Danny's take on the healthcare debate

A fascinating article in today's Times from Danny Finkelstein. Here is a quote:

The debate about American reform begins with the American system. The debate about British reform begins with the NHS. Voters in both countries fear what they stand to lose more than they look forward to what they stand to gain. Since they fear losing different things — in the US case, for instance, they fear loss of choice and control, while in the UK we fear losing universality — the debates in the two countries will always be different.

The US will never create the NHS and the UK will not adopt the American system because we are starting in different places.

The only meeting point is that we face a common crisis. Available treatments now outstrip our ability (never mind our willingness) to pay for them. In the US this is experienced as a crisis of cost, with health inflation rampant. In the UK it is experienced as a crisis of provision, with the State refusing to finance life-saving procedures.

Health care has just got too expensive.

The World Health Organisation records that in 2006, Americans spent $6,719 per head while Britons spent $2,815. One result of this disparity is the startling fact that the US Government spends more on healthcare per head of population than the UK Government does ($3,076 in the US compared with $2,457 in the UK).

This is the point that I have been trying to get across for a long time. The US already has a taxpayer-funded health service - Medicare, Medicaid, Provision for children, the VA, the NIH, the CDC, medical insurance for government employees, tax breaks for companies. Compared to the NHS, they just don't get value for money.

Meanwhile, in the UK — how do we decide how much of our income to spend on treatment and how do we cope with the fact that, while every person has a different answer to this question, we all still feel that everyone should get a good standard of care.

The truth is that as the very clever Enoch Powell once said, medical care will always cost more than we can afford, and just as we buy Fords rather than Rolls Royces, we have to cut our cloth according to our means. The NHS is predicated on getting value for money. It is reasonable that the public provision of health care should be rationed. There are plenty of conditions that could be done a few weeks later quite safely - I heard of someone who had a cataract operated on privately because the NHS appointment given was too soon to fit in with their arrangements at home. If we have to make a choice between someone waiting an extra two weeks for their hip to be done and someone getting a drug for their breast cancer that gives a 20% chance of their living an extra year, I would always choose the latter. But suppose the choice were between an extra six months wait in pain and a 1% chance of living an extra year? There is always a position of equipoise where choosing is invidious, and the choice that different individuals make will be scattered over a large area - people wouldn't even make the same choice themselves every day.

In a socialized system where the community clubs together to provide for a need, individual choices will always be different. Imagine a poor community joins together to buy a car for communal use. There will be days when more than one person needs the car at exactly the same time; how do you resolve such issues? But 2 cars? Possible but then suppose that three people need the car at exactly the same time. Eventually you reach a point where no more cars can be paid for and the demand exceeds the supply. In a free market the price goes up, but we are not dealing with a free market. For a market to operate there must always be the possibility of someone going bankrupt and their being an unlimited supply of good to sell if the price is high enough. The market in health care is constrained by a limit on the number of physicians and the impossibility of allowing a major provider to fail.

HMOs were an attempt at rationing in the US and very unpopular they were, but the fact is that not everybody in the world can have the best health care. There are scare stories from both sides of the Atlantic where both systems fail individuals.
Doctors dislike giving individuals less than the best. But I guess car salesmen would prefer that their customers drove out of the showroom in a brand new Mercedes. At the moment we are giving away clunkers on both sides of the Atlantic to some poor individuals; we should at least attempt to provide Toyotas.