International Medicine

Current Issue

Why Poland Matters

Why Poland Matters:

Do Your Shopping in Paris, but Back Polish Entrepreneurs

by Julie Meyer CEO, Entrepreneur Country.

I started off the week with a lot of 'other stuff' on my mind. I boarded the flight to Warsaw on Monday morning sort of asking myself how it was that I was going to spend my entire week in Poland. My good friend, Pawel Tomczuk, who is a leading entrepreneur in Poland, having built a financial communications firm and sold it to Publicis, had graciously organised for me to speak at the Innovation Forum in Gdansk and then a series of meetings from Warsaw to Sopot at the annual financial conference EFNI. . .

But was Poland worth a week?

I didn't expect at all to have confronted some of the great questions of history in this country of 40 million people, or to be so massively impressed by its people. How did I miss this before, I was asking myself by Day 2?  

As I stood there in the shipyard where Lech Walesa led the Solidarity movement to bring freedom to Poland as I awaited giving my keynote on stage at the Innovation Forum in Gdansk, I met Anna Hejke, a leading venture capitalist, who happens to have been one of Walesa's interpreters. Now for Americans, Walesa is a hero of freedom, so I was already intrigued. Anna *did* *not* disappoint.

Anna soon realised I was a sponge for historical information, and history I got. Poles broke the Enigma code, and gave it to the Brits. They flew valiantly and to great effect in WWII, and in many cases, made the difference decisively in battles that otherwise would have been lost. They helped Jews to survive and get to freedom. On the 1 of September 1939, the Poles were invaded by Nazi Germany, and 17 days later by Soviet Russia, but despite being divided by these invading enemies, the Poles didn't surrender.

In fact, for 50 years, they didn't surrender. Their government went into exile in the UK for 50 years until it was returned to Lech Walesa in 1989 (less 1/3 of its treasury that the Brits took for the Polish use of British aircraft that the Poles had 'used' in defending Britain)!.. Throughout the entire cold war, the Poles never surrendered.

But this fighting spirit is not new. Despite having been wiped off the face of any map, for more than 120 years, the sense that there was a Polish nation and people continued to live on, only to re-emerge in the 20 century. Talk about living in a reality distortion field.

Many if not most people will say that their country has great people, but the Poles can say this with confidence. I have learned this week that the essence of being Polish is to be unbelievably persistent and determined: to never give up, never accept no, and never go away. Despite what the world may say.

That character has been forged through hardship and tragedy, and it makes a national character worth backing bigtime. As an investor who believes wholeheartedly that capital follows ideas and that history is changed only by ideas, and those who execute them, I will spend a disproportionate amount of my time backing Polish entrepreneurs as they have grit, ambition and stamina.

Oh, and I learned another thing too. This week while I would get ready in my hotel room each morning, there was a backdrop of Hong Kong protestors and French deficit reaching 98% of its GDP leading to strikes on the streets. The average Polish person loves free enterprise in a way that the average French person doesn't I am sad to admit. I lived in France for 7 years, and they don't get it. France manages to sell a vision of the country as a wealthy European leader despite being essentially bankrupt. Its people don't understand why it's got the wealth that it has. Through free enterprise hundreds of years ago, and through its entrepreneurs today and the ingenuity of its business people, France created wealth. But it has been sold a lie by its political establishment that government can take the rough edges off of life, and provide risk-free security. Today, that lie has been exposed. Instead of creating a national identity where its citizens pull together for the greater cause of building France, with everyone willing to sacrifice in order to create a country which works for all, the people squabble over how to 'protect' their rights, oblivious to how the world is changing around it, leaving it in the dust.

And this is why Poland matters.

They have had no silver spoon. Their freedom started in a shipyard. They were treated abominably in WWII and its aftermath. I had tears in my eyes, and I haven't even read Norman Davies and Edward Gibbons yet. Patton tried to march to Moscow, but Roosevelt wouldn't let him finish the job. They have no accumulated capital, so they must rely on their human capital. The world enjoys a Polish joke at their expense occasionally. But they have what Darwin says make you fit: adaptability. The Poles have had to. They know how to fight. They love their freedom. And they understand how wealth is created. . .

Poland is open for business. If we want to be optimistic about the future of Europe, look to Poland.

They are the future – of Europe and the world.

Read the entire article at EntrepreneurCountry . . .

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International Medicine

Previous Issue

The Republic of Georgia chose to outsource regulation

How to Make Medicine Safe and Cheap

By Steve H. Hanke, Alexander B. Rose, and Stephen J. K. Walter

Assuring that affordable, high-quality drug therapies are available in poor countries is a priority for policymakers, scholars, and advocacy groups around the world. However, there is little agreement over how to achieve that goal. Some see international arbitrage as a solution. Its proponents would allow firms to buy patented, trademarked, or copyrighted goods in countries where prices are low (perhaps because of local price controls or lower wholesale prices set by manufacturers) and re-sell them in higher-price countries without the permission of the owner of the intellectual property rights attached to the goods.

They argue, among other things, that such behavior enhances competition in international markets and thus improves welfare, especially for lower-income consumers.

This view alarms many scholars, especially when such “parallel trade” (meaning the goods in question sometimes travel a parallel route out of the manufacturing country and then back again) involves pharmaceuticals. They note that developing and obtaining regulatory approval for new drugs frequently involve enormous fixed costs and low marginal costs of production. 

