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Solving The American Health Care Crisis

Solving The American Health Care Crisis

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by Umang Malhotra

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Solving the American Health Care Crisis is a comprehensive comparison of health care systems around the world, covering critical issues that America currently faces while presenting solutions for a high-quality, affordable, and accessible universal system that includes the best practices of other industrialized nations.

In the span of his career as an


Solving the American Health Care Crisis is a comprehensive comparison of health care systems around the world, covering critical issues that America currently faces while presenting solutions for a high-quality, affordable, and accessible universal system that includes the best practices of other industrialized nations.

In the span of his career as an international businessman and entrepreneur, Umang Malhotra has voyaged through nearly eighty countries and shares his vast knowledge of other nations and their health care systems as he examines the current American health care system. Malhotra provides results of his research and presents beneficial solutions while answering such questions as:

  • Why is the cost of health care per person so much lower in other countries?
  • What is the effect of rising health care costs?
  • What can United States policymakers learn from their foreign counterparts?
  • How can technology play a key role in cutting costs?

Today, more than forty-seven million Americans are uninsured and millions more are underinsured. The answers contained in Solving the American Health Care Crisis provide hope that America can create a future system where all people can receive quality health care.

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Solving the American Health Care Crisis

By Umang Malhotra

iUniverse, Inc.

Copyright © 2009 Umang Malhotra
All right reserved.

ISBN: 978-1-4401-8018-7

Chapter One


"Health care is a right and not a privilege." Senator John Kerry speaking at a Democratic Party Unity Dinner on March 25, 2004.

During one of the presidential debates between President Bush and Senator Kerry in October 2004, Bush said that "Ours is the best health care system in the world," in response to a question from the moderator. Kerry did not challenge Bush's statement. Politicians often play on the emotions and patriotism of the people. Had Kerry challenged Bush's statement and reminded the audience that the statement did not make sense according to facts about the American health care system, he would have lost votes. No country's population likes to hear that their system is not good enough, especially when their leading politicians state it.

The United States of America is the richest country in the world, with one of the highest GDPs per person. It has some of the brightest and best minds in the world. It has some of the finest medical schools, institutions, and hospitals in the world. America is one of the least bureaucratic countries, yet it spends over 16% of its gross domestic product (GDP) on health related expenditures. This figure is expected to rise to nearly 20% of the GDP of the United States within a decade. In2005, it was projected that the federal government would be responsible for more than 50% of all spending in health related fields within the following five to six years. At the same time, more than 47 million people in the United States have no health insurance and millions more are underinsured. On average, the Western European countries, as well as Japan, and Australia, spend 8 to 11% of their GDP on health care. Despite these facts, people in other rich industrialized countries have an average life span that is two to three years longer than that of the people in the United States.

Besides the fact that the life expectancy rate of Americans is lower than Western Europeans and the Japanese, the infant mortality rate in the United States is nearly twice that of other rich countries. According to the World Factbook 2008, compiled by the Central Intelligence Agency (CIA), Cuba was one of forty-one countries that had a lower infant mortality rate than the United States that year. Singapore had the lowest infant mortality rate in the world, with 2.3 babies dying before the age of one for every thousand live births. Norway, Sweden, Iceland, and Japan, all had infant mortality rates that were less than half that of America, which was nearly seven out of every thousand babies dying before the age of one.

The 2005 World Health Organization (WHO) report on the world's health care systems ranked the United States number 1 in obesity and 35 overall. America scored low in other categories too, such as in fairness in health care, where it tied with Fiji at 54. This state of affairs in the American health care system is a black mark for American decision makers and politicians.

Former President Carter said, "America can learn something from Cuba's health care system." The press rarely reports such statements because most people would have to swallow their pride to accept that a poor, communist country like Cuba has a lower infant mortality rate than the United States, and that the average life span of a Cuban is the same as for an American.

T. R. Reid, author of The United States of Europe writes in his book:

Sometimes Americans seem to be in a state of denial about what Europe has achieved. American presidents from both parties, for example, have repeatedly declared that the United States has "the greatest health-care system in the world." That claim is hard to support. The unified Europe has higher life expectancy, lower infant mortality, lower rates of heart disease and cancer, and health insurance that covers every person-all for about half as much per capita as the United States spends ... Since the United States pays much more and gets much less in return, it might behoove American policymakers to stop bragging about their own health-care system long enough to take a look at what the EU nations have done.

Subsequent chapters of Solving the American Health Care Crisis present charts that show aspects of the health care systems in different countries. There is a brief presentation on how each of these systems work, especially those of the rich industrialized countries. The information presented brings up a couple of important questions: Why is the cost of health care per person so much lower in these countries than in America? What can U.S. policymakers learn from their foreign counterparts?

