National Healthcare

[Gerald Tarrant]

I wanted to post this after some of my family's experiences with health insurance. I'm posting it now despite Mr. Snowman's similar thread, because I think it's tangential enough to warrant its own thread since my question is about foreign National Health care. Also I spent a long time writing this, so the other thread may now encompass this topic. In which case I apologize for duplicating thread topics.

To start some background; my youngest brother has Leukemia. It was touch and go for a while, but now he's in remission again and the doctors are getting ready for a bone marrow transplant. During the course of his treatment, his pediatric oncologists wanted him to go on anti-fungal medication (chemo usually has anti-immune system side-effects). The case workers at our health provider weren't sure it was necessary because apparently there weren't enough studies and statistical analysis about this sort of thing; so he didn't get the anti-fungals. In Murphy-esque fashion he got a fungal infection which almost killed him; treatment included putting a tube in his lungs for direct application of anti-fungals. And he spent 2 weeks in the intensive care unit at an excellent children's hospital (Primary Children's Medical Center in Salt Lake City). The treatment he received for that 2-week period ended up costing around 99,000 dollars (patient to doctor and nurse ratio is much lower, plus he got very expensive medication). And now of course the Insurance company (bastards) allowed his anti-fungal drugs.

Unfortunately this is also my younger brother's 2nd relapse of leukemia (or third round of chemo for curative purposes) each relapse means that his statistical likelihood of survival is lower. That forced the Doctors to use more aggressive treatment approaches. One month's worth of treatments including surgeries and hospital stays were 21,000 dollars. Eventually they switched to a new drug Chlofarabine, and this round of chemo seems to have done the trick (although as per it's normal side effects my younger brother's platelets are slower to recover). Once again the treatment is incredibly costly (Chlofarabine was running around 2500 a dose, and it's very invasive also the side effects are more persistent and pronounced-forcing him to stay in the hospital longer).

So now some caveats about my political leanings, and then my questions. I'm a libertarian, one of the market libertarians instead of a rights-based one. So I've always had some reticence about National Health Care, mostly it was formless (and maybe baseless) fears about Creeping Socialism. After some study and reading, that's coalesced into a worry about what Monopsony power would do to Medical Research in the US; which is primarily profit driven. Balanced against this concern is the certainty that uninsured persons in my family's position would face crippling medical bills and bankruptcy to prevent the death of a child (and without insurance it's unlikely that they would be able to afford the highest quality care that was necessary in my brother's case, meaning all that heartache and financial ruin might still result in death). So to clarify I've developed some un-Libertarian empathy[size=0]I'm being sort of facetious[/size], but I'm still worried about the unintended consequences of National Health Care, and I'm trying to find out how many of them are justified. To wit, here are my questions:

• 1. How do foreign national health care (NHC) plans control costs for cases similar to my brothers?
  1a. In my brother's case Health Insurance made a bad bet on preventative care which massively impacted long-term costs. I don't imagine this is true for NHC in other countries, but does anyone have specific knowledge of this?
  2. How do the rest of the world foreign medical industries compare to the U.S's (drug research, medical technology, Health professional training etc)
  3. How do foreign NHC plans compare in health outcomes for marginal patients like my brother? (I say marginal because the 2nd relapse really lowers his chances).
  4. If you have any of this sort of information, do you have any time-sequenced stuff? I.E. before and after major expansions in your country's NHC.

I'm hoping for people with specific information, either direct experience or like stuff from an equivalent to the US NIH. I realize it's a little odd since my information is only anecdotal; but since the contributorship to this site includes people that have been the beneficiary of other systems I thought information about Health Outcomes and the like might be available to them. And

[AdmiralKanos]

First, let me say how sorry I am to hear that your family is suffering through such a terrible illness.

1. How do foreign national health care (NHC) plans control costs for cases similar to my brothers?

Are you asking if they are as cost-efficient as the ridiculously expensive private industry figures you cited? Is this a joke?

1a. In my brother's case Health Insurance made a bad bet on preventative care which massively impacted long-term costs. I don't imagine this is true for NHC in other countries, but does anyone have specific knowledge of this?

