US Healthcare: The Irrelevant Debate

[leftcider]

There are frequent debates on this site and elsewhere over whether it would be wise for the US to change to a fully nationalized system of healthcare. The US already publically spends more per capita on public healthcare than most countries with a universal system, while at the same time requiring huge private expenditures. What we should be debating is how costs can be systemically lowered.

An example:
In the US, total public and private per capita costs topped the world at $4,631, 44.9% of which was made with public money. Thus, per capita, the US was spending roughly $2079 of public money on healthcare.

In Canada, total public and private costs were $2535 per capita. 69.9% of all healthcare expenditures were made with public funds. Thus, per capit, Canadian public healthcare expenditures were $1772.

The US is paying more PUBLIC money on healthcare per capita than Canada, and getting far less potent public health services.

This begs the question, WTF? Why are our healthcare costs so high? The generally more unhealthy lifestyle of Americans probably has something to do with it, but I seriously doubt that they would make our healthcare costs nearly twice as high per capita compared to those of Canada. How can HMOs continue to charge prices giving them huge profit margins without facing lower priced competition? Why haven't businesses offering lower cost healthcare successfully emerged in the American healthcare industry if the market for them is so big, and the costs being charged for healthcare are much greater than the expenses? Why is the US market for healthcare failing to produce an outcome more beneficial to consumers?

The real debate that we should be having is how we can lower our healthcare costs, rather than if we should bear them privately or publicly, because we are already bearing the costs greatly in both sectors.

Note: all statistics compiled from www.nationmaster.com. Statistics all taken from early 21st century. Some statistics by category (not country) may vary by 1-2 years.

[tman_ndsu08]

Quote by: leftcider There are frequent debates on this site and elsewhere over whether it would be wise for the US to change to a fully nationalized system of healthcare. The US already publically spends more per capita on public healthcare than most countries with a universal system, while at the same time requiring huge private expenditures. What we should be debating is how costs can be systemically lowered. An example: In the US, total public and private per capita costs topped the world at $4,631, 44.9% of which was made with public money. Thus, per capita, the US was spending roughly $2079 of public money on healthcare. In Canada, total public and private costs were $2535 per capita. 69.9% of all healthcare expenditures were made with public funds. Thus, per capit, Canadian public healthcare expenditures were $1772. The US is paying more PUBLIC money on healthcare per capita than Canada, and getting far less potent public health services. This begs the question, WTF? Why are our healthcare costs so high? The generally more unhealthy lifestyle of Americans probably has something to do with it, but I seriously doubt that they would make our healthcare costs nearly twice as high per capita compared to those of Canada. How can HMOs continue to charge prices giving them huge profit margins without facing lower priced competition? Why haven't businesses offering lower cost healthcare successfully emerged in the American healthcare industry if the market for them is so big, and the costs being charged for healthcare are much greater than the expenses? Why is the US market for healthcare failing to produce an outcome more beneficial to consumers? The real debate that we should be having is how we can lower our healthcare costs, rather than if we should bear them privately or publicly, because we are already bearing the costs greatly in both sectors. Note: all statistics compiled from www.nationmaster.com. Statistics all taken from early 21st century. Some statistics by category (not country) may vary by 1-2 years.

It's pretty simple: the less public services there are for people to use, the less we all have to pay for them.

[grandpa]

Quote by: tman_ndsu08 It's pretty simple: the less public services there are for people to use, the less we all have to pay for them.

And the more each individual has to pay for private ones.

Grandpa h.

[SteveA]

The way to lower costs is to simply pay them less. Demand more and be more critical of the services. Don't push for government giving them any more money and if insurance costs are greater than the likely benefits you're receiving, drop the insurance or find a less expensive deal elsewhere. Just pay for the services you truly need and make them offer better deals if they want people to buy more of the services.

