Whereas, in the US…??? by mattsteinglass
July 8, 2009, 11:58 pm
Filed under: Europe, Health

[posted by Matt]

Megan McArdle writes, of US vs. European health care systems:

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.

Yeah…doing something extraordinary is “often not possible” for “the overwhelming majority of citizens” in the US either. Depends on what that “something extraordinary” is, because the overwhelming majority of people in the US really don’t have coverage that includes many of those “extraordinary” somethings.

I’m really not sure what Megan is talking about here and what evidence backs it up. My wife’s best childhood friend is currently on her third round of intensive arthroscopic knee surgery. Another friend’s wife is a 15-year leukemia survivor. My wife’s father broke his neck and had three vertebrae fused, and has been in various kinds of physiotherapy for related issues for 20-odd years. A close friend has two children with severe birth defects; one was expected to die within six months of birth but, with heart surgery as an infant and constant care, is now 5 and doing okay physically, though he’s severely mentally disabled. And the main difference I can see between all of these people and any similar cases in the US is that while most of the people I’ve mentioned above are of modest means — air traffic controller, nurse, anthropology grad student — none of them are bankrupt, and all of the medical decisions they’ve had to make have been strictly medical decisions, not financial ones.

Add: Going back, I see Megan is on even less firm ground in her earlier post on health care.

…as Ezra [Klein] points out, people in Germany and France are not dying in the streets.  So centralization does work better on health care than it does in steel. But I’d argue that the difference is that Germany and France, unlike the Soviet Union, have companies which produce in American markets to provide them products.

On the issue we are discussing — the issue of health insurance — Germany and France do not have any “companies which produce in American markets to provide them products”. The insurance policies offered by NUTS or AON in the Netherlands, say, are completely unrelated to the policies they offer in the US. The US could disappear from the face of the earth tomorrow with no substantial impact on how German or French health insurance companies write their policies, and no sensible argument to the contrary can be made. What Megan means to argue is that medical treatment and care is only developed in the free US market. But the German and French markets for medical treatment and care are no less “free” than the US market. What’s different are the markets for insurance. And “innovation” in insurance is almost exactly equal to new ways of siphoning away more money from the insured, and has virtually no benefits for anyone but those employed in the insurance industry.


5 Comments so far
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1) If you and other “liberal internationalists” truly believe that the US is “the
indispensable nation”, then if the US disappeared “from the face of the earth tomorrow”, the rest of the world would soon follow – and that would include health care in France and Germany. So take your pick, either the US is “the indispensable nation” or it is not. You can’t have it both ways.

2) European governments have far more price controls on prescription drugs than does the US. So a huge amount price shifting goes on, with US citizens subsidizing lower cost drugs around the world through higher priced drugs here at home. So what is your solution to this? Or is it something along the lines that it is the “responsibility” of the US to “provide global leadership” and bear these costs?

3) So, logically speaking, we can assume that you will never be one of these “medical tourists” that go to Asia advantage of free-enterprise medicine (which is supposedly “morally wrong” and inferior), instead of socialized medicine in the West, is that correct?

Comment by Frank

1) I can’t speak for Matt here, but I can’t say that I get the impression that he is a ‘liberal internationalist’ of the type you describe (which would seem to be more along the lines of the liberal interventionists who he has often criticised).

2) Price controls do not matter so much as the low prices offered by state-run medical systems like the NHS via subsidy and bulk-buying. I guess I should also point out the massive pharmaceutical companies carrying out R&D in the Europe: GSK, Bayer, AstraZeneca, Hoffman-La Roche, Sanofi-Aventis, and Novartis are all based here. Whilst the US is an important market for these companies, servicing the large state medical systems as well as private companies (like BUPA for example) which operate in Europe is equally important.

