Health care thought for the day: The U.S., Canada, France, and Germany on average and in general terms have equal successes in health care. That is, in some indicators, the U.S. surpasses Canada, in others, Canada surpasses the U.S. In some, Canada surpasses France, in others, the reverse is true, and so on. But overall, the citizens of each of those four countries live healthy for about as long, live unhealthy for about as long, and then die at roughly the same age.

The problem? The U.S. spends significantly more than do the other three, but for the same end results. Those who advocate universal health care wisely point to this stark economic fact.

The problem with this problem? Imagine a scenario in which the U.S. health sector does not exist and never did. Imagine the impact on both the price structures and end results in the other three countries: Canada, France, and Germany. For example, imagine Canada's market in cheap drugs without U.S. drugs to import. Anyone with a shred of intellectual honesty will agree that this hypothetical scenario is much different.

Now, imagine the reverse, the health care system in one of those countries simply vanishes. Canada's current health care system does not exist and never did. What impact on the U.S. health sector, if any, could you imagine?

I met with an insurance broker last week, and asked him to explain the high price of health coverage. He barely needed a moment to consider.

1. Over-utilization. A commodity that is higher in demand is more expensive.
   
2. Technological advances. A commodity that requires more expensive machinery -- which in turn requires costly maintenance -- will be more expensive.
   
3. Overly cautious doctors. Needs no explanation.
   
4. Limited or no price shopping on behalf of the end user. Bizarre federal tax law allows businesses to pay for health insurance with pre-tax dollars, but does not allow individuals the same. This way the consumer and the end user are two different entities. Market distortions ensue.
   
5. Indiscriminate pharmaceutical drug use. Again: higher demand, higher price.
   
6. Limited or no emphasis on wellness. Waiting until you are sick sadly limits your options.
   

It's an indictment of market-based health care, to be sure, but # 1, # 3, # 4, # 5 all indict a single-payer system as well. Technological advances could arguably slow under universal health coverage. Emphasis on wellness would arguably increase under universal coverage.

As a follow up to this post, find the following Nation Master statistic, "Patents granted (per capita) by country:"

#1 Luxembourg: 431.098 per million people per 1
(...)
#9 New Zealand: 25.5266 per million people per 1
(...)
#38 UK: 1.35669 per million people per 1
#39 Spain: 1.04112 per million people per 1
#40 United States: 0.97723 per million people per 1
#41 Canada: 0.944978 per million people per 1
#42 Uzbekistan: 0.931064 per million people per 1
(...)
#56 Iran: 0.014702 per million people per 1
#57 Brazil: 0.0107462 per million people per 1
#58 Mexico: 0.00941593 per million people per 1
#59 India: 0.0009257 per million people per 1
#60 China: 0.000765513 per million people per 1

I'm not altogether sure what to make of these numbers. At least my first post on the subject is validated somewhat.

Post postscript: it occurs to me that very large populations (China, India, Brazil) might grant fewer patents per capita than smaller populations (Luxembourg, New Zealand) simply on mathematical grounds. There is no ideology to the statement that number n divided by a larger divisor ld will result in a smaller ratio sr. It is clear that there needs to be some balance between protecting intellectual property and maintaining perpetual monopolies. I'll let the policy wonks figure out what precisely that balance is.

As a follow up to an earlier post, find the following Reason Hit and Run dispatch, and a lively comments section.

The gist? Is the U.S. government just a "large buyer" of anything? And should it be a large buyer of drugs? And, as our earlier post alluded, if drug companies are not allowed the protection of long patents, will they be willing to make large R & D expenditures for other, potentially life-saving drugs?

The debate goes something like:

(From the left)
1. Corporate greed and irresponsibility

2. Disease mongering boosting sales (see also # 6 below)

(From the drug companies themselves)
3. Price fixing in all other world markets (try this link as well)

4. Pipeline expense and failure rate, combined with regulatory uncertainty

5. Simple economics: how can a massive research and development campaign work effectively for drugs intended for rare or short-lived diseases?

(From free-market proponents)
6. Increased demand

7. Extended monopolies on drugs

8. No competition (try this link as well)

There is certainly a kernel of truth in each of these, although #4, 5, and 8 seem the most culpable. Curiously enough, each of those three indicts the FDA in spirit as well as in letter.