The words “single payer” are among the dirtiest in healthcare’s lexicon — but mostly here in America. Some of the other countries operating either single payer or so-called dual systems that essentially pit a public option against private care have seen certain measures of success. And that is among the reason that some other countries, such as Singapore, have superior healthcare.
So contends David Lareau. As CEO of health IT vendor Medicomp Systems, Lareau regularly globe-treks to service and search out customers and, along the way, witnesses myriad health systems from the inside. Lareau spoke with Government Health IT editor Tom Sullivan about the competitive virtues of a thriving public option, how the U.S. healthcare system stacks up against some of the superior nations, and why low-cost incentives are not aligned with care delivery outcomes in a fashion to bend that cost curve.
Q: In your travels and experiences, which country has the best healthcare and why?
A: Probably the best and most efficient one I’ve seen is in Singapore. It’s only my opinion based on what I’ve seen – I’m nowhere near a healthcare policy analyst – I just go based on my experiences with people in the trenches, administrators, talking to patients about workflows, costs. The reason I say Singapore is that even though their Gross Domestic Product per capita is higher than the U.S., their average healthcare spend per capita is 28 to 30 percent of the U.S.
Think about that: Their per capita GDP is 20-30 percent higher than ours but their per capita healthcare spend is 30 percent of ours; not less, of ours. As I go to countries like that, even the National Health Service in Britain and Australia, they’re 45 to 50 percent of our per capita healthcare spending.
And one of the things in Singapore is they have a dual system. About 50 percent of their care is delivered by an integrated delivery system called Sing Health, which is a private system. About 50 percent — and it varies year-to-year so it could be 40-60 one year — is handled by the Singapore Ministry of Health hospitals. What that does is set up a natural completion for what constitutes cost-effective care. And if one of those gets out of whack with the other, market forces and demand tend to bring it back into alignment.
Q: One of the things you mentioned is the GDP. It’s among the most-cited struggles of the U.S. healthcare system, that it swallows 17 percent of the GDP while other countries manage on 7 or 8 percent but, taking the global perspective here, is the GDP really a good measure? We’re talking about an incredibly complicated number…
A: The other judgment we use is the per capita healthcare spend and that’s where the real misalignment occurs. The latest year for which I have numbers is 2009 but per capita healthcare spend, according to WHO, if the U.S. is 100, China is 4, Malaysia is 9, New Zealand is 36, Singapore is 28 percent, Thailand is 5, Australia is 45 and the U.K. is 46 percent.
Q: Particularly given that disparity, how do people from those countries you just named view the American healthcare system?
A: They think we’re a bunch of litigious fat slobs sitting around watching TV getting inundated by pharmaceutical commercials who then go to the doctor, demand that medication, get it if we have an employer-based health plan for somewhere between $10 and $30 regardless of what the cost of it is. If the doctor can add on a few tests, and maybe have the diagnostic equipment in his or her office and make a little money for that, everybody profits — maybe not the patient’s health — but we don’t see measurably better outcomes for the U.S. model of care than we do in other countries.
Q: Which might be more about the citizenry than the system itself…
A: And the senior people in China are starting to look at the way we are and they’re not going to have the litigation problems we have but the one problem they will have: KFC is the fastest growing restaurant chain in China. Over the last couple years they’ve opened up a new KFC in China almost once every two days. So they’re coming in our direction. All they need to do is spend three of four more hours a day in front of the TV and they could turn into us.
Q: I’m chuckling but it’s really not that funny…
A: I keep seeing this over and over again. Because of the way they deliver with this dual-model of public hospitals competing with private hospitals for the same patients, in some regard, that leads to a natural competition and also means that, at least in the public sector, they actually have some sort of incentive to help patients manage their own health. I’m not saying that they’re active in it but the patients seem to not assume that there is a pill or procedure to cure every ailment — and here in the U.S. the tendency seems to believe “I’ve made myself sick. Now you fix me and somebody else is going to pay for it.”
I watched the whole healthcare debate in the U.S. over whether there should be a single payer or not. All I can tell you is that in most of the countries where there is, the per capita healthcare spend is less than it is here — and that’s not the only reason, it’s all the other stuff I just mentioned also.
Q: So why is single payer such a dirty phrase in America when it works for some other countries?
A: We can’t talk about it because it’s viewed by people who are against it as a government takeover of healthcare and the advocates of it point to some of these other models and say “we do not have the means to control the costs if there’s not somebody who’s driving the cost down and in the U.S. there’s such an incentive to do more for a patient whether or not it leads to the best outcome.”
If the docs do extra procedures, they get paid more. If they prescribe more pills, the insurance companies and the pharmaceutical companies make money. In the hospitals, there’s a much higher proportion of for-profit hospitals in the U.S. than in these other countries and we have the liability issue. If you don’t do something that the patients see you should have, they might come after you. I just don’t see malpractice ads on TV in other countries, or ads encouraging people to ask their doctor about a specific drug.
Q. What have you learned about the various levels of government involvement in healthcare outside the U.S. in terms of what works and what doesn’t?
A: The government has to set some standards and at least some sort of a parallel system. If you’re going to try and provide care to everybody, you’ve got to have some entity that provides care that is not compensation or volume-based but is just care based, like the public hospitals in Singapore, like the public hospitals in Thailand. We say we have public hospitals here but we really don’t have that many and our version of that are the academic medical centers which are really almost as much about research as patient care, so the government has to establish some minimum floor for standards of care and provide a way for people to get access to it. We don’t do that here. Once you do that, have a mix of private and public hospitals, you don’t have to have all single payer, you can have an effective way of establishing what a care baseline is. Now, we’re attempting to do that through the Affordable Care Act, not based on care but based on coverage, the minimum coverage a plan should have. That’s different than setting minimum standards for how healthcare organizations operate to provide that care.
Q: Based on that, it sounds like the lack of a public option in the ACA might be something you consider an Achilles Heel?
A: I think it is. I think it is. Remember when Medicare prescription drugs was put in under the Bush administration, one of the things left out was to provide them with the ability to negotiate pricing because that would expose the massive profit on some of these drugs which the pharmaceutical companies say “we need the profits on these drugs to offset the costs of uncompensated development on these other drugs for rare diseases.”
It’s all caught up in emotions. But unless you have a viable option for low-cost care efficiently delivered, I think you’re going to have trouble bending that cost curve down because the incentives to do so are not aligned with the delivery of outcomes-based care. They’re just not yet. We’re still talking about it.