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WHO's Fooling Who? The World Health Organization's Problematic Ranking of Health Care Systems, Cato Briefing Paper No. 101

WHO's Fooling Who? The World Health Organization's Problematic Ranking of Health Care Systems, Cato Briefing Paper No. 101

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Published by Cato Institute
The World Health Report 2000, prepared by the
World Health Organization, presented performance
rankings of 191 nations' health care systems.
These rankings have been widely cited in
public debates about health care, particularly by
those interested in reforming the U.S. health care
system to resemble more closely those of other
countries. Michael Moore, for instance, famously
stated in his film SiCKO that the United States
placed only 37th in the WHO report. CNN.com,
in verifying Moore's claim, noted that France and
Canada both placed in the top 10.

Those who cite the WHO rankings typically
present them as an objective measure of the relative
performance of national health care systems.
They are not. The WHO rankings depend crucially
on a number of underlying assumptions
The World Health Report 2000, prepared by the
World Health Organization, presented performance
rankings of 191 nations' health care systems.
These rankings have been widely cited in
public debates about health care, particularly by
those interested in reforming the U.S. health care
system to resemble more closely those of other
countries. Michael Moore, for instance, famously
stated in his film SiCKO that the United States
placed only 37th in the WHO report. CNN.com,
in verifying Moore's claim, noted that France and
Canada both placed in the top 10.

Those who cite the WHO rankings typically
present them as an objective measure of the relative
performance of national health care systems.
They are not. The WHO rankings depend crucially
on a number of underlying assumptions

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Published by: Cato Institute on Mar 27, 2009
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WHO’s Fooling Who? 
The World Health Organization’s Problematic Ranking of Health Care Systems
by Glen Whitman
Glen Whitman is an associate professor of economics at California State University at Northridge.
No. 101
The
World Health Report 2000
, prepared by theWorld Health Organization, presented perfor-mance rankings of 191 nations’ health care sys-tems. These rankings have been widely cited inpublic debates about health care, particularly by thoseinterestedinreformingtheU.S.healthcaresystem to resemble more closely those of othercountries.MichaelMoore,forinstance,famously stated in his film
SiCKO
that the United Statesplaced only 37th in the WHO report. CNN.com,inverifyingMoore’sclaim,notedthatFranceandCanadabothplacedinthetop10.Those who cite the WHO rankings typically present them as an objective measure of the rela-tiveperformanceofnationalhealthcaresystems.Theyarenot.TheWHOrankingsdependcrucial-ly on a number of underlying assumptionssome of them logically incoherent, some charac-terizedbysubstantialuncertainty,andsomeroot-edinideologicalbeliefsandvaluesthatnotevery-oneshares.The analysts behind the WHO rankingsexpress the hope that their framework “will lay thebasisforashiftfromideologicaldiscourseonhealth policy to a more empirical one.” Yet theWHOrankingsthemselveshaveastrongideolog-ical component. They include factors that arearguablyunrelatedtoactualhealthperformance,someofwhichcouldevenimproveinresponsetoworse health performance. Even setting thoseconcernsaside,therankingsarestillhighlysensi-tivetobothmeasurementerrorandassumptionsabouttherelativeimportanceofthecomponents. And finally, the WHO rankings reflect implicit valuejudgmentsandlifestylepreferencesthatdif-feramongindividualsandacrosscountries.
February28,2008
Executive Summary
Cato Institute1000 Massachusetts Avenue, N.W.Washington, D.C. 20001(202) 842-0200
 
Introduction
The
World Health Report 2000
, prepared by theWorldHealthOrganization,presentedper-formancerankingsof191nations’healthcaresystems.
1
Those rankings have been widely cited in public debates about health care, par-ticularly by those interested in reforming theU.S.healthcaresystemtoresemblemoreclose-lythoseofothercountries.MichaelMoore,forinstance, famously stated in his film
SiCKO
that the United States placed only 37th in theWHO report. CNN.com, in verifying Moore’sclaim, noted that France and Canada bothplacedinthetop10.
2
Those who cite the WHO rankings typi-callypresentthemasanobjectivemeasureof the relative performance of national healthcare systems. They are not. The WHO rank-ings depend crucially on a number of under-lying assumptions—some of them logically incoherent, some characterized by substan-tial uncertainty, and some rooted in ideolog-ical beliefs and values that not everyoneshares.Changesinthoseunderlyingassump-tions can radically alter the rankings.
MoreThanOneWHORanking
The first thing to realize about the WHOhealth care ranking system is that there ismore than one. One ranking claims to mea-sure “overall attainment” (OA) while anotherclaimstomeasure“overallperformance”(OP).These two indices are constructed from thesame underlying data, but the OP index isadjusted to reflect a country’s performancerelative to how well it theoretically could haveperformed (more about that adjustmentlater). When using the WHO rankings, oneshould specify which ranking is being used:OAorOP.Many popular reports, however, do notspecify the ranking used and some appear tohave drawn from both. CNN.com, for exam-ple, reported that both Canada and Francerank in the top 10, while the United Statesranks 37th. There is no ranking for whichboth claims are true. Using OP, the UnitedStates does rank 37th. But while France isnumber1onOP,Canadais30.UsingOA,theUnited States ranks 15th, while France andCanadarank6thand7th,respectively.Innei-ther ranking is the United States at 37 whilebothFranceandCanadaareinthetop10.Which ranking is preferable? WHO pre-sents the OP ranking as its bottom line onhealth system performance, on the groundsthatOPrepresentstheefficiencyofeachcoun-try’s health system. But for reasons to be dis-cussed below, the OP ranking is even moremisleading than the OA ranking. This paperfocuses mainly on the OA ranking; however,themainobjectionsapplytobothOPandOA.
FactorsforMeasuringtheQualityofHealthCare
The WHO health care rankings resultfrom an index of health-related statistics. Aswith any index, it is important to considerhow it was constructed, as the constructionaffects the results. WHO’s index is based onfive factors, weighted as follows:
3
1.Health Level: 25 percent2.Health Distribution: 25 percent3.Responsiveness: 12.5 percent4.Responsiveness Distribution: 12.5 per-cent5.Financial Fairness: 25 percentThefirstandthirdfactorshavereasonably goodjustificationsforinclusionintheindex:
 Health Level.
This factor can most justifi-ably be included because it is measured by a country’s disability-adjusted life expectancy (DALE). Of course, life expectancy can beaffectedbyawidevarietyoffactorsotherthanthehealthcaresystem,suchaspoverty,geogra-phy, homicide rate, typical diet, tobacco use,and so on. Still, DALE is at least a direct mea-sureofthehealthofacountry’sresidents,soitsinclusionmakessense.
2
TheWHOrankingsincludefactorsthatarearguably unrelatedtoactualhealthperformance,someofwhichcouldevenimproveinresponsetoworsehealthperformance.
 
