Greg Mankiw writes:
The next time you hear someone cavalierly point to international comparisons in life expectancy as evidence against the U.S. healthcare system, you should be ready to explain how schlocky that argument really is.
He points to the following claim by Gary Becker:
National differences in life expectancies are a highly imperfect indicator of the effectiveness of health delivery systems.for example, life styles are important contributors to health, and the US fares poorly on many life style indicators, such as incidence of overweight and obese men, women, and teenagers. To get around such problems, some analysts compare not life expectancies but survival rates from different diseases. The US health system tends to look pretty good on these comparisons.
Becker cites a study that finds that the U.S. does better than Europe in cancer survival rates and in the availability of hip and knee replacements and cataract surgery.
It makes a lot of sense to think of health as multidimensional, so that some countries can do better in life expectancy while others do better in hip replacements and cancer survival.
But I disagree with Mankiw’s claim that it’s “schlocky” to compare life expectancy. If the U.S. really is spending lots more per person on health care and really getting less in life expectancy compared to other countries . . . that seems like relevant information.
To put it in statistical terms: much of our quantitative analyses are essentially comparisons. And, once you’re comparing, it makes sense to consider other factors (for example, Americans are less likely than Europeans to smoke, and more likely to be obese). But the overall outcome is important in its own right. Becker mentions cancer survival rates, and, cancer survival is definitely important–more important than all the research I’ve ever done, that’s for sure–but a large change in cancer survival rate does not necessarily correspond to a big increase in life expectancy. And the same can be said for joint replacements and cataract surgery. What’s missing in Mankiw’s discussion is the connection between the huge cost differences between the U.S. and other countries, and the very specific cases where our system works better.
The funny thing is, I think my former co-blogger Robin Hanson would probably agree that government-funded healthcare is a bad thing–but for an opposite reason from Mankiw’s! Hanson would oppose government health care, I think, because he would fear that it would lead to political pressure to spend even more on healthcare that, as he sees it, doesn’t actually do much of anything to improve net health outcomes. In contrast, I think Mankiw is opposing a government system because he fears it would lead to cost-cutting and a move to a European-style system with lower cancer survival rates, fewer hip replacements, etc.
In summary, I am sympathetic to Mankiw’s frustration with people who draw sweeping conclusions from raw comparisons. If policymakers are interested in moving the U.S. to a medical system more like France’s, or Taiwan’s, or whatever, they ultimately should be looking not at static comparisons but at how health and cost outcomes might change here under different proposed policies.
That said, life expectancy is important. If you’re going to make a raw comparison, I’d rather compare countries on life expectancy than on cancer survival rates or the availability of hip replacements and cataract surgery.
If the U.S. really is spending lots more per person on health care and really getting less in life expectancy compared to other countries . . . that seems like relevant information.
But that's the whole question, i.e., whether it's appropriate to use the very term "getting" here. Right? If the main driver of life expectancies in America is the way we eat and live, then it's inappropriate to imply that the only input to life expectancies is health care quality.
Stuart:
I agree, but if the main driver of life expectancies in America is the way we eat and live, then maybe it would make sense to spend 50% less on our health care system.
I agree with Mankiw that it is a complex issue that can't be easily summarized by simple total life expectancies per country. But I also agree with Gelman that the differences in spending are enormous, and it certainly doesn't seem like the US gets as much bang for their buck in its current system.
Another thought: should eating and smoking habits fall under differences in health care systems? I'll explain: imagine a system in which there is no health insurance of any kind. Suddenly, getting type II diabetes or lung cancer becomes much more costly to the individual. As far as an individual acts rationally, he or she will weigh the odds of disease and the costs of future care (and potential shortening of life) against the benefit of eating another twinkie or smoking another cigarette. Such an outcome would be influenced by the incentives set up by the health care system. I'm not advocating such a system, but the point is that systems influence more than just medical examinations and procedures; they can influence behavior too.
Also, one key difference to observe that is not mentioned in this post is demographic differences across countries.
I believe Dr. Mankiw's distaste for government is more general and that he believes the market provides better solutions. I'm not sure how results under a government program would be worse than the current US system, which is ridiculously expensive and doesn't cover a significant portion of the population, but he places his faith in the market.
The question of using life expectancies as a proxy is often discussed. Every country has its demographic peculiarities, meaning not only the composition of the population but the diseases to which they fall prey. Japan, for example, has more stomach cancer. Life expectancy has a couple of usual roles in the discussion. First, it measures basic well-being and matches up well with wealth, which is self-evident. It then allows analysis of health issues by their effect on expectancy, such as alcoholism in Russia. Beyond that, it is of course a rougher but still useful proxy. You can, for example, use it to analyze how much coverage would improve results for the poor and how that would move the expectancy number. I can't cite papers but I know this work is out there.
maybe it would make sense to spend 50% less on our health care system
It would also make sense to make our cars smaller.
