything free market and VERY cheap. Clinics charge as low as $1.75 to about $28. Medicines are bought WITHOUT prescriptions. A double cataract operation cost me $1300 including ALL tests, hospital room, everything.