This year someone is stealing $6,500 from your family. It’s a perfect crime because you don’t even realize it. Before you get your paycheck, they take the money out of it and give it to insurance companies and hospitals and pharma.
The United States now devotes one-sixth of its economy to medicine. Divvy that up, and health care will cost the typical household roughly $15,000 this year, including the often-invisible contributions by employers. That is almost twice as much as two decades ago (adjusting for inflation). It’s about $6,500 more than in other rich countries, on average.
We may not be aware of this stealth $6,500 health care tax, but if you take a moment to think, it makes sense. Over the last 20 years, health costs have soared, and incomes have grown painfully slowly. The two trends are directly connected: employers had to spend more money on benefits, leaving less for raises…
One thing we don’t get is better health than other rich countries, whether it’s Canada, France, Japan or many others. In some categories, like emergency room care, this country seems to do better. In others, like chronic-disease care, it seems to do worse. “The fact that we spend all this money and don’t have better outcomes than other countries is a sign of how poorly we’re doing,” says Dr. Alan Garber of Stanford University. “We should be doing way better.”
There it is. The money is taken from us, ostensibly to give us the best healthcare in the world, yet America has poor results in key areas like chronic disease or infant mortality. Pharma, insurance, hospitals, etc., take all that extra money from us but we don’t see better results than other rich nations.
$6,500 a year.
That’s highway robbery.
Read the whole article by David Leonhardt.
When I saw the headline, I said to myself, “dear God in Heaven…please, not another bloody post about the Gates-Crowley brouhaha.” Thank you, joeltpatterson…for writing about something else.
Although I suppose I’m more to blame for continuing the Gatesgate comment-fest than most.
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p>Great post, Joel.
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p>Do you agree that a public option is the deal breaker for real reform: anything less is just tinkering. That is the way it seems to me.
continue the 6,500 payment to pharma, insurance, hospitals, etc? I suspect that the public option would increase the proportion that goes to pharma, not decrease it.
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p>How about we nationalize drug companies, claim the patents by ethical mandate, fire the researchers and managers and marketers, and keep only manufacturing. That would reduce the cost down 90%. And stop paying for new hospital equipment, just claim it by ethical mandate. It’s unethical to withhold lifesaving drugs from people by insisting on getting paid for them.
Don’t rock the boat, just steady it from time to time.
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p>Nationalizing anything does no good.
If there’s one bright spot in our health care industry it’s the R&D aspect of the pharmaceutical companies. We can/should certainly cut the marketers lose, however. Also, I’m not sure I buy the implication from the promotional comment that anyone who works for these companies is inherently a bad person.
A public option would need less money to provide the same level of services. A public option plan would pay doctors by quality of care not quantity of care, and we’d save money that way.
I know a middle-class person in Missouri whose premiums just shot up 40%. So those premiums have exceeded her car payments. If that keeps growing at the same rate, her insurance premiums will be bigger than her mortgage.
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p>”the system works just fine the way it is?”
mean that I’m not in the drivers seat anymore?
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p>This is my concern – the public option means that the government decides “what you get.”
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p>To wit: there are hundreds of people with developmental disabilities using the “public option.” Their conditions have been diagnosed and have for years, qualified for ICF-MR care. Their families and guardians want this care for them….but the people managing the Dept. don’t agree. They want a different medical model, called “community first” and this model is exactly what they’re going to get. Despite being multiply handicapped, and medically fragile – they are being shoe-horned into a system that can’t support them because this is what the government has decided.
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p>This is my concern with the public option. I am afraid that I will lose the ability to make decisions about my own care, and those decisions will be made by a government who really doesn’t give a rat’s patootie about me. I am concerned that if I had say – breast cancer, I would not be informed about all my options; I would only be told what they were willing to give me. AND that scares the hell out of me.
So are you saying I will get that money back if Obama’s bill passes.
But health insurance premiums have gone way up, gouging employers and employees. Those premium raises could have been wage raises or profit-sharing. Once we get this reform through, we see that $6,500 start going to someone besides Pfizer, Cigna, Aetna, etc.
The CBO just said that the proposed health care “reform” legislation increases — repeat, INCREASES, not DECREASES — costs in the range of $1 trillion plus.
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p>The president, retreating, has said the health care bill has to be revenue neutral. The Congressional response is to propose increased taxes. The public is skeptical, and the race to pass health “reform” before the August recess is finished.
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p>Democrats are so spooked they even blocked a Republican mailer which enclosed an organizational chart of the proposed new federal takeover of health care.
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p>I’m thinking the Amercian voter/taxpayer is getting buyer’s remorse.
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p>So, I’m guessing that you’re ok with Republicans in Congress using public funds to spread lies and misinformation?
