So I am finally ready to begin the health care series that I have been working on. I will say up front as I begin this series of articles that I am NOT the expert in this arena. I wish that I could say that I am. But there is so much information out there, and even more misinformation out there, that it might take a lifetime to read it (and the first lifetime of reading may only get you through the bill itself once they are done writing the massive thing). I wanted to take a moment here in the first part to this series to discuss the “need” for health care reform. Health care is such a gigantic subject, and there are so many parts to it. So the term “health care reform” in and of itself does nothing to tell us what part of the system they intend to “reform” (since government is doing it you can read “reform” as RUIN). We will get into the actual proposals and bills being offered in later parts. For now, let’s understand what is in play and whether the claims being made about the need for health care reform are accurate.
Let’s start with the President’s proposal as laid out by him during the campaign and afterwards. I first went to the President’s own site, barackobama.com . There I found this under the issues – healthcare section:
The Current Situation
Making sure every American has access to high quality health care is one of the most important challenges of our time. The number of uninsured Americans is growing, premiums are skyrocketing, and more people are being denied coverage every day. A moral imperative by any measure, a better system is also essential to rebuilding our economy — we want to make health insurance work for people and businesses, not just insurance and drug companies.
Reform the health care system: We will take steps to reform our system by expanding coverage, improving quality, lowering costs, honoring patient choice and holding insurance companies accountable.
Promote scientific and technological advancements: We are committed to putting responsible science and technological innovation ahead of ideology when it comes to medical research. We believe in the enormous capacity of American ingenuity to find cures for diseases that continue to extinguish too many lives and cause too much suffering every year.
Improve preventative care: In order to keep our people healthy and provide more efficient treatment we need to promote smart preventative care, like cancer screenings and better nutrition, and make critical investments in electronic health records, technology that can reduce errors while ensuring privacy and saving lives.
Sure sounds great on paper. But obviously the issues as laid out above offer no actual facts or figures that back up the vague claims, and offer no actual examples of what “reforms” will be used to change things, just vague areas. That isn’t a knock, just an acknowledgement that we have to dig a little deeper than this quick snippet on his website to understand what he is actually saying. And that is important, because what percentage of people who read that are actually taking another step after reading this vague stuff? Fear not, we are going to look at it all here. But the bottom line is, thus far, we are often told that “health care reform” is of vital importance in our country. Nothing more than a listing of a few statistics that seem to support such a claim are offered. So let’s first look at the claims:
Let me start out by saying that statistics are such a valuable tool to those attempting to sway opinion. For the fact is that no matter the subject, you can come up with statistics that will support whichever side you want to support. Statistics are both vital and worthless, because they are most often used in the world of politics without any context or explanation. They are framed in the worst or best possible way and are more focused on creating a talking point than being accurate. The only way to actually evaluate statistics is to dig deeper and evaluate where they came from, how they were gotten, and whether what they are saying actually leads to the conclusion they are supporting.
There are 45.7 million Americans unable to afford health care or without health care (depends on which speech you listen to)
Patently false in my opinion. This number (usually rounded to 46 million) is offered by politicians throughout the Democratic Party, and President Obama himself. From a town hall meeting in New Hampshire:
“Now, health insurance reform is one of those pillars that we need to build up that new foundation,” said President Barack Obama. “I don’t have to explain to you that nearly 46 million Americans don’t have health insurance coverage today. In the wealthiest nation on Earth, 46 million of our fellow citizens have no coverage. They are just vulnerable. If something happens, they go bankrupt, or they don’t get the care they need.”
I had to dig a lot to find truth about this. Politifact and many others offer the reality on part of the issue, and that is non-citizens. This number came from the U.S. Census Bureau, which releases estimates of the uninsured yearly. The 46 million estimate is for 2007, and the data was released in 2008. (The 2008 data are scheduled for release on Sept. 10, 2009.) This data from the US Census bureau does break down easily. According to that same report, 9.7 million of that 46 million are non-citizens. That means they are not entitled to free health care under this bill, and illegal immigrants are NOT covered under the current proposals (more on this when we talk about the myths). So what we are really talking about at this point is 36 million Americans.
But not so fast… what of the stated rebuttal that another 10 million of the uninsured are folks who CAN afford insurance, but do not purchase it by their own decision, not because they are unable. They choose to not have health insurance. According to FactCheck.org, about 9.1 million of the uninsured have household incomes greater than $75,000, and 10% (about 4.7 million) make more than 400% of the federal poverty threshold, according to Kaiser Family Foundation. In 2007, the most recent year of Census statistics, a family of four at 400% of the poverty level would have a household income of $84,812 or more. Another report from the Census Bureau itself shows that “18 million of the uninsured have annual household income of more than $50,000, which puts them in the top half of the income distribution. About a quarter of the uninsured have been offered employer-provided insurance but declined coverage.”
