Eric Patashnik Compares International Healthcare Responses to the United States

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Public Policy Challenges of the 21st Century

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University of Virginia

Public Policy Challenges of the 21st Century

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This course introduces class participants to the political significance and societal consequences of challenges facing U.S. and international policymakers. It is designed to help participants develop skills to analyze policy proposals and advocate for their preferred options for issues on the public policy agenda ahead. The class assumes basic knowledge about governing institutions and democratic processes, while recommending supplemental materials for further study to complement reading links provided. The course focuses on future policy challenges, while examining the broad historical context in which policies are adopted and implemented. As the course evaluates how issues are advanced by private sector interests, non-governmental organizations, and government policymakers, it examines how groups become effective policy advocates. Particular attention is paid to how winning coalitions are formed and how issue framing shapes the outcome of policy campaigns. The goal is neither to produce partisan talking points, nor to favor one governance philosophy over others. Rather it is to clarify the public policy challenges ahead and to enhance participants’ understanding of how policy options are adopted in the real world arena of contemporary politics.

Из урока

Healthcare Systems and Insurance Markets

Professor Eric Patashnik examines healthcare reforms, weighing costs, benefits and the efficacy of alternative approaches, including 'Obamacare.'

Student Introduction to Healthcare Lecture with Eric Patashnik1:15

Gerry Warburg introduction to Eric Patashnik and the Importance of Healthcare Policy6:32

Eric Patashnik Discussing Imperfect Information and the Three Dilemmas of Medical Finance6:27

Eric Patashnik Discusses Different Types of Healthcare Markets5:25

Eric Patashnik Compares International Healthcare Responses to the United States9:40

Eric Patashnik Provides an Overview of the Affordable Care Act10:08

Eric Patashnik Answers UVa Student Questions5:28

Eric Patashnik Continues to Answer UVa Student Questions8:18

Gerry Warburg and Eric Patashnik Post Lecture Discussion4:30

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Professor Gerry Warburg
Professor of Public Policy, Assistant Dean for External Affairs
Frank Batten School of Leadership and Public Policy

Okay, so I have been talking to you a little bit about the fact that there

are some basic dilemmas, that lead to government responses in health care, and

that these dilemmas do not cause the same responses in every country.

There are vast differences across countries.

One of the most important and salient differences between the United States, and

other countries in health care is by orders of magnitude, the United States

spends much more on health care than any other country.

The differences between our spending and

health care, and other advanced nations is not a minor one, nor

is it one that can easily be attributed to our greater wealth.

If you look on the right you can see that as a percentage of GDP,

the US currently spends something like 18% of GDP on health care.

That means for every dollar that is produced in the American economy,

18 cents of it is allocated to health care, and

that has gone up dramatically over time as recently as 1980, we were only around 9%.

And our level of health care spending is on the order of twice as much, of

other advanced wealthy nations including Netherlands, France, Germany and so on.

This is part of the reason why a concern about health care costs has

been at the top of the policy agenda.

Why a concern about what health care cost might be

doing to the stagnation of wages, as I just mentioned before.

If the gap is providing it's employees a dollar in health care insurance subsidies,

that's a dollar that can't be given to the employee in the form of wages.

So as we are spending more as a society on health care, there is no free lunch.

It means we're devoting other kinds of investment to other services less.

At the governmental level, the rise in health care costs for

programs like Medicare and Medicaid are crowding out invests in other programs

including education, infrastructure, defense, research and investment.

These are issues about which people can disagree about the appropriate level of

healthcare spending, but there can be no disagreement that there are tradeoffs.

And that as we spend more on healthcare,

we are going to necessarily spend less on all other goods.

One of the reasons why this has become such an area of policy concern,

is that it is not the case that the United States' healthcare system on

all dimensions is unambiguously superior to other countries' health care systems.

One could talk about areas in which the US is infact, the best in the class,

the best in the world.

There is some kinds of treatments for advance cancers, for

advance heart disease, where we are clearly the leader of the world.

But if you look across overall performance of the health care system,

effective care, safe care,

coordinated care, patient centered care, how timely the care is provided.

And then not only efficiency concerns, but how equitably we give care.

Do we cover everybody?

Do we make sure that we are investing in preventative medicine?

Are we getting good value for our money?

