08.20.09
Stupid Statistics: USA Actually Has Highest Life Expectancy
In terms of the health care debate, one reason reformers use to push change is that the USA has a low life expectancy for a developed country. That may be so, but the reason has nothing to do with our health care system. Read this great letter from Professor Philip Coelho to the Financial Times today.
Medical insurance debate is not advanced by prejudice
From Prof Philip R.P. Coelho.Sir, Philip Stephens’ article is misleading. Quoting raw data may energise argument but it is not a substitute for reasoned analysis. After adjusting for murder, suicide and other popular American forms of mayhem, Americans have the longest life expectancy of any developed nation (Robert Ohsfeldt John Schneider, 2008). It would be a surrealistic stretch to blame the American health system for our high rates of self-destruction and murder relative to other countries.
Similarly, infant mortality has to be adjusted for low birth weights and the definitions of live births. In a 2007 study June and David O’Neil found that the infant mortality rate of Canada would be above that of the US if Canada had the same incidence of low birth weight babies as the US. Low birth weight babies are much more common in teenage mothers than in older women, and teenage motherhood is very common in the US relative to Canada. Again, teenage motherhood may not be desirable, but it is not symptomatic of what is wrong with US healthcare.
Nor does Mr Stephens seem to be aware that much employer-provided healthcare is actually self-insurance by the employing company. “Insurance” companies manage the plan for employers and they are the gatekeepers that deflect criticism away from the employers and on to the “insurance” companies. Demonising insurance companies for their lack of coverage or their denial of care is misguided. If the US forces companies to provide greater health benefits to employees, this will disproportionately affect low-income workers (a mandated benefit of $2,000 per worker is a 10 per cent increase in the cost of employing a worker whose annual income is $20,000, while it is only a 2 per cent increase in the cost of employing a worker whose annual income is $100,000).
US healthcare is expensive and perhaps we should be spending less, but any critique of the system has to be based on accurate assessments, not on prejudice and “conventional wisdom”.
Philip R.P. Coelho,
Professor of Economics,
Ball State University,
Muncie, IN, US
John Hunter said,
August 22, 2009 at 7:57 am
One question is without dispute, by far the most costly system in the world is that in the USA. The question of what is health care, and how to measure it, then can cloud the debate over which performance numbers are best. It seems to me most analysis shows the USA system at best, in the middle of the pack for rich countries (while being by far the most expensive). It is hard to find any reason to think costs should not be reduced dramatically while coverage is increased to more of the population. And unless people think the USA is just less capable than all other rich countries – I would think we would believe that we shouldn’t be by far the most costly country for health care.
The USA certainly does some great work in health care. But it also does a very poor job at running a health care system instead running a sickness, accident and disease management system. Failing to do things like provide pre-natal visit to uninsured (other countries by and large don’t even have uninsured but…), stocking schools with sugar water vending machines, failing to encourage exercise… are signs of a failure to promote health.
Some of my posts on the topic
http://investing.curiouscatblog.net/2008/02/09/international-health-care-system-performance/
http://investing.curiouscatblog.net/2008/12/08/many-experts-say-health-care-system-inefficient-wasteful/
http://investing.curiouscatblog.net/2008/05/06/traveling-to-avoid-usa-health-care-costs/
http://management.curiouscatblog.net/2009/02/19/applying-disruptive-thinking-to-the-healthcare-crisis/
http://management.curiouscatblog.net/2008/01/08/measuring-the-health-of-nations/
The USA should be doing much better. It is a tragedy that in such an important area the USA is not performing much much better. One area the USA has done well with is reducing the prevalence of smoking and greatly increasing health in that way.
DataGuru said,
September 14, 2009 at 11:50 am
Coelho seems to have been cherry picking his statistics. Someone who dies of murder or an auto accident should not be subtracted from the data set entirely when determining if the health care system influences life expectancy. They never had the chance.
In the US, death by auto is the most common non-healthcare related death. Is it possible some of the road deaths can be attributed to traveling to Canada and Mexico for prescriptions healthcare?
Michael Goode said,
September 14, 2009 at 12:00 pm
DataGuru — Why shouldn’t they be subtracted from the data? If you are looking in terms of life expectancy, injuries and homicides reduce life expectancy while not being symptomatic of the quality of the health-care system. When using life expectancy data to compare health system efficacy across countries it would make sense to try to eliminate non-healthcare related causes of death.
Another way of comparing health systems is survival rates for different diseases, but the problem with these data is that differing diagnosis rates across countries will skew the data.
Jennifer said,
September 17, 2009 at 4:20 pm
While I agree that if we have a more violent society that may create early death outside of our healthcare system’s ability to save a life it could skew our life expectancy figures. His assertion that the rate of low birth weight babies is not relevant to our healthcare picture is frankly dead wrong. The medical community repeatedly asserts that pre-natal care is essential to a healthy birth and avoiding low birth weight and premature births. To simply state and think we will all take at face value that this item can be dismissed on the assumption that teenage pregnancy is 1) unique to the U.S. and 2) the only meaningful cause of low birth weight is incorrect.
Another issue I have with his commentary is that larger companies that “self insure” really just use the insurance carrier to be the “bad guy” to deny claims is not accurate either. Large companies who self insure do have the ability to structure their employee’s plans more freely than smaller companies. However the options they choose from are given to them by the insurance company. The final arbiter of coverage or lack thereof is the insurance company as many of these types of plans have a stop limit of self insurance above which the insurance company will pick up the cost.
It seems we all agree that our current healthcare system is not ideal and there is need for change. “Raw data” may be misleading but cherry-picking statistics and inferring too much from too little is also quite misleading. However, it does open meaningul debate based on fact and that is certainly a step in the right direction.
Petrean said,
September 20, 2009 at 10:28 am
Great website, adding your to my RSS !!
Goode Value Investing & Trading Blog » Lies They Told me About Healthcare said,
October 16, 2009 at 10:20 am
[...] (relative to other OECD countries) is proof that our health care system is flawed. I have blogged about this before. Life expectancy is driven by all sorts of things, and the US has higher violent death rates and [...]