oes your job provide affordable medical insurance for you and your family? If so, then this probably isn't a big issue for you. If you run a business and have to deal with the costs of it, or you have had to battle an HMO to receive treatment you or your children need, or you don't have health insurance and are a car crash or blown appendix away from bankruptcy, you've probably spent a bit more time pondering the issue.

Why do Americans spend far more per capita on health care than the rest of the modern world, while receiving less in return? Why is American medicine so good at cutting and using drugs, and so awful at common sense prevention and non-invasive healing? Would everything be better if we had "single payer" medical insurance, like they do in Canada and most of Western Europe?

More recent blog entries on this subject are added on top of this page. 

January 23, 2004

The state of health care in the US is pretty much a disaster (unless you're rich or have a good-paying job from a major corporation or the government that covers your medical expenses) and it's something that I'm sure I'd spend more time talking about on this blog, except that I'm young and healthy haven't ever needed any major medical care, and neither have either of my parents; at least not any major medical stuff they didn't have good insurance coverage for.

While the issue is often presented as greatly complicated, health care is really quite a simple concept, and well summed up in the first paragraph of this brief post by Tom Tomorrow.

Health insurance is a pretty simple concept--individuals pooling their resources so that when one of their number falls ill, he or she can afford to pay for treatment. That's really all it boils down to. (The only real question here should be whether the managers of those pooled resources are entitled to place their own interests--i.e., profits--above the needs of the insured, but that's another post.)

See; a kidney transplant or open heart surgery costs a fortune.  Several years pay, for most people.  You can't set aside 10 or 15 or 20% of your life earnings for an unforeseeable (assuming you don't smoke) medical crisis, not when you've got bills to pay and a house to buy and kids to provide for and college loans to pay off, and perhaps even elderly parents with medical problems (not covered adequately by their insurance) to help financially.

The thing is, not everyone will need such an expensive procedure.  Lots of people never have a stroke and spend 20 days in ICU and another 3 months in the hospital, or crash their motorcycle and need emergency spinal surgery and a motorized wheel chair for the rest of their lives.  Which is why procedures that cost 3 or 4x more than any one individual pays into the insurance fund are affordable; other people who pay more than they get back make up for it.  That's why it's called insurance; it's there if you need it, but you hope that you won't.

And oddly enough, it's about the only investment that people are happy not get their money's worth out of. After all, would you rather have a near-fatal heart attack and get back more than you paid in, or not have that heart attack at all?

I bring this up since Bush mentioned his next tax break boondoggle in the State of the Union speech, and it relates to medical insurance.  To continue quoting from the previously linked post by Tom Tomorrow:

So what's Bush's solution? Why, health savings accounts, of course--a tax free account, so you can set aside money to pay for your own health care. Who needs health insurance? We'll just give you a tax cut so you can save up money for your own medical needs! We're a self-reliant nation, after all! Working together as a society--that's socialism! Like the godless Canadians have! Hell, why don't you just study up and perform your own appendectomy, while you're at it?

Given the rate of savings in this country, and the state of the actual economy (in contrast to the fictional one Bush is also likely to discuss tonight), most people might manage to save just about enough money for a single MRI. If they're lucky.

After that, it's back to the emergency room, I guess.

I'd think it's fairly obvious that in a country where the average person (Democrat or Republican) is juggling about $5k in credit card debt and living in a house they really can't afford while trying to figure how they'll be able to pay for their kid's text books, much less tuition, the percentage of regular people who can actually take advantage of a tax credit to save for their own medical crisis is fairly low.  And that most of the people who can are very rich people, much like the president and all of his closest friends, family members, and high ranking Republican supporters and donors.  Not that I'm implying this is anything other than a complete coincidence.