Recovering the fixed costs while maximizing the gains from exchange commonly requires not a uniform price across markets and countries but, rather, adept price discrimination. These scholars claim that “Ramsey pricing”—higher prices in affluent countries where demand for pharmaceuticals is inelastic, and much lower prices in poorer countries where demand is more elastic—would maximize welfare and be more likely to recover fixed and marginal costs. They warn that allowing parallel trade would cause prices to fall toward marginal costs everywhere, disrupting the Ramsey pricing scheme and reducing research and development investment and innovation. To avoid that, the scholars say, drug companies likely would stop giving discounts to low-income nations—or leave them unserved altogether.

As befits a topic that is both controversial and important, volumes have been written about the advisability of allowing parallel imports, but much of this work is theoretical. There have been few assessments of the actual effects of this phenomenon, especially in developing countries. In this brief case study, we contribute to this sparse empirical literature by examining the reasons for and consequences of international arbitrage of medicines in the Republic of Georgia, which encouraged the practice via regulatory reforms starting in late 2009.

We find that the regulatory environment and market conditions in a particular country will be key factors in determining whether parallel trade in pharmaceuticals (and presumably other goods for which intellectual property rights issues are important) might be welfare-enhancing. Specifically, Georgia’s experience demonstrates that the nature of institutions in a small, developing nation can lead to noncompetitive pricing in local markets, and that regulatory changes—in this case, outsourcing some key processes—that facilitate arbitrage can deliver major benefits to consumers without, apparently, disturbing manufacturers’ pricing policies or adversely affecting cost recoupment for R&D efforts. . .

Concluding Remarks

Though there are many reasons to be concerned about possible ill side-effects of expanded international arbitrage of pharmaceuticals, the regulatory reforms that enhanced such trade in Georgia must be counted as a success—at least thus far—and should be instructive for other developing countries.

Georgia did not simply jettison regulation and invite unfettered parallel imports of drugs. Rather, the country removed some regulatory barriers to competition that had, by creating and maintaining oligopoly power among its largest pharmaceutical firms, inflated domestic prices. By farming out some regulatory duties to bodies in larger, wealthier states, Georgia’s reforms quickly and significantly reduced prices of essential medicines to consumers by making market entry easier and less costly. Thus, price relief came in this case not because parallel trade disturbed an intricate international price discrimination scheme on which R&D cost recoupment and further innovation depend, but simply by enhancing domestic competition.

Of course, the efficiencies resulting from this reform should not be terribly surprising. As noted earlier, Georgia is about as populous as the Phoenix metropolitan area. If Phoenix officials decided they did not trust the U.S. Food and Drug Administration to regulate drug safety and efficacy, and the city set up its own regulatory apparatus, it would be obvious that such needless duplication would significantly increase costs for local distributors and retailers. The added (fixed) compliance costs would tilt the competitive playing field in favor of large-scale local enterprises.

There would be an immediate hue and cry to “open up the Phoenix market” to parallel trade, and doing so would likely have effects every bit as favorable as those demonstrated here for Georgia, and without adverse effects on the behavior of innovators. . .

Read the entire report at Cato . . . .

Steve H. Hanke is a professor of applied economics and co-director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise (IAEGHSBE) at the Johns Hopkins University. He is also a senior fellow at the Cato Institute. Alexander B. Rose is a research assistant at IAEGHSBE. Stephen J. K. Walters is a professor of economics at Loyola University Maryland and a fellow at IAEGHSBE

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International Medicine

Past Issue

Democracies Less Likely to Go to War

War has undoubtedly been a fixture throughout human history, and the battles raging in the Middle East today are just one example. But is war necessarily a permanent part of human civilization? In Scientific American, science writer Michael Shermer suggests that democracies are less likely to go to war. 

In 1795, philosopher Immanuel Kant first suggested that those in democratic republics were less likely to support wars, and -- despite the War of 1812, the American Civil War, the Israel-Lebanon war and others -- since then, scholars have continued to support the theory. In 2001, political scientists Bruce Russett and John Oneal analyzed 2,300 interstate disputes taking place from 1816 to 2001. For each country involved in a conflict, Russett and Oneal gave them a "democracy score" based on the nation's political process, system of checks and balances, electoral process, and the like. According to their research:

· Disputes would decrease by 50 percent between two countries with high democracy scores.
· The chance of dispute doubled when one of the countries had a low democracy score or was an autocracy.
· Countries more dependent on trade in one year were less likely to have a militarized dispute in the year following.
· The researchers also looked at membership in intergovernmental organizations (IGOs). For any two countries scoring in the top 10 percent in terms of democracy, trade and IGOs, they were 81 percent less likely to have a militarized dispute than a pair of average countries would be.

More recent studies have followed, says Shermer. In 2014, Havard Hegre, political scientist at Uppsala University, made similar findings, concluding that two democratic states were less likely to have conflicts.

Shermer writes that 63 percent of the world's 195 countries are democracies.

Source: Michael Shermer, "Perpetual Peace?" Scientific American

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International Medicine

Past Issue

Socialized medicine, same song, another verse

The Ugly Truth About Canadian Health Care

David Gratzer, MD

Socialized medicine has meant rationed care and lack of innovation. Small wonder Canadians are looking to the market.

I was once a believer in socialized medicine. I don’t want to overstate my case: growing up in Canada, I didn’t spend much time contemplating the nuances of health economics. I wanted to get into medical school—my mind brimmed with statistics on MCAT scores and admissions rates, not health spending. But as a Canadian, I had soaked up three things from my environment: a love of ice hockey; an ability to convert Celsius into Fahrenheit in my head; and the belief that government-run health care was truly compassionate. What I knew about American health care was unappealing: high expenses and lots of uninsured people. When HillaryCare shook Washington, I remember thinking that the Clintonistas were right.

