www.cato.org/pub_display.php?pub_id=9259WHOm Are They Kidding?
by Glen Whitman
This article appeared in the American Spectator on March 10, 2008.
Armed with supposedly objective reports showing the American medical system is among the worst in the developed world, candidates left and right -- but mostly left -- are plugging ambitious plans to "fix" healthcare. Invariably, their plans call for more government intervention. Senators Clinton and Obama both want to regulate premiums and benefits while increasing healthcare subsidies, and Clinton would go even further by requiring everyone to buy a federally-defined health insurance policy.
But is lack of government really the problem -- and if so, how would we know? Healthcare interventionists frequently cite the World Health Organization's World Health Report 2000, which studied the performance of 191 countries' healthcare systems -- and awarded the U.S. a dismal rank of number 37. While the WHO rankings are touted as an objective measure of the relative performance of healthcare systems, in reality they depend on a number of ideological or logically incoherent assumptions.
The WHO rankings are based on a constructed index of five factors. One factor is "health level," defined as a country's disability-adjusted life expectancy. Another is "health responsiveness," which includes desirable characteristics of healthcare like speed of service, protection of privacy, and quality of amenities.
Both of these are sensible indicators of health quality, but they constitute only 37.5 percent of each country's score. The other 62.5 percent encompasses factors only tenuously connected to the quality of care -- and that can actually punish a country's ranking for superior performance.
Take "Financial Fairness" (FF), worth 25 percent of the total. This factor measures inequality in how much households spend on healthcare as a percentage of their income. The greater the inequality, the worse the country's performance.
Notice that FF necessarily improves when the government shoulders more of the health spending burden, rather than relying on the private sector. To use the existing WHO rankings to justify more government involvement in healthcare is therefore to engage in circular reasoning, because the rankings are designed to favor greater government involvement. (Clinton's plan would attempt to improve the American FF score by capping insurance premiums.)
The ostensible reason to include FF in the health index is to account for people landing in dire financial straits because of their health needs. Yet the FF factor worsens for every household that deviates from the average percentage of income spent on healthcare, regardless of whether the deviation is on the high side or low side.
That means the FF factor doesn't just penalize a country because some households are especially likely to become impoverished from health costs; it also penalizes a country because some households are especially unlikely to become impoverished from health costs.
The other two factors, "health distribution" and "responsiveness distribution," are no better. Together worth 37.5 percent of a country's score, these factors measure inequality in health level and responsiveness. Strictly speaking, neither measures healthcare performance, because inequality is distinct from quality of care. It's entirely possible to have a healthcare system characterized by both extensive inequality and good care for everyone.
Suppose, for instance, that Country A has health responsiveness that is "excellent" for most citizens but merely "good" for some disadvantaged groups, while Country B has responsiveness that is uniformly "poor" for everyone. Country B would score higher than Country A in responsiveness distribution, despite Country A having better responsiveness for even its worst-off citizens.
What if the quality of healthcare improves for half of the population, while remaining the same for the other half? This should be regarded as an unambiguous improvement: some people get better off, and no one gets worse off. But in the WHO index, the effect is ambiguous because the improvement could increase inequality.
The WHO rankings have also been adjusted to reflect efficiency: how well a country is doing relative to how much it spends. In the media, however, this distinction is often lost.
Costa Rica ranks higher than the United States (number 36 versus number 37), but that does not mean Costa Ricans get better healthcare than Americans. Americans most likely get better healthcare -- just not as much better as could be expected given how much we spend. If the question is health outcomes alone, without reference to spending, we should look at the unadjusted ranking, where the U.S. is number 15 and Costa Rica is number 45. (And even the number 15 rank is problematic, for all the reasons discussed above.)
The WHO rankings implicitly take all differences in health outcomes unexplained by spending or literacy and attribute them entirely to health system performance. Nothing else, from tobacco use to nutrition to sheer luck, is taken into account. These variables were excluded largely because of underlying paternalist assumptions about the proper role of the health system.
If the culture has a predilection for unhealthy foods, there may be little healthcare providers can do about it. Conversely, if the culture has a pre-existing preference for healthy foods, the healthcare system hardly deserves the credit. Some people are happy to give up a few potential months or even years of life in exchange for the pleasures of smoking, eating, having sex, playing sports, and so on. The WHO approach, rather than taking people's preferences as given, deems some preferences better than others, and then praises or blames the health system for them.
Those who cite the WHO ranking to justify greater government involvement in the health system -- like the plans pitched by the leading Democratic presidential candidates -- are assuming what they're trying to prove. The WHO healthcare ranking system does not escape political bias. It advances ideological assumptions that most Americans might find questionable under the guise of objectivity.
