“It shows how much more Americans spend just to do slightly better than the UK in life expectancy.”

I might be completely misreading their graph…but it shows that they spend over twice the amount per person than the UK and have a LOWER life expectancy, surely?

Yes, the US’ life expectancy is over a year shorter than the UK’s – the UK’s is 79.4, compared with 78.2 for the US.

http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy has the figures – they’re not that easy to read from this (otherwise very nicely designed) graph. I’m using the UN figures – the CIA World Factbook figures show a similar gap of about a year.

You’re missing what the American system is actually good at. Responsiveness.

Go look at the WHO statistics on health care systems. The US is number 1 on responsiveness.

Now, you (or I) may not think that getting the health care treatment you want as fast as you want (which is what that measures) is an important goal of a system. But that is what the US system delivers according to the official WHO statistics.

The NHS provides all sorts of other things: greater equity in access for example (from the same WHO stats). But to say that one or the other is better purely on cost and life expectancy is to ignore the, what’s the modern phrase, “multi-faceted nature” of health care delivery.

The facts are indisputable but irrelevant, because market fundamentalism is an idealogy. For its proponents markets ‘must’ produce the best outcomes because the text books say so. The idea that a publically funded health service could be both cheaper and more efficient doesn’t compute. Of course, if you are very wealthy it’s an ideology that serves your interests, but how the average taxpayer can think they would be better if paying into a private insurance system which by its very nature introduces incentives for unnecessary proceedures, while rationing essential healthcare by bank balance remains a mystery.

“For its proponents markets ‘must’ produce the best outcomes because the text books say so.”

Erm, funny textbooks you’re looking at then. “Market failure” is something covered even in GCSE economics courses.

The argument is only ever about *when* markets fail to be the best solution, not whether there are times when they are not.

Wonder when Tim Worstall will admit he’s got his economics badly wrong?

“Wonder when Tim Worstall will admit he’s got his economics badly wrong?”

When somebody proves it of course: as Keynes said, when the facts change I change my mind.

This recently published book on market failures has attracted glowing reviews in unexpected places:

John Cassidy: How Markets Fail (Penguin Books, 2009)

The healthcare market is infested with characteristic failure features. Just for starters, pervasive information asymmetries because consumers of healthcare services typically lack the technical knowledge for diagnosis and to compare the potential benefits of treatments against the scale of risks associated with not having treatment. This is widely recognised among governments of affluent countries. Virtually all, including the US, engage in massive state intervention in healthcare markets, providing extensive subsidies of healthcare costs out of taxation.

Try this from the OECD Factbook 2009 on public and private spending on healthcare as a percentage of national GDP:
http://oberon.sourceoecd.org/vl=1074433/cl=30/nw=1/rpsv/factbook2009/10/02/01/10-02-01-g1.htm

The US comes out even worse on international comparisons of infant mortality rates – a very sensitive indicator – than it does on average life expectancy at birth:
http://oberon.sourceoecd.org/vl=1423589/cl=34/nw=1/rpsv/factbook2009/11/01/02/11-01-02-g1.htm

Britain’s NHS does not come well out of comparisons of national healthcare systems in other west European countries in the regular annual assessments by a Swedish think-tank on healthcare:

“The Netherlands win the 2009 Euro Health Consumer Index (EHCI), for the second year in a row – the first time this happens since the EHCI started in 2005 – and with an outstanding margin. Nevertheless, Denmark keeps its runner-up position from last year. Besides the Dutch and Danish system there is a small group of strong performers: Iceland, Austria and Switzerland. Luxembourg leaves the top league, losing 5 positions. Estonia, “the wonder boy” of the EHCI, drops significantly but anyhow delivers value for money healthcare.”
http://www.healthpowerhouse.com/files/EHCI-2009-general-Press-release-final.pdf

This recently published book on market failures has attracted glowing reviews in unexpected places:

John Cassidy: How Markets Fail (Penguin Books, 2009)

The healthcare market is infested with characteristic failure features. Just for starters, pervasive information asymmetries because buyers typically lack the technical knowledge for diagnosis and to compare the potential benefits of bought treatments against the scale of risks associated with not having treatment. This is widely recognised among governments of affluent countries. Virtually all, including the US, engage in massive state intervention in healthcare markets, providing extensive subsidies of healthcare costs out of taxation.