There is no way to make bad judgement calls impossible. That will happen under any kind of system.

2. How do the rest of the world foreign medical industries compare to the U.S's (drug research, medical technology, Health professional training etc)

Health outcomes are not significantly different between Canada and the US, despite our health-care system costing far less than yours and covering the entire population. As for medical research, I'm not sure what the current figures are, but I've never seen anyone explain why a single-insurer system would somehow prevent research. Some say that the US system is the best because it generates the most research, but since it's also the biggest single market, that would be an almost certain outcome under any system.

3. How do foreign NHC plans compare in health outcomes for marginal patients like my brother? (I say marginal because the 2nd relapse really lowers his chances).

Your brother is probably doing as well as he would be under any other system. It's the people who have no insurance who are screwed by your system. If you had no insurance or you lost coverage for some reason, your parents would have to bankrupt themselves trying to keep your brother alive. Only after they had completely destroyed themselves financially, the government would step in to help.

4. If you have any of this sort of information, do you have any time-sequenced stuff? I.E. before and after major expansions in your country's NHC.

Your family is in a good position in the US health-care system if you have an insurer who is actually paying the bills. The biggest weakness of the US system is not how patients do when the system is there for them; it is how patients do when the system tells them to go fuck themselves.

[Gerald Tarrant]

First, let me say how sorry I am to hear that your family is suffering through such a terrible illness.

Thanks I appreciate that.

1. How do foreign national health care (NHC) plans control costs for cases similar to my brothers?

Are you asking if they are as cost-efficient as the ridiculously expensive private industry figures you cited? Is this a joke?

First of all some background, then the question. Some of the cost of US healthcare includes profit for hospitals, and HMO's, obviously a public Healtcare system doesn't have that concern. However other high cost factors apply. Skilled labor like RN's, Doctors and medical technicians is very expensive. (I believe Doctors are the highest paid profession in the US-excluding CEO's). Also the Chemotherapy drug prices turn out to be pretty pricey, the current regime my little brother is on runs $2500 a dose.
The ICS (Immune Compromised Suites) also requires extra precautions, higher training for nurses, more frequent maintenance of air filters, more stringent anti-infection protocols, which accounts for some of the higher cost of the treatment.

Now I'm well aware that removing profit from the consideration of health providers and hospitals cuts costs. My question is, is that the only way that foreign health services cut costs? If my brother were treated in Canada would the only difference in cost of treatment be due to the fact that health providers don't get profits? Or does Canada have other ways of lowering costs for similarly expensive patients?

More broadly does Socialized Healthcare have more insights to offer American observers other than no profit for healthcare providers? I wouldn't doubt if this were the case, risk averse Insurance providers might stymie useful innovations, but I don't know about this, and that's the sort of question I'm asking.

1a. In my brother's case Health Insurance made a bad bet on preventative care which massively impacted long-term costs. I don't imagine this is true for NHC in other countries, but does anyone have specific knowledge of this?

There is no way to make bad judgement calls impossible. That will happen under any kind of system.

Private Insurance has the added pressure of maintaining profits which means they have heavier pressures to reduce costs than a socialized medicine case worker would.

As a thought experiment these are the simplified restrictions the two should face.

Code: Select all

Private Insurer
Total_Treatment_Cost + Profit = Premiums_Received

Public Health Provider
Total_Treatment_Costs = Budget Allocated

Now as a thought experiment consider 
Premiums_Received = Budget Allocated (i.e. their "customers" pay the same)

It's clear that Private Insurer's treatment costs != Public "Insurer's"

In this case I mean total treatment of all patients.

Now it seems to me that a private insurer would have more pressure to limit the moderately expensive preventative maintenance to maximize their profits. (I realize this is complicated by actuarial analysis) That suggests to me that beneficiaries of Socialized Medecine probably get a few more of the expensive precautionary treatments. This reasoning may be wrong, but my question concerns more the experience you may have with this.