My health-care prejudices crumbled not in the classroom but on the way to one. On a subzero Winnipeg morning in 1997, I cut across the hospital emergency room to shave a few minutes off my frigid commute. Swinging open the door, I stepped into a nightmare: the ER overflowed with elderly people on stretchers, waiting for admission. Some, it turned out, had waited five days. The air stank with sweat and urine. Right then, I began to reconsider everything that I thought I knew about Canadian health care. I soon discovered that the problems went well beyond overcrowded ERs. Patients had to wait for practically any diagnostic test or procedure, such as the man with persistent pain from a hernia operation whom we referred to a pain clinic—with a three-year wait list; or the woman needing a sleep study to diagnose what seemed like sleep apnea, who faced a two-year delay; or the woman with breast cancer who needed to wait four months for radiation therapy, when the standard of care was four weeks.

I decided to write about what I saw. By day, I attended classes and visited patients; at night, I worked on a book. Unfortunately, statistics on Canadian health care’s weaknesses were hard to come by, and even finding people willing to criticize the system was difficult, such was the emotional support that it then enjoyed. One family friend, diagnosed with cancer, was told to wait for potentially lifesaving chemotherapy. I called to see if I could write about his plight. Worried about repercussions, he asked me to change his name. A bit later, he asked if I could change his sex in the story, and maybe his town. Finally, he asked if I could change the illness, too.

My book’s thesis was simple: to contain rising costs, government-run health-care systems invariably restrict the health-care supply. Thus, at a time when Canada’s population was aging and needed more care, not less, cost-crunching bureaucrats had reduced the size of medical school classes, shuttered hospitals, and capped physician fees, resulting in hundreds of thousands of patients waiting for needed treatment—patients who suffered and, in some cases, died from the delays. The only solution, I concluded, was to move away from government command-and-control structures and toward a more market-oriented system. To capture Canadian health care’s growing crisis, I called my book Code Blue, the term used when a patient’s heart stops and hospital staff must leap into action to save him. Though I had a hard time finding a Canadian publisher, the book eventually came out in 1999 from a small imprint; it struck a nerve, going through five printings.

Nor were the problems I identified unique to Canada—they characterized all government-run health-care systems. Consider the recent British controversy over a cancer patient who tried to get an appointment with a specialist, only to have it canceled—48 times. More than 1 million Britons must wait for some type of care, with 200,000 in line for longer than six months. A while back, I toured a public hospital in Washington, D.C., with Tim Evans, a senior fellow at the Centre for the New Europe. The hospital was dark and dingy, but Evans observed that it was cleaner than anything in his native England. In France, the supply of doctors is so limited that during an August 2003 heat wave—when many doctors were on vacation and hospitals were stretched beyond capacity—15,000 elderly citizens died. Across Europe, state-of-the-art drugs aren’t available.  . .

But single-payer systems—confronting dirty hospitals, long waiting lists, and substandard treatment—are starting to crack. Today my book wouldn’t seem so provocative to Canadians, whose views on public health care are much less rosy than they were even a few years ago. Canadian newspapers are now filled with stories of people frustrated by long delays for care:

back patients waiting years for treatment:

vow broken on cancer wait:

most hospitals across canada fail to meet ottawa’s four-week guideline for radiation therapy

patients wait as p.e.t. scans were used in animal experiment

As if a taboo had lifted, government statistics on the health-care system’s problems are suddenly available. In fact, government researchers have provided the best data on the doctor shortage, noting, for example, that more than 1.5 million Ontarians (or 12 percent of that province’s population) can’t find family physicians. Health officials in one Nova Scotia community actually resorted to a lottery to determine who’d get a doctor’s appointment. . .

Read more, including Dr Jacques Chaoulli’s famous case which he took to the Canadian Supreme Court and Won: Final verdict: Canadians don’t have access to healthcare, they only have access to a waiting list.

Thank GOD, that we had a DOCTOR who was willing to give up his PRACTICE and fight for our suffering PATIENTS who were denied relief from a compressed spinal nerve.

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

 

International Medicine

Past Issue

If Universal Health Care Is The Goal, Don't Copy Canada

Avik Roy, Forbes Staff

GUEST POST WRITTEN BY Jason Clemens and Bacchus Barua

Mr. Clemens is the executive vice-president and Mr. Barua is senior health economist at the
Fraser Institute in Canada.

The heated and often emotionally charged debate over the Affordable Care Act (aka Obamacare) hasn’t subsided despite it being the law of the land for more than four years. Indeed, with the VA scandal, continuing problems in the rollout of aspects of Obamacare and the upcoming mid-term elections, the likelihood of increased acrimony is high.

One aspect of the health care debate in the United States that is, unfortunately, riddled with misinformation is the state of Canada’s single-payer health care system. Too often advocates of Canadian-style health care in the U.S. present limited or even misleading information about the true state of Canada’s health care system and worse, often times present the ideal of Canadian health care rather than its reality. 

It’s first important to recognize that a single-payer model is not a necessary condition for universal health care. There are ample examples from OECD countries where universal health care is guaranteed without imposing a single-payer model.

Amongst industrialized countries — members of the OECD — with universal health care, Canada has the second most expensive health care system as a share of the economy after adjusting for age. This is not necessarily a problem, however, depending on the value received for such spending. As countries become richer, citizens may choose to allocate a larger portion of their income to health care. However, such expenditures are a problem when they are not matched by value.

The most visible manifestation of Canada’s failing health care system are wait times for health care services. In 2013, Canadians, on average, faced a four and a half month wait for medically necessary treatment after referral by a general practitioner. This wait time is almost twice as long as it was in 1993 when national wait times were first measured. . .