Additionally, many of the uninsured already are eligible for public coverage. The National Institute for Health Care Management Foundation found that in 2006, 12 million of the uninsured were eligible for Medicaid or the Children’s Health Insurance Program (formerly SCHIP) but were not enrolled. There are a multitude of reasons why this could be, including not being aware of the program or trouble understanding how to enroll. But it is worth noting that despite the claims, the option for health coverage for these 12 million IS available already.
With all those detractions from the actual numbers, it is also important to remember that the number released for 2008 (in a couple of weeks) will likely be larger, with the subsequent year being even larger than that. This is because as unemployment grows, the ranks of uninsured is sure to grow as well, as much health coverage is provided by employers.
The bottom line is that this 45.7 million number is fatally flawed and being presented as fact with no disclaimers when there are apparently a plethora of other relevant data sets that are not included in the claims made in support of health care reform. At this point there is no way to accurate come up with the “real” number to anyone’s satisfaction. The fact remains, however, that there are a large amount of uninsured in the US. But I don’t believe that the number is as big as those in favor of reform are claiming, or as small as what those opposed are claiming either. My guess is that the number probably falls in the 10-15 million area, which would be, at most, 5% of the population. Not quite the same as the nearly one in six that the liars… err politicians, are claiming.
Average Life Expectancy Numbers Prove the US Health Care System is broken
I see this one a lot. I have yet to hear a liberal argument about health care that did not have this little tidbit thrown in as proof positive that either a) our system sucks OR b) their system is better. So first, where are we really on the scale of countries in terms of life expectancy? Two big sources exist that I have read. The CIA provides stats on this. According to them, Macau (China) is #1, at 84.36 years. Some notables on the list above the US include Japan (#3, 82.12), Canada (#6, 81.23), France (#7, 80.98), Sweden (#10, 80.86), and the United Kingdom (#36, 79.01). The United States comes in at number 50 on that list with an A.L.E. of 78.11. If you only count UN member states, the CIA lists us as #36.
The United Nations report had some variation to the data. The ten countries with the highest A.L.E. in their report:
- Japan – 82.6
- China, Hong Kong SAR – 82.2
- Iceland – 81.8
- Switzerland – 81.7
- Australia – 81.2
- Spain – 80.9
- Sweden – 80.9
- Israel – 80.7
- China, Macao SAR – 80.7
- France – 80.7
The United States ranks #38 on the United Nations list. The source material for both lists are at the bottom of the article, but I warn you that the United Nations link is a long PDF document that took me about an hour and a half to read. And the charts are not as simple to interpret as I have made them seem here.
However some of those same reports offer data that seems to contradict the claims by those who would use statistics to bolster their arguments. For example, the UN report states clearly that the US is second in the world in terms of the number of persons aged 80 and over: “In 2005, 15.4 million lived in China, 10.6 million in the United States and 7.8 million in India. In 2050, those countries will still have the largest numbers of persons aged 80 or over: 103 million in China, 51 million in India and 31 million in the United States.” While our life expectancy is not as high as some other countries, we are second in the world in terms of the sheer number of folks our system manages to get past the age of 80. And that says something good about our system.
There are also many other mitigating factors out there that they don’t bother to tell you when they are throwing around how horrible the health care system is based on A.L.E.. For example, Professor of Economics at Harvard, Greg Mankiw, writing for the New York Times, wrote an article giving further data to some of these numbers. He addressed the claim that Canada has higher life expectancy than the US, which is true, but it doesn’t take into account the reasons why that might be. He offers some data from the same study that provided the stats politicians got that claim from:
For example, Americans are more likely than Canadians to die by accident or by homicide. For men in their 20s, mortality rates are more than 50 percent higher in the United States than in Canada, but the O’Neills show that accidents and homicides account for most of that gap. Maybe these differences have lessons for traffic laws and gun control, but they teach us nothing about our system of health care.
Americans are also more likely to be obese, leading to heart disease and other medical problems. Among Americans, 31 percent of men and 33 percent of women have a body mass index of at least 30, a definition of obesity, versus 17 percent of men and 19 percent of women in Canada. Japan, which has the longest life expectancy among major nations, has obesity rates of about 3 percent.
