As we look around for “solutions” to the health care cost inflation problem, we often examine other countries to see how they are able to deliver better results in terms of health indicators (infant mortality, life expectancy, etc.) with so much less expense.
The thought is, if we just adopt a single payer, universal coverage system like the Canadians, or use strong controls and multiple insurers like the Germans, or set strict controls on pharmaceutical prices like most other countries, or restrict the acquisition of technology like many EU countries, or make the individual consumer pay much more for their health care like the Swiss, then we’ll solve the problem.
The fact is in the developed world, health care costs are increasing at roughly the same rate, about 2.5 points higher than GDP expansion. While there are years where the rate is higher for some countries than others, and the US’ rate occasionally bounces up for a year or two, over the long term, everyone’s costs are heading north at about the same pace.
The difference between the US and the rest of the developed world is twofold.
First, every other developed nation has universal coverage. The US has universal health care, it just isn’t funded by an insurance program for the so-called uninsured. Americans who do not have health insurance get health care, although it is paid for indirectly through taxes, surcharges on bills to insured patients, providers forgoing income and outright charity.
Second, we started with a higher base rate of inflation, putting our costs as a percentage of GDP significantly higher than other developed nations. In fact, the nation with health care costs nearest our 15.4% of GDP is Switzerland at 11%.
What does this mean?
We have much higher expectations of our health care system than most other nations do. We want the best, the most, the latest, regardless of the cost. Britons, Canadians, Italians, Singaporeans and Australians have more modest expectations. These expectations are perhaps the key drivers of our health care system. When patients are used to demanding, and getting, the best/most/latest, it is terribly hard to ratchet back their expectations. Yet if we don’t, we perpetuate the problem.

The single most valuable governmental agency is the Agency for Healthcare Research and Quality.
AHRQ’s latest published research is the report on health care quality in all 50 states and DC. Measurements of over 100 indicators in 14 areas, the report indicates how each state compares in each area to national averages. AHRQ has tried to prevent interstate comparisons by releasing 50 separate reports, an indication of the agency’s desire to focus not on ranking each state but on identifying areas each state can improve upon.
Indicators included nursing home quality, percentage of seniors who receive flu shots (interesting metric given last year’s flu vaccine debacle), kidney dialysis effectiveness, suicide rates, counseling for medicare recipients who smoke on smoking cessation, and others. It will come as no surprise that no single state came out well in all metrics. In fact, there is remarkable inconsistency within states. Illinois is an example; according to the Chicago Tribune; “

A few semi-random observations from this excellent conference.
1. The rate of inflation in medical expenses in the EU is essentially identical to that in the US. This despite the major differences between the systems; drug and procedure price controls, very limited access to some new technology, end-of-life care restriction/rationing, and mandatory coverage. Yes, our expenditures are higher, but that is only because we started from a higher base. The EU’s costs are going up just as fast as the US’.
2. Generic drugs are much more expensive in the EU than in the US, partly because most countries in the EU set “reference prices” that effectively keep prices high when drugs come off patent. According to panelists in the session I moderated, this serves to reduce the incentive for drug companies to innovate, as their returns are quite adequate for absolutely no risk.
Compare this to the new drug development business, where 10,000 compounds are required to deliver one new drug, and the reference-priced generics look like a much better business.
3. The new intellectual property protection law in India, passed within the last couple of months, has already generated strong interest from pharmas in moving or locating drug R&D as well as manufacturing in that country. The highly educated workforce, 300 million-strong population of middle class consumers, and new patent protection will likely make India a very powerful force in pharma, and sooner rather than later.

Ten employers in Florida, several of whom are receiving substantial tax breaks from the state, have a total of 49,100 employees enrolled in Medicaid. Florida is one of the few states that does not require employers receiving such tax breaks to provide health insurance as a requirement for the subsidy.
The subsidized companies, WalMart, Publix Super Markets, Winn-Dixie Stores, Burger King Corp. and Walgreen Co have an estimated 29,900 employees and/or family members enrolled in Medicaid.
According to the St. Petersburg Times,
“Combined, these five firms have been approved by the state for up to $10.8-million in tax credits and tax refunds for at least 3,805 jobs