Long wait times in Canada have also been observed for basic diagnostic imaging technologies that Americans take for granted, which are crucial for determining the severity of a patient’s condition. In 2013, the average wait time for an MRI was over two months, while Canadians needing a CT scan waited for almost a month.

These wait times are not simply “minor inconveniences.” Patients experience physical pain and suffering, mental anguish, and lost economic productivity while waiting for treatment. One recent estimate (2013) found that the value of time lost due to medical wait times in Canada amounted to approximately $1,200 per patient.

There is also considerable evidence indicating that excessive wait times lead to poorer health outcomes and in some cases, death. Dr. Brian Day, former head of the Canadian Medical Association recently noted that “[d]elayed care often transforms an acute and potentially reversible illness or injury into a chronic, irreversible condition that involves permanent disability.”

New research also suggests that wait times for medically necessary procedures may be associated with increased mortality. A recent report concluded that between 25,456 and 63,090 Canadian women may have died as a result of increased wait times between 1993 and 2009. Large as this number is, it doesn’t even begin to quantify the possibility of increased disability, poorer quality of life, and mental stress as a result of protracted wait times.

As Americans struggle with determining the next steps for health care reform, whether that means continuing to tweak the ACA or “repealing and replacing it,” they should keep in mind that the success of any reform depends in part on the degree to which facts dominate fiction and ideology. Discussion of the Canadian model is worthy of inclusion in such a debate, but more in terms of “what to avoid” than as a model for reform. The reality of Canadian health care is that it is comparatively expensive and imposes enormous costs on Canadians in the form of waiting for services, and limited access to physicians and medical technology. This isn’t something any country should consider replicating.

Read the entire report in FORBES

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

 

International Medicine

Past Issue

The 10 leading causes of death in the world 2000-2012 - WHO

Ischaemic heart disease, stroke, lower respiratory infections and chronic obstructive lung disease have remained the top major killers during the past decade.

Noncommunicable diseases (NCDs) were responsible for 68% (38 million) of all deaths globally in 2012, up from 60% (31 million) in 2000. Cardiovascular diseases alone killed 2.6 million more people in 2012 than in the year 2000.

Lung cancers (along with trachea and bronchus cancers) caused 1.6 million (2.9%) deaths in 2012, up from 1.2 million (2.2%) deaths in 2000. Similarly, diabetes caused 1.5 million (2.7%) deaths in 2012, up from 1.0 million (2.0%) deaths in 2000. . .

Major causes of death

I: How many people die every year?

In 2012, an estimated 56 million people died worldwide. 

II: What kills more people: infectious diseases or noncommunicable diseases?

Noncommunicable diseases were responsible for 68% of all deaths globally in 2012, up from 60% in 2000. The 4 main NCDs are cardiovascular diseases, cancers, diabetes and chronic lung diseases. Communicable, maternal, neonatal and nutrition conditions collectively were responsible for 23% of global deaths, and injuries caused 9% of all deaths.

III: Are cardiovascular diseases the number 1 cause of death throughout the world?

Yes, cardiovascular diseases killed 17.5 million people in 2012 that is 3 in every 10 deaths. Of these, 7.4 million people died of ischaemic heart disease and 6.7 million from stroke.

IV: Do most NCD deaths occur in high-income countries?

In terms of number of deaths, 28 million (about three quarters) of the 38 million of global NCD deaths in 2012 occurred in low- and middle-income countries.

In terms of proportion of deaths that are due to NCDs, high-income countries have the highest proportion – 87% of all deaths were caused by NCDs – followed by upper-middle income countries (81%). The proportions are lower in low-income countries (37%) and lower-middle income countries (57%).

V: WHO often says that smoking is a top cause of death. Where does tobacco use affect these causes of death?

Tobacco use is a major cause of many of the world’s top killer diseases – including cardiovascular disease, chronic obstructive lung disease and lung cancer. In total, tobacco use is responsible for the death of about 1 in 10 adults worldwide. Smoking is often the hidden cause of the disease recorded as responsible for death.

Why do we need to know the reasons people die?

Measuring how many people die each year and why they died is one of the most important means – along with gauging how diseases and injuries are affecting people – for assessing the effectiveness of a country’s health system.

Cause-of-death statistics help health authorities determine their focus for public health actions. A country where deaths from heart disease and diabetes rapidly rise over a period of a few years, for example, has a strong interest in starting a vigorous programme to encourage lifestyles to help prevent these illnesses. Similarly, if a country recognizes that many children are dying of malaria, but only a small portion of the health budget is dedicated to providing effective treatment, it can increase spending in this area.

High-income countries have systems in place for collecting information on causes of death in the population. Many low- and middle-income countries do not have such systems, and the numbers of deaths from specific causes have to be estimated from incomplete data. Improvements in producing high quality cause-of-death data are crucial for improving health and reducing preventable deaths in these countries.

Read more at WHO . . .

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Please See All media releases from WHO . . .

 

International Medicine

Previous Issue

Eliminating use of monetary policy to achieve country-specific goals

NATIONAL CENTER FOR POLICY ANALYSIS

Measuring the Unfunded Obligations of European Countries

Policy Report No. 319 by Jagadeesh Gokhale, PhD

Europe is undergoing two major transitions. On the demographic front, many European countries are undergoing rapid population aging as their Baby Boom generations enter retirement, senior citizens live longer and fertility rates remain well below the population replacement level. On the economic front, 15 European countries have adopted the euro as a common currency, eliminating the ability to use monetary policy to achieve country-specific economic goals. Both transitions will place tremendous, conflicting pressures on the domestic national budgets of European countries.

