In Excellent Health: Setting the Record Straight on America's Health Care

In Excellent

Health

The Hoover Institution on War, Revolution and Peace, founded at Stanford University in 1919 by Herbert Hoover, who went on to become the thirty-first president of the United States, is an interdisciplinary research center for advanced study on domestic and international affairs. The views expressed in its publications are entirely those of the authors and do not necessarily reflect the views of the staff, officers, or Board of Overseers of the Hoover Institution.

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Hoover Institution Press Publication No. 619

Hoover Institution at Leland Stanford Junior University, Stanford, California 94305-6010

Copyright © 2011 by the Board of Trustees of the Leland Stanford Junior University

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First printing 2011

Manufactured in the United States of America

Library of Congress Cataloging-in-Publication Data

Atlas, Scott W., 1955- author.

In excellent health : setting the record straight on America’s health care / Scott W. Atlas, MD.

   pages cm. — (Hoover Institution Press publication ; no. 567)

Includes bibliographical references and index.

ISBN 978-0-8179-1444-8 (cloth : alk. paper) — ISBN 978-0-8179-1446-2 (e-book)

1. Medical care—United States. 2. Health care reform—United States. I. Title. II. Series: Hoover Institution Press publication ; 567.

RA395.A3A85 2011

362.10973—dc23     2011037058

To my father, who often joked, My mind’s made up, don’t confuse me with the facts.

CONTENTS

List of Figures and Tables

Author’s Note

Foreword by John Raisian

Preface

1    The WHO Ranking of Health Systems Redux: A Critical Appraisal

2    The Limited Value of Life Expectancy Comparisons in Ranking Health Systems

3    Infant Mortality as an Indicator of Health and Health Care

4    Measuring Medical Care Quality in the United States

5    Evaluating Access to America’s Medical Care

6    Specialists and Medical Innovation: The Best of the Best

7    Maintaining Excellence While Reducing Costs: An American Solution

Notes

About the Author

About the Hoover Institution’s Working Group on Health Care Policy

Index

LIST OF FIGURES AND TABLES

Tables

AUTHOR’S NOTE

Make everything as simple as possible, but not simpler.

—attributed to Albert Einstein

It was the summer of 2007. My wife and I attended a small dinner party with two other couples. All six adults were highly educated, all with prestigious undergraduate degrees as well as six post-graduate degrees from some of the most elite universities in the world, including Princeton, the University of Chicago, Yale, and Stanford. Four had earned MD degrees, one held a PhD in molecular biology, and another held a master’s in public health. Four of us were practicing physicians. Suffice it to say that one might expect the discussions would be well informed—at least about health care, given everyone’s background.

At that time, media attention was increasingly focused on health care, due to its central position in the ongoing presidential campaign. The movie Sicko by Michael Moore was playing in Palo Alto. The national press coverage and the local buzz, especially in the Bay Area, were becoming intense. The conversation at the party, as I had expected, quickly turned to the movie and to the state of U.S. health care. After a cautious beginning, emotions ran high. Generalizations were bandied about, and strident statements were soon in the air. Being an active participant in health policy research and a health policy advisor to one of the presidential candidates, I began to recite statistics—facts about outcomes from serious diseases, facts about who really did and did not have insurance, facts about access to medical care in the U.S., facts about access to innovative drugs and safer treatments. I pointed out gross flaws in the claims of the movie and the overt distortions in the movie’s anecdotes. But disregarding these facts, everyone else at the party insisted the movie was highly accurate, that the movie’s claims were unerringly correct. Indeed, I was the only one in the group who disputed any of Sicko’s accusations about the scandalous inferiority of American health care. Yet, to my further dismay, no one else at the party, despite their education and experience, presented any facts to support their emotional, strongly worded opinions. Not even one, single fact … other than the low World Health Organization’s rankings that had been repeatedly publicized by the popular media.

Needless to say, the party ended a bit awkwardly. On reflection, it wasn’t the biggest surprise to later discover that my wife and I were the only ones who had even seen the movie, despite all the others adamantly attesting to its accuracy. And it wasn’t even the greatest disappointment that people who experienced the medical system first-hand in their training and jobs would have such little understanding of it. But to me, it was shocking, even depressing, to witness how such intelligent people, people educated at the world’s most elite universities, people whom I respected and admired, people who I assumed would be critical thinkers, would not even bother to base their opinions on any facts.

So, to them also, this book is dedicated.

FOREWORD

The quality of health care in the United States has made remarkable advances during the past sixty years. Dramatic improvements in diagnostic and therapeutic strategies as well as medical technologies, pharmaceuticals, and surgical procedures have extended the length and greatly improved the quality of life. Progress in the treatment of cardiovascular disease has reduced the U.S. death rate from heart attacks by more than 50 percent, accounting for nearly all the increases in the expected life span in the United States since 1950. Also, mainly as a result of the development of combination antiretroviral therapies for the treatment of AIDS, at least three million years of life have been cumulatively saved in the United States since 1989.

