We’re Number 44! Bloomberg Ranks Countries on Efficient Health Care
Bloomberg (the media business, not the former mayor of New York, although the latter appears to have regained control of the former), has ranked 51 high- and middle-income countries on healthcare efficiency. The U.S ranks 44th.
44 of 51 is pretty bad. (Indeed, we are bracketed by the Dominican Republican and Bulgaria). However, the Bloomberg rankings suffer from some of the same problems that we see with other rankings. NCPA has never thought the U.S. healthcare system was efficient, but neither do we think that other countries do a great job. NCPA scholars addressed this in a monograph published in 2009: Health Care Reform: Do Other Countries Have the Answers? My criticism of Bloomberg’s rankings draws largely from that monograph.
First, 60 percent of Bloomberg’s rankings come from life expectancy, which is a terrible measure of healthcare “efficiency”. Differences in genetic inheritance, environment, and habits will greatly influence life expectancy, much more than the healthcare “system” will.
Second, Bloomberg uses both health spending as a share of GDP and health spending in dollars (although unclear whether adjusted for purchasing power parity, PPP). This is actually an improvement over the Commonwealth Fund’s frequently updated study, which uses only health spending per GDP as a variable. However, it neglects that which I have frequently pointed out: Spending more dollars or a greater share of GDP on health care is only a problem if it takes away from spending on other goods and services, and this is clearly not the case for the U.S.
(Another technical problem is that health spending cannot be legitimately compared across countries without at least adjusting for the age-distribution of the population. The only international ranking of which I am aware that does this is the Fraser Institute’s.)
Third, the Bloomberg rankings ignore a lot of factors relevant to efficiency: How much health spending is private versus government? How much is paid by patients directly versus third-parties (insurers)? Of government health spending, how much is controlled by the central, regional, or local governments? (In Canada, for example, the federal government controls a small and shrinking share of health spending, while the U.S. federal government controls a large and growing share.) Is the country geographically large and diverse (e.g. U.S., Canada, or Australia) or a small city-state (e.g. Singapore or Hong Kong)?
Ranking international health systems is a very challenging task. So challenging, perhaps, that doing so risks misinforming rather than informing decisions.
Towards the end of your post you mention how the Bloomberg rankings omit additional factors that one may attribute to efficiency. Could future comparative analysis on this topic include said factors?
Sure they could. One think I’d like to do is look at the composition of private spending, both insured and out of pocket.
For example, in Canada, dental and much pharmacy spending is private. In the UK, it’s some hospital and specialist physician spending. In France it’s physicians’ balance billing and some hospitals.
“Ranking international health systems is a very challenging task. So challenging, perhaps, that doing so risks misinforming rather than informing decisions.”
What would be the real-world implications of said rank-based analysis? Globally and/or domestically.
Well, I’d say that people go off the deep end demanding more government intervention in health care. Interestingly, only in the U.S. do we constantly compare ourselves to other countries.
A Canadian who recommends any reforms from another country to the Canadian healthcare system will be criticized as unpatriotic. My friends at the Fraser Institute have been doing it for years.
Bet most countries don’t have and MRI or pharmacy on every corner.
Bringing us back to the issue, how do we objectively measure health care “efficiency” or “quality?” 60% of the analysis derived from life expectancy does appear to be excessive. The macroeconomic aggregates as they pertain to health have an abundance issues as well when it comes to comparison.
Although it would be very difficult to quantify, one could argue that inferior health outcomes for Americans in a global comparison is due largely in part (and perhaps more so than any issue regarding public/private finance) to the obesity epidemic, which has surpassed tobacco and alcohol (respectively) in estimated negative externalities.
If you want efficiency, someone necessarily has to be in charge of spending. That can either be consumers, or it can bureaucrats in charge of rationing. If consumers are in charge of their own decisions (and paying much of the bills), providers will have an incentive to compete on price. Only when efficiency enhances their bottom line will providers work to achieve it.