Sunday, June 16, 2013

Swedish and US Health Care - Professor Frank's Ideological View

If you are an economist, you have been raised to think that your tools can be applied all over the place.  If you are an economist and a newspaper columnist, your weekly obligation will lead to an uneven output, shall we say.  And so it is with Cornell professor of economics Robert Frank and his weekly column in the Sunday New York Times business section.  My son Allie has brought today’s column to my attention:

Professor Frank is spending a month in Sweden – that is the professorial gig, is it not?  (Full disclosure – my neurosurgeon father Henry Shenkin used to get red in the face decrying the traveling predilections of professors while he, Henry, did real work with real people under hard conditions.  Programmed as I am, it’s hard to forget his feelings as I hear about the visiting professor gig.)  While there, he asks health economist friends about the Swedish health care system.  Having lived in Sweden for a year doing research on their health care system, and having published about it twice in the New England Journal of Medicine decades ago, and having followed health policy in the US for decades, this is something I know something about.  So when Professor Frank takes out his economics glasses, and opines on the comparison of the Swedish health care system with American care and Obamacare, my critical faculties are engaged.

What I find is an ideological view of a liberal economist that seems to combine a very superficial knowledge of both systems.  Pretty much what one would expect from someone on vacation – I mean, visiting professor – for a month and shooting the shit with colleagues.

First, the Swedish health system is not ridden with bureaucratic inefficiencies, they say, so Frank opines that Americans shouldn’t fear it either.  Oh, yeah?  So if Swedish government can run it, then American government can, too?  That’s not worthy of Frank.  And he completely glosses over the fact that the power over health care for the 9 million population in Sweden is in the Landstings, the county governments.  How would that translate to the US?  No answer needed.  The capacities of governments in different countries are different.

Second, compare infant mortality rates and male death rates between ages 15 and 60, and America comes out short, which to Professor Frank is an indictment of the United States health care system.  That’s a poor argument.  Infant mortality does little to measure differences in health care systems in advanced countries.  What it measures more is economic disparities, and the US has a lot more poor people than Sweden.  As to the male death rate, there is recent evidence on this, which I think I have shared on this blog.  The increased death rates for Americans has to do with violence, suicide, and motor vehicle accidents, none of which are attributable to the health care system.  It does have to do with availability of guns, I imagine, and most importantly with the number of miles traveled by car, which is much more in the US than in Sweden.  After the age of 50 death rates of Americans are comparable to the most advanced countries.  So the argument of poorer quality because of the organization of health care does not wash.

OK, after indicting the health care system on these flimsy statistics he recants in the next paragraph, but in a silly way.  He says that more Swedes commute by bicycle and thus avoid obesity – actually, the public transport system is the real difference, and obesity is not the issue, accidents are the issue.  And he mentions the income disparity.  But doesn’t this destroy his argument in the paragraph before?  Poor show.

Third, he commends Swedish large hospitals for efficiency, and condemns American “boutique hospitals” for people with high cost health plans.  This is crap.  The US has a lot of big hospitals, and many of these are the worst offenders in cost – see UCLA, for instance.  The problem with American health care has something to do with efficiency, but more to do with prices.  The largest hospitals in the US command higher prices because of their mini-monopolies in local areas.  And the proliferation of under-utilized, high cost machines is less of a problem in the US than it used to be.  The problem here is lack of regulation of technological proliferation and pricing, rather than the size of hospitals.  You have to have either real competition or real regulation, each with its own strengths and weaknesses.  Sweden has state ownership and control.  The problem in the US is we have neither effective regulation nor sufficient competition.

The tip-off on his ideology is in the riff on “boutique hospitals.”  These exist, but they are probably cost-savers.  One important proposal for future health care organization calls for more and more “centers of excellence,” some of which would be these very “boutique hospitals.”  He is just ideological here, thinking that "boutique hospitals" are for the affluent only.  Get Medicaid payments to competitive levels, and make Medicare payments rational, and there would be no problem.

Fourth, he says Sweden centralizes care so that more operations are carried out by more experienced facilities and surgeons.  That’s true, but this happens in the US as well.  Frank notes parenthetically at the end of the article that there can be a three-month wait in Sweden for a hip replacement, but says this is acceptable as a trade-off for centralization.  Maybe it is, but what other inefficiencies from the patient point of view are there?  I don’t know since I haven’t been there in a long time, but I guarantee they are there.  I remember, for instance, talking to Swedish friends about their primary care.  I said that with the polyclinic system there had to be a decrease of personal relationships.  Yes, they said, but isn’t objectivity a good thing, too, not to be swayed by the personal relationship?  I don’t think Americans would agree.  Centralization has its problems that the Swedish system has tried to address by introducing elements of competition – but we don’t hear any of that in this article.

Fifth, he says that since Swedish care is non-profit and they are charged with high quality mission, they won’t withhold care, as for-profit institutions in the US will.  Whaaa?  The problem with for-profit is supposed to be doing too much, not too little!  And the problem at Kaiser, a large non-fee-for-service institution, is withholding care.  Frank is severely off track here – it’s just ideology talking.

Sixth, more hip-replacements in Sweden are attributed positively to the fact that the system is well funded and care options are generous.  But his argument is heads I win tails you lose.  If there were fewer hip replacements, he would say this is evidence of runaway profit-mongering by operation-hungry surgeons and institutions in the US. I think I know what he is trying to say here, that despite the capacity of a state system to withhold care for financial reasons, that doesn’t seem to be happening in Sweden if you take this one operation as a measure.  But just citing one operation as a proxy for generosity and quality doesn't work.  For all we know, all those hip operations could be a result of the pressure from the Swedish orthopods who want more and more work for their cadre, and more and more residents – who knows?

I happen to be a Swedophile, and I think there is much in Sweden worth emulating.  If we were Swedes, it would probably work very well.  We can certainly learn from some elements.  But to gloss over bureaucratization on the say-so of Swedish economists reveals the essence of his one-sided view.  And I hope I am not defending the American health care system, which needs revolutionary change and is not likely to get it.  But ideological columns like this are not likely to advance the cause.

Like my father, it gets me so mad when somebody thinks he is so smart he can plop himself down for paid-for month in a foreign country and talk to some economist friends, and come up with something worth saying in a New York Times column.  I’m sure he’s smart, and he is probably a nice guy, and our ideas on health care are probably not very different, but this article is, well, let’s just say, not fully thought out.

Budd Shenkin


  1. You'd find of interest, as well, the May 18 ECONOMIST column on introducing business efficiencies and management incentives into the Swedish hospital systems. It's in the weekly "SCHUMPETER" column, with the subheader: "Sweden is leading the world in allowing private companies to run public institutions".

  2. Thanks for this, anonymous. The Economist link is This is what lots of what big hospitals should be doing, especially the academic centers, I think.

    Budd Shenkin