[Milton Bradley]

Quote by: leftcider There are frequent debates on this site and elsewhere over whether it would be wise for the US to change to a fully nationalized system of healthcare. The US already publically spends more per capita on public healthcare than most countries with a universal system, while at the same time requiring huge private expenditures. What we should be debating is how costs can be systemically lowered. The real debate that we should be having is how we can lower our healthcare costs, rather than if we should bear them privately or publicly, because we are already bearing the costs greatly in both sectors..

By steering this debate around the critical issue of "public funding" you do several things.


1) You void the constitution, and the constitutional process by assuming all Americans are "OK" with the idea of socialized medicine.

2) You ask for the government to become further entrenched into an industry they are far too incompotent to run. (as an example I cite any other government run program you can think of)

3) You make the concept of law, and order (or constitutionality) seem all the more antiquated, because of your cavalier attitude about usurping the power of We the People.

[Osborn F Enready]

leftcider said:
The real debate that we should be having is how we can lower our healthcare costs, rather than if we should bear them privately or publicly, because we are already bearing the costs greatly in both sectors.

I say:
The real debate is if we should bear them privately or publicly, because we are already bearing the costs greatly in both sectors DUE to governments lack of oversight, insurance fraud, illegal aliens burdening the system, and socialist inspired thought processes.


Right now the government is spending my,as well as EVERY other taxpayers money, on others, with little oversight, which causes corruption and fraud. If we all spent our own money, we would get more out of it, and those without it would get more from legitimate charities, whose MISSION is to help those in need WITHOUT PROFIT.

Non-profit charities are noble organizations, though some have faulted. Overall though, they are much more conscious and responsible with the money than ANY government organization COULD be.

There is no room in the Constitution for taxpayer funded healthcare.

[RVonse]

If Canada's healthcare is so much better and more efficient than the U.S. we should copy what they do. Actually, what I think the U.S. government should do right now is look at which country does the best healthcare (longest lifespan for population while spending the least $) and copy that model. I could be wrong, but I believe that Australia has the best healthcare system in the world. So we should study their system and copy it ASAP.

Based on the sucess and failure of healthcare systems throughout the world it is pretty obvious that private just doesn't work. But if Australia did have a private system I would still say the same thing. Copy what works and get rid of our system that is broken.

[SteveA]

Quote by: RVonse Based on the sucess and failure of healthcare systems throughout the world it is pretty obvious that private just doesn't work. But if Australia did have a private system I would still say the same thing. Copy what works and get rid of our system that is broken.

Then we should first remove our current socialized system. After all we can't simply take private industries by force and let only a few people control them. That's opposed to most everything this country was founded on and not part of the deal most the people who created these industries bought into.

So first remove our current socialized system and see if that's not enough of a benefit to satisfy people and avoid needing changes.

[SteveA]

My apology, RVonse. I jumped on your post unnecessarily. Here's an interesting quote:

Australia spends about 8.5% of gross domestic product on healthcare, which compares favorably to spending in countries such as the United States (13.7%), Canada (9.5%), and England (7.0%).

from this link:
http://www.medhunters.com/articles/h...Australia.html

So apparently the U.S. is spending too much on healthcare. We need to cut back on medical expenses (I'd recommend government expenses first and that would encourage them to lower costs to be more competitive for private dollars)

[SteveA]

Here's an article talking about this same issue:

http://www.fff.org/freedom/fd0409g.asp

I'll group the main elements in that article of why costs keep increasing while accessibility to quality services declines:

1) Out of control and detached from market forces.

"Skyrocketing costs are due to the structure of health care in all these nations. All are mainly socialized, including America’s. This means they operate as top-down bureaucracies, out of touch with people’s real needs. Almost no market forces are allowed to operate for rational decision-making and cost control.

The results are predictable. In 2002, America spent $1.6 trillion on health care, up 9.3 percent from 2001. Drug costs increased 15.3 percent while hospital costs increased 9.5 percent. Out-of-pocket costs, the most market-related, declined.

