Health Care Costs (6/21/09)

Here is where I shall vent my spleen on whatever political topic might cross my mind on a given day. Comments or responses may be posted to whatever forum might be appropriate to that particular topic.

Health Care Costs (6/21/09)

Postby Ferguson Foont » Sun Jun 21, 2009 11:39 am

As anyone who reads my occasional screeds knows, I favor a single payer health care system. I have many reasons for favoring this plan, chief among which include the fact that it is better and cheaper than any other alternative this side of actual socialized medicine. Under single payer, you go to the doctor, get diagnosed, get whatever drugs and procedures you require to get well, and go home, none the poorer for the experience. It's all reimbursed to your CHOSEN provider by the government at rates set by the government.

Republicans (and a lot of Democratic legislators whose election campaigns are funded largely by health care providers and pharmaceutical firms -- which is very nearly all of them) hate this. The thing they hate about it is that it will slow the gravy trains of their benefactors, and therefore indirectly of themselves when they go begging for campaign contributions, because health care costs can then be controlled for the benefit of the American people (hey, remember us?) rather than for the sole benefit of the providers.

The opponents of this plan use as their chief argument the presumed costs of such a plan and the impact it will have on "your" taxes. They portray this equation as being wholly negative -- they add all of its costs at today's (and projected future) prices for universal health care in all of its manifestations together and simply add it to the tax burden. This of course ignores a lot of the aspects of single payer that would actually prevail in the real world, including the following:

1. Because health care costs in the United States are currently completely uncontrolled, and because the market is not free in any real sense which allows providers to set prices for their own sole benefit, we spend much more on health care overall than any other country on earth, and much more than we would under single-payer. We spend double, and in some cases nearly triple, of the overall costs as expressed as a percentage of GDP than many nations that employ systems similar to single payer, and yet the performance of our system lags significantly behind those other systems in terms of such broad measures of health care as life expectancy, infant mortality, and person/days lost at work due to illness and injury. Only single payer addresses this strange anomaly ("strange" in that we continue to tolerate such a ridiculous situation). The critics of single payer simply ignore in their propaganda the savings we would obtain by the market controls single payer would provide.

2. The amount of money we spend on health insurance would be completely eliminated from our out-of-pocket expenses. Under single payer, health insurance simply goes the way of the buggy whip industry into oblivion, as it should. The health insurance industry provides absolutely no value added to the health care equation. No health insurance provider has ever cured any person's disease, healed any individual's injury, or delivered any mother's baby. All they do is take their ENORMOUS cut of the money we spend in this country on health care, giving their companies the biggest buildings and their executives the highest salaries.

It is very difficult to discover the total amount we spend in America overall on health insurance. I have tried to locate figures that would allow a roughly accurate figure, but I have been unable to locate the necessary data anywhere online. But I will take a brief stab at it below by calculating it in a way that will provide a gross underestimate that will nevertheless serve my purpose in making my point here.

According to the Department of Commerce Census Bureau, in 2007 we had slightly over 250 million people (253,449,000 actually, but I will round down here) covered by health insurance from whatever sources. Unfortunately, 2007 is the last year for which this figure has been published.

According to the National Coalition for Health Care, the average cost of private health insurance coverage, whether purchased individually or provided by an employer, for a family of four in 2008 was $12,700. This of course includes both the employer and employee contributions for employer-provided plans. Divide this by four and you get more than $3,000 per person for health insurance ($3,225, to be precise, but I am rounding down here, remember). Of course, individual coverage is higher, but I am trying to provide the most conservative estimate possible here.

Now, $3,000 times 250 million people comes to $750 billion dollars a year (considerably more, actually, because this is a ridiculously low estimate possibly by 25% or more). The provision of single payer, universal health care in the United States would have this bucket of cash available to it without subtracting a single dollar out of anybody's after-tax take-home pay -- it's what we are spending on health insurance now, an expenditure that we would no longer need to carry.

3. The above figures INCLUDE Medicare, Medicaid, and VA medical benefits, entitlements on our budget that would be ENTIRELY eliminated by going to a single-payer system. In 2008, Medicare spending totalled $455.4 billion, and Medicaid cost us $226.7 billion, for a total of an additional $682 billion. VA Medical Care added another $37 billion to the mix, which brings this total additional amount available to $719 billion. Added to the amount we spend on insurance, the amount available to a single payer system without subtracting even a single dime from paychecks or industrial profits now comes to $1.469 TRILLION dollars a year.

4. Add to this the total amount we spend on our co-pays, deductions for Medicare from our paychecks, and the amount we spend on prescription drugs each year, and this rises significantly, although exact figures are hard to provide. Figures I have been able to find claim that the total out-of-pocket expenditures for prescription drugs alone was nearly $300 billion, so let's say that brings us up to $1.765 trillion. The receipts from Medicare deductions comes to around $35 billion, bringing us up to maybe $1.8 trillion. I have no figures on total co-pays so I will leave them out.

Now, the total cost of all medical care in the United States in 2008 was roughly $2.2 trillion, leaving us with a shortfall here of $400 billion. But that is the TOTAL cost of all medical expenditures including such items that would not be included in any single-payer plan like non-prescription drugs (est. $35 billion) and elective medical procedures unrelated to remedial or preventive care (I have no figures here but I am sure they are quite significant).

These costs, of course, would be significantly reduced under single-payer. For example, there would be a significant decline in that portion of our health care dollar that goes toward malpractice insurance and the payout of settlements. Most of our malpractice expenses involve continuing care, and these would be completely erased from the equation.

The use of redundant and defensive tests and procedures would be greatly reduced. The costs of prescription drugs would fall significantly as we, like other countries already do, would be able to negotiate prices. Prices for procedures would be regulated. And the increased prevalence of preventive care would reduce the enormous costs of those conditions that preventive care is designed to prevent.

I believe that single payer would actually leave the vast majority of us with MORE money to spend on things other than health care than we have now, even as it covers every American's health care cost. We would be a healthier and more prosperous nation, and our products would suddenly become competitive on the world stage as the cost of employer-provided health insurance would be eliminated from the prices of our products.

We need single payer. It has GOT to be put back on the table.
Republicans whine and Republicans bitch: "Our rich are too poor, and our poor are too rich."
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Ferguson Foont
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