The Healing Of American by T.R. Reid

The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care by T.R. Reid is a book about health care systems around the world. It seems Reid had an answer in mind when he wrote this book. The data and the story are slanted to support it, alternatives are set up against straw-man arguments, and even the terminology is biased to a Socialist solution.

B+
432 pages

Amazon Book Preview of “The Healing of America”

Thomas Roy Reid has a sore shoulder.  As a journalist for the Washington post he was stationed around the world. He gives a first hand look at health care systems in other countries and gets advice on his shoulder. Some doctors want to do a radical reconstruction of his shoulder. But most suggest physical therapy, letting the body heal itself. This is a perfect metaphor for the book. Reid is suggesting some radical surgery to the US health care system. I suggest we massage the system, injecting a little competition, removing blockages, and let Capitalism’s natural heal powers work.
Ironic that Reid picks physical therapy for his shoulder. (If he had picked surgery what are the odds Reid would have had it performed in the United States?)

There are three problems with health care in America: It is too expensive, free riders, and Insurance companies use the complexity of our system to maximize profit at the expense of their customers. I would argue competition and deregulation are the answers for these problems. Reid argues for less competition and more regulation. All under the guise of fairness and/or morality. The systems he looks at are far from fair especially if you’re a medical professional.

There are some interesting comparisons: In Japan the average health consumer visits the doctor 14 times per year and spends $3000 annual vs. 5 visits at $7000 for an American. This surprised me- who goes to the doctor five times a year?

I like Reid’s ‘Universal Laws of Health Care Systems‘

• No matter how good the health care in a particular country, people will complain about it.
• No matter how much money is spent on health care, the doctors and hospitals will argue that it is not enough.
• The last reform always failed.

Reid complains about the 80% medical loss ratio in the US health insurance and compares it to Medicare’s 97% and Britain’s NHS operating at 95%. It isn’t the fault of US insurance companies that our system is so complex. You can’t ignore overhead and payroll (including the taxes they pay). Even marketing occurs in the NHS, but it is buried in government budgets, called something else all together, or cost shifted to the private sector.

It seems to me if there were insurance portability and a crack down on claim denials and rescission this would go a long way to fixing insurance problems in the US without resorting to freedom destroying Individual Mandates and Guaranteed Issues. We live in the United States of America not Europe. Many if not most of us cherish our freedom more than some flaky vision of social justice. Even if a majority preferred universal health care, the desires of the majority can not override the rights of the minority.

France was rated by the World Health Organization as having the best health care systems. One factor that allows it to operate more efficiently than the US is the use of Electronic ID Medical cards. The US systems drowns in paperwork, little of it seems to be stored in electronic form, and none of it is portable.

The German system is similar to the US system. Their government dictates the contents of the health issue plans. With a level playing field there is more competition. The Germans also take advantage of Electronic ID Medical cards. They offer free medical educations for their medical professionals, but then grossly underpay them. There is little need for Malpractice Insurance, so the rates are dramatically lower than in the US and there is no need for defensive medicine.

The Germans have the oldest universal health care systems, started by Otto Von Bismarck in the 1880s. He was a frugal man like me, but unlike me he was more concerned with political power than freedom, “He introduced social rights to avoid granting wider political rights.” (Paul Starr)
Had he granted political rights two world wars might have been avoided. Instead we have socialism that is impossible to remove. “The programs of state socialism will dig themselves in.” No matter what happens in the future once a country goes down the road of socialism there is no prying the state out of your life.

If I didn’t care about the future; if I only was concerned for myself I would look at the Japanese health care system. I like how they managed to wring all the costs out of the system by letting the doctors complete. There is no money any where in the system: Doctors, nurses, hospitals, labs, drug companies, medical equipment manufactures. It would never work in the United States. It works in Japan because they have a mono-culture where doctors are willing to trade money for status.

