Author, The Happiest Man in the World: Life Lessons from a Cultural Economist
(continued): Ukraine/Atlanta: January, 1997: Nowhere else could they have accessed the information, intelligence, and experience available to them in Atlanta this weekend. And perhaps most important, they are experiencing the gift of love and concern for the people of Ukraine and their future. They have been, for the most part, responding with appreciation; however, each has lived an entire lifetime under the old, centralized Soviet system, and occasionally I could see that it is difficult for them to break from the “security” of that system.
Dr. Mark Litow, the actuarial consultant, used his time to identify and explain some of the strengths and weaknesses of the US health-care system. He spoke of the types of systems involved and the six distinct market groups receiving health care in the US. He pointed out how, as the US has moved toward a more socialized, centralized health-care system, we have increasingly been pushed further and further into debt. Today half of the US deficit is caused by Medicare alone. He suggested three desirable elements to be included in health-care reform:
1. Reasonable cost
2. High quality
3. Access to treatment
Dr. Litow used a lot of charts and overhead projections to simplify the understanding of his facts. For the largest portion of his time, he presented concepts he feels are necessary for the reform process and package.
The openness of the meeting made it conducive for the Ukrainian delegation to freely discuss their present health-care system. They revealed that in 1985, the equivalent of US$180 was allocated per person per year for health care in the Ukraine out of the government budget. In 1994 it dropped to only $16 per person per year. Now the system has completely collapsed, and the state is completely irresponsible. They have eliminated over sixty thousand beds from hospitals throughout the system, and their doctors have not received their government paychecks (only the equivalent of US$50 per month) for four or five months.
The situation has made criminals out of nearly every doctor, since doctors are now forced to treat patients privately (from their back doors or in some secret place) in order to try to generate some cash on which to live. Presently such activity is punishable by imprisonment. The situation has presented the entire country with a huge moral problem. The state simply cannot come up with the necessary $1.8 billion to provide medical care for the people this year.
As we broke for the dinner hour, a whole lot of frustration was evident, but what had been presented to the delegation was making sense, and comments were indicating hope and the possibility of workable ideas.
Following dinner we combined the Ukrainian delegation, all of our presenters, and the board of directors of the Association of American Physicians and Surgeons (AAPS) for our final session of the day. I was chosen to speak during the first half of the session. The final portion would include a round-table discussion in which the Ukrainians would explain their present system and situation, and the entire group could ask questions or offer insights.
I had thought about what I was going to say for several days and had also used the flight time from Denver to Atlanta as an opportunity to crystallize my thoughts. I did not want to denigrate the Ukrainian health-care system and exclusively emphasize their problems. So I decided to share with the whole group some of the observations I had made in my hospital Needs Assessment Studies around the world. The Ukrainian delegation could readily identify with each of the problems, but I wouldn’t be pointing my finger directly at them. I titled my presentation “International Health-Care Observations.”
I am continuously crisscrossing the avenues of a bankrupt portion of the world, viewing the aftermath of the great social experiment of the past eighty years. It promised everything and ultimately delivered nothing. Why? Because you can only pursue the philosophy of redistribution for a limited period of time. After you have stripped the treasure chests of accumulated wealth from a nation and wasted it without any plan to replenish the coffers, it becomes impossible to redivide and redistribute “nothing.” That sort of set the groundwork in my presentation for the following observations:
1. In theory, you can argue that a centralized health-care delivery system has the advantage of efficiency, but lost-opportunity costs are unacceptably high. In my book What’cha Gonna Do with What’cha Got?, I tried to explain the economic principles of scarcity, choice, and cost. Items are scarce because they have two or more alternative uses, but eventually you must choose one of the alternatives. The next highest valued other thing or other use you give up is the real opportunity “cost” of what was chosen, because you have to do without that. In North Korea, the health-care system is very centralized and very regimented. It appears to be efficient, but the rigidity of the system disallows any creative or altered approach to a medical procedure. The lost-opportunity costs are very high.
2. A centralized health-care system does not allow for keeping pace with medical discoveries and new technologies. Example: The head doctor in one of Cuba’s largest hospitals begged me to bring in new medical procedural and research books. “We are so restricted,” he said, “we don’t even know current medicine.”
3. Health care that is freely available to all is the same as equally unavailable to each. Example: In Brazil and Peru, I saw people coming to a clinic in ox carts, in old buses, or on foot. They would stand in line all day only to have to return the next day and get back into line because they were unable to receive help.
4. A centralized health-care system produces overspecialization and undertraining in general family medicine. Example: In Uzbekistan, a young doctor told me, “I am trained to remove gallbladders. I don’t have to be responsible for anything else.” One man in Moscow told me, “I’m sorry the hallway is completely dark, but the man who is trained to change lightbulbs doesn’t work anymore, so we are in the dark now. I don’t change lightbulbs.”
5. In a centralized health-care system, there is a built‑in disincentive to take any risks or make any decisions to do anything new. Example: In Minsk, Belarus, I watched a medical team in a burn unit just stand and watch rather than deviating from the standard care procedure. In a centralized system, there is no way to experience a reward for doing something new or different, but there is almost a certain possibility of experiencing loss for trying something different.
6. When a centralized health-care system controls a single source of medical supplies and goods, the level of quality usually suffers, and the delivery system for those goods becomes inadequate. Many of the hospitals I visit around the world experience the same thing. Example: Doctors often tell me, “Mr. Jackson, we have not been able to get the medical supplies we need for several years now.”
7. A centralized medical system can seldom get the cost-versus-value ratio correct. Example: In countries where the value of the health care given is greater than the individual cost paid, people use too much health care. Long lines form, and the people who really need the care are excluded because of the long lines. If the cost charged is greater than the value received, then no one can afford the health-care services.
8. Hospital stays are longer where there is a centralized health-care system. Example: In Kazakhstan and Uzbekistan, it is not unusual for a patient who has experienced a heart attack to stay in the hospital seven or eight weeks. The hospital receives its budget allocation based on the number of patient days. There is no incentive for the patient to be sent home earlier.
After sharing some other more generalized observations of international health-care systems, I began to describe the unique role Project C.U.R.E. plays in providing donated health-care products to newly developing countries around the world.
Next Week: Change in more than health care.
© Dr. James W. Jackson
Permissions granted by Winston-Crown Publishing House
Dr. James W. Jackson often describes himself as "The Happiest Man in the World." A successful businessman, award-winning author and humanitarian, Jackson is also a renowned Cultural Economist and international consultant, helping organizations and governments to apply sound economic principals to the transformation of culture so that everyone is "better off."
As the founder of Project C.U.R.E., Dr. Jackson traveled to more than one hundred fifty countries assessing healthcare facilities, meeting with government leaders and "delivering health and hope" in the form of medical supplies and equipment to the world's most needy people. Literally thousands of people are alive today as a direct result of the tireless efforts of Project C.U.R.E.'s staff, volunteers and Dr. Jackson.