But then you come to America.
I love America. I love the people, their enthusiasm, their patriotism, their sports. The customer service is outstanding and the Bay Bridge looks beautiful right now.
But I do not love the American healthcare system.
In Britain, if you get sick, you do not have to pay for your healthcare. You have already paid for it through your taxes. Everyone has paid for it through their taxes.
In America, if you get sick, you have to pay for a not insignificant portion of your healthcare bill.
Not all of it. Those kind people at the Insurance Companies pay most of it. (And I have never had to deal with them, but I am sure they go out of their way to do this justly, generously and easily, with no hassle or wrangling whatsoever).
But a not insignificant portion of it.
Let's say that healthcare payments equate to taxes. That is, for every dollar that people spend on healthcare payments in the US private healthcare system, the alternative would be to spend an equivalent amount of dollars on taxation to provide for public healthcare (like in Britain).
• Of course, this is not strictly accurate. The taxes that you would pay would be lower, because in a public healthcare system, your taxes would not go towards the profits of the Healthcare Companies.
• But then again, a private system should in theory be more efficient and keep costs down (and I think the word theory is an important caveat here), which would make healthcare taxes relatively higher.
I do not know which of these two effects (profit and efficiency) is bigger, but I have my suspicions and a small selection of rapidly-Wikipedia-assembled facts to support them:
1. The US spends more on healthcare per capita than all other OECD countries. The US spent 16% of GDP on healthcare in 2007, compared to 8% in the UK and 10% in Portugal. That is, healthcare costs in the UK were half what they were in the US as a proportion of GDP per capita. Presumably then, healthcare provision in the US is much better…
2. …Well not according to life expectancy (which I would argue is a pretty good assessment of healthcare provision). Life expectancy in the US was 78.2 between 2005-10, compared to 79.4 in the UK and 78.1 in Portugal.
3. Not according to infant mortality either. The infant mortality rate in the US was 6.3 deaths per 1,000 births between 2005-10, compared to 4.8 in the UK and 5.0 in Portugal. That is the infant mortality rate was more than 30% higher in the US than in the UK during this period.
4. According to the IMF, US GDP per capita was $46,400 in 2009, compared to $35,700 in the UK and $20,700 in Portugal.
So in summary, the US is more than twice as rich as Portugal, and a third richer than the UK. And the US spends 3.5 times the amount of Portugal and 2.5 times the amount of the UK on healthcare per capita. And yet the US has lower life expectancy and higher infant mortality rates.
This is obviously a very simplistic, naïve and bullet-hole-ridden analysis, but it does seem clear that in America we are paying quite high healthcare payments for the service we are being provided with – perhaps because we have to pay big bonuses to the already well-paid executives of Healthcare Companies (and let's remember that when Healthcare Companies make high profits, this basically means that they have received a lot of payments from the public, and have incurred relatively lower costs in the provision of healthcare).
And perhaps, on some small level, it’s also related to incentives. In the American medical system, as far as I can make out, doctors are (at least financially) incentivised to treat their patients. Whereas in Britain, doctors are incentivised to cure their patients. I am not for a moment suggesting that American doctors deliberately do the wrong thing by their patients in order to make more money, but I do find the misalignment of social objectives and financial incentives slightly ironic, given that the private provision of healthcare is justified on capitalist principles, which are strongly linked to the importance of incentivisation. And I do wonder if this has something to do with the relatively high costs of US healthcare. If there are two treatments for a disease, the first is 85% effective and earns you $500, and the second is 87% effective and earns you $1,000, as a doctor which would you recommend? What about if they were both 85% effective?
But this is beside the point.
The point is that the American system of private healthcare provision is a regressive tax. Wikipedia describes a regressive tax as one that:
"Imposes a greater burden (relative to resources) on the poor than on the rich".
Now I know that Medicare is available for some people in America, and I think this is a good thing. But imagine that you do not qualify for Medicare. If you are earning $100,000 per year and your medical bills come to $5,000 in a year, this will be 5% of your income. But if you are earning $50,000 per year and your medical bills come to $5,000 in a year, this will be 10% of your income. That is, if you are poorer, you pay a higher proportion of your income for the same amount of medical care. A 2007 study found that 62% of all personal bankruptcies are caused by medical debt.
Isn’t that tragic?
As if poverty of health isn’t bad enough, it also results in poverty of finance. If your income is $5,000,000 your $5,000 is inconsequential. In Britain, in this example everyone would pay more or less the same proportion of their income. And dividing $15,000 by $5,150,000 I make it that the tax rate would be 0.3% across these three examples. Of course, these are made up numbers but you get the point. In my opinion, the British system is fairer because it says that everyone should pay an equal proportion of their income for the medical costs borne by society. (In fact, rich people will end up paying a slightly higher proportion of their income because income taxes increase with annual salary. In my opinion, this is even fairer still).
But it gets worse. Because not only do poor people pay relatively more for healthcare in America, but sick people do as well. If you are healthy, all you pay is your pay-cheque payments. But if you are sick, you have to pay the deductibles, the co-payments, the co-insurance etc. etc. Is it fair that sick people should pay higher taxes than healthy people? If you get cancer, is it your fault? Surely, if anything, sick people should pay lower taxes because they are less able to work. In Britain, sick people and healthy people pay the same amount for healthcare (again, in terms of proportion of their income). That is, healthy people are providing for sick people. My friend Pete once said that he thought societies should be judged on how well they provide for the poor and the marginalised and the dispossessed in their midst. As far as I can tell, the American healthcare system discriminates against the sick in favour of the healthy. I think this is unfair.
I do not know much about it, but I doubt that Mr. Obama's healthcare scheme is perfect. But change of this kind rarely, if ever, happens seamlessly. And given the choice between the maintenance of the status quo, and a suite of changes that, if nothing else, at least raise the issue and catalyse smart people into developing and refining a solution to this problem, I would opt for the latter. I would vote for the latter.
Of course the British system is open to abuse - to hypochondriacs unnecessarily clogging up waiting lists because Mars is not aligned with Venus for example - but I don't really think this happens much. And I definitely don't think it happens to the extent that would justify a system that charges poor people relatively more than rich people for healthcare, and sick people relatively more than healthy people.
And of course I have painted a simplistic caricature here. And I openly confess that I speak from a position of minimal knowledge of either the British or the American healthcare systems. And I would welcome any thoughts and comments and counter-arguments.
This is just an impression.
Except it's not a just impression.