Despite such extraordinary progress, however, U.S. health care faces serious challenges. The problem is not just that health care spending is high but that competition and value-based purchasing are lacking. As spending grows, an increasing number of people are priced out of the market for insurance. The fiscal burden of federal and state health care entitlement programs, such as Medicare and Medicaid, can no longer be sustained in their current forms without either deep reductions in other public programs or sharply higher taxes. Diverting both public and private resources from more productive uses has become a serious problem.

The debate over the direction of U.S. health care policy occupies center stage in the domestic policy arena now and will continue to do so during the coming years. The promise of future medical advances and innovations is bright, but progress will require us to transcend the terms of the current debate, which are often expressed as the competing goals of universal insurance and cost control. The fundamental challenge is to devise public policies that enable more Americans to get better value for their health care dollar and to foster appropriate innovation that extends and improves life. Key principles that guide policy formation should include focusing on the central role of individual choice and competitive markets in financing and delivering health services, individual responsibility for health behaviors and decision-making, and appropriate guidelines for government intervention in health care markets.

The Hoover Institution’s Working Group on Health Care Policy have been actively involved in the ongoing health care debate: assessing the cost of health care and the implication of providing universal health insurance to Americans.

In this volume, In Excellent Health, Scott Atlas offers an alternative view of the state of health care in the United States by utilizing facts and data to challenge the statistics often cited as evidence that medical care in America is substandard in value relative to that of other countries. Atlas offers a complete reform plan that includes a series of key improvements in three critical areas of the health care puzzle—tax structure, private insurance markets, and government health insurance programs—that will reduce health costs and maintain essential support for America’s most vulnerable citizens (seniors and low-income families) without jeopardizing the exceptional health care quality and access in the United States.

JOHN RAISIAN

Tad and Dianne Taube Director,

Hoover Institution, Stanford University

Stanford, California

PREFACE

Health care has become a topic of passionate debate in the United States. Capitalizing on the undeniable need to address a true crisis in America’s health care system—its exploding cost—a highly partisan Democrat-dominated U.S. Congress and President Barack Obama created and passed the Patient Protection and Affordable Care Act (PPACA) in March of 2010. This sweeping legislation represents a political and philosophical agenda rather than a fiscal solution and fundamentally transforms America’s entire health care system. The legislation, often referred to in some circles as Obamacare, radically alters health care in the United States by imposing a host of new federal government mandates, regulations, bureaucracies, and taxes in this most personal area of American life.

Americans will be forced to buy insurance they may not want or value; businesses will be fined unless they acquiesce to government dictates about the composition, structure, and breadth of health insurance benefits; coverage must be certified as acceptable by government health exchanges, not by the individuals and their families who receive the insurance; private insurance companies will be forced to price their products according to government fiat rather than market forces; and doctors will be compelled to treat patients and accept lower prices for medical care based on what government-appointed panels determine to be appropriate.

In addition to the dramatic shift of power from individuals to the federal government, the plan calls for significant tax increases, including ones on the very sources of innovative medical technology that have improved and prolonged the lives of Americans so dramatically over the last half century. Hand-in-hand with more centralized control goes a massive expansion of Medicaid insurance. This irrational expansion of an entitlement health insurance program—one that is already widely acknowledged as financially unsustainable and a scandalous failure in terms of quality of care and access—will shift more costs onto those with private health insurance and provide further power to government for directly and indirectly restricting care. And despite all of these changes to health care and health insurance, Obamacare does not address the single issue of highest importance—cost. Health care costs are so high and escalating so significantly—most projections indicate that health care expenditures will soon overwhelm the entire federal government budget—that they threaten the sustainability of access to medical care and its excellence for America’s citizens.

All stakeholders recognize that reforms are essential. The debate is about what specific reforms are appropriate to reduce the cost and fix the inadequacies of this country’s health care without jeopardizing its distinction.

In an attempt to justify the radical reforms of the PPACA law and its premise that more government involvement is the solution to health care problems, President Obama and others have vilified private insurers and repeatedly criticized and unfavorably compared the quality of United States medical care to that in countries where government plays a far more prominent role in its availability and utilization.

In 2000, the World Health Organization published a report ranking the United States low among international health care systems. Despite its wide exposure in the peer-reviewed journals as an agenda-driven, biased compilation of misleading statistics, it supported two overtly flawed and at best indirect measures of health care quality—overall life expectancy and infant mortality—and gave supporters of the Democrat Congress and President Barack Obama’s transformative health care legislation a seemingly data-driven argument. The juxtaposition of the allegedly poor quality of United States health with the fact that health expenditures are higher in the United States than anywhere else in the world has rationalized the imposition of more government control of health care.

This book exposes the facts about the state of America’s health care. First, it revisits and analyzes the documents and statistics often cited as evidence that medical care in the United States is substandard and poor in value relative to that of other countries. Second, instead of relying on purely subjective judgments about equity and fairness, it provides evidence to answer the paramount question when considering quality of health care, Where do you want to be if you are sick? Here are the facts—as documented in scientific and medical journals—about the most important role of health care, which is the diagnosis and treatment of serious diseases. Medical care quality in the most important diseases in the United States is compared with that in other countries of the developed world. Here are the facts on access to medical care, inarguably one of the most fundamental requirements of any health care system, based on evidence from documents and journals, comparing the United States to numerous countries with nationalized systems often held up as models for health system reforms.

