Broken Mirror on the Wall: On the Commonwealth Fund’s Increasingly Frustrating Comparison of International Health Systems

The Commonwealth Fund has released another edition of its Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System Compares Internationally. Following tradition, it concludes that the American health “system” is the worst of eleven developed countries. This time, it prompted the editorialists at the New York Times to conclude:

Britain and Switzerland were top scorers in a study examining the quality and efficiency of health care systems in 11 advanced nations by a leading American research organization. As usual, the United States finished last over all and last on several important measures of cost and health outcomes, despite having the most costly system in the world.

The poor results for the United States reflect the high cost of its medical care and the absence of universal health insurance, a situation being addressed by the Affordable Care Act.

Other advanced nations are far ahead in the game because they have long had universal health coverage and promoted strong ties between patients and doctors.

However, the report itself concludes that “the U.K. continues to demonstrate strong performance and ranked first overall, though lagging notably on health outcomes” (emphasis mine). So, the British health system works well, except for that one small problem: It does not help people get better.

Nevertheless, the British system tops all four sub-categories within the category labelled “quality”: Effective, safe, coordinated, and patient-centered. If you spend any time in American health-policy circles, you know that these slogans feature prominently in titles of conferences and keynote speeches by high officials in the Department of Health & Human Services — even though they do not lead to systemic improvements.

We sympathize with the Commonwealth Fund’s criticism of U.S. health care as overly bureaucratic and suffering from administrivia. We haven’t met anyone who would disagree with that. Where we differ is on the idea that transferring some of that administrative load towards government efforts to “coordinate” care is going to improve things.

What is really frustrating is the authors’ conclusion (essentially unchanged for many years): “The most notable way the U.S. differs from other industrialized countries is the absence of universal health insurance coverage.”

This is a meaningless term. The top two performers, Britain and Switzerland, have vastly different systems. Britain has a single-payer government monopoly, supplemented by private medical and hospital insurance for a small share of the population. Switzerland has mandatory private health insurance, described for an American audience by Professor Regina Herzlinger in her 2007 book. In 2007, Swiss voters rejected single-payer health care by a huge margin.

Who joins the United States at the bottom of the list? Canada! Canada has the most government-dominated single-payer system: There are no competing private insurers that offer access to privately paid physicians or hospitals, like in Britain.

Furthermore, an American senior is likely enrolled in the most centrally controlled single-payer system in the world: Medicare. Traditional Medicare’s fees are set by federally appointed panels, and spending is fully federally funded. That is more centrally controlled than Canada’s, where each province runs a system for its residents of all ages; and doctors and hospitals negotiate fees with provincial, not federal bureaucrats; and most of the funding is provincial. It’s a long way from consumer-driven, but at least it’s a level of government marginally closer to the people.

Americans can learn a lot from international health systems, but simply declaring that everywhere else is better because of “universal health care” confuses rather than clarifies the issues. For a more effective analysis of international health systems, please see a 2009 study by Dr. John Goodman and colleagues.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.