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p>To your other points – a link to your CBO study would be helpful, since I have a link to a CBO study that shows a $6 surplus at the end of ten years (PDF):
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p>http://www.cbo.gov/ftpdocs/104…
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p>As to the bill being revenue neutral, why is that a retreat? Seems like good policy to me – and buyer’s remorse? 72% of the country wants a public option:
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p>
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p>Source: http://www.nytimes.com/2009/06…
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p>I guess you’re among the 20% opposed? If you ever get seriously ill and lose your coverage, you might sing a different tune…
That should read $6 billion surplus above
An interesting table showing the historical increase in health expenditures as a percentage of GDP.
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p>Most of the significant year over year increases came in the 1990s. What happened then?
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p>The increases from 2004-2007 have been extremely moderate. I will have to track down the other report I read earlier this morning that indicated there has been a decrease since 2007 (maybe it has just been in premiums).
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p>Source: http://www.cms.hhs.gov/Nationa…
Clinton’s attempt to get health care reform passed was scuttled, for one thing…
You’re blaming Clinton for rising healthcare costs? Possible I suppose, but harsh.
I’m not “blaming Clinton” for anything – his health care reforms were shot down by the same arguments being used today, and the results, predictably, were increased costs to consumers. This isn’t Clinton’s fault – it’s the fault of those who use lies and specious arguments to prevent real reform when it’s needed.
There is a common misconception that people want the healthcare reform currently on the table. BULLSHIT! People, even me, want some reform for healthcare. But I would like some pertinent data and for people to stop the demagoguery. Please stop quoting the 45 million Americans without healthcare like these people are walking the streets with arterial bleeding and nobody will help. First of all, anybody with a health problem will be treated at ANY hospital in the country.. that’s the law. Second, I know a number of people who amongst the 45 million and they have CHOSEN to not buy healthcare insurance. They are young healthy adults and don’t feel like spending money every month on a benefit they don’t use. MA understood this and now we FORCE those people to buy insurance. So please, STOP headlining the 45 million poor slobs living every day worrying that their child will need heart surgery and nobody will help them… it’s a lie!
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p>I like the healthcare I have and all the many insurance companies I’ve had over my life. They have worked great. But yes we can do better. How about opening healthcare clinics or health centers around the country (with supplementary government support). How about looking at where the dollars are spent? This $6,500 is meaningless to me. Tell me more about things like 50% of all healthcare costs being spent on 5% of the population. Tell me about ~80% of healthcare costs being spent on the last 2 years of someone’s life? How much would it cost to provide some HMO type insurance for the 45 million people? Low income people could use their welfare cards as ID at specific hospitals?
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p>The current plans are nothing more than more social bullshit wrapped up with a $1 TRILLION price tag.
I guess you’ve never been so sick that an insurance company dropped you, eh? That’s what happens all the time – someone gets seriously ill, so the insurance company looks for a reason to drop them. It’s called recission, and the insurance companies set up their applications so that it’s easy for them to get away with it – read this article for more info. Would you be singing a different tune right now if your insurance company had dropped you (or one of your loved ones) when you got sick and needed the coverage?
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p>You think people wanting health care reform is bullshit? In my comment above, I linked to a poll showing 72% support for health care reform – where’s your numbers? Your one trillion dollar price tag is also bullshit – read the CBO study I linked above…
Young people don’t want health insurance? Let a young person fall down a flight of stairs and then ask if they want health care. As for being treated at any hospital, that only takes place once catastrophe strikes – if I didn’t manage my high blood pressure with medication, I’d show up in the ER needing dialysis, vastly more expensive than my meds. Much of the savings in a national health plan comes from preventative care, which people without insurance don’t get.
Then an emergency appendectomy racked up $2000 in bills for me after my weak insurance paid whatever it paid for my surgery and overnight stay.
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p>$2000 as a sudden expense really hurts when you’re only grossing $24,000 a year.
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p>We should not let young people make bad decisions about health insurance just because they feel invincible.
He shattered his hip, and has walked with a limp ever since. He can’t get insurance due to this pre-existing condition, and he’s seriously screwed if anything else goes wrong…
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p>Actually, unless the law has changed since I worked in health care, this is not true.
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p>The Hill-Burton Act requires any hospital that receives Hill-Burton dollars to provide a certain level of service under certain circumstances. There are plenty of private, for-profit hospitals and facilities that do not receive Hill-Burton dollars and, therefore, can refuse treatment based on one’s ability to pay. These facilities are usually not found in New England but are common in other parts of the country.
Recall that nearly a full 1/2 of healthcare spending is public spending. 53.8 % is private insurance; the remainder is a combination of federal and state programs. So if there’s a robbery in progress, its a conspiracy in which the government is complicit. Further, since 2004, costs are rising more quickly in government spending, than private.
Love the post, thanks for posting joel.
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p>Why is it that health care has been talked about for years on years but nothing seems to change or get better? Probably because too many people are making money from it.
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p>Not only do we lack in comparison to other countries, why is it that other countries have national health care, yet ours is still just talk? Or I just don’t know the subject well enough?