Thursday, November 10, 2011

International Healthcare Comparisons

Some years back, I had a post criticizing the widely cited (and often misrepresented) WHO study comparing medical care in a large number of countries. More recently, an online discussion resulted in someone pointing me at a book by Sheila Leatherman and Kim Sutherland, aimed mainly at evaluating the British National Health Service but with a number of international comparisons, in most cases among the U.S., UK, Canada, Australia and New Zealand. Parts of the book are available online at Google Books.

Judging by the information on the pages shown, the widely believed claim that the U.S. not only spends more per capita on health care than other developed countries but also gets worse results for its money is not supported by the evidence. The webbed parts of the book contain the following comparisons (pp. viii-xviii):

For “mortality from causes considered amenable  to healthcare,” “in 1998 the UK had the highest mortality rates of the five countries compared.”

“England continued to have the highest breast cancer mortality rates among these comparator countries.”

“Of the five countries compared, the US had the highest survival rates from breast cancer, ...”

For colorectal cancer, “New Zealand had the highest mortality rate ... and the US had the lowest.”

“In 2001, England's mortality rate from stroke ... was lower than that in Australia ... but higher than that in the US ...”

“82% of UK respondents indicated that they were treated in [Accident and emergency] in less than four hours, a figure broadly in line with comparator countries (AUS 87%; CAN 74%; NZ 86%; US 87%).

“Patient reports of access to primary care within 48 hours saw the UK … outperform both the US and Canada” (Australia and New Zealand did still better).

“In response to a question regarding whether recent [Accident and emergency] visits would have been necessary if appropriate primary care had been available … the UK had the best result.”

“The UK had the lowest level of health consequences resulting from … errors and mistakes.”


I think these are all of the pieces of information shown that provide information on the relative performance of either the U.S., the U.K. (or in some cases England), or both, although I might have missed something. I am not including various input measures.

By my count, U.S. medical outcomes (including things such as speed of treatment) are superior to U.K. outcomes (in some case English outcomes) on five different measures, inferior on three. On two measures the U.K. (or England) is the worst of the five countries considered, on two the best; on three the U.S. is the best of the five (counting one tied for best), on none the worst. 

There are four pure outcome measures, mortality and survival rates from various causes. The US was superior to the UK on all of them, best of the five countries on two. The UK was worst of the five countries on two.

The overall conclusion, based on this (very fragmentary) data, is that U.S. healthcare outcomes are on the whole better, not worse, than UK healthcare outcomes.

These results might change if I had a chance to look at the entire book. Unfortunately, neither the library at GMU, where I’m currently visiting, nor the library at SCU, where I teach, appears to have it. If by any chance someone reading this has access to the book, I would be interested in a more complete list of comparisons.

Two other points in the book struck me. Judged by per-capita spending on health the U.S. is  the worst of the five, as I would expect, but North Ireland and Wales are close behind, which surprised me a little.

Also, the text has, under “Waiting for elective surgery,” the information that “The UK in 1998 and 2001 had high numbers of patients waiting: and in 2000 had long waits for elective surgery, relative to comparative countries.”

That’s a charge often made against the English system by its critics and routinely denied by its supporters. In this case it is coming from authors whose speciality seems to be the study of NHS performance.


At 3:12 PM, November 10, 2011, Anonymous Anonymous said...

"That’s a charge often made against the English system by its critics and routinely denied by its supporters."

I think it's broadly agreed that the UK has a penny pinching system. Who are these "supporters" who deny it?

At 8:14 PM, November 10, 2011, Anonymous Nightrunner said...

Dont we spend twice as much per cap as UK? If we did better per $, now that would be a surprise.

At 10:59 PM, November 10, 2011, Blogger Jonathan said...

As an (expatratriate) Englishman, I can say that tales of long waiting times in the NHS are common; I'm surprised that anyone attempts to deny it. For instance, I seem to remember my late grandmother waiting six months or so for a hip replacement operation.

Despite such tales, the NHS continues to enjoy very wide popularity in Britain, which seems odd to me. No political party can afford to seem hostile to it.

At 4:21 AM, November 11, 2011, Blogger David Friedman said...

"Dont we spend twice as much per cap as UK?"

According to the graph on page xxvii of the book I linked to, we only spend about 15-20% more (that's eyeballing it).

I don't know if we do better or worse per dollar. I was initially responding to people who claim that we both spend more and get worse results.

At 4:55 AM, November 11, 2011, Anonymous Nightrunner said...

David said: According to the graph on page xxvii of the book I linked to, we only spend about 15-20% more (that's eyeballing it).

Understood that you discuss particular book. The consensus on spending (obvious disclaimer: i am not a healthcare economist) seems to be reflected in, for example, .

At 7:34 AM, November 11, 2011, Anonymous Douglas Knight said...

Survival rates are not pure. They depend on diagnosis.

