Americans die younger and spend more years disabled than our counterparts in Canada and Europe. Our infant mortality rate is higher, too. And yet, even though the most common objections to nationalized health care from its opponents in the U.S. are that it’s too expensive, too restrictive and too inefficient, we spend way more money on health care than they do. Why, if our health care is the best in the world and we spend more money on it than anyone else and the free market is a marvel of efficiency, aren’t our results the best in the world?

In 2004, the U.S. spent nearly twice as much money or more on health care per capita than any of the other countries featured in Michael Moore’s new film, Sicko. We spent $6,096; France, Canada, the United Kingdom and Cuba spent $3,464, $3,037, $2,900, and $230 respectively. Yet all of those countries fared at least as well and most often considerably better in the statistical categories mentioned above. Only dirt-poor Cuba lives down to U.S. life expectancies, and even that country has an infant mortality rate 30% lower than ours at 5/1000 live births, the same as Canada and the U.K. (France comes in at 4/1000; ours is 7/1000).

And Moore wasn’t cherry-picking: you can expand the selection considerably and find similar results, as this comparison of two dozen countries shows. None of them except Norway (with a per capita income a third higher than ours; I lied, we’re not really the richest anymore) spend anywhere near what we do, and but the people in all of them fare at worst only a little less well and generally better, especially on infant mortality.

Our national disgrace of a health care system isn’t the only factor contributing to our shoddy performance in these areas — the U.S. has a much higher homicide rate than other developed countries, for instance, which drags down the life expectancy figures a bit, and the death rate from injuries among children under five years old in the U.S. is anywhere from 20% to more than 100% higher than in the Sicko countries — but it’s a safe bet that leaving nearly 20% of the population uninsured and much more of it underinsured is a big factor.

Despite the obvious drawbacks of leaving those tens of millions inadequately served or completely unserved, and despite the escalating failure of the for-profit health care sector to contain costs and provide affordable, comprehensive coverage for all, critics of the systems in other countries insist that we’re better off with what we have than they are with what they have. Let’s look at some of their arguments.

National Health Care Is Too Expensive

We hear a lot about how the cost of providing universal health care is breaking the bank in countries that do it. But among the Sicko countries — Canada, Cuba, France and the U.K. — all spend a considerably smaller percentage of their budgets on health care than we do. And again, that’s not cherry-picking from among the countries with universal care: among that larger group of countries we looked at, only New Zealand and Australia spend about the same percentage as we do, but, unlike the U.S., neither of those countries leaves anyone uncovered. And although both countries offer a mix of government funding and private plans, the percentage of health care paid for by the latter is much, much smaller than in the U.S.— 32.5% in Australia and 22.6% in new Zealand, as opposed to 55.3% in the U.S.

What this means is that our government spends about $2,750 on health care per capita — within shouting distance of the total amount, public and private, paid annually by big-spending countries like Australia, France, Germany and Sweden, only slightly less than the United Kingdom, and more than many others — and consumers spend another $3,300 directly, and in return we get huge coverage gaps, a less healthy population and higher infant mortality. What’s wrong with this picture?

Where’d The Money Go?

We’re dealing with a pool of $1.8 trillion health care dollars. About a trillion of it is non-government spending, and the remaining $800 billion funds Medicare, Medicaid, Veterans Administration medical services and a host of smaller programs, all with different eligibility criteria and administrative peculiarities.

Using Medicare, the largest of the government programs, as an example, we see that the government’s administrative costs run at about 3%. So of that $800 billion the government spends, $776 billion goes to pay for the services — doctors, tests, facility fees, etc. — and drugs the government’s clients use.

In the private sector, administrative costs are much higher. It’s difficult to tell exactly how much, but the lowest administrative fees you can find are associated with non-profit insurers such as the various Blue Cross/Blue Shield companies, where administrative overhead is about 10%. The overhead can run as high as 30% in the for-profit sector.

But let’s say, conservatively, that the average private-sector administrative cost is 15%, which means that of the trillion dollars we spend, $150 billion of it is paying for things such as billing, enrollment, claims rejection and the like. If the U.S. went to a single-payer system that was only as efficient as Medicare, we’d save more than $100 billion overnight.

That’s $100 billion annually that could go toward providing additional services and drugs. And that really is a conservative estimate.

If one were to go further and, as organizations such as Physicians for a National Health Program (PNHP) advocate, convert all investor-owned health-care providers to not-for-profit organizations — PNHP argues for issuing bonds to compensate shareholders for the current market value of the companies, in effect buying them out — the savings would be even greater, with the money that at present goes to shareholders instead reinvested in the delivery of services.

