Waiting for Health Care

Okay, so much for the bad side of US health care: high costs and mediocre-to-poor average results. But what about the benefits that the “market-driven” US system provides? Sure, the argument goes, the US health care system has some shortcomings – but at least it doesn’t involve long waiting lists for elective procedures, as is the case with countries that have primarily government-run health care.

It turns out that this is largely a myth.

Let me leave aside the point that waiting lists exist in abundance in the US for elective procedures – it’s just that when people are waiting in the US, they are waiting for a miraculous windfall of money to be able to afford the procedure, rather than waiting a few months until their number is called. No, right now I want to focus on the myth that government-financed health care necessarily entails waiting lists for elective procedures.

The data shows that many countries with “nationalized” health care systems have little or no waits for elective medical procedures. A 2003 OECD working paper entitled “Explaining Waiting Times Variations for Elective Surgery across OECD Countries” by Luigi Siciliani and Jeremy Hurst provides some survey evidence of actual waiting times in various OECD countries. The results of that survey are presented below.

Note: figures for Canada and U.K. reflect median waiting times.

In all of the countries surveyed above (except the US), the government is responsible for the vast majority of health care spending. (See AB’s post from yesterday for specific data on that.) Yet many of them have no waits for common elective procedures. Clearly government financing of health care does not, in and of itself, cause waiting lists for medical procedures. If a country has waiting lists for elective health care, that is due to some specific design flaws in its health care system, not because it is financed by the government.

The rest of the paper mentioned above goes on to take a look at the factors that lead to waiting lists. The authors run some econometric tests that conclude that long waits for elective surgeries tend to happen when 1) countries don’t have enough acute care hospital beds (France and Germany have plenty, the UK doesn’t); 2) countries have older populations (older populations create more demand for elective procedures); and 3) countries pay specialists a salary rather than according to a fee-for-service formula.

One last point of interest: what do consumers in other countries have to go through in order to receive these elective procedures? The following table shows out-of-pocket costs for elective procedures, and who makes the decision about whether an individual should receive the service.

In countries with government-financed health care, the decisions are made by doctors – often by the specialists themselves – and out-of-pocket expenses to individuals are negligible. Compare this to the case of the US, which is somewhat different in both dimensions. What would an American expect to pay out-of-pocket for elective hip replacement, and how many hoops would they expect to have to jump through to get approval from their HMO?

So the next time you hear that the US health care system is better than those of other countries because Americans don’t have to wait for their health care, recognize this argument for the myth that it is.