Seven years ago, the World Health Organization made the first major effort to rank the health systems of 191 nations. France and Italy took the top two spots; the United States was a dismal 37th.
"...To see the illogic for myself, I downloaded the relevant WHO report and the study it was based on. But before I could verify the factors included in the health performance index, I had to figure out which index to look at. It turns out that the U.S. ranks 37th on the “overall performance index.” But on this index, while it’s true that France is #1, Canada does not rank in the top 10 – it’s only #30. There is another index, “overall health system attainment,” on which the U.S. ranks #15 (while France and Canada are #6 and #7, respectively). As far as I can tell, the two indices are based on the same underlying data, but with the “overall performance index” calibrated according to some measure of how well the country is theoretically capable of doing. I’m still trying to figure out exactly how this calibration works. In any case, it looks an awful lot like someone cherry-picked the results to make the U.S.’s relative performance look worse than it is. Contrary to CNN.com (and possibly Michael Moore – I haven’t seen the movie yet), there is no index that has both Canada and France in the top 10 and the U.S. at 37.
But back to Masten’s point. Both of these indices include “financial fairness” (FF) as a factor with 25% weight in measuring the system’s performance. FF is measured first by finding a household’s contribution to health expenditure as a percentage of household income (beyond subsistence), and then looking at the distribution of this percentage over all households. The wider is the distribution, the worse a nation will perform on the health performance index (other things equal). But it should not be surprising at all that a larger percentage of poor people’s income will be spend on health than would be spent by the rich. Insofar as healthcare is treated as a necessity, we should expect that people will spend a decreasing fraction (not a decreasing amount, but a decreasing fraction) of their income on healthcare as their income increases. Rich people tend to spend a larger percentage of their income on luxuries than do the poor.
More importantly, the distribution of household contributions will obviously decline when the government shoulders more of the health spending burden. In the extreme, if the government pays for all healthcare, every household will spend the same percentage of their income – zero – on healthcare. In other words, this measure of health outcomes necessarily makes countries that rely on private payment look inferior.
It gets worse. The ostensible reason for including FF in the healthcare performance index is to consider the possibility of people landing in dire financial straits because of their health needs. It’s debatable whether this factor deserves inclusion in a strict measure of actual health performance – but let’s suppose it does. FF does not actually measure exposure to risk of impoverishment. FF is based on cubing (!), for each household, the difference between that household’s contribution and the average household’s contribution to healthcare. Consequently, FF is negatively affected by households that spend a larger percentage of their income on healthcare than others. But FF is also negatively affected by households that spend a much smaller percentage of their income on healthcare than others! This is senseless, but it’s a natural result of focusing on distribution instead of the effectiveness of the healthcare people receive."
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