 Responsiveness.
Thisfactormeasuresavari-ety of health care system features, includingspeed of service, protection of privacy, choiceofdoctors,andqualityofamenities(e.g.,cleanhospital bed linens). Although those featuresmay not directly contribute to longer lifeexpectancy, people do consider them aspectsofthequalityofhealthcareservices,sothereisastrongcaseforincludingthem.Theotherthreefactors,however,areprob-lematic:
 FinancialFairness.
 Ahealthsystem’sfinan-cialfairness(FF)ismeasuredbydetermininghousehold’s contribution to health expendi-ture as a percentage of household income(beyond subsistence), then looking at the dis-persionofthispercentageoverallhouseholds.The wider the dispersion in the percentage of household income spent on health care, theworse a nation will perform on the FF factorand the overall index (other things beingequal).In the aggregate, poor people spend a larg-er percentage of income on health care thando the rich.
4
Insofar as health care is regardedasanecessity,peoplecanbeexpectedtospendadecreasingfractionoftheirincomeonhealthcare as their income increases. The samewould be true of food, except that the richtendtobuyhigher-qualityfood.The FF factor is not an objective measureof health attainment, but rather reflects a  value judgment that rich people should pay more for health care, even if they consumethe same amount. This is a value judgmentnot applied to most other goods, even thoseregarded as necessities such as food andhousing.Mostpeopleunderstandandacceptthat the poor will tend to spend a larger per-centage of their income on these items.More importantly, the FF factor, whichaccounts for one-fourth of each nation’s OAscore, necessarily makes countries that rely onmarket incentives look inferior. The FF mea-sure rewards nations that finance health careaccordingtoabilitytopay,ratherthanaccord-ing to actual consumption or willingness topay. In most countries, a household’s tax bur-den is proportional to income, or progressive(i.e., taxes consume an increasing share of income as income rises). Thus, a nation’s FFscore rises when the government shouldersmore of the health spending burden, becausemore of the nation’s medical expenditures arefinanced according to ability to pay. In theextreme, if the government pays for
al
healthcare,thenthedistributionofthehealth-spend-ing burden is exactly the same as the distribu-tion of the tax burden. To use the existingWHO rankings to justify more governmentinvolvement in health care—such as via a sin-gle-payer health care system—is therefore toengage in circular reasoning because the rank-ingsare
designed
inamannerthatfavorsgreatergovernment involvement. If the WHO rank-ingsaretobeusedtodeterminewhethermoregovernment involvement in health care pro-motes better health outcomes, the FF factorshouldbeexcluded.The ostensible reason for including FF inthe health care performance index is to con-sider the possibility of people landing in direfinancial straits because of their health needs.It is debatable whether the potential for desti-tutiondeservesinclusioninastrictmeasureof health performance
per se
. But even if it does,the FF factor does not actually measure expo-suretoriskofimpoverishment.FFiscalculat-ed by (1) finding each household’s contribu-tion to health expenditure as a percentage of household income (beyond subsistence), (2)
cubing 
the difference between that percentageand the corresponding percentage for theaverage household, and (3) taking the sum of all such cubed differences.
5
Consequently, theFF factor penalizes a country for each house-hold that spends a larger-than-average per-centage of its income on health care. But italso penalizes a country for each householdthat spends a 
smaller 
-than-average percentageofitsincomeonhealthcare.Put more simply, the FF penalizes a coun-try because some households are especially likely to become impoverished from healthcosts—butitalsopenalizesacountrybecausesome households are especially 
unlikely
tobecome impoverished from health costs. Inshort, the FF factor can cause a country’s
3
TousetheexistingWHOrankingsto justifymoregovernmentinvolvementinhealthcareistoengageincircularreasoningbecausetherank-ingsare
designed 
inamannerthatfavorsgreatergovernmentinvolvement.

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