Most studies suggest that as a minimum the United States is in the middle of

the pack internationally on some dimensions we're very,

very good, on other dimensions we are not.

So one would hope, ideally, that if we were spending as much as we are,

ideally, we would be doing better than other countries.

But there's reasons to believe we are not.

Now of course many of you are probably thinking, and quite correctly,

that there a lot of factors that shape our health care outcomes, besides health care.

And that is absolutely right.

When we think about why Americans are healthy or

not healthy, the most important factors are probably not health care.

It's diet, and exercise, and genetics, and

stress, and all the lifestyle factors that shape health care.

But even when we control for those factors,

even when we statistically take them into an account, there's a lot of evidence that

suggests the United States spends more on health care than other countries.

And that our return or value is not an ambiguously better at a minimum, and

it's perhaps quite wasteful at the extreme.

One thing that you might think is, well, the U.S. spends more than other countries

because Americans go to the doctor more than people in other countries.

That's actually false, Americans go to the doctor less than is the case,

in many other advanced countries.

Here are some OECD data, and you can see that the average annual number of

physician visits per capita, in 2009, was 3.9 in the U.S..

In Japan, the average Japanese citizen goes to the doctor over 13 times per year.

In Germany, over eight times per year.

So it's not the case that the US,

we have people that are always going to the doctor, what we have in the US,

rather, is our health care prices are significantly higher.

Charges are much higher,

because government doesn't regulate how much pharmaceuticals can charge.

We don't have regulations about for

example the number of MRI machines that a given town can have.

Physicians are better paid, and we use more intensive use of expensive technolog.

So we have higher prices, we have higher drug costs,

we have more technology and we spend more on it.

Now again these are all issues on which people can debate about whether these

are good things or bad things, but at a minimum we can say that part of

the reason why the US spends more in health care,

is not because Americans are getting more visits to physicians.

It's, or, we don't even have more hospital beds per capita,

it's rather we are paying more for it.

And we're using more interventions, advanced technology, pharmaceuticals, and

we're not regulating the prices that those, charge.

Okay, I mentioned earlier that in addition to the high cost of American health care,

one of the big dilemmas, one of the biggest concerns for the last 50 years has

been the fact that many Americans, despite the fact that we spend more than any

other country in the world on health care, many Americans lack health insurance.

This has been, of course, one of our major policy dilemmas in the United States,

the fact that 16% of all Americans lack health insurance.

And there has been a struggle, a political struggle,

going back to the 1930s to try to address this problem.

This has been a struggle that has involved politics, economics, disagreements,

good faith disagreements between Americans about the appropriate role and

scope of government.

Philosophical disagreements about the trade off between liberty and

freedom on the one hand and equality and fairness on the other.

It's involved the struggle that has involved the role of doctors,

businesses, activists, policy entrepreneurs.

Many different actors over the last half century have played a role in

this ongoing struggle.

As early as the 1930s there was an effort in the FDR administration to include

health insurance coverage as part of the landmark Social Security Act of 1935,

this was unsuccessful.

The American Medical Association did not want this, for

fear that it would lead to socialized medicine.

Again in 1949, FDR's successor, Harry Truman, called for

universal health care as part of his Fair Deal, but Southern Democrats and

conservatives and the medical profession adamantly opposed that effort.

In 1965, during the great society under Lyndon Johnson,

we did see a significant legislative move in the creation of Medicare and

Medicaid after the sweeping Democratic Party victory in the 64 election,

following Kennedy's assassination.

Liberal Democrats at the time, believed that the passage of Medicare and

Medicaid would pave the way to universal health insurance, whether you

agreed with that policy or not, that's what people thought at the time.

They said, we will pass Medicare and

Medicaid, these programs will grow in popularity.

They'll build up a constituency, and then, before long,

we will have universal health insurance, but in fact, that did not happen.

And by the 70s, we saw President Nixon, a Republican, but

a remoderate Republican, a pragmatist, was pushing for a health insurance system

based on employer mandate, not wholly dissimilar from aspects of Obamacare.

And yet at the time this was an error of liberalism many liberals opposed it

because they believed it was too incremental and modest.

In the 1990s, Bill Clinton made a major push for comprehensive health reform, but

he could not generate support even within his own party.

And then of course, in 2010, we had the historic passage of

the Affordable Care Act, under President Obama.

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