Another, major advantage to single-payer or government-dominated health care is that single-payer means single-buyer. At the moment, Medicare is prohibited by law from negotiating prices with drug manufacturers, who are accordingly free to charge drug sellers — pharmacies, clinics and hospitals — as much as they can get away with, sticking Medicare and its clients with the higher tab. But if the government were to negotiate prices on behalf of all 300 million Americans, or even by region, as the Canadians do — each provincial government negotiates its own deals — we’d be paying substantially less than even the biggest private-sector buyers.

Prices in Canada are typically 30-50% lower than they are here. Americans spent $275 billion on prescription drugs in 2006; shaving 30% off that cost would save almost $90 billion.

And private-sector purchasers pay more to doctors and hospitals as well. The reason Medicare can pay less is that it represents nearly 40 million clients, far more than the largest private-sector insurer, and far more than most providers can afford to turn their backs on. About half of every health care dollar goes to pay doctors and hospitals; even modest savings would have a big impact, whether achieved through an immediate reduction in fees or simply a long-term reduction in the rate of health care cost inflation, which at the moment is outpacing other cost of living increases by 100% or more annually.

There are are savings to be held as well, some obvious, some not so much. On the provider side, doctors and hospitals spend a lot of money on billing and dealing with the complexities of the various insurance plans they accept; a single payer plan would eliminate that expense. As noted elsewhere in this series, malpractice premiums would be affected: it’s not likely that our litigious culture would quit suing for malpractice, but future health care costs for successful plaintiffs would no longer be an issue because, with universal coverage, those escalating costs are no longer borne out of pocket by the patient or an insurance company that loses in court.

Not least, no more medical care-related bankruptcies. About a third of bankruptcies can be reasonably described as primarily medical ones, and they have an impact on every creditor, not just those to whom medical bills are owed. Single-payer universal coverage would eliminate medical bankruptcies and the provider-side costs associated with it, such as lawyers and bill collectors.

Of course if the government were to pay for everyone’s health care — if it were to take on that trillion-dollar private sector spending tab, minus whatever savings are realized from economies of administration and purchasing power, from the end of unpaid medical bills — we’d have to raise taxes.

Quelle horreur! Raise taxes! Well, sure: as we’ve noted elsewhere in this series, most Americans think everyone in the country should be provided health care and would willingly pay more in taxes if doing so would accomplish that. And of course any increase in taxes would be offset, to a greater or lesser extent depending on individual circumstances, by the elimination of health insurance premiums.

A government-funded system would also curtail the runaway inflation of health care costs, ending the uncertainty facing individuals and businesses over what they’ll have to pay next year and the year after, and it would make what increases are necessary, transparent: they would be the subject of open debate. All of us would know with some precision what the future is bringing.

So, costs … we’re already paying more than any other country, and we’re paying it into a hideously inefficient and grossly unfair system under which many Americans have no access to health care and many others have inadequate access. What critics on the cost front are really saying is that affordability, efficiency and fairness are beyond our national capacity. As we can see, they’re dead wrong.

Maybe It’s Affordable, But It’s Crappy

Another popular argument against national health care is that it delivers miserly and substandard care. Americans won’t put up with rationed health care and long waiting lists.

But that too is nonsense. Every health care system is rationed, every health care system imposes waiting times, and ours is different only in degree. Most fundamentally, anyone who cannot afford health care in America is subjected to rationing at a truly Draconian level. Those who have insurance are also subject to rationing: insurers make money or, in the case of not-for-profits, stay solvent by limiting the nature and amount of services their customers are offered. Excluding pre-existing conditions is rationing; capping payments is rationing; the push to limit hospital stays is rationing; limiting benefits in any way is rationing.

People in countries with national health care do gripe about services and waiting times. Other countries are struggling with health care costs just as we are, and over the past decade, public satisfaction with many national health care systems has declined. (To some extent, they’re the victims of their own success; longer lives mean more, and more expensive, health care, which squeezes the entire system.) The question is whether or not everyone in this country should be covered and, if the answer is yes, whether we want the system to be subject to public debate and public action. The further question is whether Americans can figure out a way to parlay our higher spending into better service.

We hear a lot about the rationing and waiting lists to which Canadians are subject. One particularly enduring myth is that Canadians flock to the U.S. to receive health care they can’t get in their own country, or that they have to wait too long to receive. A 2002 study looked at admissions of Canadians into U.S. hospitals and other providers of medical procedures commonly wait-listed in Canada, and found … nothing. If Canadians are swarming the border, they’re doing it with an extreme of stealth.

