American Elephants

Is Our Future To Be Found in Medical Tourism to Escape ObamaCare? by The Elephant's Child

Democrats like to claim that the inspiration for ObamaCare came from Massachusetts’ Romney Care. They did copy the individual mandate, I believe, and had as an adviser someone who had helped to develop RomneyCare.

However, the main group of Obama’s health care advisers: Ezekiel Emanuel MD, Tom Daschle, Peter Orzag, Donald Berwick MD and Jacob Hacker, were all great admirers of Britain’s National Health Service (NHS). Much of their admiration was centered on the idea that the highest medical costs came from elderly people in their final years, and that to significantly cut costs, they would have to limit those costs in some way.

Why they would admire a system so mired in scandal — with elderly patients dying in hospital from dehydration and starvation — is hard to understand, for the stories are published regularly in the British newspapers, from people who are using super glue to fasten in their teeth due to inability to see a dentist, to patients parked in ambulances outside hospitals to keep the numbers at emergency rooms down.

Back before ObamaCare first passed in this country, we noted that Canadians unable to get the care they needed in Canada were coming to the US for care in droves. They were suffering from long wait times to see a specialist, lack of availability of advanced diagnostic equipment or long wait times to get to use it. Here, an appointment for a CT scan can be had in 45 minutes.

You don’t get sent to a specialist unless you have a potential problem. Some potential problems are far too catastrophic to wait for several months. Now, we learn that today, as many as 41,838 Canadians — out of a population of around 35 million — left the country last year for health care treatment. More than 42,000 did so in 2012, and more than 46,000 sought treatment elsewhere in 2011. The Fraser Institute calls the 2013 figure a conservative number and says that it is deeply damning about Canadian care.

Canada has companies devoted to arranging medical tourism, including Costa Rica, India, Thailand and the U.S. Some companies send clients to Mexico, Turkey, Poland and the Dominican Republic. Those who leave Canada for treatment do so for reasons related to the country’s government-run health care system: better outcomes, avoidance of the consequences of wait times, concerns about the quality of medicine in a country whose system destroys the incentives needed to build more advanced facilities and develop higher tech medicine. [Note the word “incentives” in that last sentence.]

It is hard to tell, but ObamaCare seems to be in a death spiral — the insurance pool equivalent of bankruptcy — when too many older and sicker people sign up for insurance relative to the number of younger healthier people. According to figures released this week over half the people who have enrolled are over the age of 45, and only 24 percent are between the ages of 18 and 34,  half the number needed to keep premiums affordable.

Democrats will not admit the depth of the problems, and most probably will attempt to switch it to a “single-payer” plan which is what they wanted all the time like Britain’s failed NHS.

The most frightening possibility is attempts to patch, jigger, or reform the current  plan. Obama is determined to do whatever is necessary by executive order, but how far he will take that is unknown. ObamaCare cannot be fixed. The most basic need is to get government out of the business of running American health care. They are not competent to do so.

Free markets, free people — and let innovation triumph.

6 Comments so far
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Let’s see, about 750,000 U.S. residents travel abroad for care each year — notably for dental work and heart surgery. That’s a higher percentage of the population than the 42,000 Canadians. Some are non-citizens returning to their home country, but many seek to have procedures done abroad because they can’t afford to have it done in the United States.


Comment by Subsidy Eye

Let’s see… 42,000 Canadians out of a population of around 35,200,000, or just under 2%, versus approx 875,000 (the latest number from Deloitte Accounting, which actually does track it) US citizens out of around 316,200,000, or right around 2.75% of the population. As a percentage of the population, the difference just isn’t that significant.

What IS significant are the REASONS for the medical tourism. The majority of the US citizens traveling overseas have mainly to do with costs… and I’m all for that. If you can get the same level of care for a lower price, then by all means, do it (Belize and Costa Rica are popular for this). However, the Canadians seem to be traveling abroad for medical treatment (mainly to the US) for principally MEDICAL reasons… the treatment isn’t available, the wait time is too long, provincial insurance doesn’t cover the procedure. Little bit of a difference there priority-wise, wouldn’t you say?


Comment by Lon Mead

Um, better check that calculator: 42,000 out of 35.2 million is 0.12%, not “just under 2%” — i.e., less than half the proportion of U.S. medical tourists (0.28%). One out of 800 is a lot less than 1 out of 50.

