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What Would You Do for $4,298?

Ara Darzi, a former British Minister of Health, and Tom Kibasi, a scholar at Imperial College, have an op-ed this morning defending the British health-care system. It's good stuff, though little of it will be new to readers of this blog. What's weird, however, is what they don't say.

The British health-care system is worth studying for a simple reason: It is insanely, unbelievably, cheap. Not just cheaper than our health-care system. Cheaper than France. Than Canada. Than Germany. Than Japan. According to the latest OECD numbers, America's 2007 health-care costs equaled out to $7,290 per person. Britain spent -- I almost feel like you won't believe me on this -- $2,992. That's a difference of $4,298. Every. Single. Year. And because our costs are growing faster than their costs, that check gets bigger and bigger.

Darzi and Kibasi don't mention that difference in their op-ed. But it's the central distinguishing feature of the British health-care system. It's cheap. It seems to produce outcomes that are arguably as good as ours, or at worst, a little bit inferior. It insures everyone, which our system doesn't do. And no one ever goes medically bankrupt or is turned away because they can't afford care. You can argue whether you prefer it to our system. But the argument isn't British health care versus American health care. It's British health care alongside a $4,298 check or American health care. And I could think of a lot of things that $4,298 could buy me ...

By Ezra Klein  |  August 17, 2009; 11:30 AM ET
Categories:  Health of Nations  
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Comments

"British health care alongside a $4,298 check"

This should be "an annual $4,298". Much more compelling.

Posted by: fluxisrad | August 17, 2009 11:37 AM | Report abuse

What is meant by "per person"? Is that per citizen, or per person actually covered by health care of some kind?

Posted by: KathyF | August 17, 2009 11:37 AM | Report abuse

That's because the Brits use private doctors and clinics so much, out of disgust for the NHS.

There are working single-payer systems in the world, but nobody in their right mind would consider the NHS to be one of them.

Posted by: WashingtonDame | August 17, 2009 11:46 AM | Report abuse

"That's because the Brits use private doctors and clinics so much, out of disgust for the NHS."

Completely untrue. Stop lying.

The NHS isn't a model for US healthcare reform. But as Daniel Davies noted, it delivers consistent second-tier outcomes at third-tier costs, while the US non-system delivers a mixture of first- second- and third-tier outcomes at first-tier costs.

Posted by: pseudonymousinnc | August 17, 2009 11:52 AM | Report abuse

Our local CBS affiliate, WBBM, played this quote, completely unchallenged, by Sen. Shelby over and over again yesterday:

SHELBY: "Well, I think rationing is underlying all of this. There's a lot of denial out there, but you look at the other plans -- you look at the Canadian plan, the British plan and so forth, and you have long lines."

So of course, the Brits might only spend $4,298 but you have to wait in these "long lines" to get care.

Posted by: leoklein | August 17, 2009 11:58 AM | Report abuse

$4,298 could buy you a lot of things. But you forgot to give the top 1% their cut.

Posted by: bcbulger | August 17, 2009 12:04 PM | Report abuse

Ezra, did you see this '"fun fact", provided by Atrios?
"as a % of GDP, the US has greater public expenditures on health care than the UK does. Not total expenditures, we know that. Public expenditures. More big government health care in the US than the UK."
http://www.eschatonblog.com/2009/08/trouble-with-nhs.html

Posted by: Gray62 | August 17, 2009 12:23 PM | Report abuse

Ezra, why don't you have the open threads anymore? I have a question about comparative effectiveness that I've been sitting on, but it doesn't really fit in any one thread. So, for lack of a better venue:

Is comparative effectiveness review supposed to eliminate the use of treatments that simply don't work at all for what they're being used for, or is it to limit the use of long shot treatments? One of the consistent arguments I get from my fiancee (and my soon to be father-in-law) is that a doctor may present a patient with a treatment that has a 15% chance of working. Does using comparative effectiveness mean that person doesn't get the treatment? The primary concern that I seem to run across with compartive effectiveness review is that someone will be sick and not get the longshot treatment that may save their life. Is there anything to that? Also, can you give me an example of a treatment that is used ineffectively that comparative effectiveness review would stop/reduce/eliminate?

Posted by: MosBen | August 17, 2009 12:31 PM | Report abuse

If i had $4298 I'd buy insurance that would actually cover my care when i needed it.

Posted by: visionbrkr | August 17, 2009 12:34 PM | Report abuse

this point should be made every time a repiglican talks about the horrors of Canada, Britain, or some other socialist hellhole. Their costs are around 60% of what we pay for the roughly the same outcomes. A canadian or british system with 40% more money would eliminate the problems of waiting for care, cover everybody, and get better health care outcomes. Why don't we hear this every day on the MSM?

