Tag Archives: Income

American health care: does it cause poor life-expectancy and high infant mortality?

Probably one of the best health care policy experts writing today is Avik Roy, who writes for Forbes magazine.

Here is his latest column, which I think is useful for helping us all get better at debating health care policy. (H/T Matt from Well Spent Journey)

Excerpt:

It’s one of the most oft-repeated justifications for socialized medicine: Americans spend more money than other developed countries on health care, but don’t live as long. If we would just hop on the European health-care bandwagon, we’d live longer and healthier lives. The only problem is it’s not true.

[…]If you really want to measure health outcomes, the best way to do it is at the point of medical intervention. If you have a heart attack, how long do you live in the U.S. vs. another country? If you’re diagnosed with breast cancer? In 2008, a group of investigators conducted a worldwide study of cancer survival rates, called CONCORD. They looked at 5-year survival rates for breast cancer, colon and rectal cancer, and prostate cancer. I compiled their data for the U.S., Canada, Australia, Japan, and western Europe. Guess who came out number one?

Here is the raw data:

Health care outcomes
Health care outcomes by country and type of treatment

Click here to see the larger graph.

So, what explains this?

The article continues:

Another point worth making is that people die for other reasons than health. For example, people die because of car accidents and violent crime. A few years back, Robert Ohsfeldt of Texas A&M and John Schneider of the University of Iowa asked the obvious question: what happens if you remove deaths from fatal injuries from the life expectancy tables? Among the 29 members of the OECD, the U.S. vaults from 19th place to…you guessed it…first. Japan, on the same adjustment, drops from first to ninth.

It’s great that the Japanese eat more sushi than we do, and that they settle their arguments more peaceably. But these things don’t have anything to do with socialized medicine.

Finally, U.S. life-expectancy statistics are skewed by the fact that the U.S. doesn’t have one health-care system, but three: Medicaid, Medicare, and private insurance. (A fourth, the Obamacare exchanges, is supposed to go into effect in 2014.) As I have noted in the past, health outcomes for those on government-sponsored insurance are worse than for those on private insurance.

To my knowledge, no one has attempted to segregate U.S. life-expectancy figures by insurance status. But based on the data we have, it’s highly likely that those on private insurance have the best life expectancy, with Medicare patients in the middle, and the uninsured and Medicaid at the bottom.

I know that my readers who like to dig deep into economics and policy will love the links at the bottom of the article:

For further reading on the topic of life expectancy, here are some recommendations. Harvard economist Greg Mankiw discusses some of the confounding factors with life expectancy statistics, citing this NBER study by June and Dave O’Neill comparing the U.S. and Canada. (Mankiw calls the misuse of U.S. life expectancy stats “schlocky.”) Chicago economist Gary Becker makes note of the CONCORD study in this blog post. In 2009, Sam Preston and Jessica Ho of the University of Pennsylvania published a lengthy analysis of life expectancy statistics, concluding that “the low longevity ranking of the United States is not likely to be a result of a poorly functioning health care system.”

The funniest thing I have found when talking to people from countries with socialized health care systems, like Canada and the UK, is that they are woefully uninformed about American health care. They literally do not know about free emergency room care, which is free for anyone regardless of insurance – including illegal aliens. They do not know about our expensive Medicaid program, which helps people who cannot afford health insurance. And our very very expensive Medicare program, which provides health care to the elderly – including prescription drugs. I get the feeling that foreign critics of American health care are getting their views from amateur documentaries produced by uneducated Hollywood propagandists, or maybe from TV shows on the Comedy Channel. They certainly are not getting their information from peer-reviewed studies by credentialed scholars from top universities, like the ones cited above.

I have literally spoken to Canadians who think that people in the USA without insurance do not get treatment and just die in the streets from stab wounds. They don’t know about the emergency room rule, or about charity care, or about Medicaid and Medicare. There is a lot of ignorance up there – wilful ignorance, in some cases. And keep in mind that the average Canadian household is paying over $11,000 a year for this substandard health care! They are paying more for less, and that’s not surprising since a large chunk of the taxes that are collected for health care go to overpaid unionized bureaucrats. Naturally, when their left-wing politicians need treatment, the first place they go is to the United States, where they pay out of pocket for the better health care. But that doesn’t stop them from denouncing American health care when they are talking to voters.

Higher infant mortality rates?

One of the other common arguments you hear from uninformed people outside the USA is the higher infant mortality rates argument.

Here’s an article by Stanford University professor Scott Atlas to explain why the argument fails.

Excerpt:

Virtually every national and international agency involved in statistical assessments of health status, health care, and economic development uses the infant-mortality rate — the number of infants per 1,000 live births who die before reaching the age of one — as a fundamental indicator. America’s high infant-mortality rate has been repeatedly put forth as evidence “proving” the substandard performance of the U.S. health-care system.

[…]n a 2008 study, Joy Lawn estimated that a full three-fourths of the world’s neonatal deaths are counted only through highly unreliable five-yearly retrospective household surveys, instead of being reported at the time by hospitals and health-care professionals, as in the United States. Moreover, the most premature babies — those with the highest likelihood of dying — are the least likely to be recorded in infant and neonatal mortality statistics in other countries. Compounding that difficulty, in other countries the underreporting is greatest for deaths that occur very soon after birth.

