More on Healthcare

Hey everyone. A Sunday post after a fun filled August long weekend and the annual street dance/buffoonery in Speedy Creek last night.

Our friends to the South continue to furiously debate the issue of health care reform. Through town hall meetings, talk shows, the debate has become increasingly vicious and the dialogue has been enhanced with some increased vitriol. It has been very tough to find an educated debate on this issue with points of view from both sides. Real Time With Bill Maher this past Friday was a refreshing exception.

In the debate, the inevitable comparison with the Canadian health care system has come up, and the mention of our system's trouble spots, such as elective and non life-threatening surgery wait times. However, the continued comparison and criticism of Canada's health system by opponents of Obama's reform bill is a red herring. The United States system was ranked 37th in the world by the World Health Organization. Canada's however, was only ranked 30th. To me if the Americans are looking to spend billions to reform healthcare they should be looking at other large industrial democracies that are ranked much higher such as France (1), Italy (2), and Spain (7). It is important to note that the United States system costs much more per capita ($6600) on healthcare compared to other large Western democracies ($2500 - $3500) such as France, Canada, Germany, Spain, Italy, and Great Britain.

The Boston Globe provided an excellent article highlighting the French system. The French system is a public/private hybrid system. Insurance companies manage the public health insurance system, and citizens have a choice of providers. Like Canadians, the French also can have relatively inexpensive supplemental coverage to look after the areas not covered by the public system. Doctors are given full professional control over their practices and medical decisions, which all but eliminates both rationing (common in Canadian and British systems) and the interference of private insurance common in the American system. Also interesting is that the French have greatly reduced the overhead required for practicing Doctors with a very simple billing and reimbursement system, eliminating the need for a large amount of non-medical support staff (which is very common in the States).

The Boston Globe article also touches on a very important issue that the debate in the United States has largely ignored, and that is medical liability litigation. A major reason why care in the United States is so expensive is the practice of "defensive medicine". This is the practice of ordering expansive and unnecessary tests to "cover all bases" to avoid litigation. Naturally, this is very expensive. The medical malpractice tort system needs to be overhauled in the United States to accomplish any real reform and to also get costs under control. Punitive damages and huge rewards have caused medical malpractice insurance premiums to skyrocket, often in the hundreds of thousands per year, per practice. According to a lot of legislators in the States, tort reform is not in Obama's package.

Why is this? Why isn't a main cause of high healthcare costs being reformed in Obama's bill? Simple. Trial Attorneys. Medical malpractice claims is a cash cow for personal injury law firms, and the trial attorney is a powerful lobby in Washington. Trial attorney associations are also a key contributor and supporter of the Democratic Party. The Democrats would have a tough time swallowing a bill that would lose them support and contributions of trial attorneys. Canadian and French systems in general only allow for economic damages in malpractice suits, which are typically significantly less then the punitive/pain and suffering awards given in the United States.

Some food for thought, and the coming weeks will continue to be very interesting in this debate.

Cheers.