2. How do the rest of the world foreign medical industries compare to the U.S's (drug research, medical technology, Health professional training etc)

Health outcomes are not significantly different between Canada and the US, despite our health-care system costing far less than yours and covering the entire population. As for medical research, I'm not sure what the current figures are, but I've never seen anyone explain why a single-insurer system would somehow prevent research. Some say that the US system is the best because it generates the most research, but since it's also the biggest single market, that would be an almost certain outcome under any system.

I don't know anything about this which is why I'm asking. I've heard claims that the US pharma makers make more new drugs per-capita than other countries. However I haven't seen evidence of this.

The theory about this however is a little more solid. Monopsonies are single buyers which have sellers competing to sell to them (think Wal-Mart). They can get better prices than buyers would in a free market with many buyers and sellers. Now the Pharma Industry in the US includes lots of failures for every good drug. (If you remember the Martha Stewart scandal, she got in trouble for selling stock from a company who didn't get approval for their cancer drug, which effectively killed the drug company in question, the pharma company had huge costs for research and no viable product).

The worry is that cutting profits will make the drug companies take less risks, which means less new drugs. That's the theory anyway.

3. How do foreign NHC plans compare in health outcomes for marginal patients like my brother? (I say marginal because the 2nd relapse really lowers his chances).

Your brother is probably doing as well as he would be under any other system. It's the people who have no insurance who are screwed by your system. If you had no insurance or you lost coverage for some reason, your parents would have to bankrupt themselves trying to keep your brother alive. Only after they had completely destroyed themselves financially, the government would step in to help.

Alright, I'd actually heard some contrary claims that health outcomes were actually not as good for American HMO clients as they were for citizens with socialized Health Care.

4. If you have any of this sort of information, do you have any time-sequenced stuff? I.E. before and after major expansions in your country's NHC.

Your family is in a good position in the US health-care system if you have an insurer who is actually paying the bills. The biggest weakness of the US system is not how patients do when the system is there for them; it is how patients do when the system tells them to go fuck themselves.

Here I was actually hoping to separate out some of the differences between health outcomes that aren't insurance related. America has higher obesity rates which create worse outcomes, similar cross country comparisons include "noise" outcome difference not-attributed to Insurance. But information about Health care outcomes before/after Socializing schemes reduces many of those variables. Also looking at a country's Pharma industry before/after removes the variables like different tax structure, and things like education. Whereas if we were to compare German and American Pharma (for example) the comparison would include higher taxes in Germany which has higher average unemployment than the US.


I'm not trying to argue any position. Call me a doctrinaire free-marketer who is suffering a crisis of faith and is trying to separate fact from unfounded dogma. As such I'm trying to verify/falsify the claims that I can, which is part of what my OP was about.

[mr friendly guy]

I just want to make a comment on the treatment angle. It may be a bit different for kids, but having worked on haem / onc wards for adults, I have to say anti-fungals are not usually given as a prophylaxis ( to prevent).

According to the protocol when people start dropping their cell count we do things like isolate, and if they get a temperature we start culturing blood and giving antibiotics (bacteria being the more common infection). If they are not responding then we consider fungus and start putting them on antifungals are trying to find the specific one.

This is of course with ADULTS, and there may very well be a different protocol for kids.

[Gerald Tarrant]

I just want to make a comment on the treatment angle. It may be a bit different for kids, but having worked on haem / onc wards for adults, I have to say anti-fungals are not usually given as a prophylaxis ( to prevent).

According to the protocol when people start dropping their cell count we do things like isolate, and if they get a temperature we start culturing blood and giving antibiotics (bacteria being the more common infection). If they are not responding then we consider fungus and start putting them on antifungals are trying to find the specific one.

This is of course with ADULTS, and there may very well be a different protocol for kids.

Thanks, that may explain the Insurance companies decisions a little better. My understanding of the Oncology people's decision was this: This was my brother's first relapse, so the Oncology people said they were going to be more aggressive in their treatment. During the first treatment my little brother was able to spend most of his recovery period out of the hospital, and while the doctors insisted on extra cleanliness at home they thought that he would be able to spend time away from the hospital. During the second bout of chemo, his WBC counts dropped much faster (I thought this was due to the more aggressive treatment). My brother was still able to spend time at home, but the doctors were much more concerned about infection, which was why they wanted the anti-fungal. I don't remember any problems with approval of the prescribed medications for the initial response. All the other requests the oncology people had for medication were approved by my parent's insurance. This was the only thing that got any objection.