A graph plotting the percentage of government payment for health care with the total cost of health care would turn almost vertical after the passage of Medicare and Medicaid in 1967. "

2) Irresponsive and beaurocratic

"All the above are funded from taxes confiscated from the people at the point of a gun, making this a less-than-compassionate system. All are insulated from the health-care marketplace and thus from rational decision-making. All are run as huge bureaucracies, with their inherent problems of fraud and high administrative overhead. Medicare rules alone are 133,000 pages in length. This makes the 10,000-page income-tax code look like a model of simplicity. "

3) Government intervention removes accountability

"An example of the dismal failure of the government sector in America is the “war on cancer,” which is administered by the National Cancer Institute. It has cost taxpayers some $30 billion over a 35-year period. After adjusting for a longer life span, between 1950 and 1989 the incidence of cancer rose by about 44 percent. Breast cancer and colon cancer in men have risen about 50 percent, while some others have risen 100 percent. A recent article in the Journal of the AMA was entitled “Are Increasing Five-Year Survival Rates Evidence of Success against Cancer?” The answer was “No.” "

4) Ineffective private competition due to government regulations

"The so-called private sector of American health care is better termed the regulated sector. It includes insurance companies, HMOs, and licensed pharmacists and physicians. To receive any government reimbursement they must “play by the rules” imposed by the socialized sector. As a result, this sector is mainly an extension of the socialized sector.

Insurance companies are burdened with a thousand state and federal mandates regarding what services they must supply. HMOs are also heavily regulated and are in fact creations of the U.S. Congress by virtue of the HMO Act of 1973.

Medical schools also receive government subsidies and grants. This means that what is taught is influenced if not dictated by these funding sources. Physicians are regulated by state licensing boards and, of course, must abide by Medicare and HMO regulations if they choose to work in those settings. To call any of these aspects of the health-care system “private” is a joke. "

5) Alternative solutions legally restricted (I'm skeptical of a lot of these but the claims that many health providers would prefer to treat a chronic problem than allow a cure seems to ring true)

Perhaps 2 percent of the health-care system is private or free-market. It is composed of the unregulated, non-mainstream holistic and alternative healing schools and practitioners. People pay cash for their services and products. Practitioners and suppliers must respond to people’s needs to stay in business.

I have a medical degree but have worked as an unlicensed nutrition consultant (not a dietitian) for 23 years. My attention is focused 100 percent on what clients need, not on getting grants or subsidies, receiving insurance reimbursement, or paying lobbyists to plead my case in Washington. In the free-market sector, costs for vitamins, for example, have decreased.

Sad to say, many alternative practitioners who are shut out of mainstream medicine have lobbied for licenses. There is no real need except they can charge more, keep out the competition, and perhaps force insurers or the government to reimburse their services. These include chiropractors, some naturopaths, acupuncturists, and physical therapists.

6) Lobbying and special interests allow monopolistic cartels

7) The FDA can make or break many companies simply by allowing or denying a company to sell their products.

The article concludes by saying that returning power to individuals and providing a freer market in the health services allows more options for people to address their needs while denying overpriced monopolies to continue their practices. I'll skip the details but here's the same sentiment I expressed earlier:

"Though we may not wish to admit it, American health care is only slightly less socialized than the single-payer systems of Europe and Canada. No wonder costs are out of control. Deregulating health care would benefit all Americans and restore a crippled system to sanity. Health care does not have to be costly or dangerous. "

We already have a socialized health industry and that's why most these problems have come to exist in the first place. Power corrupts and leaves those in that position detached from individual desires. It seems simple to me - To provide greater incentives for the industry to serve individual desires, you return the control (and resources directing the actions) of these instutions back to individual desires. There's nothing complex at all to it. Instead of trying to please government officials, they'd find the need to keep customers happy and willing to pay their bills.

[RVonse]

Steve,
Is there another country with private healthcare that works better than ours? If there is, please share with us.

Free enterprise and capitalism works very good for most things, but probably not healthcare. The difference is that healthcare is a monopoly. If you want to buy a car you go out and shop and try to get the best price for what you want. But if you are desparately sick, you go to the doctor regardless of the cost. You are too sick to worry about shopping around. In this manner I would suggest that healthcare is more like a monopoly like the gas or light company than it is a free market like selling hot dogs.