There is also an explanation of how the American health care system works, as well as why it has the highest cost per person in the world, followed by a discussion of the problems and issues relating to the cost of health. The latter are defined as:

* Aggressive drug ads on TV and radio, and in newspapers and magazines * Lobbying and campaign contributions by drug and insurance companies * The cost of malpractice insurance for doctors * Frivolous lawsuits in courts * Fragmented and complicated health care policies and entitlement programs * Profits of insurance and drug companies * Bureaucracy * Lack of electronic health care records for patients * The high cost of drugs

A look at all of these, as well as certain other problems and issues will reveal why the cost of health care is so high in the United States. Basic health care should not be based on any ideology or system-i.e. capitalist, socialist, or their branches-it is a basic need. All politicians and decision makers in the United States should be concerned with finding a cost effective and ideal solution to the health care problem. It requires urgent attention and resolution from decision makers, much more so than any other domestic issue in America.

In closing, suggestions and cost effective solutions to the American health care crisis are presented, ones that would benefit everyone in America. The solutions take into consideration the best practices of the health care systems of other affluent nations, and the implementation of information technology (IT), which has a key role to play in cutting costs and in making any health care system more efficient and cost effective.

Health care-like clean air and water, food and shelter, and education-is a basic need in any society, especially in rich countries that can afford it, and it is necessary for development into a more free and mature democratic society.

Chapter Two

Multinational Comparisons of Health Care Systems

(Expenditures and Outcomes)

International comparisons of health care systems offer important tools for decision makers and politicians for evaluating the performance of their own systems. The data on the following pages suggests in what aspects a country is doing well or poorly.

The Organization for Economic Cooperation and Development (OECD) brings together countries sharing the same principles of a market economy, pluralist democracy, and respect for human rights. It has forty members from industrialized countries, including the United States.

The data in figure 1 shows key aspects related to health care figures for many of the industrialized countries. Data about Cuba is also included because this country has done exceptionally well in caring for the health of its people even though it is an economically developing country ruled by the authoritarian government of Fidel Castro for more than four decades. Despite economic sanctions by the U.S. government, Cuba's infant mortality rate per thousand children is lower than that of the United States.

Sweden has one of the lowest infant mortality rates at 2.75 per thousand, and one of the highest life expectancies, 80.74 years. It spends 9.2% of its GDP on health care. In comparison, the U.S. has a much higher infant mortality rate of 6.30 per thousand, and one of the lowest life expectancy rates, at 78.14 years, while it spends 15.3% of its GDP on health care. The cost of health care in all nations is rising and in America, it is likely to reach nearly 20% of the GDP within a decade.

The previous chart does not specify life expectancy of males and females separately, showing only average life spans. Take note though, that the average for females is four to seven years higher than that for men in all of the countries mentioned. The CIA World FactBook clearly states this.

Figure 2 gives the health care spending of most industrialized countries in that year. Spain's health care spending was 8.4% of its GDP, compared with 15.3% in the U.S., as of data sourced from the OECD.

The life expectancy and infant mortality rate for Spain were 79.52 years and 4.26 per thousand respectively, while health care spending was 8.4% of its GDP. In the case of America, the rates were 78.14 years and 6.30 per thousand respectively, while health care spending was 15.3% of its GDP. How is it that people in Spain live longer and have a much lower infant mortality rate than those in the United States, while spending half the amount per person on health care? It can't be only the eating habits of the American people.

In a study published by Dr. Michael Marmot and his colleagues in the Journal of the American Medical Association (JAMA) on May 3, 2006, they found that "Americans are much sicker than the English." This study covered large samples of white middle-aged males from England and America, and excluded less healthy Scotland and healthy Wales, which run their own parts of the National Health Service in Great Britain. In all diseases like diabetes, hypertension, heart diseases, myocardial infarction, stroke, lung disease, and cancer, Americans were reported to be much sicker than their counterparts in England were.

In another study by Harvard Medical School, researchers reported on May 30, 2006, in the American Journal of Public Health that Canadians are healthier than Americans are. This study reported that Americans are 42% more likely than Canadians are to have diabetes, 32% more likely to have high blood pressure, and 12% more likely to have arthritis. This study was based on a telephone survey of about 3,500 Canadians and 5,200 U.S. residents, eighteen or older, during 2002 and 2003.

The studies on English and Canadian comparisons of certain health parameters to those of America are the first of their kind done by researchers. Dr. Steffie Woolhandler, a co-author of the Canadian study, makes a point in stating that universal coverage makes it easier for more Canadians to get disease-preventing health services. One can draw the same conclusion about England, as there is universal health care coverage there too. Why are decision makers ignoring the facts on the state of the health care system in America?

Expenditure on health care is rising in almost all of the countries however; one of the biggest rises, in terms of percent, has been in the United States, where the percentage of people over the age of sixty is lower than in all the other industrialized countries mentioned in figure 1. Why then is the cost of health care rising much faster in the United States?

Figure 3 shows how costs have been rising for selected countries since 1960. Total expenditure on health care is shown as a percent of GDP (Includes private and public spending)

When compared to the sixties, health care expenditure in almost all of the countries increased by a factor of two to three times what it was in the beginning of that decade. Health care expenditure of most nations was stable from 1993 to 2000 except for in Australia, Germany, and Japan. These countries had special circumstances. In the case of Germany, it absorbed nearly 15 million people from Eastern Germany. Japan was in recession during most of the nineties.