He was 14 at his initial diagnosis with ALL. My understanding is that treatment of ALL for that age group generally follows a certain routine. I thought the relapse made them reconsider how they treated my brother. During the first bout BMT wasn't discussed, but after the relapse they discussed it as an almost certainty. This is probably why the Oncology people differed from SOP. Of course since SOP apparently didn't normally include anti-fungals it offers an excuse for the insurance company's decision. So my comment about them was wrong.

[Darth Wong]

First of all some background, then the question. Some of the cost of US healthcare includes profit for hospitals, and HMO's, obviously a public Healtcare system doesn't have that concern. However other high cost factors apply. Skilled labor like RN's, Doctors and medical technicians is very expensive. (I believe Doctors are the highest paid profession in the US-excluding CEO's). Also the Chemotherapy drug prices turn out to be pretty pricey, the current regime my little brother is on runs $2500 a dose.
The ICS (Immune Compromised Suites) also requires extra precautions, higher training for nurses, more frequent maintenance of air filters, more stringent anti-infection protocols, which accounts for some of the higher cost of the treatment.

Now I'm well aware that removing profit from the consideration of health providers and hospitals cuts costs. My question is, is that the only way that foreign health services cut costs? If my brother were treated in Canada would the only difference in cost of treatment be due to the fact that health providers don't get profits? Or does Canada have other ways of lowering costs for similarly expensive patients?

Doctors and nurses were traditionally not as well-paid in Canada as they were in the US, although they were still highly paid. The collapse of the US dollar may have changed that, however, in terms of buying power. Our hospitals do have oncology facilities etc. like yours, although (as the US right-wing media is fond of pointing out), we have fewer MRI machines per capita than the US does. One area where we have a particular cost advantage (apart from the elimination of the profit motive) is the fact that our doctors are encouraged to use generic drugs whenever one is available, rather than brand-name ones (a lot of American doctors are bribed by drug companies to prescribe very expensive brand-name drugs where a generic one will do), and we also have price controls on some kinds of drugs to keep their costs from spiralling out of control. Another area of cost savings is in the area of paperwork; the American health-care system wastes far more money on paperwork than the Canadian system does, because the structure of our system is simplified relative to yours.

More broadly does Socialized Healthcare have more insights to offer American observers other than no profit for healthcare providers? I wouldn't doubt if this were the case, risk averse Insurance providers might stymie useful innovations, but I don't know about this, and that's the sort of question I'm asking.

American health-care is dominated by the profit motives not just of the insurance companies, but also of the big pharmaceutical companies. They insist that no R&D would go on if they were forced to abide by price controls as they do in Canada, but given the fact that a sizable percentage of current pharmaceutical R&D is actually government-subsidized already (something the pharmaceutical companies ignore in many ways, such as the fact that they invariably cite before-tax R&D costs even though R&D is a tax-deductible expense for them), I don't buy their propaganda. Particularly since the American pharmaceutical companies spend twice as much on marketing and administration as they do on R&D. According to Verispan, America's health-care system has an astonishing occupation army of over 100,000 pharmaceutical salesmen; who do you think pays for this?

Also, according to the Patented Medicines Price Review Board, Sweden, Switzerland, and the UK all spent more on R&D than their share of drug sales would suggest. France, Germany, and the US spend roughly the same amount on R&D as their sales shares would indicate, and Canada and Italy spent less than our sales shares would indicate. So yes, Canada isn't spending that much on R&D, but our immediate proximity to the huge market of the US probably has something to do with that. Looking at the other countries, there doesn't seem to be any correlation between socialized medicine and health-care R&D spending, and in fact, Canada has passed several measures since the 1980s designed to make the pharmaceutical industry in Canada more profitable, having been promised that R&D spending would increase accordingly. It has not.

