What is a 'U.S.' corporation and why it matters

I stumbled upon this old article below but it's still fresh and new. You should read the whole thing, but this part jumps out at me [emphasis mine]:

Other countries see themselves as countries, and compete with us as a country, for their benefit and the benefit of their people. As much as some of us might want a world in which we all cooperate and share and have "free trade" and other ideals and dreams, the fact is that other countries understand themselves as countries. Companies and industries located in other countries are operated to benefit their people. Their governments give them special benefits to help them compete with our companies. And then they are taxed so their country can have good schools and infrastructure and all the rest of the benefits of the modern world, for them.

And if we do not respond in kind, then their people end up better off at the expense of our people.

Anybody who's taken Econ 101 or Political Economy has surely learned that protectionism is bad; it leads to higher prices for consumers, can often escalate to beggar-thy-neighbor policies, etc. This is the economic theory, and it's sound as far as it goes. But it is not political-economic reality. 

When every other country -- including China -- is looking out for its own corporations' best interests while we preach "free trade," it is tantamount to America's unilateral disarmament.  

Moreover, in the history of the modern world there has never been free trade.  As an ideal, free trade is about as realistic as communist utopia.  In a few hundred years, yes, when we're all wearing Star Trek-style unitards that come in three colors and speaking Esperanto, then maybe we will have free trade. But before then we will probably have invented a better economic system than capitalism. So free trade is a silly ideal. The best we can hope for is freer trade, mostly achieved on a bilateral basis, with friendly countries that we trust.

Nor can we look at trade in isolation. Yes, Americans pay very cheap prices, compared to other countries, for goods like flat screen TVs and automobiles. However, fewer and fewer Americans these days have jobs or sufficient income to pay even these "reduced" prices that are thanks to "free trade." Yet many working-class Americans have lost their manufacturing jobs because of free trade and globalization. So what good are cheaper goods if they are still not affordable for the un- and underemployed?  

And there is more to global trade -- and the economics that drives it -- than tariffs.  For instance, taxes.  Most people don't realize that about one-third of global trade is intra-company trade, i.e. trade in intermediate goods between parts of the same company. There is also inter-company trade, i.e. trade between two or more internal business entities that results in a legal transfer of prices. 

To make things even more complicated, there is also trade in financial products between internal entities of one company, or related entities (with the same beneficial owner), such as inter-company loans.

This year, the conservative publication Forbes estimated that 95 percent of America's trade deficit comes from intra-company trade; and much of this intra-firm trade is designed precisely to avoid and evade taxes, that's its only purpose. And so instead of discussing ideal concepts like free trade, we ought to be discussing real things like "arm's-length transfer pricing."  

There are positive signs of change in the G20 countries and the OECD, however. With most of the world in recession, fiscally ailing national governments everywhere are trying to prevent tax base erosion and profit shifting (BEPS). They realize that many multinational corporations (MNCs) are playing a shell game with their operations, sales, and tax declarations to lower their overall (global) tax bill. Such tax shenanigans are corporations' "responsibility" in order to maximize returns for their shareholders, say business groups, economists and the financial press. They say "double taxation" of their firms in different countries is unfair and economically inefficient. 

(Conspicuously, U.S. businesses say little about their moral, patriotic obligations to the USA, where their corporate HQ are located. Thus companies like Google and Apple may call themselves "American" -- falsely so, in my view -- although any Middle Eastern sheikh may own their stock; and meanwhile they pay most of their taxes in places like Ireland and employ most of their workers overseas).

At the same time, it is governments' responsibility to maximize tax receipts to provide for the welfare of their citizens; and governments argue that "double non-taxation" is just as economically inefficient and harmful. It is in governments' collective interest to stop a global "race to the bottom" where MNCs are registered for tax purposes in tiny havens like the Caymans, Bahamas and Ireland.  

And governments require tax revenues to re-train workers who lost their jobs to overseas low-cost competition, through programs like U.S. Trade Adjustment Assistance.

Keep alert and informed as events unfold, because the global debate on BEPS -- and the inevitable push-back from international Big Business lobbies -- is only going to get more intense....

What Does It Mean To Be An 'American' Corporation?

By Dave Johnson

April 26, 2013 | Crooks and Liars

What does it mean to be an American? What does it mean to be an American corporation? An article in the Wall Street Journal the other day should trigger questions like these.

WSJ: Domestic-Based Multinationals Hiring Overseas,

Multinational companies based in the U.S. boosted their global work forces in 2011 almost entirely by hiring workers overseas, underscoring the slow growth in the U.S. job market.

