Opinion: Myth vs. Reality

February 1, 2007
Humphrey Taylor
Pharmaceutical Executive

Volume 0, Issue 0

Myth vs. Reality: The American healthcare system needs a makeover. That requires policies based on accurate information about how our country’s system compares to others’. To start, we must separate fact from fiction.

Until recently there was little reliable information comparing the healthcare systems and quality of medical care in different countries. As a result, the debate about reform of the American healthcare system has been ideologically driven rather than evidence-based. This is now changing. The last few years have seen a big increase in the quantity and quality of information comparing our system with those in other developed European and English-speaking countries. This information comes from cross-national research, including nine major Commonwealth Fund surveys conducted by Harris Interactive, the Organization for Economic Cooperation and Development, and the work of health economists and policy analysts. The results are shocking. Many widely held beliefs about our healthcare system and those in other countries turn out to be false. Accurate information increases the likelihood of developing good policy. It is time for policymakers, and those who seek to influence them, to separate myth from reality.

Humphrey Taylor

1 Myth: The reason we spend so much on healthcare is that consumers pay so little out of their own pockets, and the government and employers pay most of the cost.

Other countries spend much less on healthcare than we do even though their consumers pay much less than Americans.

2 Myth: Americans spend more on healthcare because they consume more care, and more services are available to them.

While Americans do have many tests and more of some elective procedures, they have fewer doctors' visits and use fewer hospital beds than people in many other countries that spend much less on healthcare.

3 Myth: When patients have to pay more for their care, they cut back on marginal and unnecessary care and spend their money more wisely.

The evidence is clear that when patients have to pay more for care they cut back on both appropriate and inappropriate care. As prices rise, consumption falls and people with diabetes, asthma, hypertension, and elevated cholesterol are much less compliant in the use of effective drugs for controlling these conditions—increasing costs for their care over the long term.

4 Myth: Commercial health insurance plans are more efficient than government programs such as Medicare and Medicaid.

In no other country is the cost of administration as high as it is here. The administrative costs of Medicare and Medicaid are much lower than those of commercial health insurance plans.

5 Myth: In places with more doctors and more hospitals, competition promotes efficiency and keeps spending down.

Evidence shows that in communities with more doctors and more hospitals, the public incurs more healthcare expenses without any apparent improvement in outcomes.

6 Myth: The uninsured have access to, and receive, the same healthcare as people with insurance. They just don't pay for it.

Many studies have shown that the uninsured do not have the same access to, and do not receive, the same medical care as people with insurance, and that they have substantially worse outcomes. Indeed, they are more likely to die.

7 Myth: The quality of care is better in America than in other countries.

A growing number of cross-national studies over the last several years have found that the quality of care provided in America is, on average, no better, and often worse, than the care provided in many other countries.

8 Myth: The United States is a leader in the use of health information technology.

The data show that the United States lags behind almost all other western developed countries in the use of health information technology.

9 Myth: The United States is a leader in the use of quality measures to distinguish between better and worse care.

The same data show that the United States lags behind a number of other countries in the use of quality measures.

10 Myth: The American healthcare system provides more incentives than countries with "socialized medicine" to doctors and hospitals to provide better quality care.

The United States also lags behind other countries in the use of "pay for performance" incentives, which are larger, and have been introduced earlier and on a wider scale, in Europe and some other countries.

11 Myth: Because Americans spend more on healthcare than people in other countries, more services are available to them.

The United States has fewer physicians, nurses, and hospital beds than a number of other western countries, and far fewer MRIs than Japan.

12 Myth: In countries with single-payer systems, people are not free to choose their own doctors.

In most—possibly all—of these countries, people are free to choose their primary care physicians, if not their specialists.

13 Myth: The public welcomes consumer-driven care and wants to be empowered to take personal responsibility for its own healthcare.

So-called consumer-driven healthcare is really driven by employers and insurers. "Empowerment" and "personal responsibility" are code words for increasing out-of-pocket costs, which is not something the public wants or welcomes.

14 Myth: If information on the quality of care provided by different doctors and hospitals is available, most people will use it.

The great majority of people who have seen information comparing the quality of different hospitals, physicians, and health plans do not make decisions based on this information. Rather, they make decisions based on word of mouth, location, and reputation.

15 Myth: Patients are the best people to decide which care is appropriate and which is marginal or inappropriate.

Throughout the history of medical care, most patients have relied on the advice of their doctors to determine what care is and is not appropriate. It is difficult for a patient who is afraid or in pain to make those decisions.

16 Myth: Malpractice insurance and defensive medicine are major reasons why American medical care is so expensive.

Research suggests that this may account for one or two percent of healthcare spending (which is, of course, a lot of money). But no economists include these on their lists of major causes of high US healthcare costs.

17 Myth: The United States has the best healthcare system in the world.

Ten or 15 years ago, I heard this said at many healthcare conferences around the country. But, I have only heard it once in the last few years, in a videotaped address by President Bush to the 2006 World Health Congress in Washington, DC. We have many wonderful hospitals, doctors, and nurses. We have the latest in high-tech care. But it is difficult to find any important criterion on which our system is demonstrably the best. It is by far the most expensive and, compared with many countries, the least equitable and the least efficient, and one of the most unpopular.

The good news is that, as more good information about healthcare systems becomes available, we can distinguish myth from reality. In addition, more people recognize that we can learn a great deal from the best practices in other countries without necessarily adopting their healthcare systems.