Posted by: srw3 | August 17, 2009 12:49 PM | Report abuse

"It seems to produce outcomes that are arguably as good as ours, or at worst, a little bit inferior."

In what sense aren't their results better than ours? WHO ranks them 18th; US is 37th. Better life expectency. Come on what do we do better? Please don't give survival rates which is the wrong statistic. (If your disease is not dedected, you can't be a survivor).

Posted by: lensch | August 17, 2009 12:59 PM | Report abuse

Visionbrkr, $4298 wouldn't come close to buying you insurance that would cover your care when you need it.

Posted by: tl_houston | August 17, 2009 1:23 PM | Report abuse

If Britain's health insurance plan is so efficient and, crucially, replicable here then, as the US government already controls about half of health care spending in the country, then the US government already has enough money to cover *all* Americans with such insurance - including those who currently purchase it privately - without raising taxes a smidge.

Of course, American doctors are accustomed to getting paid more and American patients of any means are accustomed to nicer surroundings and readier access to technology. So it's questionable whether most American physicians and patients would voluntarily avail themsevles of such and coverage even were it avaiable at a bargain price and whether doctors would sign on as providers.

Posted by: tbass1 | August 17, 2009 2:05 PM | Report abuse

"If Britain's health insurance plan is so efficient and, crucially, replicable here"

It isn't replicable. It's a product of its time, as is Canada's Medicare. It makes the point that on a strict cost basis, state-run provision delivers decent outcomes on the cheap for the vast majority of healthcare.

The countries that offer better models for the US -- through reform that isn't hamstrung either by exceptionalism or having legislators in the pocket of healthcare profiteers -- sacrifice some of those savings for increased flexibility.

The function of the NHS in the US debate is simply to be a boogieman for the right. And it's not even the thing itself, but an imaginary NHS cultivated over decades, and perpetuated by liars and con-artists like Dick Shelby (and WashingtonDame in this thread) in which grannies are put in a mincer and Dickensian urchins line up in for hours the rain to see the doctor. (As opposed to the US, where people actually do line up for hours, as the health fair in Inglewood made clear.) It has no more in common with the NHS than "Deliverance" does with America.

Posted by: pseudonymousinnc | August 17, 2009 2:21 PM | Report abuse

"If Britain's health insurance plan is so efficient and, crucially, replicable here"

It isn't replicable. It's a product of its time, as is Canada's Medicare. It makes the point that on a strict cost basis, state-run provision delivers decent outcomes on the cheap for the vast majority of healthcare.

The countries that offer better models for the US -- through reform that isn't hamstrung either by exceptionalism or having legislators in the pocket of healthcare profiteers -- sacrifice some of those savings for increased flexibility.

The function of the NHS in the US debate is simply to be a boogieman for the right. And it's not even the thing itself, but an imaginary NHS cultivated over decades, and perpetuated by liars and con-artists like Dick Shelby (and WashingtonDame in this thread) in which grannies are put in a mincer and Dickensian urchins line up in for hours the rain to see the doctor. (As opposed to the US, where people actually do line up for hours, as the health fair in Inglewood made clear.) It has no more in common with the NHS than "Deliverance" does with America.

Posted by: pseudonymousinnc | August 17, 2009 2:21 PM | Report abuse

tbass, but the most important point, which Ezra has mentioned about a million times, is that nobody is promoting a switch to an NHS-like system in the U.S. Instead, they're promoting reforming the system we have to patch up some of its biggest flaws, but the opposition consistenly bring up the NHS as a nightmare scenario. This response is a) that the Brittish receive comparable care to people in the U.S. and 2) they pay less than half what we do.

It's entirely possible that an NHS-like system wouldn't work here (it may, but it's possible that it wouldn't), but nobody's proposing an NHS-like system, so conservatives should stop baselessly demonizing it.

Posted by: MosBen | August 17, 2009 2:33 PM | Report abuse

If you think British health care is cheap you should look up Singapore health care.

Posted by: pm23184 | August 17, 2009 3:39 PM | Report abuse

From what I've read, the NHS is pretty good at some things, not so great at others, but some of the main complaints are that there aren't enough doctors in the system and that in order to save costs, they scrimp a bit on the conveniences (meaning that your stay in the NHS hospital might not be as comfortable as a stay in an average for-profit American hospital, although the treatment success may not actually vary much).

They get that by basically squeezing on both sides of the health care system - supply and demand - for savings, whereas most other systems (like Canada, France, and Germany) usually only squeeze on the "demand" side by setting reimbursement rates.

Posted by: guardsmanbass | August 17, 2009 3:50 PM | Report abuse

One sticking point will be persuading US doctors to accept UK salaries....