But if there is another country that has proven free private enterprise healthcare actually works good then I am all for it. Otherwise, lets adopt what England or Australia does so we can live longer and pay less.

[SteveA]

Quote by: RVonse Steve, Is there another country with private healthcare that works better than ours? If there is, please share with us. Free enterprise and capitalism works very good for most things, but probably not healthcare. The difference is that healthcare is a monopoly. If you want to buy a car you go out and shop and try to get the best price for what you want. But if you are desparately sick, you go to the doctor regardless of the cost. You are too sick to worry about shopping around. In this manner I would suggest that healthcare is more like a monopoly like the gas or light company than it is a free market like selling hot dogs. But if there is another country that has proven free private enterprise healthcare actually works good then I am all for it. Otherwise, lets adopt what England or Australia does so we can live longer and pay less.

People overuse the current system and waste resources. As I mentioned on another thread, we even have doctors that pay people to use their Medicare so that they can charge government for the services. Such abuses are almost impossible without government involved. So we're wasting resources and limiting availability.

You claim healthcare is a monopoly. I think you mean a necessity at least to some extent. But how does having government limit competition help assure an adequate supply? If you don't want to see a monopoly, free up competition.

Consider also that every dollar funneled into healthcare is a dollar less in other areas of peoples lives that are at least as critical. We can't have a good healthcare industry if we don't have educated professionals, so education is at least as important and in a broader sense as well. Also it's more important that someone has a home to live in than a hospital available. And what about the costs of a family? If we're busy pumping too much money into saving some lives but at the expense of new ones, that's a cost too. This is why free markets do a much better job at balancing and growing the economy because they allow people to weigh their options instead of relying on a central beaurocracy to 'figure it out'.

[RVonse]

Healthcare is a monopoly because we all have to have it and the price vs demand is inelastic. Another words, if you suddenly have a heart attack you want to be taken to the hospital and cared for regardless of the cost. We only think about the cost after we are healed because there is no time to shop or compare competition. No competition = monopoly.

The government is probably the best way to regulate or handle a monopoly. Otherwise it is very possible for the supplier to take advantage of the consumer.

But like I say, if you can find even 1 example of a county using private healthcare doing it better than England, then I would say do it that way.

Clearly what the U.S. has right now is broken very bad. It can't get any worse than it is.

[zynner]

A couple of points, here:

(1) Due to Canada's socialized health care system, many Canadians just cannot get elective proceedures in their home country. So, they come to the USA. This will tend to skew the numbers. The Canadian "private" costs will be less and the USA "private" costs will increase, even though it is Canadians who are paying for and receiving services. I have no idea how much this affects the total numbers (maybe not a lot, but maybe when you consider all foreigners), but it is issues like this that also need to be factored into the equation.

(2) In Canada, there is a crises. Not just a "health care" crisis, but a "what happens when we just don't have enough doctors" crisis: http://www.liberty-page.com/issues/h...shortage2.html

Socialized medicine creates all sorts of disequalibriums in the system. If socialized medicine was really the best way to go, then the old USSR would have lead the world.

~ zynner

[SteveA]

Quote by: RVonse Healthcare is a monopoly because we all have to have it and the price vs demand is inelastic. Another words, if you suddenly have a heart attack you want to be taken to the hospital and cared for regardless of the cost. We only think about the cost after we are healed because there is no time to shop or compare competition. No competition = monopoly.

That's not actually a monopoly. What you're saying is that a monopoly (no competition in the markets) could be easily abused in this industry, and that's what I've been saying also.

What makes the healthcare industry so monopolistic with few competing options is that government has made it largely a defacto monopoly which limits supply and increases costs. If you're going to be treated by a doctor, he's got to have a license. If you need some medicine, the FDA has to approve it etc.

