Health care in America

Read today`s piece by Paul Krugman in the NYTimes called The Best Places to Get Sick which is a commentary on rising US health care costs. He analyzes the so-called privatized healthcare system in the US which he argues is increasingly expensive relative to other rich country`s health systems while not yielding desirable results in health indicators like overall life expectancy and infant mortality. He cites some interesting stats:

In 2002, the United States spent $5,267 on health care for each
person ($2,364 – 45% by the government on Medicare and Medicaid) while Canada spent $2,931 per person ($2,048 from the government) and France spent $2,736 per person ($2,080 was government spending).

His main argument is that Americans spend more on healthcare than their counterparts but do not receive more care. He attributes this difference to higher doctor`s wages, American health care system overpays for the same drugs, and too much is wasted in admin costs (31 cents per dollar compared to 17 cents in canada).

Not bad but I wish he went more in depth about things like legal system and practice (we are much more litigous in this country than France or Canada) which contributes to admin costs (ie HIPA), or compares the health care quality of the top 10% of income earners (more and better tertiary care in the US) and also that American consumers subsidize research and development cost of new drugs for the world while french and canadian consumers have the benefit of buying the cheap generics that are made possible by the American pharmaceutical market. And what about consumption? Doesn`t the average american lead a much unhealthier lifestyle than their counterparts (longer working hours, more stationary, higher caloric intake, less fiber, etc etc)

I can`t say I am a big fan of the increase in doctors salaries (driven by the increase in salaries of specialists that are getting paid more for treating a smaller and more focused patient base than before while primary docs salaries have stayed relatively constant) but I do believe there are other factors at work which complicate the problem. The solution may be a combination of many behavioural changes over a long period of time: work-life balance, diet, exercise, doctors that value what they do rather than how much they are paid.

The only problem with such a long term solution is that the American consumer increasingly values short term solutions. We think that with all the breakthroughs in medical science, there are (or will soon be) fast acting magic pills that will fix all our problems and allow us to get back to running the rat race ASAP.

Even so, how does one ultimately counteract capitalism which incentivizes doctors to specialize and make more money, consumers to extract more and more services they don`t need from insurers, and already unhealthy people to eat, drink and smoke more?