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Last in Credibility

The liberal campaign to discredit American health care.

Aug 16, 2010, Vol. 15, No. 45 • By DAVID GRATZER and MERRILL MATTHEWS
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In its 2010 iteration of the Medicaid multiplier effect, Families USA writes:

For every dollar a state spends on Medicaid, the federal government contributes a matching amount of money that the state would not otherwise get. .  .  . This injection of new federal dollars into state economies has a measurable effect on states’ business activity, wages, and jobs. The new dollars pass from one person to another in successive rounds of spending, generating additional business activity, jobs, and wages. Economists call this the “multiplier effect.”

Actually, many economists call it a bunch of hooey. There is a long-running debate over the impact of this Keynesian multiplier effect—or whether it exists at all. But the most glaring omission, the one neither Families USA discusses nor the media question, is whether there is also a “divider effect.” Before the federal government can hand out a dollar, it has to take a dollar from somewhere else—from a taxpayer who would have spent or saved the dollar, suggesting that Medicaid spending may actually be a net drag on the economy.

And then, there are the academics. David Himmelstein, a Harvard physician, may be the most widely quoted. President Obama’s speeches include his statistics on medical bankruptcies. His most recent study—concluding that 62 percent of all bankruptcies in America are due to medical debt—has been widely reported by the media and was even discussed approvingly at a recent hearing by House Judiciary Committee chairman John Conyers: “This surge in medical bankruptcies demonstrates why health care reform is urgently needed right now.”

There’s just one catch: The study isn’t worth the paper it’s written on. Northwestern University professor David Dranove and a coauthor analyzed data from a previous Himmelstein paper on the topic, finding that medical bankruptcies had been overstated by a factor of three to one. In fact, Canada—with its socialized health care system but similar laws—has a higher bankruptcy rate than the United States, calling into question Himmelstein’s basic assumptions.

Himmelstein isn’t exactly hiding his bias. He cofounded Physicians for a National Health Program and has spent decades writing about the benefits of government-run health care. And though he publishes frequently on American health care, his papers and studies are often controversial and similar: They conclude that the U.S. system is cruel.

But is it? No one would question that the American health care system has problems, but is it really that bad? Drop the ideological prism of the Commonwealth Fund and its allies, and ask a simple question: How good is American medicine?

A reasonable way to judge a health care system is to look at outcomes​—how people fare after diagnosis or when stricken with illness. Although there is a dearth of such data, cancer offers an opportunity to make an international comparison: The illness is common; every Western country collects good data; and cancer is a research and treatment priority.

How does the United States fare? Excellently, two major studies suggest. First, a working group associated with the European nongovernmental organization Confederation for Relief and Development completed a study comparing five-year cancer survival rates for several malignancies. Combining the efforts of some hundred researchers and drawing data from almost 2 million cancer patients in 31 countries, the study, published in the August 2008 issue of The Lancet Oncology, is groundbreaking.

While France excels in treating women’s and Japan in men’s colorectal cancer, the U.S. clearly leads other nations in overall survival. These international results replicate those that appeared in a broader cancer review of Europe and the United States. For the 16 types of cancer examined in that paper:

♦ American men have a five-year survival rate of 66 percent, compared with only 47 percent for European men. In Europe, only Sweden has an overall survival rate of more than 60 percent. 

♦ American women have a 63 percent chance of living at least five years after a cancer diagnosis, compared with 56 percent for European women; only five European countries have an overall survival rate of more than 60 percent.

Looking at specific cancers yields striking results: 

♦ For men, the bladder cancer survival rate in the United States is 15 percent higher than the European average. 

♦ For American women, the uterine cancer survival rate is 5 percent higher than the European average; for breast cancer, it is 14 percent higher. 

♦ The United States has survival rates of 90 percent or higher for five cancers (skin melanoma, breast, prostate, thyroid, and testicular), but there is only one cancer for which the European survival rate reaches 90 percent (testicular).

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