Everyone knows â or should know â that the United States spends much more than any other country on health care. But the Kaiser Family Foundation broke that spending down into two parts, the governmentâs share and the private sectorâs share (both measured as a percentage of total gross domestic product), then compared the results with figures from 12 other countries that are members of the Organization for Economic Cooperation and Development. And hereâs the shocker: Our government spends more on health care than the governments of Japan, Australia, Norway, the United Kingdom, Spain, Italy, Canada or Switzerland.
Think about that for a minute. Canada has a single-payer health-care system. The government is the only insurer of any note. The United Kingdom has a socialized system, in which the government is not only the sole insurer of note but also employs most of the doctors and nurses and runs most of the hospitals. And yet, measured as a share of the economy, our government health-care system is the largest of the bunch.
 And itâs worse than that: Atop our giant government health-care sector, we have an even more giant private health-care sector. Altogether, weâre spending about 16 percent of the GDP on health care. No other country even tops 12 percent. Which means weâve got the worst of both worlds: huge government and high costs.
This is where a âserious conversationâ on health-care costs would start â with what has worked, and what we can learn from it. Instead, itâs where our conversation about health-care costs never quite goes.
The Democratic plan, conversely, quietly recognizes that government-run health-care systems that are willing to throw their weight around can control costs. So the plan is to have Medicare try to pay for quality, not volume.
The first step is figuring out what quality is. So Medicare has been collecting vast amounts of hospital data on patientsâ experiences, the delivery of pre-operative antibiotics, the prevalence of medical imaging and other topics. Come October, the hospitals posting good numbers will get a bonus from the Affordable Care Act; those posting bad numbers will face a penalty. Next year, the bonus and penalty will get bigger. Democrats have also created and funded a center to start testing the effectiveness of various drug, device and surgical treatments.
As for the inevitable political blowback, Democrats created the Independent Payment Advisory Board, a panel of 15 Senate-confirmed health-care experts who can make tough, cost-cutting reforms to Medicare in Congressâs stead. To be stopped, Congress needs to vote the board down, and the president needs to sign off on lawmakersâ opposition. That creates ample room for Congress to hand the IPAB the decisions it doesnât want to make on its own.
Could it work? Sure. But itâs a gamble. Itâs easy to imagine that strategy improving quality without cutting costs. Thatâd leave us with a better health-care system than we have now but the same budget problems. Another danger is that Congress could override the IPAB, rendering it useless as a tool for cost control.
But thatâs the choice weâve been left with: a plan that has never worked or a plan thatâs never been tried. As for the approach thatâs helped every other industrialized country achieve universal coverage at about half our costs? Well, weâre still not ready to talk about that.
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