Sick? Leave the Country: Harmonizing American Foreign and Domestic Health Policies

Posted on by Laurie Garrett

Millions of lives are prolonged or saved throughout the world, thanks to United States-supported health programs. But Americans aren’t so lucky. For many, the best way to get affordable treatment at U.S. taxpayer expense might be to move to a poor country that is committed to building universal coverage, backed by U.S. development aid.

The Supreme Court decision on the Affordable Care Act opens the possibility that the United States may now begin to implement domestic policies that foreign aid agencies and the Department of Defense have long supported – both, politically and economically – as elements of U.S. foreign policy. It may now be possible to harmonize long-standing American foreign and domestic policies regarding healthcare access for poor and middle class peoples.

Following World War II the United States made building health systems a key pillar of its foreign policy.George Marshall famously said in his Harvard University 1947 Commencement Address, “Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos,” including elimination of European epidemics and erection of universally-accessible healthcare systems across the continent. Though Marshall Plan investments in Europe amounted to less than 3 percent of the recipient countries’ total incomes during the post-war years, investments in public health and medical systems development constituted a disproportionally larger element of the effort.

Similarly, General Douglas MacArthur ranked creation of a national health system for Japan as a top priority of the Supreme Commander for the Allied Powers. Working closely with Japan’s Public Health and Welfare Section the 1945-1949 occupying U.S. forces stopped countless epidemics across the Japanese Islands and built one of the world’s strongest, utterly universal healthcare systems on Earth.

Sey Nishimura summarizes the spectacular success of this American-financed health reform in Japan:

The mortality rate of the Japanese dropped from 14.86 per 1000 in 1947 to 8.9 per 1000 in 1953, and the birth rate per 1000 dropped from 35.01 in 1947 to 21.4 in 1953.84 The neonatal death rate dropped from 76.2 per 1000 in 1947 to 49.1 per 1000 in 1953. Average life expectancy increased from 50 years in 1945 to 61.9 years in 1953 for men, and from 54 to 65.7 years for women. Daily protein intake per person increased from 10.7 g in 1945 to 40.3 g in 1953. The mortality rate for diphtheria, which was 3.1 per 100 000 in 1947, dropped to 0.74 per 100 000 in 1952.

Today Japanese enjoy the longest life expectancies on Earth (combined male/female of 83 years, versus 78 years in the U.S.), lowest infant mortality rates and by every measure the best health of any peoples. The key to their phenomenal success is the Public Health Insurance System, created under MacArthur’s command between 1945-1952. Japanese leaders feel so strongly that they made health system strengthening a central focus of the 2008 G8 Summit in Hokkaido, calling for global commitment to health coverage and access.

As was the case with Marshall Plan-inspired efforts in Europe, the PHIS in Japan rested upon a fundamental principle: Pooling risk based on mandated enrollment by all citizens, sick, well, elderly and young, alike. Japan controls the financial burden of this system through an elaborate codification of all medical costs and reimbursements to physicians, dentists, hospitals and other providers. Though health costs as a percentage of GDP rose in Japan from 7.7 percent in 2000 to 8.5 percent in 2007, the system remains a bargain compared to the costs of care in the United States. Per capita spending on health in Japan (2010) was $4,065, compared to$8,362 in the United States. (In 2000 the U.S. spent 13.7 percent of GDP on health; by 2008 that rose to 16.4 percent, and the U.S. Centers for Medicare & Medicaid Services predicted that without health reform in 2018 America would spent 20 percent of its GDP on health.)

Similarly, the U.S. played a major role in developing the healthcare system of South Korea following the Korean War, and political leaders in that country today credit post-war health development efforts and the U.S-supported 1977 creation of the National Health Insurance system for startling improvements in Korean health and the so-called Han River economic miracle. South Korea lowered its child mortality rate from 146 deaths per 1000 children under 5 years of age in 1960 to a mere 4/1000 in 2010, according to the World Bank. And between 1980 and the present life expectancy in the country shot up from 66 to 81 years, well ahead of the United States. The country spends $1,439 per capita on health, or about 6.9 percent of GDP.

U.S. military analysts draw on the Marshall/MacArthur/Korean experiences in current promotion of health systems development in Africa. AFRICOM, the Department of Defense command for the region, favors massive development for the continent, hinging on advances in healthcare access and provision.