Try this from the OECD Factbook 2009 on public and private spending on healthcare as a percentage of national GDP:
http://oberon.sourceoecd.org/vl=1074433/cl=30/nw=1/rpsv/factbook2009/10/02/01/10-02-01-g1.htm

The US comes out even worse on international comparisons of infant mortality rates – a very sensitive indicator – than it does on average life expectancy at birth:
http://oberon.sourceoecd.org/vl=1423589/cl=34/nw=1/rpsv/factbook2009/11/01/02/11-01-02-g1.htm

Britain’s NHS does not come well out of comparisons of national healthcare systems in other west European countries in the regular annual assessments by a Swedish think-tank on healthcare:

“The Netherlands win the 2009 Euro Health Consumer Index (EHCI), for the second year in a row – the first time this happens since the EHCI started in 2005 – and with an outstanding margin. Nevertheless, Denmark keeps its runner-up position from last year. Besides the Dutch and Danish system there is a small group of strong performers: Iceland, Austria and Switzerland. Luxembourg leaves the top league, losing 5 positions. Estonia, “the wonder boy” of the EHCI, drops significantly but anyhow delivers value for money healthcare.”
http://www.healthpowerhouse.com/files/EHCI-2009-general-Press-release-final.pdf

8. Bob B – “The US comes out even worse on international comparisons of infant mortality rates – a very sensitive indicator – than it does on average life expectancy at birth”

Although part of this is artifact of the question. The US has a strong pro-Life movement and they count every dead baby as a dead baby. A lot of other countries do not. The country I am most familiar with, Germany, does not count a dead baby as part of its infant mortality unless the baby lives about two weeks. Needless to say this keeps their figures low. Cuba probably does the same as does most of Europe. In turn this drives the average life expectancy down in America. It does not take many dead babies to lower that average a lot.

@7: your own post @3 provides sufficient info to prove the problem.

The US health market delivers ‘responsiveness’, at the cost of both overall outcomes and inequality. This comes down to doing whatever the patient/customer pays for: typically screening and diagnostics on the healthy.

That’s a pretty natural market outcome, given a certain pattern of property rights. You’d get something similar if geologists worked for landowners instead of oil companies: they would search for oil in the areas their employees owned, rather than where-ever the oil was most likely to be.

The market dogmatism comes when you define the logical consequence of that particular set of property rights (i.e. individual ownership of a health insurance plans, versus national-level citizenship rights) as inherently ‘natural’ or ‘modern’, telling you something universal about what people want, rather than just a consequence of explicit political decisions.

“The market dogmatism comes when you define the logical consequence of that particular set of property rights (i.e. individual ownership of a health insurance plans, versus national-level citizenship rights) as inherently ‘natural’ or ‘modern’, telling you something universal about what people want, rather than just a consequence of explicit political decisions.”

I agree that both sets of rights are artificial. But it’s hardly market dogmatism (Paul Samuelson who came up with the idea of revealed preferences was hardly a market dogmatic) to point out that if we observe people with the choice to get what they want we’ll find out what it is that people actually want.

Whereas if we observe people who do not have that choice, it being made by others, then we’ll not observe the individuals getting what they want: they’ll be getting what those making the decisions think they should want.

I’d also agree that there are indeed times when people shouldn’t be getting what they want but what they ought to, by some other standard than personal desire, want. More aircraft carriers and less homeopathy perhaps?

13
The real problem with the argument for observing individuals choosing/getting what they want, is, that in an ultra-technological age most individuals do not have enough information to make an informed choice. People within medicine take many years to learn the theory and many more learning through practice
And has you conclude, ‘want’ can be quite an individualist value judgement, that has no merit relative to the majority.

8
I sent my post before I read your own, I have not read the book you mention, but this has been a common argument expressed amongst healthcare professionals.

@14: “I have not read the book you mention”

Cassidy: How Markets Fail, is not particularly about healthcare market failures but about the array of reasons why market fail and presented in an accessible way, with contemporary examples, for general readers, unlike much recent professional literature, which is highly abstract and awash with (often degree level) mathematics.