At 7:46 AM, November 11, 2011, Anonymous Anonymous said...

Amazon (US) has a few used copies for under $10 including shipping.

At 7:51 AM, November 11, 2011, Anonymous Snorri Godhi said...

You might also be interested in a comparison of the UK to continental Europe:

The gist seems to be that UK health care is both more socialist and less effective (with similar levels of expenditure) than continental health care. But I have not yet read it through.

At 8:51 AM, November 11, 2011, Blogger ClassicalLiberal said...

You may have seen this study on the WHO rankings from Cato but it addresses some interesting points about their shortcomings. 1) While it penalizes a country for households that are likely to become impoverished from health costs, “it also penalizes a country because some households are especially unlikely to become impoverished from health costs.” The greater quantity of the latter, the worse the ranking will be. 2) “They measure relative differences in quality, without regard to the absolute level of quality.” If a country has poor quality of care but they have a more equal distribution, they rate higher than a country with better overall care with greater inequality of distribution. 3) QA and OP rankings are misleading, have an 80% margin of uncertainty interval per country, and often get misinterpreted. 4) The WHO approach holds health systems responsible not just for treating lung cancer, but for preventing smoking in the first place; not just for treating heart disease, but for getting people to exercise and lay off the fatty foods.

There are several factors that drive up costs and one such factor is mandates. In the US, CAHI (2009) estimates that mandated benefits currently increase the cost of basic health coverage from a little less than 20% up to 50%, depending on the number of mandates, the benefit design and the cost of the initial premium.

Maybe SimpleCare and MinuteClinics will catch on for more basic services. That is one aspect of medical services I would like to see more of.

At 9:36 AM, November 11, 2011, Anonymous Anonymous said...

I'm not seeing any mention of US spending in that graph on page xxvii.

At 2:41 PM, November 11, 2011, Blogger David Friedman said...

Thanks for pointing out the availability of used copies of the book--I've ordered one.

At 2:44 PM, November 11, 2011, Blogger David Friedman said...

"I'm not seeing any mention of US spending in that graph on page xxvii."

Oops. Mea Culpa.

I thought the top line was U.S., but it's Scotland.

At 3:37 PM, November 11, 2011, Blogger jimbino said...

I'd be far more interested in seeing stats on how much each country discriminates in medical care based on sex, age, race, marital status, family status, residence, etc.

I know that in the USSA, when it comes to health insurance:

Men are cheated because they don't live as long and under-utilize healthcare when alive;

Single men in their 20s subsidize everybody, since they seldom see a doctor, and women of their cohort spend billions just for perinatal care;

Kids get free care, subsidized by the non-breeders;

Married couples are subsidized by singles and cohabiting couples, both gay and straight;

Breeders make out like bandits, since family premiums usually amount to merely twice the premium for a childfree single.

Medicare and Medicaid are not available to those Amerikans who reside overseas, regardless of the fact that they have paid lifelong into those programs. Obamacare will not only be unavailable to Amerikan expatriates or tourists, but they will be charged to support it unless they both have a "tax home" outside the USSA and stay more than 330 days outside the USSA.

Give me a free market in health care any day. I do not participate in insurance, Medicare or Medicaid, and I am determined not to participate in Obamacare.

I would like to know what the situation is in Estonia, with a flat income tax, or in Hong Kong, with a 15% maximum income tax.

At 5:39 PM, November 11, 2011, Blogger Xerographica said...

So what would happen to the healthcare debate if taxpayers could directly allocate their taxes? It would seem that the amount of funding that public healthcare received would determine the percentage of the population that qualified for coverage.

Do you defend anarcho-capitalism primarily from a "results" (consequentialist) or "rights" (self ownership) based perspective?

Personally, I appreciate the subjectivity of moral ethics and have set them completely aside to make the "results" based argument that forcing taxpayers to consider the opportunity costs of their tax allocation decisions is the only way to guarantee the best possible use of public funds.

When I made this argument on the Ron Paul forum a fervent supporter of self-ownership had this to say..."Being allowed to choose my rapist IN NO WAY renders the fact that I'm to be raped more tolerable."

Honestly I laughed out loud when I read his statement. If we can intuitively appreciate having some choice in the matter of who would rape us...doesn't it make sense to want to have some choice in the matter of who "steals" our taxes?

I know your time is very valuable but I'd really appreciate hearing your thoughts on the value of pragmatarianism. If you get a chance here are a few pragmatarian questions.

Well...while I'm at your interest in WOW primarily based on PVE or PVP? My favorite thing in WOW is managing to win a BG that I was almost certain that my side had lost. So I'd have to say that the "Don't Get Cocky Kid" achieve is probably one of my favorite achieves.

At 7:32 PM, November 11, 2011, Blogger David Friedman said...