In any case, that is not a defense of the Canadian system, which has its own problems. But critics on the right seem to gloss over the question of affordability of medical care in the United States. Eighteen percent of GDP and rising just isn’t sustainable.

One aspect of affordability I find interesting is the idea among some of my Republican relatives that somehow costs just disappear into the ether. “Why should a young person buy health insurance?”, asks my cousin. “Young people don’t NEED it!”

If only it were so. Perhaps young people don’t contract as much cancer or have to be treated as often for heart disease. But they still have accidents.

Several states now have eliminated mandatory helmet laws for motorcyclists. As a recent article in The Economist magazine notes:

Biker deaths rose 18% after Michigan repealed its all-rider helmet law in 2012. A rule obliges unhelmeted Michigan riders to carry at least $20,000 in medical-payments coverage. That does not even cover initial stabilisation in intensive care after a nasty crash.

Such patients typically run up $1.3m in direct medical costs. Fewer than a third work again. A study of helmet-shunning bikers admitted to one large hospital, cited by the Centres for Disease Control (CDC), found that taxpayers paid for 63% of their care.

The Libertarian in me is all for allowing motorcyclists to ride without helmets. But to be consistent, I would also have to be willing to say, “And if they crack their noggin, tough luck. Caveat emptor.” But, apparently, nobody advocating freedom to be stupid is willing to apply that part of the Darwinian equation.


Comment by Subsidy Eye

You’re right, my math was off on the Canadian figure. Have a cookie. It still doesn’t make the figure that much more overwhelming as a percentage, and the reasons are still the same.

And healthcare costs have been and been declining since 2002 or 2003, something Obamacare advocates seem to want to “gloss over”,and I find that 18% number to be a little dubious, but the economist in me isn’t really up to debating the figure right now.

However, I’ll be more than happy to discuss the rest of your comment. I’m one of those who felt the repeal of the helmet law was stupid to the nth degree. And yes, the amount of coverage required by the state is inadequate for catastrophic situations. But you and The Economist are both trying to make the case that the worst case scenario is the norm… the vast majority of motorcycle accidents are of the “road rash” variety, and do not involve major head injury. While any one of those catastrophic incidents is tragic, they still do not happen frequently enough for insurance companies to raise the rates higher than they are now (btw, that $20,000 figure… that’s the minimum required by the STATE… the minimum required by by the insurer is usually much higher. And since I’ve already had this conversation with my insurer ( I carry $100,000 for my motorcycle), I can tell you that in the case where the medical bills go over the liability limits, the insurer still pays the total cost for initial treatment… because those incidents ARE so rare (they will also generally cover initial costs for rehab), and long term care is usually in a different part of the policy. This is not saying they don’t still face some solid medical bills out of their own pocket.

The thing is, even people who have full coverage health insurance typically don’t carry enough liability to cover the worst case scenarios. Why? Because they’re the worst case scenarios! The reason insurance companies keep such solid statistics on this stuff is that this is how they figure rates… what’s average, what’s rare… and set their premiums accordingly. You can’t plan for everything, and insurance was never intended to serve as a shield against all harm (despite what the commercials say)… it’s intended to be a buffer for when something extraordinary happens. I will always encourage anyone to carry insurance, but I am very much opposed to the idea that it should be a requirement for simply being a citizen.


Comment by Lon Mead

You’re right, my math was off on the Canadian figure. Have a cookie. It still doesn’t make the figure that much more overwhelming as a percentage.

Indeed. I would argue that 0.12% is a pretty underwhelming figure.

Thanks for the lesson in actuarial science, but the point I draw out of the article is that, at the end of the day, taxpayers are picking up a large part of the (residual) tab.


Comment by Subsidy Eye

Only if by “taxpayers” you mean “people purchasing insurance”. The majority of healthcare cases are fully covered by insurance, and the few that run over liability limits there’s usually some agreement between the hospital (or, more frequently the hospital corporation) and the insurance company to write off the balance… which, I know, has the side effect of raising rates to cover those losses, but it’s on the but the rates are going up only on those that are insured. The only time the taxpaying general public are usually involved is when there is some sort of government entity in the process (until now, usually limited to state or local involvement).


Comment by Lon Mead

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