• Consumer driven health care again (and again)

    Posts are flying today from Megan McArdle (who argues that the US isn’t even close to being the leader in consumer-driven medicine), Tyler Cowen (who cites her and others) and even Paul Krugman (who doesn’t like thinking of patients as consumers at all).

    I’m going to repost some stuff, because I was talking about this a week ago. Specifically, to Megan’s point. We’re not number one, but we’re nowhere near the last. Here again is a chart using OECD data and G8 countries (minus Russia), to look at out of pocket payments per person, for each of those countries.


    In terms of per capita costs, the US has the highest out of pocket expenses. This is using Megan’s definition (it’s not premiums). It’s what a lot of people think about when they talk about “skin in the game”.

    But, since the US spends more total on health care, and is the richest country in the world, a better way to think about this may be to look at out of pocket spending as a percentage of all health care spending:

    It’s true that there are other countries that beat us. But who should we be most like? I have always argued that the G8 seems like a good place to start, and that’s why I use them.

    So yes, Switzerland may beat us in terms of how much of percentage of costs are out-of-pocket. But it’s hard to keep arguing that the US is some crazy outlier in terms of rich countries. In the G8, our out of pocket spending percentages aren’t the highest, but they’re not the lowest either.

    • How about relating the out of pocket expenses to the proportion of bankruptcies with a medical expense basis. We’re number one!!

    • I think maybe I am missing something.

      The ratio of out of pocket to total healthcare costs just doesn’t seem like a factor most patients would consider. All things being equal the spending ratio would place more ‘skin in the game’ but things clearly aren’t equal.

      I have used both the German and Japanese health care systems extensively and yet I was continuously struck by how low out of pocket costs were relative to the United States. The ratio may be higher in Japan but total costs are so much lower that out of pocket expenses still seem small. As a consumer I am concerned with out of pocket costs relative to my income not my total health care spending. In the United States my out of pocket costs are much higher and I see a doctor less frequently and comparison shop whenever possible.

      I’m not trying to be snarky but the spending ratio honestly seems less useful than a simple control for income.

      (also, who do we talk to about retiring the phrase ‘skin in the game’?)

    • One of my reasons for pushing for much higher deductibles is that it could lead to voters pushing for easing doctor and nurse licensing.