Reid likes Britain’s National Health Service (NHS). This chapter reads like a horror novel. There is nothing fair about socialism and nothing fair about rationing. The only saving grace in the NHS is they allow private insurance. The NHS distorts the medical market, which is why UK General Practitioners made make more money than specialists. A GP is paid a bonus to provide the services they would/should normally provide. Costs are contained by underpaying all medical professionals. The hospital stock is old and there is little money for upkeep let alone expansion. Unlike Fargo, where Stanford is constantly remodeling and building.
The NHS is very expensive and much of the cost is hidden. There is a 17.5% VAT tax on everything in the UK but everything is 1.5 to 3.0 times as expensive, which suggests socialism in the UK is no bargain.

In Canada they are willing to screw over the individual as long as the group is treated the same. They offer basic coverage but won’t allow supplemental coverage. A two tier system would allow some profit to flow from the health care system back to the R&D which feeds medical research and allows some progress in health care worldwide. In a way the United States is the second tier for rest of the world. If we universalize our system, health care R&D will stagnate worldwide.
Thanks to Tommy Douglas, and his hard luck story our neighbors to the north are saddled with a terrible system that is wildly popular. When implemented in 1962 all the doctors went on strike. The government just waited them out. Again costs are hidden. All the medical professionals are underpaid. Patients have no recourse- there is no way to win a malpractice charge against a Canadian doctor. The courts always side with the health care system. In the US the opposite is usually true. Both are extremes and neither is optimal. The Canadian health cares system is also home to the waiting list. Health care is rationed and anyone needing care is put on a waiting list. This is another (unhidden) cost that is borne by Canadians and may be worse than having no medical care at all.

Reid points out Medicare in the United States is based on Canadian Medicare. I’m not surprised it is going bankrupt. But even if it isn’t, government programs don’t control costs in a reasonable manner. They force price cuts on the providers. I find it hypocritical to insist health is so important that it must be a universal right and then screw over the very people tasked with delivering health care. There is also serious economic illiteracy at work in this book. Drug manufacturers and to a lesser extent Medical equipment manufactures have two costs: a fix cost, and a variable cost. As long as the US consumer picks up the fix cost, the manufactures can sell their products worldwide for a fraction of the price (their variable cost). This hardly means the US can install a universal health care system without effecting worldwide costs in a dramatic fashion.

Five principles for National Health Plans
Relying on Government Financing *

1. Public Administration. Each province’s health insurance system must by operated by a public body on a not-for-profit basis.
2. Comprehensiveness. Each plan must pay for all “medically necessary” services. The definition of “necessary” tends to change over time, with new treatments and drugs regularly added to the list.
3. Universality. Every resident of the province must have the same access as everybody else to treatments and drugs covered by the plan.
4. Portability. The provincial plan has to pay for coverage anywhere in the country (and, often, in foreign countries).
5. Accessibility. Doctors must treat everybody for the same fee, regardless of age or illness.

*I don’t agree with any of this and would rewrite the Canadian list to encourage more competition and more freedom for the patients. Why the unnatural fear of profit? With proper competition, profit flows to the most valuable parts of the system and the system reacts by increasing service levels until the price levels drops to equilibrium.

The United States is a big country. If some crazy state (Massachusetts) wants to implement a Universal Coverage medical plan let them. Why does the Federal government have to get involve? (Unconstitutional) Many of our states are as big as the foreign countries listed in the book.

The worst chapter is “Nine: Out of Pocket“, Reid looks at health care systems in some of the poorest, most over populated, most despotic nations on earth. Leaving it to the reader to assume this is the other option. It is either India or France. He could have looked at Laserik Surgery, Animal Health care systems, or even Health Maintenance Organizations but no. One thing the reader does learn is ‘Out of Pocket‘ care keeps costs down, “But there are so few Indians who have insurance coverage that most domestic patients pay out of pocket. Accordingly, the clinic has to hold prices down to bargain-basement levels.”

