Comparing the Performance of Health Care Systems: An Alternative Approach

Abstract

The health care system in the United States has been diagnosed as a moribund institution by a large number of media commentators and health policy analysts. Continually rising health care costs and inadequate health insurance coverage for approximately thirty-seven million people are cited as two of the most visible symptoms supporting their diagnosis. Most of these individuals see little chance for the U.S. health care system to recover given its present design. Full recovery, they believe, requires the successful transplant of a health care system from another country. The health care systems in Europe and Canada, where government is assigned a much larger role than in the United States, are argued to offer universal health care coverage and simultaneously contain health care costs. Simple comparative statistics appear to support the view that the performance of the U.S. health care system could be improved through a new health care system design. Infant mortality in the United States ranked twentieth among twenty-four member countries of the Organization for Economic Cooperation and Development (OECD) in 1988. Yet, health care expenditures in the United States comprised 11.8 percent of gross domestic product in 1989, while the comparable average for all OECD countries was only 7.4 percent [28]. These statistics portray the U.S. health care system as being deficient and, therefore, unable to offer quality medical services at a reasonable price. Given the limited stock of information that exists on this issue, however, it is ill-advised to place full blame for the seemingly dismal performance on the U.S. health care system. The simple international comparisons fail to take into account that differences in performance are not solely due to variations in health care systems. While the design of a health care system, including the financing scheme, reimbursement method and organization of production, is indeed important because it influences how various economic, technological and demographic characteristics of a country are transformed into health outcomes, the performance of the health care system also depends on the magnitude of these national characteristics as well. A proper analysis would try to determine how the health care system itself specifically influences the performance of health