More info: http://www.healthcoalition.ca/pharm.html

Private Insurance has the added pressure of maintaining profits which means they have heavier pressures to reduce costs than a socialized medicine case worker would.

True, although the effect is variant depending on client class. If you are wealthy, the US system will spare no expense to take care of you, and probably do more for you than Canada's system would (indeed, the generous health-care provided to millionaires and wealthy politicians was once cited by the Wall Street Journal as an advantage of the US system, in an almost comical reveal of their true mentality). But if you are poor, then the system will tend to find ways to cut its costs, because they know they're not getting them back.

I don't know anything about this which is why I'm asking. I've heard claims that the US pharma makers make more new drugs per-capita than other countries. However I haven't seen evidence of this.

Here's a source for you. According to this source, Canada does indeed lag behind the US in terms of drug R&D spending, but other countries with socialized health-care are actually ahead of it. Other market factors are probably at work here, since the US has the highest drug costs in the world yet does not seem to be translating this into the highest relative R&D spending. The fact that it spends the most in absolute terms does not mean much; it is the biggest single market.

The theory about this however is a little more solid. Monopsonies are single buyers which have sellers competing to sell to them (think Wal-Mart). They can get better prices than buyers would in a free market with many buyers and sellers. Now the Pharma Industry in the US includes lots of failures for every good drug. (If you remember the Martha Stewart scandal, she got in trouble for selling stock from a company who didn't get approval for their cancer drug, which effectively killed the drug company in question, the pharma company had huge costs for research and no viable product).

The biggest problem with big pharma is that they spend a shitload of money on marketing and they tend to develop drugs which will make them the most money, not necessarily drugs which are the most beneficial to public health. As a strict matter of incentive, they really don't have to give a shit which drugs are most beneficial to public health.

The worry is that cutting profits will make the drug companies take less risks, which means less new drugs. That's the theory anyway.

The theory neglects the two facts already mentioned: 1) the tendency to create drugs which will be highly profitable over drugs which are most necessary for public health reasons, and 2) the incredible amount of money spent on drug advertising.

Alright, I'd actually heard some contrary claims that health outcomes were actually not as good for American HMO clients as they were for citizens with socialized Health Care.

If you want to look at some articles about American HMOs from a more informed perspective, you should check out http://www.pnhp.org/

Here I was actually hoping to separate out some of the differences between health outcomes that aren't insurance related. America has higher obesity rates which create worse outcomes, similar cross country comparisons include "noise" outcome difference not-attributed to Insurance. But information about Health care outcomes before/after Socializing schemes reduces many of those variables. Also looking at a country's Pharma industry before/after removes the variables like different tax structure, and things like education. Whereas if we were to compare German and American Pharma (for example) the comparison would include higher taxes in Germany which has higher average unemployment than the US.

The problem is that health-care programs take a long time to change, and all of these social variables are changing at the same time. That is scarcely more controlled than a cross-border comparison.

I'm not trying to argue any position. Call me a doctrinaire free-marketer who is suffering a crisis of faith and is trying to separate fact from unfounded dogma. As such I'm trying to verify/falsify the claims that I can, which is part of what my OP was about.

Check out those links I provided. Maybe they will help.

[Knife]

Just wanted to poke my head in here and express my sympathies to your family. Primary is an excellent hospital though, so take some sollace in that.

[Uraniun235]

Just to poke my head in and offer some numbers, this article suggests that if American health care was to trim administrative expenses to similar proportions as in Canada, the savings would be more than sufficient to provide coverage to everyone currently uninsured.

To more specifically address the business-oriented question of the OP; from the same article:

The participation of private insurers raises administrative costs. The small private insurance sectors in Australia, Canada, Germany, and the Netherlands all have high overheads: 15.8%, 13.2%, 20.4% and 10.4% respectively, far higher than the 1% to 4% overhead of public insurance programs. Functions essential to private insurance but absent in public programs - e.g. underwriting, marketing, and corporate services - account for about two-thirds of private insurers' overhead. In addition, private insurers have incentives to erect administrative hurdles - by complicating and stalling payment they can hold premiums longer, boosting their interest income. Such hurdles also discourage some patients and providers from pursuing claims.