Executive Summary

These countries remain politically committed to maintaining fiscal discipline, but large portions of their government budgets are funded on a pay-as-you-go basis. That means that no real resources are set aside and invested each year by government or individuals to prefund future expenditures on such programs. Spending on promised retirement and health-care benefits for the elderly will increase. But there will be fewer workers to pay benefits as the bills come due, and the growth of income from which to extract taxes to support these programs will slow. As a result, all European countries have large unfunded liabilities — the difference between the projected cost of continuing current government programs and net expected tax revenues. In general:

■ The average EU country would need to have more than four times (434 percent) its current annual gross domestic product (GDP) in the bank today, earning interest at the government’s borrowing rate, in order to fund current policies indefinitely.

■ At the low end, Spain would need to have almost two and one-half times (244.3 percent) its annual GDP invested.

■ At the high end, Poland would need to have 15 times its GDP invested in real assets, forever!

No EU government has made the necessary investment. As an alternative, the next-best option is for these countries immediately to gradually but significantly increase saving and investment. In particular, the average EU country could fund its projected budget shortfall through the middle of this century if it put aside 8.3 percent of its GDP each and every year. Despite this adjustment, a budget shortfall is likely to emerge after 2050, requiring additional fiscal reforms.

What will happen if EU countries do not set aside these funds? Unless they reform their health and social welfare programs, they will have to meet these unfunded obligations by increasing tax burdens as the larger benefit obligations come due. Although spending averages 40 percent of GDP today:

■ By 2020, the average EU country will need to raise the tax rate to 55 percent of national income to pay promised benefits.

■ By 2035, a tax rate of 57 percent will be required.

■ By 2050, the average EU country will need more than 60 percent of its GDP to fulfill its obligations.

In some countries, the projected shortfalls are lower than the average. In other countries, they are higher. This is the result of several factors. For instance, life expectancy at birth (in 2004) ranges from a low of 71.2 years in Latvia to a high of 80.7 in Sweden, indicating higher age-related costs in older EU countries than in newer, Eastern countries. Another demographic factor is fertility, which is below the rate of 2.1 births per woman required to maintain populations. However, fertility rates in the EU range from a low of 1.18 in the Czech Republic to a high of just 1.93 in Ireland — indicating that the Czech Republic is closer to a population implosion. Partly as a result of these demographic differences, economic growth rates also differ widely, from a contracting economy in Malta, with a –1.6 percent rate of growth in GDP per capita (averaged over the period from 1996 to 2005), to a 5.7 percent growth rate in Estonia.

In comparison, the United States’ shortfall for Social Security and Medicare alone has been somewhat smaller than the EU average, at 6.5 percent of future GDP. But as a result of the expansion of the Medicare program to cover prescription drugs, the U.S. fiscal imbalance is now 8.2 percent of future GDP. Putting this in perspective, to close its fiscal imbalance:

■ The United States would need to save and invest an amount equal to 8.2 percent of its GDP beginning now and continuing every year forever to pay expected future benefits without future tax increases.

■ This could be accomplished by more than doubling the current 15.3 percent payroll tax on employers and employees, immediately and forever.

■ Alternatively, the federal government could immediately stop spending nearly four out of every five dollars on programs other than Social Security and Medicare — eliminating most discretionary spending on such programs as education, national defense, environmental protection and welfare — forever. Each year that the United States does not take action to reduce the projected shortfall, it grows by more than $1.5 trillion, after adjusting for inflation.


About the Author

Jagadeesh Gokhale is a senior fellow with the Cato Institute in Washington, D.C. His research focuses on U.S. fiscal policy, entitlement reforms, intergenerational redistribution, national saving, and labor productivity and compensation. He works with Cato’s Project on Social Security Choice to develop reforms for programs such as Social Security and Medicare. Dr. Gokhale served in 2002 as a consultant to the U.S. Department of the Treasury and in 2003 as a visiting scholar with the American Enterprise Institute (AEI). Earlier, he was senior economic adviser to the Federal Reserve Bank of Cleveland. His most recent book, Fiscal and Generational Imbalances: New Budget Measures for New Budget Priorities, coauthored with Kent Smetters, drew widespread attention when it was published by AEI. He has also authored numerous papers in such economic journals as the American Economic Review, Journal of Economic Perspectives and the Quarterly Journal of Economics. Gokhale holds a Doctor of Philosophy degree in economics from Boston University.

Read the entire policy report No 319 . . .

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

 

International Medicine

Past Issue

Health Care Reform: Do Other Countries Have the Answers?

John C. Goodman | National Center for Policy Analysis

Linda Gorman | Independence Institute

Devon Herrick | National Center for Policy Analysis

Robert M. Sade | Department of Surgery and Institute of Human Values in Health Care,

Medical University of South Carolina

Many arguments for the superiority of other health care systems have been repeated often: the United States spends more than any other country, but its health outcomes are often worse. Whereas no one is ever denied care because of an inability to pay in countries with universal coverage, as many as 18,000 people in the U.S. die each year because they are uninsured and more than half of all bankruptcies are caused by medical debts. Also, other countries avoid our high administrative costs.

Yet these and other assertions are debatable. Some are demonstrably false. 

The health care systems of all developed countries face three unrelenting problems: rising costs, inadequate quality, and incomplete access to care. Much analysis published in medical journals suggests that other countries have found superior solutions to these problems.

This conclusion is at odds with economic research that is published in journals physicians seldom read, using methodologies that are unfamiliar to physicians. In this essay, we attempt to shed light on topics frequently discussed in proposals for health care reform, drawing on the relevant medical and economics literature.

Does the United States Spend Too Much on Health Care?

