I was already skeptical of these numbers when I first heard them, because health performance statistics are affected by many things besides healthcare, such as crime, nutrition, and lifestyle choices. But I had assumed the statistics at least measured actual health outcomes. It took a post from David Masten at Distributed Republic to make me realize I had assumed incorrectly. Masten draws attention to this crucial little sentence (emphasis added):
The rankings are based on general health of the population, access, patient satisfaction and how the care’s paid for.Including the mode of payment when measuring the system’s performance is, as Masten astutely observes, assuming what you’re trying to prove. After all, the whole question is how healthcare ought to be financed – publicly or privately, with insurance or out-of-pocket payments, etc.
To see the illogic for myself, I downloaded the relevant WHO report and the study it was based on. But before I could verify the factors included in the health performance index, I had to figure out which index to look at. It turns out that the U.S. ranks 37th on the “overall performance index.” But on this index, while it’s true that France is #1, Canada does not rank in the top 10 – it’s only #30. There is another index, “overall health system attainment,” on which the U.S. ranks #15 (while France and Canada are #6 and #7, respectively). As far as I can tell, the two indices are based on the same underlying data, but with the “overall performance index” calibrated according to some measure of how well the country is theoretically capable of doing. I’m still trying to figure out exactly how this calibration works. In any case, it looks an awful lot like someone cherry-picked the results to make the U.S.’s relative performance look worse than it is. Contrary to CNN.com (and possibly Michael Moore – I haven’t seen the movie yet), there is no index that has both Canada and France in the top 10 and the U.S. at 37.
But back to Masten’s point. Both of these indices include “financial fairness” (FF) as a factor with 25% weight in measuring the system’s performance. FF is measured first by finding a household’s contribution to health expenditure as a percentage of household income (beyond subsistence), and then looking at the distribution of this percentage over all households. The wider is the distribution, the worse a nation will perform on the health performance index (other things equal). But it should not be surprising at all that a larger percentage of poor people’s income will be spend on health than would be spent by the rich. Insofar as healthcare is treated as a necessity, we should expect that people will spend a decreasing fraction (not a decreasing amount, but a decreasing fraction) of their income on healthcare as their income increases. Rich people tend to spend a larger percentage of their income on luxuries than do the poor.
More importantly, the distribution of household contributions will obviously decline when the government shoulders more of the health spending burden. In the extreme, if the government pays for all healthcare, every household will spend the same percentage of their income – zero – on healthcare. In other words, this measure of health outcomes necessarily makes countries that rely on private payment look inferior.
It gets worse. The ostensible reason for including FF in the healthcare performance index is to consider the possibility of people landing in dire financial straits because of their health needs. It’s debatable whether this factor deserves inclusion in a strict measure of actual health performance – but let’s suppose it does. FF does not actually measure exposure to risk of impoverishment. FF is based on cubing (!), for each household, the difference between that household’s contribution and the average household’s contribution to healthcare. Consequently, FF is negatively affected by households that spend a larger percentage of their income on healthcare than others. But FF is also negatively affected by households that spend a much smaller percentage of their income on healthcare than others! This is senseless, but it’s a natural result of focusing on distribution instead of the effectiveness of the healthcare people receive.
More later.
[UPDATE: See also Part 2 and Part 3.]
15 comments:
Glen,
Notwithstanding whatever problems exist in the WHO's methodology, are you contesting either of the following claims:
(1) the U.S. gets a relatively poor return on its health care spending;
and/or
(2) U.S. health outcomes -- measured by a variety of population health indices -- place it somewhat below average for industrialized nations.
Some version of the above two claims are generally accepted by the vast majority of health policy commentators, so I would be interested in knowing if you disagree, and why you would. If you do not disagree, I'm not sure what policy implications follow from pointing out flaws in the WHO ranking methodology.
www.medhumanities.org
Daniel -- I'm not convinced of those points. I'm not saying they're false, but part of the reason the "vast majority" of health policy commentators accept them is that they're looking at the WHO rankings. My point in this post, and the next one, is that these rankings are highly problematic.