So your complaint is largely the same as mine - we have too little competition in the industry and a large part of it are due to government intervention in the system. We used to have largely private healthcare in the U.S. and it was relatively inexpensive to most people. Such is no longer the case after big businesses lobbied government to give them preferred treatment at the expense of everyone else.

The government is probably the best way to regulate or handle a monopoly. Otherwise it is very possible for the supplier to take advantage of the consumer.

And what does government do to monopolies? It breaks them up. The issue is that it's making them instead, that's the flaw.

But if there is another country that has proven free private enterprise healthcare actually works good then I am all for it. Otherwise, lets adopt what England or Australia does so we can live longer and pay less.

How about if for a change we have a government that proves the benefit of (or dare I even say, right to) intervening.

Show me an example instead where a modern industrialized society has a failing healthcare industry due to government non-intervention in the private markets.

[SteveA]

Here, let's simplify it and compare apples to apples by trying to compare the health of U.S. states with a larger amount of public medical assistance, versus states with little public assistance and compare these to some possible measures of health.

I found a site with some state rankings:
Total Social Security Disability Insurance (SSDI) Beneficiaries Ages 18-64 as a Percent of Population (18-64), 2003
http://www.statehealthfacts.org/cgi-...+of+Population

The top 3 recipients are West Virginia (7.4%), Kentucky (6.4%) and Mississipi (6.3%)
The lowest 3 are Utah (2.1%), Alaska (2.3%) and Hawaii (2.4%)

Let's compare this against deaths per 100,000 people:
http://www.statehealthfacts.org/cgi-...+per+100%2c000

West Virginia 991.7
Kentucky 1000.6
Mississipi 1037.3

(Interestingly enough these are 3 of the 5 highest death rates of the states)

Hawaii 659.6 (Which happens to be the lowest death rate)
Vermont 774.2
Utah 785.8

Averaging all these gives:
Highest SSDI rates 6.7%
Death rate per 100,000 = 1,010

Lowest SSDI rates 2.3%
Death rate per 100,000 = 740

So we see a 4.4% increase in the number of SSDI recipients in a state correlates with an additional 270 annual deaths per 100,000 people. 4.4% of 100,000 is 4,400 people which seems to indicate that receiving SSDI has about a 6.1% chance of killing you every year!

Ok, you might say that's backwards and that if people are more sick or disabled in some states then they'd qualify more. That's the problem with a lot of these things is that we have little of any hard evidence that indicates social programs actually help much and instead of mostly examples of where state intervention seems to create problems. Ok, I should have picked a better indicator but I'm too tired to do it right now. Sorry.

(A sidenote: I happened to see New Hampshire listed as the second healthiest state in the nation http://www.unitedhealthfoundation.or.../Findings.html ... it happens to have the second lowest taxes in the nation as well, with only Alaska beating it because of the subsidies given by the oil companies ... is it ironic that a state with basically the lowest taxes tends to be one of the healthiest? I think not)

I tried to find on that limited the possibility of racial longevity as a factor but couldn't find any racial life expectancy information broken down to the state level.

Anyway, maybe this will stimulate a spark of creativity for you and you can figure out how to research this stuff closer. There are a lot of ways of analyzing things and few of them imply modern socialized governments are doing a good job at much of anything except creating expensive beaurocracies and monopolies in markets.

[Osborn F Enready]

Great posts Steve.

[tman_ndsu08]

Quote by: RVonse Free enterprise and capitalism works very good for most things, but probably not healthcare. The difference is that healthcare is a monopoly. If you want to buy a car you go out and shop and try to get the best price for what you want. But if you are desparately sick, you go to the doctor regardless of the cost. You are too sick to worry about shopping around. In this manner I would suggest that healthcare is more like a monopoly like the gas or light company than it is a free market like selling hot dogs.

No, it's not a monopoly! It's siomply your LACK of immagination that limits your views.


If there were a free market on doctors and healthcare, then when you get too sick to worry about shopping around: different doctors COME TO YOU!!!


Yes, think about it for a second. With so many competiting doctors, they will all have to come to you and underbid themselves if they want your business!