... The paltry hiring at home reflects where multinational companies are focusing their attention. Stronger economic growth in overseas markets in Asia and Latin America is driving their expansion, reinforcing their shift toward cheaper labor or closer access to customers.

The U.S. parents of multinational firms account for about one-fifth of total private U.S. employment. Since 1999, employment by U.S. multinationals is down by 1.1 million inside the U.S., while it is up by 3.8 million overseas.

The hiring by American companies is not happening in the U.S. At the same time these companies are holding $1.7 trillion of profits outside of the country, away from their own shareholders and our economy to avoid their taxes, while pushing to dramatically lower the taxes they pay us – and even to get out of paying any taxes at all on money they make outside of the country!

Why Do We Have Corporations?

Why do We the People even have laws that allow corporations and give them special benefits? The answer obviously is for our common benefit -- why else would we do it? The corporate form of a business enables the company to easily obtain capital from investors, in order to accomplish large-scale projects that benefit us. To encourage this we give these entities special privileges. For example, we limit liability which means the investors are not held liable for the actions of the company – they won't lose more than their investment if the company gets sued for some reason. We provide a system that helps them obtain financing, insurance, market liquidity and all kinds of things to help those investors get a good return on their money.

Benefit: We the People want railroads, but it takes a lot of money to build and operate a railroad. And our system wants private companies to do the work of building and operating railroads instead us just doing it ourselves. So we set up a way for a private company to gather investment from lots of people.

Why Do We Want "American" Corporations?

Why don't we just contract with any old corporation that comes along to get things done for us? Who cares what country these entities are from? Why should we as a country want to encourage and support our American corporations? Because American corporations make money for us. That is the whole point.

Other countries see themselves as countries, and compete with us as a country, for their benefit and the benefit of their people. As much as some of us might want a world in which we all cooperate and share and have "free trade" and other ideals and dreams, the fact is that other countries understand themselves as countries. Companies and industries located in other countries are operated to benefit their people. Their governments give them special benefits to help them compete with our companies. And then they are taxed so their country can have good schools and infrastructure and all the rest of the benefits of the modern world, for them.

And if we do not respond in kind, then their people end up better off at the expense of our people.

As long as other countries operate for the benefit of their people, it is our job to keep up our end of the bargain as it exists and operate as a country for the benefit of our people. This means that we support our companies, and expect them to bring the money they make back here, and share the returns with us.

We The People Used To Understand Who Is The Boss

We the People (used to) understand that these companies exist for our common benefit and (used to) expect certain things back from these corporations. We (used to) expect them to provide high-quality products and services and not engage in fraud and trickery. We (used to) expect them to provide a safe and fair work environment with good wages and benefits. We (used to) expect them to be good citizens that benefit the communities where they operate. And our laws and enforcement (used to) make sure they operated that way – for our common benefit.

These understandings and expectations have disappeared. An Apple executive articulated the new corporate understanding to The New York Times. He said giant multinationals like Apple "don't have an obligation to solve America's problems." And to prove it, American corporations are holding $1.7 trillion in profits outside the country – just sitting there – rather than bringing that money home, paying the taxes due and then paying it out to shareholders or using it to "create jobs" with new factories, research facilities and equipment.

We The People Have Forgotten

Citizens, elected officials and corporate management have forgotten why we have corporations and who they are supposed to serve. We have instead developed a system in which corporations exist for their own sake, doing anything they want to do, and doing these things only to enrich the few who own and manage them.

There is no longer an understanding and expectation that these entities – creations entirely of We, the People -- are supposed to exist for the common good of We, the People. They no longer try to provide high-quality goods and services. They no longer feel they must avoid fraud and trickery – and without enforcement of rules are able to gain advantage over others that do not operate this way. They no longer provide a safe and fair work environment with good wages and benefits. They are not good citizens that benefit the communities and country where they operate.

They are no longer under the control of We the People.

Are American Multinationals Really American?

For all intents and purposes giant "American" multinational corporations have transformed into entities with completely different interests from their American workers, customers, communities, citizens and government. These corporations are no longer operating in the interest of America or any country, while claiming the benefits of being American corporations (when it suits them.)

For example, the giant American multinational corporations are now set up and structured to avoid paying taxes here, or to any country. They set countries against each other in their hunt for low-wage labor, subsidies and advantages in markets.