Posted by: tomtildrum | August 17, 2009 4:02 PM | Report abuse

Ezra,

There are two important points you should have made.

First, perhaps you missed stating this because you're young and single, for a family of four that's $17,192 every single year.

Second, a very important point you should have made is the risk.

Losing $17,192 every year is a lot less bad than losing an average of $17,192, but most years you lose less, but you always live with the risk that your family will be financially ruined, and perhaps not get all of the health care they need, if you lose your family's insurance, or a family member get's very ill and the deductibles and lifetime limits bankrupt you.

Risk greatly reduces utility (quality of life); that's why the risk return tradeoff is a long established cornerstone of both academic and practitioner finance.

Posted by: RichardHSerlin | August 17, 2009 5:42 PM | Report abuse

The NHS is indeed worth consideration. A history of the NHS is available at http://www.nhs.uk/Tools/Documents/HistoryNHS.html and I would suggest reading the entries for 1952, 1980, 1990, 1991, 1998, 2000, 2002, and 2004.

The 2004 entry is an interesting summary:
"All patients waiting LONGER than SIX MONTHS for an operation are given a choice of an alternative place of treatment. [...]
NOWADAYS you can choose where and when to have your treatment from a list including local hospitals, NHS foundation trust hospitals across the country and a growing number of independent sector treatment centres and hospitals that have been contracted from the private sector.[...]"

It took only 56 years to achieve a degree of choice for those who wait more than six months for needed care. If this were to happen in American, a man now of 25 years of age might achieve a degree of choice by age 81!

Posted by: rmgregory | August 17, 2009 7:21 PM | Report abuse

rmgregory - You think we we have choice here? Your insurence compnay tells you where to go. If you are lucky you get a short list of physicians to pick from. I had very choice until I got medicare. So the UK is still ahead of us.

Posted by: lensch | August 17, 2009 7:32 PM | Report abuse

One sticking point will be persuading US doctors to accept UK salaries....


What Ezra didnt bother to read up on is that PCPs in the UK get paid MORE than PCPs in the United States, sometimes up to 30% more. I know Ezra is full on hard about this rant that all high healthcare costs must be caused by doctors, but the UK example shows thats not the case.

The difference between UK and US doctors is specialist salaries. In the UK, specialists make about double what PCPs get. In the US, its often as much as 7-10 times more.

Most doctors in the USA and UK are primary care doctors, so most doctors would be happier under a UK style system because they'd actually get a pretty good salary hike. The specialists would still make more than PCPs, just not 10 times more like in the current US system.

Posted by: platon201 | August 17, 2009 7:44 PM | Report abuse

"And I could think of a lot of things that $4,298 could buy me ..."

Such as a private health insurance policy to give you actual health care?

Posted by: Vizcacha | August 17, 2009 8:35 PM | Report abuse

"It took only 56 years to achieve a degree of choice for those who wait more than six months for needed care."

For *elective surgery*. How's your HMO doing with that?

platon's right about PCPs, but misses one key point: PCPs are considered the linchpin of the system in both the UK and Canada, and paid accordingly; in the US, PCPs are the red-haired stepkids of the profession. That's messed up.

And Vizcacha? Go and join WashingtonDame in the trolls, liars and BSers corner.

Posted by: pseudonymousinnc | August 17, 2009 10:41 PM | Report abuse

pseudonymousinnc -

"It isn't replicable."

Precisely the point of my post. But it's also true that, even were Obama to get the single payer system he would prefer, we would not be able to reduce our costs to the level found in the UK and, IMO, many people would be disatisfied with the care.

"It makes the point that on a strict cost basis, state-run provision delivers decent outcomes on the cheap for the vast majority of healthcare."

Most of the benefit of public insurance provision could be achieved at far less cost than the current bills with greater investment in public health measures. That's where the best bang for the buck is to be had. Instead our government peversely invests most of its trillion dollar+ health care budget on the middle- and upper-class elderly. That's poor value for money.

"The countries that offer better models for the US -- through reform that isn't hamstrung either by exceptionalism or having legislators in the pocket of healthcare profiteers."

All of the private insurers' profits amount to only about 1% of nation's health care spending. Even if you were to eliminate all profits from health care industry you'd only make health care very mariginally more affordable and, more importantly, you would not alter the trajectory of health care costs. Many of the largest health insurance plans are not-for-profit plans, anyway. So there are NFP insurance options to be had already.

"As opposed to the US, where people actually do line up for hours, as the health fair in Inglewood made clear."

People lined up for free money for their school-age children in NYC this past week despite the fact that the government guarantess "universal" education that is free at the point of use. People will always line up for free goods and services.


Posted by: tbass1 | August 18, 2009 4:22 PM | Report abuse

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