If only we lived in that world...

[Boetie]

I agree with another poster here that healthcare isn't like buying a hotdog. Healthcare is a complex affair. First of all a patients often starts out dealing with the unknown. How do you go around shopping dealing with the unknown? You need to take the unknown and turn it into a known this is called getting a doctors opinion.

Once you have the doctors opinion the matter can still be complex. For instance you need surgery A, but surgery A can vary between a person whom has diabetes or a person whom doesn't, the approach varies between the two types of patients.

Government is not the problem as many here would like to claim. First of all the hospitals are private businessess, it's the private sector that is stiffing the government for the money, not the patient.

You cannot create this competition to lower prices. The reason is geographical. In many parts of the country one hospital will suffice, in some cases two, in the case of my community we have four hospitals but they are all owned by the same corporation and the headquarters of this corporation is not even in our state.

Hospitals is a business, the objective is profit, this puts the pressure on doctors to generate this profit, thus the cost of healthcare goes up. Studies have shown that the pressure on doctors from the medical supply industry and hospitals have led to an increase in certain types of surgeries, there was no explaination for this increase other than the pressures.

Healthcare is complex and running around chanting cute slogans like privatization and free market doesn't address these very real problems and very real matters such as the health of the citizen. We need people and politicians to deal with the real world and not with just wishy washy idealism like free market and privatization.

[SteveA]

Quote by: Boetie You cannot create this competition to lower prices. The reason is geographical. In many parts of the country one hospital will suffice, in some cases two, in the case of my community we have four hospitals but they are all owned by the same corporation and the headquarters of this corporation is not even in our state.

Hello? Is the microphone on?

I've said as much. I have no idea what company it is but I'll do my psychic prediction that it's a large company that receives plenty of federal assistance in maintaining and growing itself. The doctors it hires have been approved by government, and I have no idea whether nurses need licenses or ceritification that's driven by federal laws but I'll hazard a guess that's true also. The drugs it prescribes are approved by the FDA etc. So you're saying that government backed company bought up all the hospitals in your area and I've been saying it's nothing new and happens in plenty of other industries as well as they are driven into line with federal desires.

You keep repeating this mantra that businesses are bad but somehow have faith that the very largest one is somehow immune to corruption. We've given a ton of evidence supporting at a minimum the fact that there's little evidence government intervention is improving things and yet you still have religious/brainwashed faith that if we just relied on yet some more it could finally turn these things around. Well it's already fixed Social Security 3 times and it's somehow still going bankrupt? It's a scam.

I don't know how to argue with blind religious faith and honestly I don't really even care what you want to do with your life, but leave me out of it, please! The difference between what I'm suggesting and what you're suggesting is that my ideas don't have to include you - you're free to join whatever associations provide you with whatever benefit you feel is best, but the unresolvable problem is that your ideas require that I be a part of it, so you expect to have a monopoly on the healthcare system. You don't see it because you've been raised on this type of thought process ... it's like breathing air. I had to go through a lot of discussions in which I failed to prove that even many of the services I believed government could supply efficiently, were truly being performed well by government agencies. That doesn't mean individuals can always find the solutions but the key point of free markets is that you don't need everyone or any predetermined group of people to solve everything, you simply enforce against damages when they occur and let the many independent minds find ways to avoid these problems as they have an incentive not to create them and be liable for them, while in the meantime they're each working to improve their own well being and have more intimate knowledge of their circumstances and desires than even a group of mind readers in D.C. could supply.

But anyway, it's fine if you want your utopia, but you need to find a way to leave others a method to 'opt out'. Religious folk don't generally force everyone to go to their church, but socialists don't want to give people that option - we're all suppose to be part of the same group, sink or swim, from their perspective. That's a warped view and the type of thinking that's started countless wars.

So how do you propose freeing people from the system you advocate? We're not a slave nation. Simply because some people want to come in and run other's lives doesn't grant them the right to do so nor can they expect it to happen free of conflict either.