Reid writes an interesting book, but when he introduces Professor William Hsiao, I wonder if it’s Hsiano’s book we should be reading. If I want to learn about socialized medicine why not from the horses mouth. “When you have a single payer… for the doctors and hospitals, then you can identify who’s really abusing the system. That also allows you to put a global budget in place. When you have a single payer, you can say, ‘I’m only going to spend X percent of my GDP for health insurance,’ and you enforce that.”
So we will abuse the patient instead. Thanks Bill. But he’s not unaware of affects competition brings to the system. On Taiwan, “And that has meant lots of competition, lots of access for the people, and low prices.”
Reid doesn’t mention all the laws and practices designed to restrict competition in the United States. Laws that guarantee high prices and mediocre service.

Reid does a poor job arguing for preventive care. He does better explaining the problem of cost shifting and the abuse it encourages, “This is the Nanny State problem. It looms large in Britain, where the NHS is like the village green – a common asset that everyone can use and everyone pays for.”

In chapter 12 Reid covers the Charter of Fundamental Rights of the European Union and contrasts it to our US Constitution. In addition to the making Universal Health Care a human right, their constitution contains a laundry list of absurd rights. Health care isn’t a right it is a service. An expensive service. In order to manage the costs associated with this expensive service the EU stomps all over real rights, which are protected by our Constitution. Reid doesn’t bother to point out that every country in the EU is floundering under the cost of these social programs and the grand experiment of the European Union is unraveling. The legal medical protections we take for granted are non-existent in countries with Universal Health care. The courts in those countries always side with the national health service no matter how egregious the claim.

“We cover everybody, but not everything.” John Reid (British Health Minister). I don’t see how this is logically or morally superior to the reverse. Are we all drones, are we all property of the state?
This chapter on Floor and Ceilings is a good one. Maybe the answer is a floor that doesn’t cover much more than first aid and the let the free market take care of the rest. The liberals get their Universal Health Care and the rest of us get a future.
“At the start of the twenty-first century, the world’s richest and most powerful nation does not have the world’s best health care system.” Mr. Reid have you considered the reason the US is the richest and most powerful nation is because we haven’t fallen for socialist solutions to problems like health care?
Reid brings up average life expectancy at birth. “The United States is among the worst of the industrialized nations on this score..” He doesn’t dig any further into the statistic. The US isn’t an average country, our population is the most diverse on the planet. If you compare the life expectancy of each group to its corresponding nation, each group lives longer than its home country. For an example a Japanese-American will outlive an Japanese native. At the other end of the spectrum, an African-American will outlive their cousins in Africa. But it is those diverse genetic groups that bring the national average down and not a failing of our health care system.
“One of the defenders of the American-style health care is Dr. Kevin C Fleming, and internist at the Mayo Clinic in Minnesota and a health care analyst for the Heritage Foundation, a Washington think tank committed to free-market solutions to national problems.” Does Dr. Fleming get to make his case? No. Reid complains Fleming looks at Inputs rather than Outputs, then Reid sums up his own argument and closes the book on the health care debate. What is so wrong about looking at Inputs? Unless there is something fundamentally different about the quality of doctors, clinics and hospitals in the United States how can Reid say we should only look at Outputs? There are fundamental differences in patients (genetics ) and cultures, which effect Outputs, so might this be a red herring? To make a true comparison it would be better to look at Inputs (which the health care system can control) rather Outputs which it can’t.

I’m sorry this was a long review. I’m pretty hard on Reid and this book. The fact is I enjoyed reading it. It was interesting and I love books that get me thinking. I recommend the book. All I ask is you think about Health Care within a bigger framework and think through all the ramifications. Keep in mind, most of the cost in a Universal Health Care System is hidden. No one is saying our US system is perfect. It isn’t even very good. We have the worst of both worlds: third party payment in a free market framework, with a large percentage of the population as free-riders, and government run socialized medicine bringing up the rear (while underpaying for the services received).