In the United States during the Presidency of Clinton (1993-2000), health care expenditure fell from 13.3 to 13.1 as a percentage of GDP. This was a period of unprecedented growth rates and falling unemployment.

The population of Australia, Canada, and the U.S. has grown by nearly 91.4%, 73%, and 59.4% respectively, since 1960. These countries have accepted the major portion of immigrants amongst OECD countries. Figure 4 shows population growth from 1960 to 2002.

According to the table in figure 4, amongst the countries considered, England has the least increase in population from 1960 to 2002 at 12.9%, while Australia has the highest increase in population for that period, at 91.4%. Reports say that up until June of 2005, Australia admitted 120,000 immigrants as well as 14,000 refugees. As a percentage of Australia's population of just over 20 million, that is well above the share that America takes, which is approximately a million a year, but with a population fifteen times greater. The Australian economy has been booming for more than a decade, with average growth rates between 3-4% despite the intake of over a million immigrants in that period. The unemployment rate has been the lowest in almost thirty years. There has been no relationship between the intake of immigrants and growth in health care expenditure in Australia.

Immigration Minister Joe Volpe of Canada stated, "Immigration is a fundamental driver of the economy of tomorrow." Canada invited nearly 240,000 immigrants in 2005. This figure is approximately two and a half times that of the United States if one takes into consideration that the population of Canada was 32 million at the time, compared to 295 million for the United States. With an aging population and low birth rates, Canada has no choice but to take in a substantial number of immigrants.

Spain's population increased from nearly 30.5 million in 1960 to nearly 41 million in 2002, yet total expenditure in health care remained steady at around 7.5% of its GDP for a decade. In 2005, Spain granted amnesty to an estimated 800,000 immigrants working illegally. This was Spain's third amnesty in fifteen years. The Spanish economy has been performing well compared to other European Union (EU) countries for over a decade. Again, there has been no correlation between the intake of immigrants and expenditure on health care.

Germany and Japan have been the exceptions, where expenditure in health care increased substantially. The West German economy absorbed over 15 million East Germans after the fall of the Berlin Wall in 1990. The one to one conversion of the East German Mark into the Mark followed. In the case of Japan, the economy remained sluggish and in recession from 1990 to 2000, hence, the percentage rise in the cost of health care was higher than in other countries.

England had the least increase in population, with only 12.9% from nearly 52.5 million to 59.2 million, between 1960 and 2002. Health care expenditure increased at a higher percentage rate due to specific policies of the Labour government that came to power in 1996, but it was still much lower in the United Kingdom than the average expenditure of other rich countries of the EU.

The population of almost all the affluent countries of Europe, and of Japan and Canada, has stabilized. With their populations aging and with low birth rates, they either have started to decline, or will do so within the next five to ten years if not supplemented by immigration.

A study from the Center for Disease Control and Prevention (CDC) released in the first week of March 2006 concluded that foreign-born residents were healthier than native residents were. CDC Statistician Achintya Dey pointed out, "In general, immigrant adults in the U.S. are healthier than their U.S. born counterparts, but the longer they live in the U.S., the more their health resembles their U.S. born counterparts." Despite having less access to health care or insurance coverage, and generally being less well off, newly arrived immigrants have significantly better physical and mental health than the people born in the United States have. One could also say that even illegal immigrants are much less likely to burden the health care system, as they are much younger and possibly healthier, than the average person in the United States is. This point is made because some politicians have created the myth that immigrants-legal and illegal-largely contribute to higher health care costs by using emergency room health care services, while they ignore the fact that over 47 million Americans are uninsured and millions more under-insured.

It is clear that there is no correlation between increases in health care spending and the intake of immigrants (including illegal ones) into various countries. There is hardly any data from which to conclude that immigrants are to any extent responsible for the rising cost of health care. Most immigrants are younger than the average age in a particular country and are more likely to contribute to the growth of the economy than to be a burden on the health care system.


Excerpted from Solving the American Health Care Crisis by Umang Malhotra Copyright © 2009 by Umang Malhotra. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Meet the Author

Umang Malhotra earned degrees from London University and his PhD from the Royal Institute for Technology in Stockholm. He later studied Economics, traveled nearly eighty countries as an international businessman, and authored Individual, Society, and the World. He is currently the CEO of Artistic Goods LLC in San Diego, California.

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Solving The American Health Care Crisis 5 out of 5 based on 0 ratings. 3 reviews.
dandiego More than 1 year ago
Umang Malhotra's book is a must read for anyone interested in learning more about what we face as a country and how other societies are dealing with the combined pressures of an aging population, increased life expectancies, and dramatically rising health care costs. Umang's travels have taken him around the world and he brings personal knowledge and experience in outlining best practices the world over all in 1 concise and enjoyable read. Highly recommended.
Anonymous More than 1 year ago
I think this is a great read. It hits all the issues and possible solutions in context of the american healthcare system.
Anonymous More than 1 year ago