Thursday, March 25, 2010

Health Care Rant

My thoughts on health care are summarized by this graph. Here I show life expentancy as a function of how much money is spent on health care. No surprise: there is generally a strong correlation that countries that spend more money on health care are generally healthier than countries that spend less.

There are a few exceptions though. These are the countries at the top of this distribution. The citizens of Vietnam, Cuba, Costa Rica, and Japan enjoy an extra five years of life more than other countries that spend a similar amount. Five years of life expentancy is huge: Japan's life expentancy was five years lower back in 1985. Five years of life expetancy represents thus maybe 25 years of medical advances! According to the trend, to gain five years of life expetancy requires almost quadrupling health care expendatures! It is the difference between a wealthy European country like Germany and a middle-income one like Poland, or the difference Poland and a poor country like Egypt.

Then there are the countries that seem to have particularly disfunctional health-care systems. I show them here. These are the places along the bottom of the distribution. These are places wracked by war or AIDS, disfunctional societies, places that are so curropt that the money spent on their system is squandered so that they have the life-expentancy of countries much poorer than they. This list of countries are places that are legends for waste, corruption, and inefficiency: Sudan, Cambodia, Russia, and the US.

Yes: our current health-care system is as wasteful and curropt as Russia's. Far from being the best in the world, it is on par with Costa-Rica's even though they spend (wait for it...) an eigth of what we spend on health-care. Our life-expetancy is only marginally better than Mexico's even though Mexico is famous for its unhealthy food and high smoking rate.

The US spends much more than other wealthy countries do on healthcare, and well we should: America's GNP per capita is substantially higher than Japan's, Germany's, France's or Britain's. But what is shocking is just how much of that money is wasted, how little we get for it. Not only do these countries spend half of what we do, but they are objectively healthier than we are. Given the basic function of our health care system to keep us all alive, its as if, under the current system, two thirds of the money we spent was siphoned off by curropt bureaucrats.

I worked in healthcare for several years, and I was shocked by the lavish waste I saw every day, the huge sums of money I see spent on equipment we don't use, the lavish salaries of the specialists (including me, though not as lavish as some), the marble plazas, the ridiculous paperwork (my primary care doctor employs more billers than nurses). Fortunately, we are such a wealthy country that we were able to afford such massive waste without it breaking our budget. But no longer. As babyboomers retire and general healthcare inflation keeps going, Medicare will in a few decades crowd out all other federal spending.

But I have a personal stake in the bill (besides wishing that I could have the lifespan of smoking and alcoholic Frenchman). I (along with half the physics department at Reading Hospital) was laid off this year due to the economic crisis (the president of the Hospital had been investing the Hospital's money in Colleteralized Debt Obligations). Even though I'm basically a healthy person who doesn't go to the doctor for more than an annual checkup, I cannot get health insurance because of some obscure pre-existing condition that I never even knew would be an issue. Once my COBRA runs out, I'm fucked. If I get cancer now, they will have to pull the plug on my treatment in a few months. Or else, the doctor who treats me will just have to work for free. We were planning on having a baby, but had to put that off because pregnancy is a "pre-existing condition". If we had already been pregnant, we would have had no choice but to have an abortion because we couldn't afford the obstetrician's fee.

I have a good job now working for an entrepreneurial high-tech startup. But we are mostly paid with stock-options, not much money or health-insurance. Thats the American way, and when our product hits the shelves and we go public, we'll all be rich. But our company is too small to be able to afford health insurance. If HCR had failed, I would have had to quit and tried to get a job at some other place that I hated doing much less valuable work. In fact, our tiny company has opened up offices in Singapore and Taiwan in part because the engineers, programmers and scientists who work there can get health insurance for so much less than it costs here in the US.

To Jeremy and Gian-Carlo: We all had the same advantages: excellent high school education, top colleges and graduate schools, good high-paying jobs with lavish benefits. These benefits gave us the kind of security (at large and growing cost to our employers) that shielded us from the fundamental horror that aflicts the millions of uninsured. But, until 2014 when most of the healthcare reform kicks in, you guys are just one lay-off from being tossed into the ranks of the uninsured and never being able to get insurance for yourselves or your families.

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