International statistics show that 2005 United States (US) per capita health care spending was 2.3 times greater than the median Organization for Economic Cooperation and Development (OECD) country ($6,401 vs. $2,759, based on purchasing power parity) and 1.5 times larger than Norway, the country that followed Luxembourg in the spending ranking.2 However, normal market forces have been so suppressed throughout the developed world that purchasers rarely see a real price for any medical service. As a result, summing over all transactions produces aggregate numbers in which one can have little confidence. In addition, other countries more aggressively disguise costs, especially by suppressing provider incomes.

Economists have long known that international health care spending comparisons are fraught with potential error. Even for uncomplicated dental fillings, reimbursement data underestimate total costs by 50% in nine European countries.3 Countries account for long term care and out-of-pocket spending differently. The accounting treatment of overhead and capital costs also varies.4 An OECD project to harmonize national accounting methods began in 2000, but even when methods are harmonized, the choice of a price adjustment method can alter hospital cost estimates by as much as 400%. The US compares more favorably when real resources are measured rather than monetary accounts. Per capita, the US uses fewer physicians, nurses, hospital beds, physician visits, and hospitals days than the median OECD country.

Even taking the monetary totals at their face value, the US has been neither worse nor better than the rest of the developed world at controlling expenditure growth. The average annual rate of growth of real per capita US health care spending is slightly below OECD average over the last decade (3.7% vs. 3.8%), and over the past four decades (4.4% vs. 4.5%).7 Despite common perceptions, a country’s financing method—public vs. private financing, general revenue vs. payroll taxes, third-party vs. out-of-pocket spending—is unrelated to its ability to control spending.

For the US, the practical question is, can the adoption of another country’s health care system offer a reasonable chance of improving US private sector methods? An answer in the negative is suggested by a comparison of the British National Health Service and California’s Kaiser Permanente found that Kaiser provided more comprehensive and convenient primary care and more rapid access to specialists for roughly the same cost.

Finally, international spending comparisons typically ignore costs generated by limits on supply. In 2002-2004, dialysis patients waited 16 days for permanent blood vessel access in the US, 20 days in Europe, and 62 days in Canada.10 Waiting for care has economic costs in terms of sick pay and lost productivity, as well as negative health consequences. In the late 1990s, an estimated 5 to 10% of English waiting list patients were on sick leave. Norway is trying to reduce waiting times for patients “in order to reduce the cost of sickness benefits.” Finland calculates that the cost of waiting (sickness benefits, medicines, and social welfare expenses) can exceed the cost of treatment.

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

 

International Medicine

Past Issue

The Cost of “Free Health Care” in Canada

The Price of Public Health Care Insurance in Canada

August 16, 2013

Canadians often misunderstand the true cost of their public health care system. This occurs partly because Canadians do not incur direct expenses for their use of health care and partly because Canadians cannot readily determine the value of their contribution to public health care insurance, say Nadeem Esmail and Milagros Palacios of the Fraser Institute

In 2013, the estimated average payment for public health care insurance will range from $3,387 to $11,381 for Canadian families, depending on the type of family.

  • For the average Canadian family, between 2003 and 2013 the cost of public health care insurance increased more than 1.5 times faster than the cost of shelter and clothing, more than twice as fast as food, and nearly 1.5 times faster than average income.

  • The 10 percent of Canadian families with the lowest incomes will pay an average of about $482 for public health care insurance in 2013.

  • The 10 percent of Canadian families who earn an average income of $56,596 will pay an average of $5,364 for public health care insurance, while those families that are among the top 10 percent of income earners in Canada will pay about $35,309.

One reason why Canadians don't know the true cost of health care is because physician and hospital services covered by tax-funded health care insurance are free at the point of use. This situation leads many to grossly underestimate the actual cost of the health care delivered. One often hears people speaking of "free" health care in Canada, which is a statement that entirely ignores the substantial taxpayer-funded cost of the health care system.

  • For example, health spending numbers are often presented in aggregate, resulting in figures so large they are almost meaningless.

  • For instance, approximately $135 billion in Canadian tax dollars were estimated to have been spent on publicly funded health care in 2012.

  • It is more informative to measure the cost of the country's health care system in per capita dollars: the $135 billion spent equates to approximately $3,870 per Canadian.

This would be the cost of the public health care insurance plan if every Canadian resident paid an equal share. Canadians certainly do not pay equal tax amounts each year, however. Indeed, some Canadians are children and dependents and are not taxpayers.

Source: Nadeem Esmail and Milagros Palacios, "The Price of Public Health Care Insurance," Fraser Institute, July 2013.

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

 

International Medicine

Past Issue

Canadian-Style Health Care System

Coming Soon To America: A Two-Tiered, Canadian-Style Health Care System

Commentary by John C Goodman

May 23, 2013

Source: Forbes

I believe we are moving toward two different health systems. In one, patients will be able to see doctors promptly. They will talk to physicians by phone and email. They will have no difficulty scheduling needed surgery. If they have to go into a hospital, a “hospitalist” (who reports to them and not to the hospital administration) will be there to make sure their interests are looked after. They may even have an independent agency that reviews their medical records, goes with them when they meet with specialists, and gives them advice on every aspect of their care.

In the other system, waiting times will grow for almost everything ― to get appointments with physicians, to get tests, to obtain elective surgery, etc. Patients may find that they don’t have access to the best doctors or the best hospitals. They may find that the facility where they are treated does not have the latest technology. In terms of waiting times and bureaucratic hassles, health care for these patients may come to resemble the Canadian system. It may become even worse than the Canadian system. 

The evolution toward a two-tiered system was already under way before Barack Obama became president. But ironically, the Affordable Care Act (ObamaCare) is accelerating the pace of change. It is doing so in four ways.