Similarly, the U.S. Agency for International Development (USAID) and the Obama Administration’s Global Health Initiative (a cross-agency effort) have shifted focus away from narrow health initiatives towards development of sustainable national healthcare programs for all in countries like Ghana, Cambodia, Ethiopia, Rwanda and South Africa. Creation of health systems at U.S. taxpayer expense is considered a lynchpin of anti-terrorism efforts in fragile states such as Afghanistan and Iraq.

Now in early stages of building universal health coverage systems are China, India and South Africa – three of the so-called BRICS emerging market nations. Brazil embarked on development of a universal health scheme starting in 1996, which picked up steam under President Lula da Silva in recent years. Life expectancy in Brazil was 54 years in 1960; it is 73 years today and rising. Over the same time period child mortality rates plummeted from 178 (number of under-5 year olds per 100 dying annually) to 21 under the nation’s Unified Health System. Even massive India, with its wide gaps in income and significant difference in governance capacity from state-to-state, is embarking on an ambitious scheme that aims to provide universal coverage for quality care to all its citizenry.

This year South Africa embarked on a program that aims by 2025 to provide equitable medical care and coverage to the entire population at a cost of some 6.2 percent of GDP, or about $33 billion/year. To accomplish this in a country of high unemployment, tremendous income disparity and an HIV rate of some 25 percent in reproductive-aged adults will be a neat trick. The government reckons this can be accomplished by tripling the number of South African doctors, creating a National Health Insurance scheme to which those providers bill their services, and funding it with a combination of a taxable income surcharge, payroll taxes and a value added tax. Helping South Africa along its way are several U.S. taxpayer-supported programs, including PEPFAR (the President’s Emergency Plan for AIDS Relief), U.S. contributions to the Global Fund to Fight AIDS, Tuberculosis and Malaria, and direct financing from the U.S. Agency for International Development. This year (FY2012) South Africa was the #1 recipient of health aid from the U.S., totaling $469,969,000.

The most spectacular improvements in population health are occurring in countries that have tackled healthcare financing, creating various means of providing universal coverage to their populations. While some of these universal coverage nations have locked into the Otto Von Bismarck-inspired Prussian tradition of designating the State the universal payer of all medical costs, most have engineered more complex and nuanced coverage that mixes public and private care insurance, capped payments to hospitals and physicians and some form of patient direct payment. A key imperative driving health coverage initiatives is the bankrupting impact of out-of-pocket medical expenses in most countries. According to the OECD Indians and Mexicans individually pay for about half of their medical bills out-of-pocket, Chinese are burdened with about 45 percent -- compared to the Netherlands where only some 5 percent of health services are covered by individuals.

In the United States 2012 polling shows that 26 percent of Americans have faced grave financial difficulties due to medical costs, and 58 percent have delayed treatments due to their inability to pay out-of-pocket expenses or insurance co-pays. For those without health insurance or Medicare coverage a startling 81 percent say they forgo treatments, as do 72 percent of poor Americans earning less than $40,000/year. A University of Maryland 2011 study found that the sharpest increases in delayed medical care were among adults that were facing housing foreclosure. In 2010, 75 million Americans skipped a treatment or medication due to inability to pay for it, representing a 60 percent increase over 2001.

By 2010 medical bills were the number one cause of bankruptcy in the U.S., exceeding housing foreclosure as reason to limit food, heat and rent payments. Four million Americans declared bankruptcy that year citing medical costs.

A 2011 Department of Health and Human Services study found that the average American patient could only afford to cover 12 percent of their hospital bills, and failure to gain full reimbursement on such bills accounted for $73 billion in losses for hospitals. The study found that:

Every year, nearly 2 million uninsured Americans are hospitalized. With 58-percent of these hospital stays resulting in bills of more than $10,000, most uninsured people are unable to afford potential hospital bills. Even the top 10-percent of uninsured families with the most assets are estimated to be able to pay the full bill for only half of potential hospital stays. Uninsured families can, on average, afford to pay the full bills for only about 12-percent of the hospital stays they might experience, bills that account for just 5-percent of the total amount hospitals bill them.

The Commonwealth Fund 2010 Biennial Health Insurance Survey found that 38 million Americans were uninsured in 2001. That number soared following the 2008 financial crisis, amid widespread unemployment, with 52 million uninsured in 2010.