It is undoubtedly true that the U.S. healthcare system has problems. No debate there, although we could have a debate about the causes. In my assessment, most of the causes relate to current tax policy, mandated benefits laws, and other government interventions. And, it should be observed, other countries' healthcare systems have problems, too. If we want a fair international comparison of problems, we need performance measures better than the WHO rankings.
Glen,
The WHO rankings are hardly the only ones indicating that the U.S. performs significantly worse compared to other industrialized nations, but I appreciate the clarification.
As to the causes of our health care problems, I am well aware of the prevailing views of the causes on this blog. Though I do not feel blog comments are an appropriate venue to air such discourse, I will say that I most assuredly disagree with the generally-stated views on this blog.
What about Daniels, Kawachi, and Kennedy's work on social epidemiology? The existence of a health gradient with a strong correlation to income inequality has been demonstrated for hundreds of years? Are you persuaded by the data presented by the social epidemiologists?
In any case, thanks for the clarification.
Daniel:
U.S. health outcomes -- measured by a variety of population health indices -- place it somewhat below average for industrialized nations.
This may be true, but to blame this on our not having socialized health care is fallacious. The United States leads the world in obesity, which negatively influences health outcomes but is almost certainly not a product of our health care system.
I remember hearing a year or two ago about a study that found that Americans were less healthy than Britons at all income levels, even in the highest income quintile. AFAIK, it's more or less universally agreed that well-off Americans get better health care than well-off Britons, so it's clear that health outcomes are not a simple function of consumption of health care.
Also, what's "a variety of population health indices"? Almost all the time I hear the claim about US health outcomes made, there are just two indices adduced as evidence: life expectancy at birth and infant mortality. This is a terrible pair of numbers to use to measure health system quality, as:
(a) it's really only 1.5 numbers (since LE at birth, as opposed to say LE at 20 or 40 or 60, is dramatically affected by infant mortality)
(b) both numbers are, as Brandon says, heavily influenced by factors that have nothing to do with the health care system.
If you look at other metrics (e.g. cancer survival rates) that are more plausibly directly connected to the health care system, the US does much better; Olaf Gersemann in _Cowboy Capitalism_ has a nice roundup of some such stats.
Brandon,
I neither said nor implied that our problems are attributable to the lack of national health care, which is not necessarily socialized medicine. In socialist systems, the government controls the means of production. That is not the case in GB, for example, where docs are independent contractors.
What this thread is about is assessing the nature of the problem. If we agree that the U.S. does have health care problems -- and I was trying to ascertain whether Glen does believe this -- then we can move on to assess how best to remedy that problem.
Anony--
As to the variety of indices, the IOM, which is hardly a bastion of socialism, has a 2002 report on public health that analyzes a number of these matrices.
Daniel:
Fine. But it doesn't necessarily indicate any problems with our health-care systems. The US health-care systems (or some of them, anyway) may actually do a very good job of caring for a uniquely unhealthy population.
The existence of a health gradient with a strong correlation to income inequality has been demonstrated for hundreds of years?
It's worth pointing out that the "Black Report" in the UK came up with similar findings, despite the UK having a government funded health system.
The point surely is that creating a national health service does not (by itself) solve this problem.
This is a test
I have just found your site as a result of searching for a critique that I read a few months ago of the COmmonwealth Fund's methodology. Can anyone point me to it? There is discussion of the US outcomes being influenced by a more heterogeneous population, higher percentage of immigrants, etc.
cubing the difference will account for a negative sign... if two families would cancel each other out normally, they will also cancel each other out if they cube the differences, they wont add, they'll still subtract.
Anon -- that would be true, except that in their formula they take the absolute value of the cubed difference. So there's no negative sign.
NEWSFLASH - the 2009 WHO ranking for the United States is now 72nd out of 191 nations. You barely edged out Cuba.
This is just one more reminder that the private sector and competitive market forces, not the federal government, are the best means to meeting our country's rapidly expanding health care needs.
I was looking for a way to try and do something positive about it, and just signed a petition with the U.S. Chamber of Commerce here to help emphasize that. We need to get involved!
Anon of 6/23/09 -- There hasn't been a new WHO healthcare ranking since 2000. The number you cite (72nd of 191) is the U.S. rank for one of the five components in the WHO's 2000 ranking.
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