The rhetoric of Free market champions seldom mentions market failure despite the origins in a professional literature going back to Pigou and Marshall, around the beginnings of the last century, or even, arguably, to Adam Smith in the 18th century and he was the original apostle for the benefits of the invisible hand of the market.

Francis Bator’s survey: The Anatomy of Market Failure takes us back to the state of the art 50 years ago: http://instruct1.cit.cornell.edu/courses/econ335/out/bator_qje.pdf

My guess is that most readers will be hanging on with their finger tips attempting that.

Then along came Coase in 1960, who argued that externalities could be left to private bargaining, without government intervention, providing the costs of bargaining were sufficiently small – which is hardly true of climate change or a host of other causes of failure in which there are many polluters and/or many adversely affected by pollution:
http://www.sfu.ca/~allen/CoaseJLE1960.pdf

And that literature took no account of failure mechanisms inherent in financial markets. Keynes and Nobel laureates Joe Stiglitz and George Akerlof deserve credits for that.

Unfortunately, many of us have to put up with Free Market champions who are mostly just ignorant.

Lee #1 that’s what I said, surely?

Tim W: funny how you suddenly measure ‘responsiveness’ over efficiency now. For spending that much money you’d expect something to be extra, if not value for money!

But funny how your priorities keep changing.

The graph uses LIFE EXPECTANCY — which has NOTHING to do with medical care.

Say for example.. if MANY die from GANG violence — THAT would be included.

If they die from CAR CRASHES — that would have NOTHING to do with it

Japan, spain, new zealand, south korea. All spend less and achieve longer life than us. Perhaps rather than looking at how the US is worse than us we should be looking at how we can improve to the standards other countries set

Lifestyle factors, especially diet, exercise and climate, influence average life expectancy at birth as well as healthcare but there is a challenging puzzle as to why life expectancy in America is less than the average for OECD countries when America spends more on healthcare as a percentage of its national GDP than any other OECD country:

As an American commentator in the FT put it a few months back:

“Why does it cost the US about $7,000 per person annually for our incomplete national healthcare system, while other major economic competitors provide universal coverage for about half that?”
http://www.ft.com/cms/s/0/4049dac4-8d05-11de-a540-00144feabdc0.html?nclick_check=1

For a comparison of average life expectancy at birth in OECD countries:
http://oberon.sourceoecd.org/vl=1780725/cl=41/nw=1/rpsv/factbook2009/11/01/01/11-01-01-g1.htm

You’re missing what the American system is actually good at. Responsiveness

Yes, but only for the few. Most of the US poor have only one form of healthcare: through ER. Most of the middle classes have to wait until they get the permission from their insurance company before they get the treatment. The rich few can get treatment immediately since they can pay on the nail.

When you look at US healthcare as a whole – rather than for the privileged few – they are not much more responsive than the NHS.

we observe people with the choice to get what they want we’ll find out what it is that people actually want.

And it is dogmatism when if think the word _actually_ in that sentence adds any value. As you said, there are arbitrary assumptions about how the system works that come before the choices people make. The choices people make given one set of arbitrary assumptions are not the choices people would make under other assumptions.

For example, if the US system was more free market than it is, people could have the property right to sell their kidneys to pay for an operation, cash in their health insurance and spend the money on TV, and so on. Are the choices they would make in that cyberpunk dystopia somehow more ‘actual’ than the ones under the 2009 system, the 1979 system, or any other variant of the system?

Property-right systems are kind of an inherent monopoly – at least I have never heard of any proposal to mix them in the same society.

If the property-rights system arbitrarily decides that everyone needs to have one eye plucked out to save money on glasses, you will probably get a revealed preference for it being the left eye. Inside the system you you can’t say any more: you have to take some kind of paternalistic liberal elitist view to come to the conclusion that that is maybe not the right set of choices to be offering.

“When you look at US healthcare as a whole – rather than for the privileged few – they are not much more responsive than the NHS.”

No. I’m quoting from the WHO rankings of health care systems. They are indeed looking at the entire system.