The point here is that there are many different factors that have an impact on the life expectancy of Americans versus the rest of the world. But the politicians certainly don’t want to “bother” you with the details that might “cloud” your judgement when assessing the need for health care reform. This might explain why some facts about the American health care system are ignored by politicians in their speeches.For example:
- Cancer Survival Rates are higher in the US than anywhere in the world. According to a WebMD article, a new study shows the U.S., Japan, and France recorded the highest survival rates among 31 nations for four types of cancer (breast, colon, rectum, or prostate cancer). The study did not the racial disparity in cancer survival within the US, however. A racial gap in survival was evident, with white patients more likely than blacks to survive, especially breast cancer.
- As a matter of comparison, the US health care system is often compared to the UK’s NHS. Experts from the National Cancer Institute and the Departments of Urology at Johns Hopkins University and the University of Kansas agreed that the latest official figures for five-year “survivability” rates for men diagnosed with prostate cancer are around 98 per cent in the United States and 74 per cent in England.
- According to a Joint Canada/United States Survey of Health in 2003, 86.9% of Americans reported being “satisfied” or “very satisfied” with their health care services, compared to 83.2% of Canadians.
The United States Spends More money for health care with less results than the rest of the world.
Well, the less results portion of this statement is certainly up for debate, as the previous section pointed out. However, the fact that the United States spends more money for health care is not up for debate. That is a bona-fied fact. Current figures estimate that spending on health care in the U.S. is about 16% of its GDP. In 2007, an estimated $2.26 trillion was spent on health care in the United States, or $7,439 per capita. Health care costs are rising faster than wages or inflation, and the health share of GDP is expected to continue its upward trend, reaching 19.5 percent of GDP by 2017. As a proportion of GDP, government health care spending in the United States is greater than in most other large western countries. Additionally, a substantial portion is paid by private insurance. A recent study found that medical expenditure was a significant contributing factor in 60% of personal bankruptcies in the United States. We spend a lot of money on health care, of that there is no debate.
What is debatable, however, is the cause of the rising costs of health care. Currently, the proponents of health care reform would blame the insurance companies, which if true would bolster the cause of health insurance reform, which the debate has now switched to. However, in my opinion, this is a flawed deduction. Health insurance, while in the private market is done for profit, has its evils and its struggles with morality. However, costs are another thing altogether. Health insurance is so costly because of the costs of providing health care, not because of some immoral practice of the health insurance providers. According to the Wikipedia article on health care reform, the factors involved are the absence of government price controls, enforcement of intellectual property rights limiting the availability of generic drugs until after patent expiration, and the monopsony purchasing power seen in national single-payer systems.
I have to say that I agree with some of those factors being a contributing factor in the equation. However, I am not willing to lay all of that at the feet of pharmaceutical companies or others in the health care industry. Because I would contend that one major factor in the increase in the costs of health care in the United States is government intervention. Funny how proponents of reform leave that part out of the equation. Let’s first look at the “price gouging” pharmaceutical industry.
We are quick to denounce this industry. However, while they certainly chase profits with the best of industries, few are willing to admit the costs piled on the industry by government. The cost of developing a drug is the result of several stages in the development process. These stages include Drug discovery/product development, pre-clinical research(microorganisms/animals), Clinical trials (on humans), Data Assessment, and Marketing. This does not include the costs of production or delivery. A 2006 study, which was in line with 4 other studies I read, estimated that the cost of drug development is between $500 Million and $2 Billion per drug. Mrs. Weapon is a Project Manager in a Pharmaceutical Clinical Research Organization. She oversees studies for the clinical trials (on humans) portion of this process. In other words, she runs the trials and gets drugs FDA approved. So drug development is an area that is well discussed in this household.
They spend millions on meeting FDA requirements alone. Would you be surprised to know that the FDA requires that once the database is closed the amount of data, printed out to be sent to the FDA, fills an entire 53 foot Tractor Trailer? How’s that for bureaucracy? The companies like my wife’s who do the trials are constantly having to reinvent their processes and procedures each year. FDA regulations are extremely vague. And each year the FDA has some “hot button” issue that is the focus for the year. For example one year the entire focus of FDA audits is informed consent documents. The following year it may be drug tracking documents. The FDA actually assigns a consultant to these companies to explain how last year’s procedures are irrelevant because this year’s focus will now be x. Add to this the multiple layers of trials that must be done, Phase 1 through Phase 4, and these costs get piled on each phase. It is easy to see how the costs add up quickly in drug development.