Last, this book proposes a logical and complete reform plan designed to maintain choice and access to excellence while facilitating competition. It gives specifics on cost reduction and individual empowerment and new transparency. Americans and their families should ultimately determine the appropriate price of health care and insurance using value-based decisions free from unnecessary government dictates. This book explains a series of key reforms in the three critical areas of the health care puzzle—tax structure, private insurance markets, and government health insurance programs—that will reduce health costs and maintain essential support for America’s most vulnerable citizens, seniors and low income families … all without jeopardizing the best health care the world has ever known.

Scott W. Atlas, MD

CHAPTER ONE

The WHO Ranking of Health Systems Redux: A Critical Appraisal

The ambitious World Health Report 2000 that ranked health care systems of nearly two hundred nations stands as one of the most influential and widely cited social science studies of health care systems in history.¹ For the past decade, this study has served as the de facto basis for much of the discussion about the health care system and health reforms in the United States. It is routinely cited by a wide range of concerned parties—government officials, policy experts, popular media, and laypersons—in the public discourse about health care. The heavily editorialized 2007 movie Sicko sensationalized the WHO rankings to denounce U.S. health care and promote socialized medicine, while earning an estimated 36 million dollars. Its most notorious claim—the relatively low U.S. rankings as defined by WHO of 37th (by overall performance) but also the less well-publicized ranking of 15th (by overall attainment)—ultimately assumed great importance by providing supporters of the Democratic Congress and President Barack Obama’s transformative health care legislation with a data-driven argument for radical reforms. Most commonly, the WHO study is asserted as objective evidence, especially in light of the fact that it is the world’s costliest, of the overall failure of America’s health care, as illustrated by comments like, We should expect a better return on this investment.²

In October 2008, candidate Obama used the study to claim that twenty-nine other countries have a higher life expectancy and thirty-eight other nations have lower infant mortality rates. On June 15, 2009, as he was beginning to make the case for his health-care bill at the annual conference of the American Medical Association, the new president said: As I think many of you are aware, for all of this spending, more of our citizens are uninsured, the quality of our care is often lower, and we aren’t any healthier. In fact, citizens in some countries that spend substantially less than we do are actually living longer than we do.³ The perfect encapsulation of the study’s findings and assertions came in a September 9, 2009, editorial in Canada’s leading newspaper, the Globe and Mail: With more than 40 million Americans lacking health insurance, another 25 million considered badly underinsured, and life expectancies and infant mortality rates significantly worse than those of most industrialized Western nations, the need for change seems obvious and pressing to some, especially when the United States is spending 16 percent of GDP on health care, roughly twice the average of other modern developed nations, all of which have some form of publicly funded system.

On the other hand, when the WHO study was published, its conclusions were met with great surprise by many health policy experts. In the highly respected peer-reviewed journal Lancet, Johns Hopkins University professor Vicente Navarro observed that while both Spain and Italy were near the top of European nations in the WHO report, these countries rarely were considered models of efficiency or effectiveness before.⁴ The rankings showed a marked disconnect with the reality experienced by citizens of many countries. The WHO ranking of Spain’s health care as third in Europe and the seventh best in the world coincided with unprecedented public demonstrations against Spain’s health care authorities which protested long waiting lists causing deaths and the miniscule three-minute average time spent with patients by primary care doctors. In concurrent surveys, 28 percent of Spanish citizens said they needed to completely rebuild their health care system, and another 49 percent said fundamental changes were needed.

And while the WHO ranked Italy as number two in the world in overall efficiency, 40 percent of Italians wanted complete rebuilding and another 46 percent said fundamental changes were needed. In striking contrast to the WHO report, Spain’s citizens were more displeased with their health care than any other major European country … except Italy. It might come as a surprise to our elected officials, the public, and the media that when asked about the WHO report Mark Pearson, head of health for the Organization for Economic Cooperation and Development (OECD), the thirty-member organization of the world’s largest economies, frankly admitted, Health analysts don’t like to talk about it in polite company. It’s one of those things that we wish would go away.⁵

Beyond contradictory data from citizens who actually use the health systems lauded by the WHO, and despite the exalted stature automatically granted to the WHO report by the all-too-willing advocates for more government control in health care, the WHO study has been roundly criticized by experts in health policy. An unrecognized and overlooked body of peer-reviewed literature, written by academic experts who have examined the study in detail, has exposed serious defects in the WHO report.⁶ On close inspection, fundamental flaws in methodology, large margins of error in data, and highly subjective inputs based on ideological bias have been found which thoroughly undermine the legitimacy of the comparative rankings in the WHO study.⁷ Ultimately, the document is only marginally a measure of health care performance at all; instead, it is a rank of countries in accordance with their alignment to a specific political and economic ideology—socialized medicine—despite its claims to objectively measure quality.

Even more than a decade after the report’s publication, today’s discussions about health care still are heavily based on the WHO rankings, which indicates the study’s ongoing impact. It is clear that far broader exposure of the overt