The Truth, Mainly - 02/28/1994

Japan-managed health care?
by Leon Satterfield

Forget about Spy, Mother Jones, Rolling Stone, Nation, or even the Daily Worker. If you're looking for something really subversive, try Consumer Reports. They're the people who tell us when we're buying a lemon, even if it's made in the U.S.A.

Is that un-American or what?

If you still believe that we make the best cars in the world, that our insurance companies really have the best interests of their clients as their guiding principle, that the invisible hand of our free market always works to the advantage of all concerned, then you probably shouldn't read Consumer Reports. It will only upset you.

And if you still believe that we have the best health care system in the world, you should close your eyes and whistle "Zip a Dee Do Dah" every time you approach a newstand. Even a passing glance at a Consumer Reports cover may cause trauma so severe that you have to make a claim to your health insurance.

Earlier this month Hillary Rodham Clinton told an audience of health care professionals that while "we have the finest physicians and hospitals in the world…we have the stupidest financing system for health care in the world. The financing system is becoming the tail that wags the dog."

She probably reads Consumer Reports.

The problem with the people at CR is that, like the capitalist enterprises they critique, they're obsessed with the bottom line. The difference is that they're obsessed with the consumers' bottom line. And in the last couple of years, that obsession has focused on medical care.

In three consecutive issues (July, August, September) in 1992, they took a long hard look at American health care. It wasn't a pretty picture. Bottom line: We waste at least $200 billion a year "on overpriced, useless, even harmful treatments, and on a bloated bureaucracy. That's enough to extend high-quality medical care to every American now uninsured. . . ."

And they didn't just let it go at that. In the current issue, Senior Editor Trudy Lieberman reports some of her findings about Japanese health care. All Japanese are covered for just about anything that goes wrong—and by "a system that spends a far smaller proportion of Gross National Product on medical care than we do." Their biggest complaint is about hospital food.

Think of that.

Their coverage comes either from employer-sponsored health-insurance societies or from the National Health Insurance program—with premiums "based largely on income."

The big difference between our medical insurance and theirs is that "in the U.S., a good chunk of each premium goes for insurance-company overhead, administrative expenses, and the cost of evaluating risks—a cost associated with keeping people out of the system. In Japan, a portion of the premium subsidizes groups with high medical expenses, such as the elderly —a cost that keeps people in the system."

The Japanese choose their own doctors, there's no rationing of service, and there's a strictly observed fee schedule determined every two years by representatives of physicians, hospitals, pharmaceutical companies and employers.

The result is that a chest X-ray costs $8 , an endoscopy $105, and an MRI $210— about one-fifth of what they cost Americans.

The NY Times this month explained why our MRIs cost upwards of $1,000. If you think in supply-and-demand terms, you'll be puzzled here. The higher cost isn't because there are too few MRI machines, but because there are too many. "Since many MRI machines are busy only half the day, they must charge high rates in order to cover their overhead."

Did you catch that? The larger the supply and the smaller the demand, the higher the price. As a non-judgmental English major, I probably wouldn't call it the "stupidest" financing system in the world, but it does seem fraught with voodoo.

Here's a final example of Consumer Reports' fanatical devotion to the bottom line. Remember the Congressional Budget Office which drew all the Republican praise a couple of weeks ago for pointing out that Clinton's health plan would put us even deeper in debt? CR had the effrontery to report that the very same office had earlier estimated that a single-payer plan would save us "at least $110 billion a year by 2003." And everybody knows that a single payer plan is socialized medicine.

Those subversive rascals at CR just have no respect for our national institutions. Next thing you know, they'll be telling us that apple pie has too much lard in the crust.

And any time now, I expect them to come up with an un-American proposal to head off a trade war with the Japanese by a compromise: We'll buy their cars if they'll manage our health care.


Satterfield is a college professor and writes as a means of discovery.

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