Some companies are even "American" when it suits them, and not "American" when it does not. The post, Unraveling The Romney/Bain Tax Story drew on a New York Times report, Offshore Tactics Helped Increase Romneys’ Wealth. From the post:

Why is part of the same company set up based in Delaware, and part in the Cayman Islands or Luxemburg or Bermuda? Because the functions of the American-based company are those functions that avoid taxes on foreign entities, and the functions of the Caymans-based part are the functions that would have to pay US taxes if it was in the US. But in reality it is the same company -- except for tax purposes! Here is the explanation of the foreign-based parts, from the Times article:

Had those funds been set up in the United States, the Romneys and other American investors would probably have been subject to certain federal taxes for their ownership of “controlled foreign corporations.” Setting up the funds in the Caymans allowed them to avoid those taxes.

Here is an explanation of the American-based parts,

Another appeal of offshore funds is that they help private equity attract investment from deep-pocketed big institutions like pension funds and university endowments. While these are generally tax-exempt, they are liable for taxes on “unrelated business taxable income” if they put money in funds that use debt financing to make investments.

So why aren't they all just foreign-based? Why do they need to have an American-based part? One reason is that making the loans that run up the debt that enables these companies to get the interest deductions (more tax avoidance) would incur income taxes if the loans came from a foreign entity,

Beyond their tax advantages, however, offshore funds controlled by American money managers can also create new tax problems. Those funds are limited in their ability to make loans without triggering corporate income taxes — an issue for Sankaty funds. Therefore, they usually have a parallel domestic fund that makes the loans, holds them for a period before selling a portion to the offshore fund, a practice known as “season and sell.”

And, of course, the American-based entities enable the low "carried interest" tax rate that hedge fund managers enjoy. The company paying Romney can't be foreign-based,

So-called carried interest, the cut of a fund’s investment gains earned by its managers, enjoys a favorable tax treatment. But under I.R.S. rules, carried interest cannot be derived from a corporation, like the offshore blockers used by Sankaty.

The American-based entities can buy American companies without incurring "foreign-based" obligations. Then the foreign-based entities can avoid the taxes that the American-based buyers of companies would have to pay. And the foreign-based investors can be in the foreign-based parts of the company, avoiding US tax obligations. Also American entities like pension funds can avoid US taxes they would otherwise have to pay.

To put it another way, the same company can pretend it is US-based when that is what it needs to be, and foreign-based when that is what it needs to be.

What Can We Do?

First of all, we want and need corporations, for the reasons outlines above. For our common benefit, to accomplish large-scale projects, and as a result to bring shared prosperity to our citizens.

But we have to be the boss of them. We have to understand again that We the People set up this system of corporations for our common benefit. (Why else would we set up these things?) And we have to again call ourselves a country.

Can we align the interests of these giant corporations with our national, American interest? If we cannot, they should be stripped of their American corporate privileges and be required to do the same things as other entities that are not wedded to the national interest. And then We the People can build and support American companies that are.

Geezers not to blame for high medical costs

"Stop blaming us!"

Good news, old folks! Now you can feel less guilty about being a burden on society. (You were feeling guilty, right?) Don your reading glasses and check this out:

[A] new study published Tuesday in the Journal of the American Medical Association strongly undercuts the assertion that an aging population is primarily to blame for soaring health care costs. Instead, the study concludes, the overwhelming share of increased health expenditures can be traced to the higher prices that hospitals, medical professionals and drug companies charge to treat a wide swath of illnesses, from cancer to depression.

[...]  All told, costs incurred from treating patients who suffer from chronic illnesses account for 84 percent of all health expenditures in the U.S.

"The attention given to rising Medicare costs is warranted, but chronic disease at all ages, not just those over 65, account for the lion's share of higher costs," said Hamilton Moses, a physician and management consultant who co-authored the report, in an interview.

Despite those high costs, we still have the finest health care system in the world, with the best delivery, right? It's because of all our innovative drugs and newfangled medical technology that let us live longer, right?  Wrong and wrong again:

Since 1980, costs have tripled, in real terms. Yet price increases have not translated into better care, the study found. By the starkest possible measure of health care success -- mortality rate -- the U.S. is slipping behind its peer countries.

Americans in almost every corner of the country die earlier, on average, than residents of other developed countries, with the difference most pronounced in the South, the study found.

And, very importantly, we must note that, "The U.S. also has relatively few doctors, at least as compared to other wealthy nations, ranking 19th out of 25 peer countries in terms of primary care physicians as a percentage of the population."