Our telephone survey of likely U.S. providers of wait-listed services such as advanced imaging and eye procedures strongly suggested that very few Canadians sought care for these services south of the border. Relative to the large volume of these procedures provided to Canadians within adjacent provinces, the numbers are almost undetectable. Hospital administrative data from states bordering Canadian population centers reinforce this picture. State inpatient discharge data show that most Canadian admissions to these hospitals were unrelated to waiting time or to leading-edge-technology scenarios commonly associated with cross- border care-seeking arguments. The vast majority of services provided to Canadians were emergency or urgent care, presumably coincidental with travel to the United States for other purposes. They were clearly unrelated either to advanced technologies or to waiting times north of the border. This is consistent with the findings from our previous study in Ontario of provincial plan records of reimbursement for out-of-country use of care. Additional findings from the current study showed that a small amount of cross-border use was related to proximal services, primarily in rural or remote areas where provincial payers have made arrangements to reimburse nearby U.S. providers. Finally, information from a sample of “America’s Best Hospitals” revealed very few Canadians being seen for the magnet referral services they provide.

Making sense of waiting lists across countries, and determining the cause of them, is difficult, in part because the systems differ — some countries have mixes of public and private insurance, others don’t, and there are significant differences even among similar systems — and in part because there’s no universal definition of what constitutes a waiting list or even who is on one. (You can read a study on the subject here.) When you look at procedures commonly subject to waiting periods, though — elective surgeries such as cataract operations and hip replacements are high on the list — it’s clear that insured Americans generally spend less time, sometimes much less, waiting for them than many national health system participants.

On the other hand, uninsured Americans and those with limited insurance can wait forever. What those who cite waiting lists and rationing of care as barriers to national health care are really saying is that Americans who enjoy good insurance with quick access to elective procedures will not and should not be asked to accept any inconvenience on behalf of those Americans who suffer from limited or no access.

They’re further saying that despite the large gap between what we spend on health care and what other countries do, we’re incapable of parlaying that extra money into a more responsive system than those other countries enjoy.

Above all, they’re denying that the plain results of coordinated national health care — longer lives, healthier lives and fewer dead babies — matter. They’re saying that those results aren’t worth the hassle. And the reason they’re saying it is that the primary beneficiaries of a national system, the people whose improved health and lengthened lives will bring our statistics into line with those in other developed countries, will be those at the bottom of the economic pile: people who can’t afford health care for themselves and their children now.

Who cares about them?

And The Horse You Rode In On

Critics raise other objections as well, many calculated to evoke visions of a dictatorial government. They say national health care would limit patient choice, dictating which doctors you can see. That’s not true under many single-payer plans: there’s no reason to limit choice because every physician is a participant. Choice is limited under plans that deliver government money through HMOs, but the limitations are imposed by the insurer, not the government. If this country were to adopt the single-payer plan advocated by Physicians for a National Health Program, many Americans would find themselves more free to choose their own physician than they’ve ever been.

Another common objection is that it’s simply not the business of government to provide health care. Americans, though, are in broad agreement that governments at all levels should provide a number of collective services for the public good. There’s no intrinsic reason public health shouldn’t join public safety and public education as one of the services we expect. And as we’ve seen, the government is already in the health care business in a big way, to the tune of $800 billion a year and climbing. Although Medicare and Medicaid participants are not universally pleased with they way those programs work, they, like the people who are guaranteed health care in other countries, would never countenance an attempt to end them; where complaints arise, the emphasis is on improving and expanding the programs, not killing them.

The most reactive argument against national health care, and the one that underwrites many of the others, is that it’s a liberal notion which presumes to regard health care as a right, not a commodity to be delivered or withheld, like other commodities, depending on whether or not one can afford it. “What next?” is the unspoken question. “A Lexus in every pot?” These are people who resent the notion of collective responsibility and regard the common good as nothing more than sloganeering.

The Right To Live V. The Right To Make A Killing

But the most profound objection to national health care, the one that sends opponents scrambling to manufacture fears of Sovietized medical bureaucracies and budgetary doom, is that it will cut the profits of an industry that spends billions annually on advertising, lobbying and buying the loyalties of politicians and doctors. Health care businesses spent more than $100 million killing Hillary Clinton’s ill-begotten comprehensive health care initiative during her husband’s first term in office; they’ve since spent nearly $1 million on contributions to her Senate campaigns and political action committee. They now regard her as a friend.

Republican Congressman Billy Tauzin, who is featured in Moore’s Sicko, took a $2 million a year job with the drug industry’s lobbying umbrella after presiding in Congress over the industry bonanza masquerading as prescription drug coverage reform for Medicare. Hundreds of senators and representatives receive millions in campaign donations and junkets courtesy of the industry, and of course doctors are assiduously wooed as well, with lavish industry-sponsored conferences, speaking engagements and grants. In return the industry benefits from a welter of tax breaks, subsidies, regulatory loopholes and reliable support in squelching legislation that might curb it.

The fact is that passage of a rational national health care plan would have an impact on our society that goes far beyond the simple provision of health care to anyone who needs it, and the implications of that impact are scary for a lot of people— politicians, pundits and industrialists alike. We’ll be taking a look at what a new system might mean for our democracy in an upcoming story.

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