The evil socialist solution to the health care (cost) crisis is what Tom jokingly refers to in his post.  Something like the Canadian system (or something similar, like what they have in virtually every European nation), where they have single payer insurance, I.E. a system of health care run by the government and funded by the tax payers.  The primary benefit of this, besides universal coverage, is that with a single payer (the government) all of the individual drug companies and hospitals and other such health care providers have to negotiate with them, and this drastically lowers prices for services. It's why prescription medications in Canada cost a fraction of what they do in the US.  It's also why big pharmaceutical companies give millions of dollars to the Republicans and Democrats in the US to be sure that things stay just the way they are.  Not that I'm implying that this is anything other than a complete coincidence.

Did you know that in the latest health bill passed by congress and signed by Bush, there are actually provisos legally barring states from negotiating lower pill prices, as Canada does?  And that tens of thousands of senior citizens living near the Canadian border in the US routinely take bus trips north to stock up on the medicines they need to stay alive but can't afford in the US due to the drug companies being able to charge sky high prices for their products and the patent system keeping affordable generic versions of their drugs from being sold? Of course this is an inevitable result of capitalism and the free market, which as we should all know is by far the best way for an economy to work, always, no matter what, end of story.

The other major benefit of single payer insurance is that all of the parasitical middlemen (I.E. insurance companies) would be driven out of business, and the billions of dollars they earn in "profits" would vanish, returning to the consumer's pockets and going to the government fund to pay for more treatments for sick people, and probably also going to doctors to pay off their student loans and earn them better livings.

I've never seen a full cost break down, but it seems to me that the whole thing would save money just by eliminating the profit motive for insurance companies, not even factoring in the billions lower costs of medications and treatments would save.  Of course there'd need to be a great increase in the size of government to administrate it all, and taxes would pay for their salaries, and conservatives are steadfastly opposed to increasing government, unless it's the parts of government that blow things up or spy on US citizens.

The other huge money saver would be getting poor people insured. As you often read news stories about; poor people without insurance can't get preventative care, and have to wait until they have some huge emergency, at which point they end up in an emergency room, rack up $10k in expenses to fix something that a prescription would have cleared up six months previously, and stick the tax payers or the hospital with the bill, since they can't pay it, and they don't have health insurance.

Like the old saying goes, an ounce of prevention is worth a pound of cure, and that holds true for most things in life.  It's just that prevention requires intelligence and foresight and logic and planning, and those are things in short supply in all levels of government at this time. 

One downside (sort of) is that in theory, many of the private insurance companies would be combined or culled or would volunteer to become the new branch of government that ran the health care insurance system for the nation, so the loss of jobs from that wouldn't be enormous, and you'd have people who already had years of denying expensive treatment until it was too late moving right into their new civil service jobs doing the same thing for tax payers.

But since the net result would be far fewer people doing the same amount of work, with all of the redundancies removed, there would still be quite a few ex-health insurance industry employees who would have to find honest work.

Most private companies spend a lot of time and money organizing their own health insurance system, or negotiating with HMOs over the non-treatment and non-payment of their employees, and you know they'd be overjoyed to just turn the whole thing over to the government.  It would remove a headache for them, and employees would probably get more per paycheck also, since they wouldn't be paying for the very expensive private health care they are now.

Of course to make any of this happen would take enormous political clout and popular support. Clinton tried it when he first took office, but the combined lobbying might of the insurance, medical, and pharmaceutical industries, together with a blitzkrieg of very effectively-misleading commercials killed public support to the point that the craven, industry-owned dogs we call congressmen could vote against it and get away with it.  It would also require short term expenses for long term savings, and that's something that the current US government, run entirely by short attention span, dessert first-ers is entirely incapable of, as well as steadfastly-opposed to.  Bush certainly sets the example with his new programs and tax cuts that are okay now, but become incredibly expensive years after he's out of office, but those are all approved by congress as well, since they well know the attention span of the US public is even shorter than theirs.  Tell the people what they want to hear and postpone the bill, and you'll go far in politics.  Balanced budgets and taxes to cover your expenses are simply out of the question in the current "that's what credit cards are for" mindset of our culture.

When this will change and if it will take a colossal financial crisis to change it is an issue that most economists spend their time debating.  And the same goes for the health care system, though it's hard to imagine just how broken it will have to be before anyone cares enough to fight powerful industry foes to fix it.

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