Heath Care: Europe vs. the US

Megan McArdle and Kevin Drum have a little debate about which system is better.

Megan first:

Since private systems have so far found it virtually impossible to deny many treatments for long, this will mean that millions of budget constrained people will find themselves with less available treatment than before.

(I say this assuming arguendo that we think a public plan can and will control costs by limiting treatment--a thesis of which I am actually pretty skeptical.)

This is not a crazy worry. What America is best at is delivering a lot of complicated care in extremis, and "quality of life" treatments. What European countries are best at is delivering a lot of ordinary care for the sorts of things that afflict people from 0-50, which is why most of the Europhile journalists writing about Europe genuinely have very good experiences to report. I'd rather be here to have a hip replacement, but I might rather be in the Netherlands to have a baby. Doing something moderately ordinary here is a hassle. Doing something extraordinary there is often not possible for the overwhelming majority of citizens, though that depends on what, and in what system.

Kevin responds:

Boy, I'd sure like to see some backup for that. If by "extraordinary" Megan means the most extreme 0.001% of procedures, then maybe she's right. Maybe....

No system is better at everything than any other system. There are always tradeoffs. But the overall evidence is crystal clear: European state healthcare systems, taken as a whole, provide better care than America's hodgepodege system at about half the price.

Maybe? You have to be kidding me. The question as to what system is better is up for debate, however, at the extreme, to quote Mr. Drum, the overall evidence is crystal clear: the US is far better. There is a reason we have the best doctors in the world many of which are immigrants.

Take as a whole, it is not at all clear the European state healthcare is better. More on that below.

Megan responds:

[C]ontrary to what Mr. Drum has apparently read--cancer survival rates in Europe lag those in the US. (Although this is complicated: we catch cancer earlier, because we're screening-test-mad, and some cancers just hang out for decades without killing you). At the highest macro level, life expectancy, Europe generally outperforms us. But it's not clear how much of that is health care, and how much things like our murder rate, and our famously sedentary lifestyles. When you drill down into many diseases, we outperform them. And many argue that we outperform them on hard-to-measure "lifestyle" issues: how fast your torn ACL gets repaired, how quickly (or whether) you get a hip replacement, etc. Such quality of life issues are nearly impossible to measure, though this hasn't stopped many people from trying. But I don't really trust the figures they generate.

Europe gets a great deal out of all of this. We figure out what works, then they adopt it. But we get a great deal too--we get earlier access to controversial treatments, and our future generations get all the treatments we've discovered so far.

Europe has cheaper healthcare that may or may not be better overall. They have access to largely American life-saving innovations later than we do thanks to their system. Also, due to price restrictions and other factors, the innovation paid for by US healthcare consumers is available to Europe at a reduced price. If we were to somehow switch to a system comparable to theirs, overall life expectancy on both sides of the Atlantic would stop increasing as fast. Treatment used in Europe is paid for by us because of our high costs. Big Pharma and biotech companies are able to pay for their life saving research because they know if the produce something worthwhile, they can market in the US. It then gets exported to Europe because these firms are profit maximizing and realize that even if they get fractions on the dollar on what they do in America, it costs almost nothing to produce something like a pill once the research has been done. But if they can't sell it for high prices in the US it reduces the incentive to innovate, and less useful medication and other technologies are invented. While this may be a worthy trade off, it means Europe can pay less for world class treatment than we do even if they get it later than Americans do.

As Americans, we like the absolute best treatment almost regardless of what it costs. If treatment A is 10 times as expensive as treatment B, and is 5% more effective, most of us, based largely on the recommendation of our doctors, choose treatment A. Often, we aren't even informed of treatment B because treatment A is "far superior" to all other options and only some irrational individual would choose B. Also, if coverage is provided by an employer or the government, there's not much reason to go with B. This is not necessarily a bad thing, a marginal improvement in care could mean the difference between life and death. Additionally, if the government is in the business of supply the poor with coverage, many people would be repulsed at the idea of providing them with inferior care to save a few dollars. This thinking dives innovation, as well as rapidly increasing healthcare costs that will potentially explode our national debt.

Healthcare cost inflation is a very difficult issue that is inseparable from innovation and treatment. While "treating the person not the disease", reducing the gold-plated treatment for very minor issues, improving healthcare IT, rooting out inefficiencies in administrative costs, preventive care etc. may make a dent in costs, they are not going to solve the problem. We, as a society, have to recognize the desire for the best treatments avaliable, innovation, and other prefrefences of ours cost a lot money. If we move to a system more like Europe (again, not necessarily a bad thing) the rate of innovation will decrease and some of the population will not have access to the absolute best medical technologies. Maybe more importantly, the next big medical invention might not get invented or get significantly delayed.

Some reduction in costs is obviously necessary, but it comes at a price, and we need to be honest about and aware that price.