First, ObamaCare is supposed to insure 32 million additional people by this time next year. If the economic studies are correct, these newly insured will try to consume twice as much medical care as they have been. In addition, most of the rest of us will be forced to have more generous coverage than we previously had. There will be a long list of preventive services that all plans will be required to cover ― with no deductible and no copayment ― and commercial insurance will be required to cover a great many services previously avoided (including, everyone must know by now, contraception). These two changes alone will boost the demand for care considerably.

On the supply side, there is really no provision under ObamaCare to create more doctors. In fact, the supply of doctor services is likely to decrease because of two more features of health reform. Doctors, who are already weary from third-party interference in the practice of medicine, will step up their retirement dates as they contemplate the prospects of even more bureaucracy. Also, hospitals are acquiring doctors as employees at a rapid rate. Indeed, more than half of all doctors are now working for hospitals. When doctors quit their private practices and start working for hospitals, they reduce the number of hours they work. (Forty hour work weeks and golf on the weekends replaces 50 and 60 hour work weeks.) Since they have a guaranteed income, they also become less productive.

These four changes add up to one big problem: we are about to see a huge increase in the demand for care and a major decrease in the supply. In any other market, that would cause prices to soar. But government plans to control costs (even more so than in the past) by vigorously suppressing provider fees and the private insurers are likely to resist fee increases as well. That means we are going to have a rationing problem. Just as in Canada or Britain, we are going to experience rationing by waiting.

Consider how much waiting there already is in the U.S. health care system. On the average, patients must wait three weeks to see a new doctor. In Boston, where we are told they have universal coverage, the average wait time is two months to see a new family doctor. Amazingly, one in five patients who enters a hospital emergency room leaves without ever seeing a doctor ― presumably because they get tired of waiting.

All this is about to get worse. Waiting times are going to be especially lengthy for anyone in a health insurance plan that pays providers below-market fees. The elderly and the disabled on Medicare, low income families on Medicaid, and (if the Massachusetts precedent is followed) people who acquire health insurance in the new health insurance exchanges will find they are financially less desirable to providers than other patients. That means they will be pushed to the end of the waiting lines.

Those who can afford to will find a way to get to the head of the line. For a little less than $2,000 a year, for example, seniors on Medicare can contract with a concierge doctor. These doctors promise prompt access to care and usually talk with their patients by telephone and email. They serve as an advocate for their patients, in much the same way as an attorney is an advocate for his client.

But every time a doctor becomes a concierge doctor, he (or she) leaves an old practice serving about 2,500 patients and takes only about 500 patients into the concierge practice. (More attention means fewer patients.) That means about 2,000 patients now must find a new physician.

Because the two tiers of health care will compete with each other for resources, the growth of the first tier will make rationing by waiting even more pronounced in the second tier. As a result, waiting times in the second tier could easily exceed those in Canada.

I also believe all this is going to happen much more rapidly than anybody suspects.

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

 

International Medicine

Past Issue

International News: We have entered the age of the individual capitalist

Capitalism Can Be Responsible

By Julie Meyer, Editor, Entrepreneurial Country

The phrase “responsible capitalism” is never going to set the world on fire. Movies will not be made about it, and MBA graduates may sneer. And yet, businesses that are built responsibly, particularly small and medium-sized companies, are destined to succeed.

Against a backdrop of sluggish economic growth on either side of the Atlantic, small businesses and entrepreneurs have created a disproportionate share of new jobs. You would be hard pressed to find bright young sparks under 30 who would not rather work for themselves. 

The digital world has enabled authors, artists and kitchen-table entrepreneurs to punch above their weight, and grab a share of revenue in transactions without needing the expensive infrastructure of a big company. Responsible companies are being created by individuals every day of the week.

We have entered the age of the individual capitalist, the natural entrepreneur working hand-in-hand with big business. The UK’s most successful small and medium-sized enterprises are defined by key relationships with large companies that provide access to the mainstream markets.

Ultimately, entrepreneurs have responsibilities – to shareholders, employees and customers – to ensure the integrity of their relationships with their corporate partners.

Accountability happens at the individual level, and the fluid nature of business relationships introduced by the internet enables people to act responsibly more easily than ever before. Today there is no trade-off: doing business responsibly is actually good business.

This article originally appeared in The Financial Times

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

 

International Medicine

Past Issue

Canadian Health Care

The Ugly Truth About Canadian Health Care
David Gratzer

Socialized medicine has meant rationed care and lack of innovation. Small wonder Canadians are looking to the market.

Mountain-bike enthusiast Suzanne Aucoin had to fight more than her Stage IV colon cancer. Her doctor suggested Erbitux—a proven cancer drug that targets cancer cells exclusively, unlike conventional chemotherapies that more crudely kill all fast-growing cells in the body—and Aucoin went to a clinic to begin treatment. But if Erbitux offered hope, Aucoin’s insurance didn’t: she received one inscrutable form letter after another, rejecting her claim for reimbursement. Yet another example of the callous hand of managed care, depriving someone of needed medical help, right? Guess again. Erbitux is standard treatment, covered by insurance companies—in the United States. Aucoin lives in Ontario, Canada.

When Aucoin appealed to an official ombudsman, the Ontario government claimed that her treatment was unproven and that she had gone to an unaccredited clinic. But the FDA in the U.S. had approved Erbitux, and her clinic was a cancer center affiliated with a prominent Catholic hospital in Buffalo. This January, the ombudsman ruled in Aucoin’s favor, awarding her the cost of treatment. She represents a dramatic new trend in Canadian health-care advocacy: finding the treatment you need in another country, and then fighting Canadian bureaucrats (and often suing) to get them to pick up the tab.