According to the OECD, in 2011, "the United States had 2.5 practising physicians per 1000 population, below the OECD average of 3.2."

We can thank the AMA, the authors of the abovementioned study, for that. As many have noted, it acts like a cartel to limit the number of medical schools (thus making fewer doctors) and hospitals, thereby keeping medical schools and hospitals more expensive and physicians' salaries higher. In 1962, uber-conservative economist Milton Friedman called the AMA “the strongest trade union in the United States." Also, the AMA's "RUC" committee strongly influences the prices for Medicare. 

Skyrocketing Health Care Costs Aren't Grandma's Fault

By Ben Hallman

November 12, 2013 | Huffington Post

URL: http://huff.to/1e1f4nv

America's hidden social welfare state

"Once tax expenditures for social welfare programs are included in social spending figures, the U.S. welfare state is a similar size to those in Europe."

You don't hear about that every day! Here are some details:

"Based on direct spending on social welfare programs as a proportion of the total economy, the U.S. (at 16.2 percent) lags behind every country in Europe except Slovakia, according to data analyzed by the Organization for Economic Cooperation and Development. By contrast, when it comes to tax breaks with a social purpose, the U.S. -- at 2 percent of gross domestic product -- leads the pack."

You also don't hear that those tax expenditures go to the middle class and especially to the rich.

Social Welfare State, American-Style, Means Relief For The Rich

By Dan Froomkin

January 13, 2012 | Huffington Post

URL: http://www.huffingtonpost.com/2012/01/13/american-social-welfare-state-mitt-romney_n_1205357.html

FOX's Pinkerton: What Obama doesn't get about health care

Pinkerton's thesis – which is nothing new among opponents of liberal health care reform – is that medical technology and drug research, which happen to be America's forte – are really the ways for us to improve the quality of care and reduce costs. In other words, the cure for our health system's woes is more of the same. This is a facile and deceptive analysis of the problem we face.

Pinkerton starts out by scaring us with the alternative to his proposal of spending even more on medical technology and drug research: "rationing." Americans, he says, want more care, not less; but the only way liberals know how to cut costs (aka "bend" the cost curve) is to reduce care. Not true. Germany spends less on medical technology and drugs than we do, but Germans see their doctor 7.5 times a year, on average, vs. 3.8 times in the U.S., and stay longer in the hospital for acute care than we do (7.8 days vs. 5.5 days). This is the very definition of receiving more care. Meanwhile, Germans spend only about 10 percent of GDP on health care – even though they have more senior citizens and smokers, per capita, than we do – while America spends over 16 percent of its GDP. All this goes to prove the conventional wisdom that preventive medicine is really the best medicine.

Pinkerton also overlooks the fact that most drug research goes into incremental improvements on existing drugs, not cures. Why? Pinkerton's beloved profit motive, of course. There is little incentive for drug companies to cure a disease and cut off the hand that feeds them, so to speak, when they can offer an incremental improvement and thus win over a market worth hundreds of millions or even billions of dollars a year. For example, some new cancer drugs often prolong a terminally ill patient's life by only a few weeks or months compared to existing drugs; nevertheless, many patients are willing to pay top dollar for such a new drug, if it means delaying death a little longer. Pinkerton is also silent on the fact that drug companies, which spend $ billions on research and development, spend more than double that amount to market and sell their new drugs to us.

This is not to say that breakthroughs in medical science aren't important. But we can't build a health care system based on breakthroughs. Old age, for instance, is not a disease that can be cured by scientists, it is a fact of life. And yet the last year of life is typically when a person spends the most on his or her health care. How are new technology and drug discoveries going to solve the problem of old age? Again, Pinkerton is silent. (Although, America will continue to be relatively "young" until 2025 compared to other OECD countries like Germany, which produce better health outcomes with more access and lower costs.)

What Obama Doesn't Get About Americans and Health Care, Part 2

By James Pinkerton

September 28, 2009 | FOXNews.com

Are we doomed to face ever-increasing health care costs because people want more treatment? Not if we see health care and medicine as dynamic and if we recognize that the variables of health and medicine can be changed.

In the first part of this two-part piece, I noted that the hot issue-within-an-issue for Washington health care wonks is "bending the curve" on health care costs--that is, reducing future increases.