I leave the implications of that to be worked out by the reader.
I wonder what Mankiw would say if the situation were reversed, i.e. if the U.S. did worse on cancer survival rates and hip replacement, but better on life expectancy? It's hard for me to imagine he would say "Yes, it's true, Europe has better health care: look at all the hip replacements they do! And people who argue that the U.S. provides better care are just wrong — the fact that we have longer life expectancy here isn't relevant." I mean, _maybe_ he would say that, but…c'mon.
Of course, if the U.S. had longer life expectancy than Europe, I don't think people in the U.S. would point to Europe as having a better health care system than we do. I might be wrong about this, too — perhaps people actually would be saying "we need a system like Europe's, so we can live shorter lives" — but I doubt it.
So I guess I'm just agreeing with Andrew's point, but saying it more strongly. Life expectancy is clearly relevant to the debate, and there's nothing "schlocky" about raising the issue. It's also fine to raise other issues — I agree that life expectancy is not the ONLY thing that should be considered — but to claim that it's not of major importance doesn't make sense to me.
Your former co-blogger Robin Hanson should be in favour of government-funded healthcare if he wants to spend less, for three reasons.
– You can observe for yourself that foreign governments do spend less on health care than the US insurance companies.
– You can read the objections by the US right themselves, who argue that government health care would be financially-restricted health care (I, the satisfied recipient of government health care, think they're being dishonest, but that's what they say)
– You can theorise that tax-funded enterprises are almost entirely funded by the unwilling rich, who are extremely keen on reducing that cost. They seem highly successful in squeezing costs out of the UK's health care system, for one example.
Given that the rich seem even more disproportionately influential versus the voters in the US than in the UK, I'm surprised that Hanson thinks that government-funded health care would lead to government ceding to the will of the people and not to that of the rich. Is there any evidence they do that now?
One point which no one has brought up is that its not clear to me that Beckers point – that lifestyle differences make international life expectancy comparisons difficult – does not apply equally to cancer survival rates or other measures that Becker likes to argue indicate the superiority of the US health system.
For specific diseases clearly medical professionals are the ones to ask about the relative impact of treatment vs. life-style on survival rates but its far from obvious to me that life-style doesn't have a similarly large effect on cancer survival rates or Beckers other preferred measures.
Well, if "lifestyle" effects are important, then a relevant question is what lifestyle features allow nations like Great Britain and Canada to get comparable aggregate effects at substantially lower costs? One candidate, suggested by the British social scientists Wilkinson & Pickett, is a more egalitarian society. If Wilkinson & Pickett are correct, the Mankiw and Becker argument is self-defeating. Mankiw's and Becker's lifestyle argument may lead to the conclusion that we need a more redistributive state, which of course would include universal health care.
As a physician I treated patients who are in nursing homes for the rest of their life. Some kept alive by feeding tubes, ventilators and IV solutions. They are doomed to this existance for years. Most are aphasic and others confabulate. There are ten of thousands of these homes with 50-150 beds occupied. It is not about life expectancy.
An excellent essay is this Wall Streets Journal
( Weekend Journal)by Dr. Abraham Verghese. He conveys a personal feeling of Doctors with a sense of compassion and a perspective for many of his fellow doctors.
He discusses how prevention does not solve the problem of cost with good examples of blood testing for cholesterol. In addition a skewed reimbusement from Medicare does not cut costs. He reaches the same conclusion from the article of Atul Gawande peioe in the New Yorker but also makes a strong case for not one idea based of cost effective studies.
Every Congress in the past several years has not exercise the cut in Medicare for Doctors. If cost may one of the largest issues why do they refrain from doing this especially since the bill was passed many years ago? Doesn't anyone find this puzzling.
In addition MPAC is the agency for Medicare reimbursement. They have the authority to rec- commend new and lower fees for Doctors and procedures and report to Congress. These are chances that our Congress avoids and maybe pressured by several lobby groups. This should cause outrage as it is the most immediate method to lower costs.
Mankiw, Becker and Krugman are all right and should be considered in the debate.All of us touch one part of the elephant. Who of us has the overview?
There is no need for hostility from any of us. If this were a classroom all opinions are heard without fear of retaliation or humility.
Doctors from Academia and private practice should weigh on our eco-blogs.
For ideological conservatives, all arguments that a government program can do better than the invisible hand are schlocky.