And speaking of intellectual property laws “being enforced” as a cause. Keep in mind that once that drug gets to market, the patent, which is on average for 7 years from the time of submission (before testing begins), is the only time that these companies have in order to sell enough drug at the right price to recoup the 500 million to 2 billion dollars they spent on developing the drug. And did I mention that they also spend that much regardless of whether the drug gets approved or not. Care to take a guess at how many drugs that start this process make it? I offer the following comments from a chemist in the industry discussing the situation:
- 38% of the drugs taken in the the clinic dropped out in Phase I (safety / blood levels.)
- 60% of those remaining failed in Phase II (basic efficacy.)
- 40% of the remaining candidates failed in Phase III (big, expensive efficacy.)
- And 23% of the ones that made it through the clinic failed to be approved by the FDA.
The other thing to keep in mind is that the money spent on these things grows terribly along the way. A failure in Phase I isn’t pretty, considering the time and money spend in the preclinical period (aka: what I spend all my working life doing.) But a failure in Phase III or at FDA time is a financial disaster.
You can do the math as quickly as I can: that translates to about a 11% success rate from starting in the clinic. And consider that for someone like me, back in the research labs, a successful program is one that makes it to Phase I. It’s no wonder that so few medicinal chemists have ever worked on a drug that’s made it all the way to market!
11%. How disgusting is that? One in ten. So that means that in those 7 years of a successful drug, the company owning the patent has to recoup the $500 Million-$2 Billion for the development of that drug along with the same costs for the other 9 drugs that failed and will never make them a dime. The US is the number one drug development company in the world. And that comes at a great cost. Yes, Canada offers cheaper drugs. Then again, they are not the ones paying to develop that drug, they are only paying the 3 cents a pill to make it once everything else has already been done. Given this situation, it makes Black Flag’s argument that “ideas aren’t property” even more bizarre to me than they were originally.
Health Care costs are also driven up by things such as liability insurance. The reward for trying to save someone’s life is that if you cannot do it, you get sued in today’s America. Private practices in the US pay hundreds of thousands of dollars a year in liability insurance. You want your health care costs to come down? How about enacting tort reform. But we won’t see that happening anytime soon. Too much money being made by lawyers, who are powerful campaign contributors (or members of Congress themselves). More on tort reform later. When your hometown doctor is paying $200k a year in liability insurance, is it any wonder that he has to charge you $5 for a tongue depressor?
As for a lack of government price controls… I would address that but it is an idea so ridiculous that I cannot even see the merit in addressing it.
Emergency Care Provided to Those Without Insurance is the cause of Cost Increases
I have seen this one bantered about lately. I won’t go into depth on this one. I can agree that illegal aliens or those poor without insurance are increasing costs because the taxpayer has to pick up their tab. What is baffling to me is the argument that the answer to taxpayers being stuck with the tab for this care after it is offered is to have taxpayers pick up the cost of this care before it is offered. A bizarre argument. “Instead of you guys paying more because of their emergency medical bills, we would like you to pay for their health insurance so that you can pay for the emergency stuff AND their routine stuff.” GREAT! Where can I sign up for that screwover!?
I can understand the claims of needing health care reform. I am not yet convinced that it is as dire a situation as the Democrats would have us believe. But I am willing to listen to reason and logic. Any other course of action would be, well, illogical. However, I do not believe that we need health care reform on the national level in the way that is being proposed. The health care reform proposed so far will be covered in depth through the rest of this series. But this part was about whether or not the national emergency really exists.
The bottom line for me is that when discussing the “need” for a national health care system, both sides of the aisle are offering facts and figures that are complete nonsense. The arguments above are given to us as the “undisputed facts” around the health care system, and clear evidence that we must act to reform health care now. It is a “national emergency”. Well, I don’t think that it is. I know that some of you will fall on the other side of the fence. I challenge you to come to this debate with an open mind.
Let’s drop the partisanship here. Let’s stop throwing around statistics that are not telling the entire story. Let’s stop simply trying to prove we are right and our opponents are wrong. Let’s discuss whether the state of the United States Health Care Industry is really in an “emergency” situation. Let’s discuss whether it is “insurance reform” that is a plausible path towards betterment of the system, whether in dire need or not. Let’s stop pretending that serving the “greater good” is what we are attempting to do. Serving the greater good at the expense of liberty or another’s wealth is never actually serving any good at all. I earn my wealth with my own labor and smarts. Convince me that the need is dire, and that your solution is plausible and sustainable, and I am more than happy to help and voluntarily contribute to making things better. Let’s stop throwing the rhetoric around on both sides of this issue, and begin to have an honest talk about whether we should be reforming health care at all at this point. That is the focus of discussion in Part 1.