Monday, July 30, 2012

Mitt Romney Heaps Praise on Israel's Extremely Socialist Health Care System

This guy supports socialized health care - first in Massachusetts, and now
in Israel. I wonder if Republicans think he's a communist.

I rather feel like Mitt Romney's trip abroad isn't going quite according to plan. He spent his time in Britain making gaffes at an Olympic pace, and now he's gone to Israel and heaped praise on Israel's highly socialized health care system. It's like he didn't realize that it's highly socialized:
"When our health care costs are completely out of control. Do you realize what health care spending is as a percentage of the GDP in Israel? 8 percent. You spend 8 percent of GDP on health care. And you’re a pretty healthy nation," Romney told donors at a fundraiser at the King David Hotel in Jerusalem, speaking of a health care system that is compulsory for Israelis and funded by the government. "We spend 18 percent of our GDP on health care. 10 percentage points more. That gap, that 10 percent cost, let me compare that with the size of our military. Our military budget is 4 percent. Our gap with Israel is 10 points of GDP. We have to find ways, not just to provide health care to more people, but to find ways to finally manage our health care costs."
Lest you think that Israel accomplished this miracle with the free market, the government of Israel provides a handy list of all the rights enjoyed by every Israeli citizen under the National Health Insurance Law:
  • Every Israeli citizen is entitled to health care services under the National Health Insurance Law.
  • Every resident has a right to register as a member of an HMO of his/her choice, free of any preconditions or limitations stemming from his/her age or the state of his/her health.
  • Every resident has a right to receive, via the HMO of which he or she is a member, all of the services included in the medical services basket, subject to medical discretion, and at a reasonable quality level, within a reasonable period of time and at a reasonable distance from his/her home.
  • Each member has a right to receive the health services while preserving the member’s dignity, privacy and medical confidentiality.
  • Every Israeli resident has the right to transfer from one HMO to another.
  • Each member has a right to select the service providers, such as doctors, caregivers, therapists, hospitals and institutes, from within a list of service providers who have entered into an agreement with the HMO to which the member belongs, and within the arrangements in place for the selection of the service providers, and which the HMO publishes from time to time.
  • Each member has a right to know which hospitals and institutes, and other service providers, are included in the agreement with the HMO, and what are the selection processes at the HMO.
  • Each member has a right to see and to receive a copy of the HMO regulations.
  • Each resident has a right to receive from the HMO complete information concerning the payment arrangements in place in the HMO for health services as well as the HMO’s plans offered for additional health services (CIP).
  • Each member has a right to complain with the Public Inquiries commissioner at the medical institute that treated the member, to the person in charge of investigating member complaints at the HMO of which s/he is a member, or to the complaints commissioner for the national health insurance law in the Ministry of Health.
  • Each member has a right to file suit at the district labor court.
Even though the health care system is thoroughly socialist, the Israeli health care system somehow manages to provide excellent care to ALL its citizens, for less than half the cost (per-person) than the U.S. health care system.


Except it's not amazing at all.

The two advanced countries with the most privatized health care systems (the U.S. and Switzerland) are also the countries that have the highest per-capital health care expenditures, and they don't have better outcomes than countries with highly socialized health care systems that manage to spend much less for the same (or better) health outcomes:

Furthermore, both the U.S. and Switzerland perform poorly on the health care spending curve (below the line is below-average performance, while above the line is above-average performance):

I'll also note that those charts are from 2000, so they're rather out of date. The disparity between spending and outcomes had grown even larger by 2007:

So why is this?

Basically, it boils down to the fact that providing health care really is different than providing just about any other good or service - the provision of health care is rife with market failures in ways that few other markets are. I'll let Paul Krugman explain:
Health care can’t be marketed like bread or TVs...
There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket.
This tells you right away that health care can’t be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can’t just trust insurance companies either — they’re not in business for their health, or yours.
This problem is made worse by the fact that actually paying for your health care is a loss from an insurers’ point of view — they actually refer to it as “medical costs.” This means both that insurers try to deny as many claims as possible, and that they try to avoid covering people who are actually likely to need care. Both of these strategies use a lot of resources, which is why private insurance has much higher administrative costs than single-payer systems. And since there’s a widespread sense that our fellow citizens should get the care we need — not everyone agrees, but most do — this means that private insurance basically spends a lot of money on socially destructive activities.
The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. (“I hear they’ve got a real deal on stents over at St. Mary’s!”) That’s why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners.
You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don’t trust them — they’re profit-making institutions, and your treatment is their cost.
Between those two factors, health care just doesn’t work as a standard market story.
All of this doesn’t necessarily mean that socialized medicine, or even single-payer, is the only way to go. There are a number of successful health-care systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn’t work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.
The sad part is, we have known this for at least 50 years, ever since the publication of Kenneth Arrow's seminar article, "Uncertainty and the Welfare Economics of Medical Care" (.pdf warning) - read that if you want an incredibly in-depth economic discussion of why socialized medicine is the only proven way of providing cost-effective health care.

And Mitt Romney agrees, apparently, even if he doesn't realize that's what he's saying. Must be a commie, at least according to the Republicans.

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