[…]The United States strictly adheres to the WHO definition of live birth (any infant “irrespective of the duration of the pregnancy, which . . . breathes or shows any other evidence of life . . . whether or not the umbilical cord has been cut or the placenta is attached”) and uses a strictly implemented linked birth and infant-death data set. On the contrary, many other nations, including highly developed countries in Western Europe, use far less strict definitions, all of which underreport the live births of more fragile infants who soon die. As a consequence, they falsely report more favorable neonatal- and infant-mortality rates.

[…]Neonatal deaths are mainly associated with prematurity and low birth weight. Therefore the fact that the percentage of preterm births in the U.S. is far higher than that in all other OECD countries — 65 percent higher than in Britain, and more than double the rate in Ireland, Finland, and Greece — further undermines the validity of neonatal-mortality comparisons.

You can listen to a podcast with Dr. Atlas here, from the Library of Economics web site.

If you want to read more about how American health care compares with health care in socialized systems, read this article by Stanford University professor of medicine Dr. Scott Atlas. And you can get his book “In Excellent Health: Setting the Record Straight on America’s Health Care” from Amazon.

Annual median household income down $4,500 since Democrats won Congress in 2006

Median Household Income Under Obama
Median Household Income Under Obama

The Wall Street Journal reports.

Excerpt:

The recovery that began four years ago has been one of the weakest on record, averaging a little more than 2%. And it has not gained speed. Growth in the fourth quarter of 2012 was 0.4%. It rose to a still anemic 1.8% in the first quarter but most economists are predicting even slower growth in the second quarter.

We hope the predictions of a faster growth in the second half will be right, but the Obama Treasury and Federal Reserve have been predicting for four years that takeoff was just around the corner. Stocks are doing great, and housing prices are rising, but job growth remains lackluster. What has never arrived is the 3%-4% growth spurt during typical expansions.

[…]What about the middle class that is the focus of Mr. Obama’s rhetoric? Each month the consultants at Sentier Research crunch the numbers from the Census Bureau’s Current Population Survey and estimate the trend in median annual household income adjusted for inflation. In its May 2013 report, Sentier put the figure at $51,500, essentially unchanged from $51,671 a year earlier.

And that’s the good news. The bad news is that median real household income is $2,718, or 5%, lower than the $54,218 median in June 2009 when the recession officially ended. Median incomes typically fall during recessions. But the striking fact of the Obama economy is that median real household income has fallen even during the recovery.

While the declines have stabilized over the last two years, incomes are still far below the previous peak located by Sentier of $56,280 in January 2008. No wonder Mr. Obama is now turning once again to his familiar political narrative assailing inequality and blaming everyone else for it. He wants to change the subject from the results on his watch.

The core problem has been Mr. Obama’s focus on spreading the wealth rather than creating it. ObamaCare will soon hook more Americans on government subsidies, but its mandates and taxes have hurt job creation, especially at small businesses. Mr. Obama’s record tax increases have grabbed a bigger chunk of affluent incomes, but they created uncertainty for business throughout 2012 and have dampened growth so far this year.

The food stamp and disability rolls have exploded, which reduces inequality but also reduces the incentive to work and rise on the economic ladder. This has contributed to a plunge in the share of Americans who are working—the labor participation rate—to 63.5% in June from 65.7% in June 2009. And don’t forget the Fed’s extraordinary monetary policy, which has done well by the rich who have assets but left the thrifty middle class and retirees earning pennies on their savings.

Mr. Obama would have done far better by the poor, the middle class and the wealthy if he had focused on growing the economy first. The difference between the Obama 2% recovery and the Reagan-Clinton 3%-4% growth rates is rising incomes for nearly everybody.

And remember, thanks to Obamacare, medical insurance premiums have soared over $3,000. We are getting poorer because of Obama’s big government policies.

Whose fault is it?

In the 2006 mid-term elections, the Democrats took over the House and Senate. That was the beginning of the Nancy Pelosi and Harry Reid spending spree. Millions of dollars have been wasted on ineffective government programs, handouts and bailouts. We’ve had trillion dollar deficits for the last four years under Obama, and over 8 trillion added to the national debt since Pelosi/Reid 2007. All that deficit spend does have an effect on economic growth – businesses know that they are going to have to pay it off at some point, either through higher taxes or inflation or both.

Single mothers are better off with a $29,000 job and welfare than with a $69,000 job

Socialism subsidizes single motherhood by choice
Socialism subsidizes single motherhood by choice

(click for larger image)

James Pethokoukis of the American Enterprise Institute explains how the welfare state discourages women from getting married before they have children.

Excerpt:

The U.S. welfare system sure creates some crazy disincentives to working your way up the ladder. Benefits stacked upon benefits can mean it is financially better, at least in the short term, to stay at a lower-paying jobs rather than taking a higher paying job and losing those benefits. This is called the “welfare cliff.”

Let’s take the example of a single mom with two kids, 1 and 4. She has a $29,000 a year job, putting the kids in daycare during the day while she works.

As the above chart  – via Gary Alexander, Pennsylvania’s secretary of Public Welfare — shows, the single mom is better off earning gross income of $29,000 with $57,327 in net income and benefits than to earn gross income of $69,000 with net income & benefits of $57,045.

It would sure be tempting for that mom to keep the status quo rather than take the new job, even though the new position might lead to further career advancement and a higher standard of living. I guess this is something the Obama White House forgot to mention in its “Life of Julia” cartoons extolling government assistance.

Fatherlessness is absolutely horrible for children across the board. Not just in terms of their development, but also their material well-being and their physical safety. Fatherlessness is a loss in three ways for children. The federal government should NOT be taking money from good married households and transferring it to women who decline to marry before choosing to have reckless, irresponsible recreational sex.