Even Barack Obama is talking the "bend" talk. In an interview with The Washington Post in July, the president used the "b-word" no less than 11 times. In this particular passage, he said that he wants to "bend" the cost curve, not only for government expenditures, but also for private-sector expenditures:

"The problem we have in this whole debate is that bending the cost curve, curbing health care inflation, is harder to measure in part because it doesn't just involve government outlays; it also involves what's happening in the private sector."

But of course, talk of "bending curves" is simply a fancy way of saying "cuts." As Howard Gleckman observed earlier this year in Business Week, "When it comes to Medicare, 'bending the curve' means rationing care." Got that? And since Obama mentioned private-sector expenditures as well as government expenditures, we can assume that he wants to extend rationing to everyone.

But as I also noted, head-on attempts at "bending the curve" are doomed to failure, at least in a small "d" democratic society. Why? Because poll after poll shows that the American people think they should be getting more treatment, not less. And they vote accordingly, which is why Obamacare is in so much trouble.

So what's the answer? Are we doomed to ever-escalating health care costs because people want more treatment? No. We are so "doomed" only if we see health care and medicine as static and unchanging. But if, instead, if we see health care and medicine as dynamic, if we see that the variables of health and medicine can be changed-- as when, for example, a new or improved treatment comes along, or even a cure-- then it's possible to see hope for outcomes that are not only cheaper, but better.

And that hope is well-grounded in medical history.

We might consider, to start, the humble headache--although, of course, for those suffering from a migraine, there's nothing humble about it. In the dark past, and yet not so long ago, some extraordinarily awful "cures" have been attempted; for example, there was trepanation--drilling a hole in one's head to let the bad stuff out. Needless to say, trepanation was among the many "cures" that didn't cure very well.

But then in the late 19th century came aspirin. Aspirin was the wonder drug of its day, and to many pain sufferers, it still is. And yet while aspirin was plenty expensive to research and develop in its the 1800s, today it is off-patent and mass-produced, so it's cheap and abundant.

So what's the lesson here? The lesson is not to "bend the curve" on ineffective methods for curing headaches-- finding cheaper ways to drill holes in heads-- but instead, to find effective methods for curing headaches. Effective is better than ineffective. Effective means bending the curve the right way. And over time, the curves of those cures will be "bent upward," even as new varieties are introduced to the market, so that every niche need is properly serviced.

The same model applies, as well, to historically more lethal diseases. Thanks to the dynamism of science, we didn't just bend the curve on smallpox, we flattened the curve on smallpox. A malady that was killing millions of people a year into the 1960s, smallpox was officially declared eradicated by the World Health Organization back in 1979. As in, no more. Instead of humans being kaput because of smallpox, the smallpox virus is kaput because of humans. Yet if we hadn't eradicated smallpox, today we'd still be talking about "bending the curve" on smallpox, which would mean, for example, figuring out ways to squeeze savings from smallpox hospitals. (And of course, we would also be struggling to calculate the economic harm done by the loss of those who were killed and disabled by the disease, although health care bean-counters rarely worry about questions of lost economic output; they focus only on direct healthcare outlays.)

Now let's take a more current example, a disease wrecking lives today: amyotrophic lateral sclerosis (ALS), also known as "Lou Gehrig's Disease." Every year, 5,000 new cases of ALS are diagnosed; when the diagnosis is made, treatment can easily cost $200,000 a year. Most patients live two to five years after diagnosis, which means that a single case of ALS could easily cost hundreds of thousands of dollars, and on into the millions. So how to bend that curve? Only the hardhearted would say of ALS victims, "Well, they're going to die soon anyway, so let's cut back and let them go quickly." The rest of us would say, "We need to do what we can for these unfortunate people." And then we would add, "But of course, it would really be great if we could figure out a cure!" Indeed, the best and also cheapest way to deal with ALS is to eliminate ALS, so that it goes the way of smallpox.

That makes sense, doesn't it? As Robert Frost observed, "The best way out is always through."

Just this past Monday, ALS sufferers, and their families, received some good news. The Food and Drug Administration approved for clinical trial a new treatment produced by Neuralstem Inc., based in Rockville, Maryland. There's no way to know how these trials will turn out, but now there's hope--hope founded in the vast success that serious medicine has enjoyed over the centuries.

If we did it with headaches, and we did it with smallpox, then we can eventually do it with ALS--if we keep at it.

The same Robert Frostian "best-way-out-is-through" logic also applies to medical devices and techniques. Let's take another example of a medical device that's so embedded in our thinking that we have forgotten how hard it was to develop: eyeglasses. The idea of using corrective lenses goes back more than a thousand years, to the 9th century; the first wearable eyeglass is thought to date from the 13th century. Yet even rich people were poor back in those days, and so the work of inventors and craftsmen over all those centuries represented, in relative terms, an enormous investment. But thanks to their accumulated good work, eyeglasses today are cheap, and so are contact lenses.