1. I generally prefer consequentialist arguments. I think I understand economics better than I understand moral philosophy, and possibly better than anyone understands moral philosophy.

2. In WoW I mostly play PvE.

3. I don't think that letting taxpayers allocate their taxes among options provided by the government solves the fundamental problems of government.

At 9:58 PM, November 11, 2011, Blogger Xerographica said...

Thanks for your response. Isn't the fundamental problem of government that of inefficiency?

According to Hayek's concept of partial knowledge there should be a significant information disparity between 150 million taxpayers and 535 congresspeople. This significant information disparity would indicate that there is a significant allocation disparity between the current allocation and an allocation determined by taxpayers.

So to solve the problem of allocation inefficiency we would just allow taxpayers to directly allocate their taxes. That would just leave the problem of productive efficiency. But allowing taxpayers to directly allocate their taxes would open their eyes to clearly see how their hard earned taxes were being spent.

If I go to the Environmental Protection Agency website and make a "donation" of $1000 then I'm going to expect that I get the most bang for my buck. What happens when I realize that I would have gotten a better return on my $1000 if I had made a donation to a private environmental organization?

Something would have to give. Right now we make these great economic arguments for getting rid of various departments...but nothing makes a stronger argument than taxpayers seeing their own individual hard earned taxes be wasted.

At 9:24 AM, November 12, 2011, Anonymous libertarian_adi said...

Let me start with a quote from Milton Friedman:

"Legislation cannot repeal the nonlegislated law of demand and supply: the lower the price, the greater the quantity demanded; at a zero price, the quantity demanded becomes infinite. Some method of rationing must be substituted for price, which invariably means administrative rationing."

I have two things to add to this discussion and the last one (II) ends with a question for professor Friedman.


Which country leads the OECD nations on drug innovation?

The United States, despite having the FDA.

Which countries freeload on American drug innovations?

All the others.

How bad would Britain with the NHS and other nations with nationalized systems perform without American medical technology?

Probably very bad.

Having a nationalized system with price controls, poor innovation and dependence on American innovation, "universal coverage" but poor access to medical care and batshit crazy wait times, is not something to be proud of.


Speaking of a free market in medical care, Kenneth Arrow published an influential paper on this topic, arguing that due to information asymmetries, a free market isn't likely to lead to optimal outcomes (or something like that).

Paul Krugman even discussed this paper of Arrow's and said markets can't cure our problems.

What do you think about this professor Friedman?

At 3:44 AM, November 13, 2011, Anonymous Andy Z said...

This is perfectly consistent with what everyone says about the US medical care system.

It's great at handling the expensive care--cancer, transplants, heart surgery.

it's horrible at handling the conventional things. Preventative care. Basic care.

Guess which one of these has a better return on investment?

Helping an 80 year old live another two years, or helping a 40 year old have extra years of productive life?

Guess which one of these earns more profit?

Guess which one of these causes health costs to decrease (and decreases profits)?

At 9:01 AM, November 14, 2011, Anonymous Nightrunner said...

Yeah, right, US innovation and EU freeloaders.
In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, with a return of 17% on revenue." ...
In the US, drug companies spend $19 billion a year on promotions.
Revenue 67,809B
Income 19,337B
Cost 48,472B
R&D 7,599B
R&D %: 15.67

What a great innovation - spending 16% (taxpayer-subsidized) on R&D costs. Those evil EU freeloaders with their commy medicine sure suck off from US.

At 3:17 AM, November 18, 2011, Blogger Ed said...

A lot has changed in the NHS since 2001. It is much improved now. A problem in previous years was that it paid relatively low salaries to doctors, which prompted some of them to emigrate. Salaries are much higher now.

A big advantage of the NHS is the removal of insurance firms' arguing over whose fault it is. That is a big waste of money. It's cheaper just to treat everyone and not wasting time pointing fingers.

The NHS is formidably popular. The British people would sooner privatise the police than privatise the NHS.

At 8:31 PM, November 27, 2011, Blogger Damien Sullivan said...

Some statistics I collected back in 2006.
By life expectancy and infant mortality the UK only slightly outperforms the US, and is near the bottom of the universal health care pack. OTOH, it spends under half of what the US does per capita, and less of its GDP than most other rich countries.

At 2:39 AM, November 28, 2011, Blogger Amara said...

Jimbino: "I would like to know what the situation is in Estonia, with a flat income tax."

See here:

The Baltic States are advertising themselves as a medical tourist destination due to their high quality service to cost ratio. My relatives say the quality is due to the medical practitioners working hard to catch up to the rest of the EU, attending workshops and conferences to learn about the latest techniques. The average citizen health care is probably still lagging western Europe due simply to not enough equipment.

My own experience of my IVF at an Estonian fertility clinic was great, my care was the highest quality equaling or exceeding what I saw in the fertility clinics in Colorado and the cost was 1/10 of what I would have paid in the US.


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