Health care costs can't be cut by competition

Echnide has a great article on health care at Alternet. It's long and not easy to excerpt but here's a few salient points.

In 2008, the U.S life expectancy at birth was 78.1 years, while the corresponding figures in Canada and the U.K. were 81.2 and 78.9 years respectively. Infant mortality rates (measured as deaths per 1,000 live births in a calendar year, and usually regarded as valid measures of care quality) show a similar pattern that year: The U.S. rate was 6.3, the Canadian, 5.1 and the British, 4.9.

And what did we pay to get those not-so-impressive results? A lot. In 2005, the latest year for which cost data is available on all three countries, the U.S. spent 15.3 percent of its gross domestic product (GDP) on health care, while the health care systems of Canada and the U.K. managed to get by with 9.8 percent and 8.3 percent of their GDPs.

To put these numbers into an even starker perspective, note that the Canadian and British systems covered everyone, but the U.S. system spent a lot more while leaving around 16 percent of Americans uninsured.

Read the whole thing. She makes a compelling argument that real cost control is impossible to obtain via measures that try to increase competition in the private health care markets. It's simply not an industry that lends itself to efficiency via free market competition.

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