Frankly, the belief that Mankiw or Becker are right is something that I don't share. I haven't seen much from Mankiw in public conversation which was correct. He even turned off blog comments, and I was reading them – it wasn't due to viturperation or other nastiness, just that internet commentators punked him on a daily basis. I went over the Becker-Posner blog, and it's no great shakes either.
And at this point, after the collapse of the neoliberal financial system, the idea that a neoliberal econ professor should be presumed to be able to waltz into another field and tell them what's what is now simply ridiculous.
They *may* have insights, and if they have a good track record (e.g., Krugman) they deserve to be heard. However, the field of epidemiology is, in fact not new, and people have been making comparisons for quite some time.
So this is what economists do? Congratulations lads. This is high value added stuff.
Unfortunately, Becker seems to have missed an important discussion that followed the paper he chose to cite (as well as cautions pointed to in this and other EUROCARE studies):
Cancer survival statistics should be viewed with caution
The Lancet Oncology, Volume 8, Issue 12, December 2007, Pages 1050-1053
Cancer survival statistics should be viewed with caution – Authors' reply
The Lancet Oncology, Volume 8, Issue 12, December 2007, Pages 1053-1054
In a nutshell, differences in survival rates could be the result of differences in patient characteristics, disease characteristics, and data recording. "Caution needs to be exercised when comparing the cancer survival statistics of the UK with the rest of Europe and certainly the USA." Details can be found in the articles linked to above. But note that the authors of the study agreed on these and other points.
Also, I wonder how socioeconomic factors fit into this analysis (which I can't find in the EUROCARE study). For example, take this study that found that "socioeconomic status and breast cancer survival were directly associated in the US cohort, but not in the Canadian cohort."
Does a subject have to be insured to be in the health care statistics? Or does it vary from metric to metric? I mean if we have a good metric w/ respect to outcome of cancer treatment but we're not treating everyone who has cancer because they're not insured and those not being treated are not included in the stats on outcome … we're not doing so much better really.
Over-looked in the comparison is that when you compare results, most of you fail to account for those who do not/cannot seek medical treatment because they lack funds and insurance.
I currently have a client dieing of breast cancer. In very brief, she's dieing because she couldn't afford to get a mammogram while dealing with over $40K worth of bills the insurance company wouldn't pay (her husband contracted MRSA in the hospital) and the hospital wouldn't forgive. This also put them behind on their taxes, blew up their mortgage and, well, will cost her her life because they couldn't afford one more medical bill while being crushed under the weight of the ones they had…
She won't be captured in your stats about outcomes. She just got diagnosed and went home to die. She takes morphine and Darvon for the pain. But since she's not being treated in a hopeless cause that will bankrupt her family… And she does have life-insurance to provide a decent trust for her disable husband (denied benefits by SSA, currently in litigation)…
Well, she's not in your stats. After all, if someone chooses to die because they can't afford treatment and don't want to bankrupt their family… Hey, they don't count as a "bad outcome…"
Just like millions of others.
Has anyone bothered to read the cancer study that Becker is refering to? You can find it here:
http://v1.theglobeandmail.com/v5/content/pdf/CONC…
What caught my eye was that while the US does do very well in age adjusted cancer survival rates there was one nation that beat the US in 6 out of the 8 gender/cancer type categories analyzed: Cuba.
Given that not only does Cuba spend considerably less on healthcare than the US (about $570 versus $7500 per capita in 2008 PPP US$) and that it has universal healthcare but that it is Communist as well should have made Becker (given his political inclinations) pause when he decided to cite this study.
I guess he didn't expect anyone to actually bother to read it.
Gary Becker,
"life styles are important contributors to health, and the US fares poorly on many life style indicators, such as incidence of overweight and obese men, women, and teenagers."
Perhaps the European countries have healthier lifestyles in part because their health systems put more emphasis on cultivating this than does ours.
Of course if you start out with the dogmatic assumption that government always does things worse than free enterprise, you can dismiss this as an impossiblity.
Here is a potential "schlock":
Americans who don’t die from homicides or in car accidents outlive people in every other Western country.
you think krugman has a good track record?
he's proven wrong on just about every article–he's lost bets to historians on economic predictions and even his last article used a moronic normalized temperature graph which made it look like there as an exponential spike in temperatures in the last 30 yrs as opposed to the linear increase from reconstruction that we've seen which is what he actually should have used to prove his point
and if we want to go onto others who you probably venerate who make moronic claims lets start with nate silver who still doesn't understand how embarassing his 'critique' of mankiw's comment about the romer paper was…you know that same ad hom'ing nate silver who cries about loss of civility and then posts multiple theories using a grand total of 2 or 3 data pts (you're lucky you got 7 in the post above this prof. gelman)