Until quite recently the United States ranked in the bottom of the advanced industrialized world for every significant marker of population health: Life expectancy, infant mortality, child mortality, vaccination-completion rates, and similarly significant statistical measures. For decades America has been the health laggard, ranking well behind Western European countries, Canada, Japan, Singapore, even some Latin American populations. The U.S. may have “risen” to higher health ranking by the end of 2012 only because Greece, Portugal, Spain, Cyprus and other financially strapped nations are scaling back medical services for their populations.

The financially hard-hit nations of southern Europe offer clear evidence, in the reverse, of the benefits of widespread access to quality health coverage. The pace of deterioration of the health of populations since 2008 has startled even the most brazen of public health experts. Mortality has already increased in Portugal, along with other vital indicators that collectively demonstrate a severe deterioration in the quality of the population’s health. In the last year the cost of seeing a doctor has doubled in Portugal, and basic services such as kidney dialysis have become unaffordable for the country’s huge unemployed population. As the Greek health system unravels, population health has been almost instantaneously harmed. Seemingly overnight HIV rates soared by 1,450 percent in Athens, and stock-outs of vital life-saving medicines across the country have become severe and commonplace. Spain has responded to its financial crisis by imposing citizenship verification requirements on individuals seeking care, and drastically cutting access to medicines and pharmaceuticals for all of its people. Most employed Spaniards must now pay out-of-pocket 50 percent of all drugs and medicines costs, and retirees will have to cough up 10 percent of their drug costs.

Though Americans have recognized the importance of universal health coverage, cost containment and widespread access to quality care overseas, we have consistently refused to bring the same standards to our own people. As a result, the U.S. ranks as #1 in the OECD nations for medically-induced bankruptcies, uninsured population size, and individuals unable to get treated for HIV infection.

Currently the U.S. State Department is committed to creating an “AIDS-Free Generation” worldwide through provision of treatment and prevention services all over the world, and U.S. taxpayers are underwriting the costs of HIV treatment for more than 7 million people, mostly living in Africa. But here in the U.S. 1,963 people living in 9 states are on waiting lists for life-sparing AIDS drugs. The individuals are unable to afford to pay the estimated $10,000/year for their medicines, but cannot qualify for Medicaid coverage because their respective states have lowered eligibility between 250-to-500% of the federal poverty line, or stopped covering for all needy citizens the costs of key drugs in the HIV formulary. (When patients develop drug-resistant HIV infections they require alternative medicines which, in many states, are no longer listed in the reimbursable formularies.)

In 1950 the United States ranked #5 in the world for female life expectancy: by 2011 it had fallen to #55. A more telling marker of U.S. health status is 15-year survival, ranking how likely a given 45-year-old individual is to reach the age of 60 years. In 2005 the U.S. #13, despite having by far the highest per capita spending on health, well behind most western European nations, Canada and Japan. Female 15-year survival for women aged 45 (likelihood to reach age 60) put the U.S. at 93 percent odds of survival, compared to nearly 98 percent for Japan and more than 96 percent for 11 other nations. Columbia University researcher Peter Muenning, who compiled those data, said commonly blamed problems in the U.S., such as obesity, accidents, violence and smoking, are not responsible for these differences, as the variation between the nations is not statistically significant. Only access to healthcare stands out as a causative factor, Muenning insists.

A Commonwealth Fund 2010 comparison of population health in seven wealthy nations found the United States in last place. Between 1987 and 2006 the numbers of American women dying in pregnancy-related causes actually increased from 6.6 per 100,000 live births to 13.3 – a doubling. In nearly all OECD countries the reverse trend was seen, as ever-fewer women died, year by year.

Political pundits will now argue the impact of the U.S. Supreme Court’s June 28, 2012 decision upholding the American Affordable Care Act (ACA), and the likelihood that Republican opponents to the health reform law will be able to overturn it through legislation. Regardless of the politics, the ACA does bring domestic and foreign policies on healthcare access and spending priorities into closer alignment. Perhaps it will now be possible for HIV-infected individuals in Mississippi or Alabama to have the same U.S. taxpayer-supported access to care as their counterparts in KwaZulu-Natal and Dar-Es-Salaam.

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