Monday, 9 June 2008

Health outcomes and inequality

A difficulty I have with socialist interpretation is their ideology is such that good outcomes are made to appear bad if they arise within capitalism. While they may claim their focus is different (equality), I have a hard time believing that socialists would abandon their political philosophy if history showed socialism was more wealth generating than the alternatives. Rather, the better living conditions would be evidenced that socialism is preferable to other systems.

If capitalism cannot be said to decrease wealth, attributing it blame for causing poverty can still be attempted.

An article evaluating the health system in Chile was published in April. It blames government policies for creating inequality in health care, and states that this causes
decreased solidarity between rich and poor.
While I disagree with the article, I will not do full justice to its subtleties here and it is best read to appreciate its point of view. Nevertheless, it apportions blame where there likely is little. It also seems to imply that had Chile not enacted its policies then the (perceived) negatives would have been avoided without having any significant effect on the positive outcomes of reform; a dubious claim.

Chileans have compulsory income contribution to health though they can choose public or private systems. A public system meant that all citizens had access to health care including the poor. The article gives examples of funds transferred from private to public which it views as inappropriate. This may be valid but without more detail I will reserve judgment. Other complaints include:
...access to care is somewhat equitable, but quality of care is not.

[Private] insurance policies for women of childbearing age may cost four times more than men's policies.

...adjusted mortality for the poorest decile is 6.0 out of 1,000, versus 4.8 for the richest.

[Private health care spends] ten times as much on administration per member and about two times as much on health care per member than [the public], even though [private] members are in better health and need less care.
But is this not to be expected?

In fact it is partially surprising that access to care is equitable. It is good that it is, but it is possible that things could be otherwise.

It is not surprising that quality is higher for a private system. It often times has more funds for this. All systems always have limits based on funding; if a private system has more funds it can do more tests, it can do more operations.

Policies for childbearing women will be more expensive. Men of that age have minimal health costs and therefore minimum premiums. Women have higher health costs due to childbirth. A health policy that excluded childbirth and related costs would be cheaper and possibly similar to men's. Do not insurance companies charge higher premiums to younger drivers as they have a higher risk? Anyway, if most women are married then the household costs for health care may be similar across families.

Mortality may be related to income even in countries which have predominantly public health, this may not be related at all to the private/ public differences; I will come back to this.

The paper complains about the money spent on administration and health care, yet notes this about the public system:
Access to specialists appeared deficient in the public service: there were waiting lists of up to four years in some specialties, such as ophthalmology.
Yet elsewhere claims the private system is inefficient. It may just be that prompt access requires a little more cash which the private system has. If the private system had waiting lists of 4 years despite more money then it is inefficient, but it doesn't.

And so enamoured with the state that anything that "sounds" like a private monopoly is bad.
Some [private] companies are in an oligopoly position: the main three firms share close to 80% of the market.
But government monopolies are good and could never be the source of inefficiency.
A logical recommendation for a health system counter-reform in Chile would be to move from a multi-insurer scheme to a single public insurer scheme, as in Costa Rica.
Despite all these claims in the discussion the authors are forced to admit,
Chile's health indicators are good, compared with countries with a similar gross national product, such as Colombia and Argentina. These results are due in part to Chile's high economic growth rate and a spectacular reduction in poverty. Further significant factors are the high proportion of the population with access to drinking water and sanitation, and the high adult literacy rate and education level.
They claim this is as the result of public policy:
But relatively equitable access to health care, mainly through public health insurance and public health services, which cover 80% of the population, played a major role in this achievement, as did maternity and child health protection programmes implemented through the public health network.
Presumably the achievement they are talking about is health indicators; not economic growth, reduction in poverty, water, sanitation, literacy. But of what evidence? Health outcomes on a population basis are better correlated to these latter issues than to individual procedures on sick individuals. As important as hospitals are it is unlikely they make nearly the same impact on life expectancy as more basic provisions and decrease in poverty.

And this is where the issue lies. If economic policy is to minimise government expenditure because that leads to economic growth, then this economic growth may be what has made the difference. Who cares how much people spend on private health care? It is a private expenditure. It is less money for the government to outlay which leaves more money in the hands of the producers. If the producers then create wealth, what does it matter that some of it is spent on health? Even if only 25% of the population contribute to the private system, that is still a large number of people the government no longer needs to pay for.

The bigger issues are:
  1. Are the poor worse off than before?
  2. Is the number of poor persons less than previously?
If the poor are no worse off (or even better off) and the middle class has grown as the lower class rises out of poverty then what is not to like? These are good outcomes.

To complain there is more inequality because not everyone has yet escaped poverty and some are excessively rich is a politic of envy. Yes the rich man has an individual responsibility to care for his poor neighbour, but income inequality is not a bad in and of itself. Oppressing the poor to become rich causes inequality but it is the injustice of oppression that is wrong.

It seems to me that socialists want equality of outcome so much that it is better that all live in abject squalor than most have a modest income, if that modest income means an associated variable income.

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