3) I’m very curious to ask which country in Asia offers ‘free-enterprise’ medicine. Every country in Asia that I can think of has roughly the same mix of public and private (in varying degrees) as Europe does. These vary from Hong Kong (public hospitals and private ones similar to the UK), to Taiwan (state insurance covering basic meds, private for everything else).I am not exactly sure who you are quoting when you say ‘”morally wrong” and inferior’ – Matt did not use these words in his post.

However, if you ask me where I would sooner have cancer, a degenerative nerve disease, or any other chronic condition, my preference would be for the only European country whose health-care system I have used – the UK. It is free at the point of use, renders relatively high quality care, is far less wasteful than the US system, and still leaves open the possibility of going to a private hospital.

Comment by foarp


On some of these issues you challenge me on, I would prefer that you would get a little more educated.

1) His overall overall tone is liberal internationalist. I’m not going to spend a lot of time on this, but things such as Russia needing to join the Western consensus and the only kind of acceptable democracy is of the Western kind are adequate examples.

2) The fact that the US has few price controls on drugs is well known as is the fact that American consumers are charged higher prices by drug companies to make up for thin profit margins elsewhere in the world. Almost no one denies this except for you.

3) India, Thailand, and Singapore all promote “medical tourism”, that is free enterprise for Westerners since Westerners are not citizens of these countries and hence are not entitled to “free” health care as local citizens in these countries are.

Comment by Frank

1) The ‘tone’ a reader can find in a piece can often be informed by their own opinions. Matt has been highly critical of liberal interventionism, and recognised the viability of other forms of government other than liberal democracy.

2) ‘Well known’ is not the same as ‘true’, especially when it only seems to be ‘well known’ by people pushing a particular agenda. GlaxoSmithKline, for example, had a first-quarter 2009 pharmaceuticals turnover of £2,200 million in the US as compared to £1,900 million in the EU – comparably sized economies. Pfizer, Bayer, etc. all show similar ratios. This tells us that whilst the US is an important market, the EU is of comparable importance to these companies. Pharamaceutical companies also invest large amounts in research in Europe, for example Pfizer spent £500 million in UK last year on R&D.

3) What I fail to see is how this proves your point. All it shows is that hospitals in these offer private medical treatment at a lower cost than private hospitals the west, and can do so as their operating costs are lower due to lower labour costs, greater availability of doctors, and lower standards of practice. Another factor driving tourism is the freedom offered to sharp practitioners in these countries by lax regulatory environments to offer treatment (such as stem-cell treatment) which is either not proven to work or not yet approved for use on human beings in the West. Medical tourism is evidence that the invisible hand of market forces operates for elective medical treatments, particularly plastic surgery, but I’m hard-pressed to see how it demonstrates your point. Are you suggesting that in future westerners suffering from Alzheimer’s disease, Parkinson’s, chronic back-complaints, chronic respiratory or pulmonary conditions will choose to relocate to Asia?

As for your point on education, I’m going to take a wild guess and say that only one of us did their dissertation on pharmaceuticals IP and EC competition law.

Comment by foarp

1) Name one post, just one, of his 1 month ago or later, where he specifically criticizes “liberal internationalism” – and where the words “liberal internationalism” are in the post. “Liberal interventionism” are your words, not mine.
2) You really know nothing about the issue I brought up with regards to price shifting and your argument on this point doesn’t even address what I was talking about.
3) For most routine procedures, private medical care in Asia is more than sufficient. As for more advanced procedures, the issue is more complicated. It is a cost-benefit analysis. In the future, if I need some tissue-generation procedure and I have to wait say 5 years to see the doctor of my choice because my problem is not life-threatening, then yes, I will be in Asia even if I would be prefer to be in the USA.

Millions of Westerners are already living in Asia officially or unofficially – and they will be joined my millions more Westerners in the coming decades. And those already there are receiving more than adequate medical care at a fraction of the cost in the West.

If you don’t like the “lower standards of practice” and “lax regulatory environments” in Asia, then stay where you are in the West. Those issues don’t bother me one bit.

Comment by Frank

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