Compare premature mortality rates in Canada, Finland, the United Kingdom, and the United States (the table is abridged to highlight the four countries):
<blockquote>Table 1: Premature mortality in OECD countries, 1997 and trends 1960-1997(1)
Females Males
Index: 1960=100 Index: 1960=100
1990 1997(2) 1997(2) 1990 1997(2) 1997(2)
Canada 49.6 42.8 3069 56.4 45.2 5215 Finland 53.1 41.9 2797 65.1 52.3 6706 United Kingdom 59.6 50.8 3302 62.6 52.1 5319 United States 60.5 54.8 4213 68.8 57.8 7351 EU average 49.6 42.4 3165 60.3 52.2 6063 OECD average(4) 51.5 44.9 3495 63.1 54.5 6605
Source : OECD Health Data 2000.
Notes: 1. Premature mortality is measured by the indicator "potential years of life lost (PYLL) under age 70". This indicator adds up age-specific death rates that are weighted by the difference between 70 years and the age in question. For example, a death at 5 years of age is counted as 65 years of PYLL. The indicator is expressed per 100 000 females and males.
<http://www1.oecd.org/media/publish/pb00-15a.pdf></blockquote>
Canada is slightly worse than Finland for women's premature mortality rate and quite a bit better than Finland for men's premature mortality rate. The UK is not as bad as the US, but it's much worse than Finland for women's premature mortality rate and much worse than Canada (though slightly better than Finland) for men's premature mortality rate. (If you want to live a long uneventful life, the best country for that continues to be Japan according to the same table at <http://www1.oecd.org/media/publish/pb00-15a.pdf>, but that's probably more due to its diet than its health care system.)
What of cost control, Jim's concern?
<blockquote>Table 2. Total expenditure on Health, 1980-1998(1)
Health spending as a percent of GDP Expenditure per
capita, in US$
PPP(2)
Rank in
1980 1990 1992 1997 1998 1998 1998 USA 8.9 12.4 13.6 13.6 13.6 4178 1 Canada 7.2 9.2 10.2 9.3 9.5 2312 5 Finland 6.4 7.9 9.1 7.3 6.9 1502 17 United Kingdom 5.7 6 6.9 6.7 6.7 1461 18
Source : OECD Health Data 2000.
<http://www1.oecd.org/media/publish/pb00-15a.pdf></blockquote>
It seems to me that it's only the United States that failed to control costs. Health expenditures in Canada, Finland, and the UK all peaked in 1992 in this table, as did those in many other nations omitted from the above abridged table: "The share of health spending in GDP has stabilised since the early 1990s. Health expenditures are rising in OECD countries at, on average, the same rate as gross domestic product (GDP). In 1998, the latest year for which comparative data are available, average health spending as a proportion of GDP in OECD countries was 8.3% (10.3% when countries are weighted according to the size of their economies), about the same level as in 1992" ("OECD Countries Appear to Follow U.S. Lead in Cutting Average Hospital Stays," <http://www1.oecd.org/media/publish/pb00-15a.htm>, 20 Jul. 2000). (Japan is one of the few nations whose health care costs kept rising rather than stabilizing, but that's probably because it is aging faster than most other nations in the world.) It is true that Finland is the only one among the four countries that shows the continuous downward trend since 1992, but that may not be a welcome trend at all, from the point of view of patients, especially since "Finns are paying for a larger share of their health care costs themselves":
<blockquote>Stories of nights spent in hospital hallways are on the increase. Staff summer holidays are not the only reason: Finland is simply spending less on health care. In a comparison of OECD countries, Finland is one of the few in which health care spending in proportion to GDP declined in 1998 from the previous year's level. Health care spending went down in Finland, Iceland, and Ireland; in all other countries it either increased or remained unchanged.
According to an OECD study, health care expenses were 6.9% of GDP in 1998, well below the OECD average. The 29 rich industrialised countries spent an average 8.3% of GDP on health care. In EU countries the average is eight percent. Finland has fallen far behind the other Nordic countries.
Markku Lehto, chief of staff at the Ministry of Social Affairs and Health sees the situation as serious. He says that in many municipalities health care services do not reach a standard that one could reasonably expect. "I guess the recession was such traumatic shock treatment that the cost-cutting mode stayed on even in municipalities that could have afforded to raise the standard of services." Lehto says.
The Minister of Health and Social Services, Osmo Soininvaara (Greens) recently said that local authorities should use the opportunity afforded by rising tax revenues to patch up the health care services that were neglected in the 1990s.
"For years, people have talked about how municipalities are cutting spending on institutional care, while there has been no increase in out-patient care. This has been most evident in mental health. There really is inferior care out there." Markku Lehto adds.
Some help for mental health services is forthcoming from the national budget, although Markku Lehto says that the budget proposal of the Ministry of Finance is slightly lower than the amount requested by the Ministry of Social Affairs and Health. He emphasises, however, that the local authorities bear the greatest responsibility for health care.
Lehto also points out that spending cuts have not necessarily led to greater efficiency in health care services. He notes that if basic health care does not function properly, people easily turn to private services and specialised health care, which sometimes ends up costing more than the care itself would require.
The municipalities, meanwhile, have complained of constant confusion and uncertainty about their state subsidies, and a shortage of doctors. Markku Lehto says that if low pay is the reason for a lack of doctors, the issue should be rectified. He feels that municipalities must not be allowed to become the embodiment of a bad employers. "It would be really expensive to start fixing health care once it has lost its reputation as a good place to work." Lehto says.
Finns are paying for a larger share of their health care costs themselves. The public sector share of health care financing has gone down to 76% when it was more than 80% in 1990. ("Finland Spends Less on Health Care than Other Rich Countries," Helsingin Sanomat, International Edition, <http://www2.helsinginsanomat.fi/english/archive/news.asp?id=20000724xx9>, 24 Jul. 2000)</blockquote>
The above story suggests that much of cost cutting in Finnish health care must have been achieved through lower levels of health care service rather than more efficient health care delivery.
In my view, spending roughly 10% of GDP on health care (as Canada did in the past) isn't necessarily bad, which all rich nations should be able to afford, provided that the money is spent to make everyone healthier and happier, rather than on administrative costs incurred to determine people's eligibility for services, deny them care, and make profits. It costs resources to offer quality health care under whatever system of production (even socialism), and below a certain level of expenditure the quality of care will necessarily go down. Since health care is labor-intensive, there is a limit to cost cutting that can be achieved through higher efficiency alone. -- Yoshie
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