But if Canadians are looking to the United States for the care they need, Americans, ironically, are increasingly looking north for a viable health-care model. There’s no question that American health care, a mixture of private insurance and public programs, is a mess. Over the last five years, health-insurance premiums have more than doubled, leaving firms like General Motors on the brink of bankruptcy. Expensive health care has also hit workers in the pocketbook: it’s one of the reasons that median family income fell between 2000 and 2005 (despite a rise in overall labor costs). Health spending has surged past 16 percent of GDP. The number of uninsured Americans has risen, and even the insured seem dissatisfied. So it’s not surprising that some Americans think that solving the nation’s health-care woes may require adopting a Canadian-style single-payer system, in which the government finances and provides the care. Canadians, the seductive single-payer tune goes, not only spend less on health care; their health outcomes are better, too—life expectancy is longer, infant mortality lower. . .

I was once a believer in socialized medicine. I don’t want to overstate my case: growing up in Canada, I didn’t spend much time contemplating the nuances of health economics. I wanted to get into medical school—my mind brimmed with statistics on MCAT scores and admissions rates, not health spending. But as a Canadian, I had soaked up three things from my environment: a love of ice hockey; an ability to convert Celsius into Fahrenheit in my head; and the belief that government-run health care was truly compassionate. What I knew about American health care was unappealing: high expenses and lots of uninsured people. When HillaryCare shook Washington, I remember thinking that the Clintonistas were right.

My health-care prejudices crumbled not in the classroom but on the way to one. On a subzero Winnipeg morning in 1997, I cut across the hospital emergency room to shave a few minutes off my frigid commute. Swinging open the door, I stepped into a nightmare: the ER overflowed with elderly people on stretchers, waiting for admission. Some, it turned out, had waited five days. The air stank with sweat and urine. Right then, I began to reconsider everything that I thought I knew about Canadian health care. I soon discovered that the problems went well beyond overcrowded ERs. Patients had to wait for practically any diagnostic test or procedure, such as the man with persistent pain from a hernia operation whom we referred to a pain clinic—with a three-year wait list; or the woman needing a sleep study to diagnose what seemed like sleep apnea, who faced a two-year delay; or the woman with breast cancer who needed to wait four months for radiation therapy, when the standard of care was four weeks.

I decided to write about what I saw. By day, I attended classes and visited patients; at night, I worked on a book. Unfortunately, statistics on Canadian health care’s weaknesses were hard to come by, and even finding people willing to criticize the system was difficult, such was the emotional support that it then enjoyed. One family friend, diagnosed with cancer, was told to wait for potentially lifesaving chemotherapy. I called to see if I could write about his plight. Worried about repercussions, he asked me to change his name. A bit later, he asked if I could change his sex in the story, and maybe his town. Finally, he asked if I could change the illness, too.

My book’s thesis was simple: to contain rising costs, government-run health-care systems invariably restrict the health-care supply. Thus, at a time when Canada’s population was aging and needed more care, not less, cost-crunching bureaucrats had reduced the size of medical school classes, shuttered hospitals, and capped physician fees, resulting in hundreds of thousands of patients waiting for needed treatment—patients who suffered and, in some cases, died from the delays. The only solution, I concluded, was to move away from government command-and-control structures and toward a more market-oriented system. To capture Canadian health care’s growing crisis, I called my book Code Blue, the term used when a patient’s heart stops and hospital staff must leap into action to save him. Though I had a hard time finding a Canadian publisher, the book eventually came out in 1999 from a small imprint; it struck a nerve, going through five printings.

Nor were the problems I identified unique to Canada—they characterized all government-run health-care systems. Consider the recent British controversy over a cancer patient who tried to get an appointment with a specialist, only to have it canceled—48 times. More than 1 million Britons must wait for some type of care, with 200,000 in line for longer than six months. A while back, I toured a public hospital in Washington, D.C., with Tim Evans, a senior fellow at the Centre for the New Europe. The hospital was dark and dingy, but Evans observed that it was cleaner than anything in his native England. In France, the supply of doctors is so limited that during an August 2003 heat wave—when many doctors were on vacation and hospitals were stretched beyond capacity—15,000 elderly citizens died. Across Europe, state-of-the-art drugs aren’t available. And so on.

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

 

International Medicine

Past Issue

Single-Payer National Health Insurance around the World

by John C. Goodman, Gerald L. Musgrave, and Devon M. Herrick

As we move further into the twenty-first century, it is clear that we are living with a number of institutions that were not designed for the Information Age. One of those institutions is health care.

Virtually everyone agrees that our health care system needs reform. But what kind of reform? Some on the right would like to see us return to the type of system that prevailed in the 1950s. Some on the left would like to see us copy one of the government-run systems established in the mid-twentieth century and variously called socialized medicine, national health insurance and, more recently, single-payer health insurance. For example, Physicians for a National Health Program, claiming membership of 8,000 physicians and medical students, contends that "single-payer national health insurance would resolve virtually all of the major problems facing America's health care system today."

We believe that neither of these two alternatives will work. But before we explain why, let us stop to consider some central problems that every reform faces.

The complete book: http://www.ncpa.org/pdfs/livesatrisk/Lives-at-Risk_NCPA.pdf (PDF | 5MB)

Lives at Risk by John Goodman, was reviewed in the early days of MedicalTuesday. Review these 20 Myths of Single Payer Medicine starting in August 2002 for twenty issues at http://medicaltuesday.net/archives/Aug2702.htm

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

http://scc.lexum.umontreal.ca/en/2005/2005scc35/2005scc35.html

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