Today, President Obama spoke before the American Medical Association about the immediate need for far-reaching health care reform. He insisted that one of the options presented to Americans “needs to be a public option that will give people a broader range of choices and inject competition into the health care market so that force waste out of the system and keep the insurance companies honest.”
On CNN earlier today, Sen. John McCain (R-AZ) rejected the public option as “a non-starter.” He admitted that the current “competition” between “1,300 health insurance companies in America today” is not successfully driving down costs — but insisted that a government plan could never be more cost efficient:
MCCAIN: Look, if we have a government option, then sooner or later it will dramatically increase the cost, it will crowd out private health insurance. And if you’re doing it in the name of competition, we have 1,300 health insurance companies in America today. They’re competing but they’re not getting the kinds of health care costs under control that is necessary.
CNN: Yeah. Do you think that is absolutely necessarily so? That if you have a competing government system, that invariably what will happen is that you will drive some of the private health insurers out of the business?
MCCAIN: I don’t think there’s any doubt about it. Over time you’ll drive them all out, and the idea that somehow the government can administer health care in a more efficient fashion than the private sector I think flies in the face of examples of other countries that have done so.
McCain is simply wrong. The United States ranked last in terms of efficiency among five other nations with universal health care, according to a Common Wealth study. In fact, the purely government-run Great Britain ranked first:
Compared with five other nations — Australia, Canada, Germany, New Zealand, the United Kingdom — the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives.
Efficiency: On indicators of efficiency, the U.S. ranks last among the six countries, with the U.K. and New Zealand ranking first and second, respectively. The U.S. has poor performance on measures of national health expenditures and administrative costs as well as on measures of the use of information technology and multidisciplinary teams. Also, of sicker respondents who visited the emergency room, those in Germany and New Zealand are less likely to have done so for a condition that could have been treated by a regular doctor, had one been available.
Or consider this measure of the VA’s medical efficiency. Veterans enrolled in its health care system are as a group far older, sicker, poorer, and more prone to mental illness, homelessness, and substance abuse than the population as a whole. … Yet the VA’s average expenditure per patient in 2004 was $5,562, including prescription drug and longer-term care benefits that have long been available to VA patients. By comparison, Americans as a whole, including children and those who never saw a doctor during the year, consumed an average $6,260 in health care dollars in 2004.