[Gerald Tarrant]

American health-care is dominated by the profit motives not just of the insurance companies, but also of the big pharmaceutical companies. They insist that no R&D would go on if they were forced to abide by price controls as they do in Canada, but given the fact that a sizable percentage of current pharmaceutical R&D is actually government-subsidized already (something the pharmaceutical companies ignore in many ways, such as the fact that they invariably cite before-tax R&D costs even though R&D is a tax-deductible expense for them), I don't buy their propaganda. Particularly since the American pharmaceutical companies spend twice as much on marketing and administration as they do on R&D. According to Verispan, America's health-care system has an astonishing occupation army of over 100,000 pharmaceutical salesmen; who do you think pays for this?

Also, according to the Patented Medicines Price Review Board, Sweden, Switzerland, and the UK all spent more on R&D than their share of drug sales would suggest. France, Germany, and the US spend roughly the same amount on R&D as their sales shares would indicate, and Canada and Italy spent less than our sales shares would indicate. So yes, Canada isn't spending that much on R&D, but our immediate proximity to the huge market of the US probably has something to do with that. Looking at the other countries, there doesn't seem to be any correlation between socialized medicine and health-care R&D spending, and in fact, Canada has passed several measures since the 1980s designed to make the pharmaceutical industry in Canada more profitable, having been promised that R&D spending would increase accordingly. It has not.

More info: http://www.healthcoalition.ca/pharm.html

Case studies like that are probably the most helpful. My research/reading into the other side of the debate was inadequate; seeing stuff from people who don't wear "The Market" blinders is pretty useful.

Private Insurance has the added pressure of maintaining profits which means they have heavier pressures to reduce costs than a socialized medicine case worker would.

True, although the effect is variant depending on client class. If you are wealthy, the US system will spare no expense to take care of you, and probably do more for you than Canada's system would (indeed, the generous health-care provided to millionaires and wealthy politicians was once cited by the Wall Street Journal as an advantage of the US system, in an almost comical reveal of their true mentality). But if you are poor, then the system will tend to find ways to cut its costs, because they know they're not getting them back.

I'm amazed they'd be so obvious as to say something like that. That almost sounds like an Onion article. Maybe they got that Republican pundit who something like "I'm happy President Bush was willing to something 'bad' for children." Both those sentiments seem similarly ghoulish.

I don't know anything about this which is why I'm asking. I've heard claims that the US pharma makers make more new drugs per-capita than other countries. However I haven't seen evidence of this.

Here's a source for you. According to this source, Canada does indeed lag behind the US in terms of drug R&D spending, but other countries with socialized health-care are actually ahead of it. Other market factors are probably at work here, since the US has the highest drug costs in the world yet does not seem to be translating this into the highest relative R&D spending. The fact that it spends the most in absolute terms does not mean much; it is the biggest single market.

Check out those links I provided. Maybe they will help.

Those are a good place to start, the links are appreciated.

Also, thanks for the kind words.

[Darth Wong]

Case studies like that are probably the most helpful. My research/reading into the other side of the debate was inadequate; seeing stuff from people who don't wear "The Market" blinders is pretty useful.

One of the things that the Market-worshippers often forget is the spiraling cost of marketing. When drug companies spend twice as much money on administration and marketing as they do on R&D, it's hard to buy the party line that this situation produces more R&D than any other system. And that situation exists despite the fact that governments give companies tax incentives to do R&D!

I'm amazed they'd be so obvious as to say something like that. That almost sounds like an Onion article. Maybe they got that Republican pundit who something like "I'm happy President Bush was willing to something 'bad' for children." Both those sentiments seem similarly ghoulish.

They made this comment after Clinton got his emergency heart bypass surgery done. They asked if the average Canadian citizen gets the same kind of health care that President Clinton did, as if the average American citizen gets the same kind of health care that President Clinton does. Yes, they actually used the health-care of a former President as an argument against Canada's health-care system.

Those are a good place to start, the links are appreciated.

Also, thanks for the kind words.

You're welcome. Best of luck to your brother; if I was a praying man, I would pray for him.