And now we have other eyesight-improving procedures, such as LASIK. As the spelled-out name--laser-assisted in situ keratomileusis--suggests, LASIK is not easy. Or at least it wasn't easy to invent and to refine. But now that the procedure has been invented and refined, it has become easy--at least easy to pay for. Indeed, it's now possible to shop for LASIK on eBay.

Now that's bending the curve!

I could cite other examples, too, such as minimally invasive, or laparoscopic, surgery, which is in the process of cost-crashing more and more kinds of surgical procedures.

So this is how we "bend the curve" in a politically and ethically acceptable fashion: We research and develop new approaches, which are faster, cheaper, and best of all, better. The only kind of health care cost control that will work over the long run is health care improvement. That is to say, Serious Medicine.

Medical history tells us that this is so, and common sense underscores that point as well. So why are the health care policy elites talking about "rationing" when they could be talking about improving health and lower costs?

Are you curious about that? Good! Then why not ask your elected official exactly that question at the next town meeting?

James P. Pinkerton is a FOX News contributor. Read his commentary on health care at Serious Medicine Strategy.

JHU study: U.S. health care most expensive, with 'average' outcomes

This is what I've been saying all along: "Be entrepreneurial about looking at what works," "and then figure out why does it work for them." Then pick and choose the best from everywhere! We've already wasted so much time and energy trying to scare and enrage each other. Let's educate ourselves instead. Wake up, Amurica!

Expensive without the results: Health care in the U.S. costs the most, not the best in the world

By Michael Saul

August 23, 2009 | NY Daily News

What nation offers the best health care on the globe? Answer: Not the United States.

The U.S. health care delivery system is by far the costliest on the planet, but comparison studies consistently show Americans get second-rate results by nearly every benchmark.

"We're twice as expensive as most other industrialized countries," said Gerard Anderson, professor of health policy and management at the Bloomberg School of Public Health at Johns Hopkins University.

"But we have outcomes that are typically about average, and we're not improving as quickly as other countries are improving," he said.

Last year, a study comparing preventable deaths in 19 industrialized countries placed the U.S. dead last. France was first, followed by Japan and Australia.

In the U.S., one in three chronically ill patients says the health care system needs to be rebuilt completely. Only one in 10 feels the same way in the Netherlands and the United Kingdom.

Foes of President Obama's push for universal coverage are quick to find fault with foreign systems, and some complaints are legitimate. In Canada, for example, a typical patient seeking surgical or other therapeutic treatment had to wait 18.3 weeks in 2007, an all-time high, one study showed.

But nonpartisan, scholarly studies show that for the most part, universal systems work well. And the key numbers, from infant mortality to life expectancy, show those countries are doing something right.

"No one is suggesting that we adopt another country's health care system," said Robin Osborn, vice president and director of the international program in health policy and practice at the Commonwealth Fund, a nonprofit.

"We should be open-minded, and we should be entrepreneurial about looking at what works," she said.

Universal care has long been the norm in many countries, accepted by political parties and their followers from both the left and the right.

Of the 30 industrialized countries in the Organization for Economic Cooperation and Development, only Mexico, Turkey and the United States fail to achieve universal coverage.

"There's a solidarity that operates in these other countries in terms of social values, a sense that people are entitled to health care," Osborn said. "In these countries, the idea of someone going bankrupt because of medical bills, it just does not exist."

In the United Kingdom, for example, there is no out-of-pocket cost to see a primary care physician or a specialist. Adults can fill prescriptions, no matter how new, rare or advanced the drug, for about $12.

Australia gives high priority to promoting access to primary care physicians. Patients in the United States spend, on average, about one-third the time that Australians spend in minutes per year with their primary care doctor.

People do better in countries that encourage regular primary care visits, in part because they get frequent counsel to follow healthy habits.

Obama has pointed to the Netherlands as a model closer to what he would like here. Dutch residents are required to purchase private health insurance coverage. And insurance companies must accept every resident in their coverage area.

Other countries are also further along than the United States in using information technology and employing a team approach to manage chronic conditions and coordinate care.

"It's really valuable to look at how other countries do it," Osborn said. "The issue is to look around and see what's good and what works, and then figure out why does it work for them."